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North Carolina, Virginia Take Steps Toward Shale Development

Geologists in North Carolina plan to collect rock samples from seven counties in the western part of the state this summer to test for oil and natural gas. Meanwhile, a bill that would open the Tar Heel State to shale development is headed to Gov. Pat McCrory's desk for his signature.

And in neighboring Virginia, regulators are reviewing that state's existing rules governing hydraulic fracturing (fracking) and considering possible changes.

Jamie Kritzer, spokesman for the state Department of Environmental and Natural Resources (DENR), told NGI's Shale Daily that geologists with the agency's North Carolina Geological Survey (NCGS) plan to begin collecting rock samples from along the rights-of-way in seven counties -- Cherokee, Clay, Graham, Macon, Haywood, Jackson and Swain -- later this summer or in early fall.

Kritzer added that NCGS geologists might also collect samples from Native American lands in the area, after securing permission from tribal governments to do so.

"It will amount to several geologists going out with shovels and other hand tools to dig up and pull rock samples that are close to the surface," Kritzer said Tuesday, adding that a lab under contract with DENR would analyze the samples to determine the amount of Total Organic Carbon (TOC). He said TOC of 1.4% or higher would warrant further testing and "indicate there is potential for natural gas in the rock."

According to Kritzer, the geologists will be collecting samples from the Precambrian rift basin, a feature outside the scope of proposed legislation -- specifically, SB 786 -- for developing shale plays across the central part of the state (see Shale DailyMay 23).

"This is a ways off in the western part of the state. Even if we determine the [TOC] is such that there is the potential for oil and natural gas, we would then have to get direction from the state legislature to determine whether fracking and horizontal drilling could be conducted in that area." He added that DENR expects to make a presentation to the state General Assembly during its 2015 session to share any rock sample analysis.

SB 786, also known as the Energy Modernization Act, passed the state Senate by a 35-12 vote on May 22 (see Shale DailyMay 21May 16). The measure then passed the House of Representatives, 64-50, last Thursday. McCrory received the bill last Friday and is expected to sign it.

SB 786 would lift the moratorium on horizontal drilling and fracking on July 1, 2015 (see Shale DailyMarch 4, 2013). It would also extend the deadline for the state to develop its own regulatory program, create a new Oil and Gas Commission and reconstitute the state's Mining and Energy Commission.

In Virginia, the state Department of Mines, Minerals and Energy (DMME) has formed an advisory panel to review the state's existing oil and gas laws and offer policy recommendations. The panel's first meeting, which will include a brief opportunity for public comment, is scheduled to begin at 10 a.m. Wednesday in Richmond. According to the agenda for the meeting, the panel will discuss chemical disclosure requirements for fracking.

"Over the course of the next couple of months, we will be asking them to provide recommendations on industry best practices and whether or not additional requirements are necessary for drilling in different regions of the commonwealth," Michael Skiffington, program support manager for DMME, told Shale Daily on Tuesday.

According to DMME, more than 2,100 vertical and horizontal wells targeting shale, sandstone and limestone formations have been drilled in the southwest part of the state since the early to mid-1950s. Virginia also has more than 6,000 coalbed methane (CBM) wells. Exploratory wells were drilled in other parts of the state during the 20th century, "but all were plugged due to the absence of commercial quantities of hydrocarbons."

DMME says that with the advent of fracking and horizontal drilling, interest in the state's Mesozoic basins -- including the Taylorsville Basin across the central part of the state -- is on the rise. The agency said a recent study by the U.S. Geological Survey (USGS) suggests that Virginia's portion of the Marcellus Shale "is thermally overmature, meaning that the shale was most likely heated to too high a temperature in the past to preserve economic quantities of gas or oil."

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