Lawmakers in the North Carolina Senate passed a bill that would change the state’s regulatory climate for oil and gas drilling and lift the state’s moratorium on hydraulic fracturing (fracking).

The bill, SB 786, also known as the Energy Modernization Act, passed a second reading by the Senate on Wednesday.

Assuming the bill passes a third reading in the Senate, it will then be handed to the state House of Representatives. Passage there will put the measure before Republican Gov. Pat McCrory.

SB 786 would lift the moratorium on horizontal drilling and fracking on July 1, 2015 (see Shale Daily, March 4, 2013). It would also extend the deadline for the state to develop its own regulatory program; create a new Oil and Gas Commission; reconstitute the state’s Mining and Energy Commission (MEC); invalidate local bans on oil and gas activities; ban wastewater injection wells, and establish a severance tax (see Shale Daily, May 16).

The bill would also make it a Class I felony for anyone to intentionally disclose the chemical contents of fracking fluids if those chemicals are classified as confidential information. In North Carolina, Class I is the least serious felony and could come with a few months in jail.

Sens. Bob Rucho (R-Mecklenburg), Buck Newton (R-Wilson) and Andrew Brock (R-Mocksville) were the bill’s primary sponsors, introducing it on May 15. Six additional senators, all Republicans, have signed on as co-sponsors.

SB 786 passed the Senate Commerce Committee and the Senate Finance Committee on Tuesday.

The North Carolina Geological Survey has estimated that technically recoverable gas exists in the state’s Sanford sub-basin (including Lee, Chatham and Moore counties in central North Carolina) and possibly the Dan River sub-basin (including Stokes and Rockingham counties in northern North Carolina).