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North Carolina Senate Overrides Energy Bill Veto

The North Carolina Senate voted Wednesday to go against the wishes of Democratic Gov. Bev Perdue, overriding her veto of an energy bill that would open the door to offshore natural gas drilling.

The Republican-controlled Senate voted 31-17 to override Perdue's veto of S709, also known as the Energy Jobs Act. Supporters of the bill had just enough votes to clear the three-fifths (60%) threshold needed for a successful override.

"I think it's great," Sen. Tommy Tucker (R-Waxhaw), one of S709's sponsors, told NGI about Wednesday's override vote. "This puts North Carolina on track to utilize the natural gas resources that we have in this country. We'll be able to move forward on the energy issues that we have in this country and not be held hostage by the Middle East."

To become law, S709 must now pass the state House of Representatives, which is also controlled by Republicans, by a three-fifths vote. The bill was ratified by the House on June 18, 69-42. If a similar vote total occurs the override will be successful.

A member of the House clerk's office told NGI on Wednesday that the bill will not come to a floor vote until July 25 at the earliest, when its members return for a full session.

Perdue vetoed S709 on June 30, declaring it unconstitutional because it called for her to enter into an offshore energy compact with neighboring Virginia and South Carolina (see Daily GPI, July 6; June 22). She said that order infringed on the powers assigned to the governor.

In a letter to General Assembly leaders on Tuesday, Perdue repeated her stance on the bill and urged them to resist overriding her veto.

"North Carolina's interests do not necessarily align with those of Virginia and South Carolina," Perdue said. "While Governor McDonnell, Governor Haley and I could likely agree that a certain percentage of royalties should be paid to the states, beyond that our interests diverge."

She added that she believed S709 was "potentially detrimental" to the state's interests, and could hurt the state's efforts to create jobs through oil and gas exploration.

"North Carolina will likely compete with other coastal states, including Virginia and South Carolina, for the jobs and other benefits that offshore oil and gas exploration promise," Perdue said. "If and when it becomes clear that a compact is in our best interests, then we should join one. But that time has not yet arrived."

On Wednesday, Perdue said the Senate "made the wrong choice for North Carolina. I remain hopeful that the House will take up these issues and make better choices."

Tucker described Perdue's advice on the bill as "incorrect."

"Her real problem was that she used a very vague 1999 opinion by the [state] attorney general that said the legislature didn't have the authority to ask her to be our representative in a compact with Virginia and South Carolina," Tucker said. "But we have legal opinions from both the General Assembly attorney and outside attorneys that we have the authority to ask her to represent North Carolina.

"Florida, Louisiana and Mississippi have [compacts]. This is really about getting on board with what's going on throughout the country."

On the same day Perdue had vetoed S709, she issued two executive orders creating an offshore wind task force and a scientific advisory panel on energy. The governor said her measures were designed to prepare the Tar Heel State for "any eventual federal authorization" for offshore oil or gas production.

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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