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North Carolina Governor Vetoes Energy Bill

North Carolina Gov. Bev Perdue vetoed a bill that would have permitted offshore natural gas drilling to move forward, and instead issued two executive orders creating an offshore wind task force and a scientific advisory panel on energy.

Perdue said S709 -- also known as the Energy Jobs Act -- was unconstitutional because it called for her to enter into an offshore energy compact with neighboring Virginia and South Carolina (see Daily GPI, June 14). She said that infringed on the powers assigned to the governor.

"Furthermore, and even more basically, the General Assembly lacks the authority to instruct the governors of other states to do anything at all," Perdue said Thursday. "That's why I am vetoing this bill."

Perdue said the federal government still needed to approve any offshore oil or gas production. But she added that she wanted the state to be prepared for "any eventual federal authorization" and was in turn issuing Executive Order Nos. 96 and 97, respectively creating the wind task force and the energy panel.

"I am completely committed to North Carolina's energy policy of developing jobs that foster America's energy independence," Perdue said. "I have been working on this for two years. Because of my experience in this area, I know it is critical that we plan and prepare for any eventual federal approval to move forward. We cannot wait until we have authorization to get ready, we must do that now."

Sen. Bob Rucho (R-Raleigh), one of S709's sponsors, told NGI that Perdue's reasoning behind her veto was "a lame excuse."

"This is an extremely important issue to the state and for energy independence," Rucho said Tuesday. "She sloughed it off as an unconstitutional issue rather than facing up to the challenges of meeting the energy needs of our state. That's a shame."

Rucho said he and his colleagues in the General Assembly were in the process of determining whether they have sufficient votes -- three-fifths (60%) in both houses -- to override Perdue's veto. S709 passed the Senate by a 35-10 vote on June 16 and was ratified by the House of Representatives on June 18, 69-42 (see Daily GPI, June 22). If the vote totals remain unchanged, an override would be successful.

"It is kind of ironic because during the political campaign [for governor in 2008] she made a statement that under her watch [offshore drilling] will never happen," Rucho said. "As the campaign went on she said we need to look on it. But now, by acting like she did, she is in blatant opposition to any natural gas exploration, offshore and onshore."

Perdue's first executive order, No. 96, creates a 15-member Offshore Wind Economic Development Task Force. Its responsibilities would include studying the economic costs and benefits of developing an offshore wind industry.

Meanwhile, Executive Order No. 97 reauthorizes and expands the Governor's Scientific Advisory Panel on Energy (GSAPE), a panel of between 10 and 20 members that would be responsible for performing a comprehensive evaluation of all potential onshore energy resources, including oil and natural gas.

Perdue said GSAPE's responsibilities would include conducting a review of North Carolina's existing energy laws and studying similar regulation in other states. The panel will also take a look at advances in energy technology, identify the most viable areas for onshore and offshore energy transmission and production, and report its findings and recommendations to the governor on or before Dec. 31, 2012.

"This is something that we had in our bill," Rucho said. "It's ironic that she said that they don't have to report back until Dec. 31, 2012. That will be right after the [gubernatorial] election, so she won't have to make a stand on the issue."

GSAPE will also review the findings of the Governor's Scientific Advisory Panel on Offshore Energy, which was set up under a previous order in 2009 and whose term expires on Sept. 18. Under the order, the governor would appoint the GSAPE chair and all of its members to two-year terms, but two at-large members would be recommended by the speaker of the state House of Representatives and another two at-large members would be suggested by the president pro tempore of the state Senate.

S709 supporters contend that developing the state's offshore gas resources would create more than 6,700 jobs and add more than $659 million a year to the state's gross domestic product for the next 30 years, generating almost $10 billion in cost sharing of government revenues at an average of $484 million per year to the state.

The federal government estimates that nearly 30 Tcf of natural gas lies off the coast of North and South Carolina and Virginia. Active offshore leases in North Carolina -- which comprise two individual lease blocks, each about nine square nautical miles in size -- reportedly contain about 5 Tcf of economically recoverable natural gas.

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