The North Carolina state Senate this week passed legislation that would end the state’s moratorium on shale gas drilling, opening the door for new energy development that supporters say could bring thousands of new jobs and billions of dollars to the state.
The measure, which is likely to pass the Senate in a final vote Thursday, would lift the moratorium on drilling by July 1, 2015, and would allow the state Department of Environment and Natural Resources to issue permits to energy companies that want to explore the state for oil and gas.
A top state House aide said he expected the House to pass it before the shortened election-year session ends on July 1.
Republicans who back the measure point to more than 100 rules the state Mining and Energy Commission has drafted over the last two years governing energy exploration. The bill would allow the state to begin issuing exploration licenses even before those rules are finalized.
With the appropriate safeguards in place, Republicans say, the upsides for North Carolina’s economy are too large to ignore.
“If we have deposits [of shale gas], and it appears we do from the geology, and you look at what’s occurred in other states, the opportunity is to create a whole new jobs sector in North Carolina,” state Senate President Phil Berger (R) said in an interview. “We should be in a position to enable the industry to come in, in a safe way, and if there’s something there to be found and there’s something there to be extracted, then North Carolinians will be able to benefit.”
Bill supporters highlight groundwater testing provisions they say will be the strictest in the nation. After the bill passes, water within half a mile of well sites will be tested before and after drilling for quality and pollution.
But environmentalists say the legislature is reneging on a pledge it made in 2012 to allow the Mining and Energy Commission to establish a regulatory framework for horizontal drilling and hydraulic fracturing. Dustin Chicurel-Bayard, a spokesman for North Carolina’s chapter of the Sierra Club, said the legislature should vote on whether to allow hydraulic fracturing after the commission’s rules are finalized.
Legislative Republicans promised a full vote after overriding then-Gov. Bev Perdue’s (D) veto of legislation that set the current process in motion. That override was controversial: It passed after state Rep. Becky Carney (D) accidentally cast the deciding vote for the veto override. North Carolina legislative rules allow lawmakers to change their vote unless making the change alters the outcome of the vote.
Environmentalists are also irate over a provision that allows the Department of Environment and Natural Resources to treat leaks of fracking trade secrets as a criminal act. The department has to keep the information on file for emergency responders, but the Sierra Club said the fact that leakers can be charged with a crime would work to intimidate whistle-blowers.
New fracking technology has been a boon to other oil- and gas-rich states, which have experienced explosive growth in severance and income tax revenues in the last decade. States like North Dakota, Wyoming and Montana have seen their energy sectors boom, and their tax revenues skyrocket, as technology improves.
Geologists don’t know for certain how much oil and natural gas lies buried below North Carolina. State geologists estimated in 2012 that the Triassic basins, which cover a little over 1,200 square miles of land, could have as much as 2 trillion cubic feet of natural gas, less than 1 percent of the 273 trillion cubic feet of proven gas reserves in the U.S.
But energy companies are eager to explore anyway, and the state is interested in the jobs and revenue they would bring.
“I think it would be a mistake for anybody to tout the benefits in terms of X number of jobs, X amount of additional revenue for the state,” Berger said. “But I do think the promise is there, and the expectation is it would be a net positive for the state.”