Republicans Reach Agreement on Fracking Legislation

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Laura White blogs for the Record about all things fracking in North Carolina. Have a specific question you want us to address? Email or Tweet @lewhite.

It seems Representative Mitch Gillespie and Senator Bob Rucho have come to mutual terms on Senate Bill 820, the Clean Energy and Economic Security Act. This agreement comes in the form of a fairly in-depth revision that was unveiled at the Senate Commerce Committee Meeting Thursday morning.

The bill was not voted on, and discussion of the proposed changes to the legislation will resume next week when the committee meets again. But that means, if things proceed smoothly, the bill could be on the Senate floor by next week.

The changes to SB 820 will also be proposed in the House next week, according to Rucho, where the bill is currently working its way through the Environment Committee as HB 1054, with Gillespie as one of the sponsors.

The most notable difference between this latest version of the bill and the initial proposal is that, while horizontal drilling would still become immediately legal, there is no longer a set time frame on when the moratorium for drilling would be lifted. In this latest version, the General Assembly would instead have to vote to allow the issuance of drilling permits once legislators felt the proper regulations had been established.

And while Rucho admits that these pieces of legislation are working their way quickly through the General Assembly, he remains committed to his reasons for pushing the issue: job-production, energy self-reliance and economic benefits for North Carolina.

“What makes the industry come here is if there is a way of doing business. This opens the door, makes it legal, allows us to do the rules and regulatory requirements before we even determine how much natural gas is here,” Rucho said. “It’s moving fast to implement what we believe is a great framework based on DENR report on shale gas production, and what we hope to do is let the commission, who are the experts, determine how to best implement that report.”

The “commission” refers to the regulatory board that Rucho’s bill would establish, formerly called the Oil and Gas Board, but now re-worked as the North Carolina Mining and Energy Commission. This combines the gas industry-related need for regulation with the already existing Mining Commission, nestling the board within the Department of Natural Resources.

The board is made up of 14 people, 5 of whom would be non voting members. Of the members who are able to vote, 7 out of 9 of them would be industry-affiliated appointments. And while the commission would be within DENR, DENR would have no say over the decisions made by the board regarding those shale gas regulations.

This concerned some senators, including Senator Josh Stein, the Democratic representative for Wake County, especially in regards to this commission having preemptive authority over local governments — a provision this revised bill also specifically ensures.

“I’m very concerned that we are handing to a board that I think … I think was designed to have industry control, we’re handing over all the rules and regulations, all the protections which the Department of Environment and Natural Resources said we need, we’re handing it to this commission,” Stein said. “If we want to have protections that we have confidence in, it should be done by an agency and not by a commission that by its very nature is going to be interested in fracking.”

Other important changes to the bill include the legalization of injection wells for the disposal of fracking fluid, a controversial mehtod of disposal that some believe causes earthquakes in other states, most recently and notably in Ohio.

It does introduce some important regulations that were not present before, however, like the establishment of minimum royalty payments, required lease terms, required pre- and post-drilling testing of water supplies 5,000 feet from a well head, and presumptive liability and compensation for water contamination and other damages.

Our next post will dive deeper into this legislation, and pull out the rest of the revised Senate Bill 820 Need-to-Knows.

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