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Last week, after months of speculation and study, the North
Carolina General Assembly passed legislation to allow for the
exploration and development of natural gas resources from shale
rock formations through the process of hydraulic fracturing.
Previously the state had operated under a law adopted more than six
decades ago that prohibited horizontal drilling, which is a
critical component of the hydraulic fracturing process.
JUNE 25, 2012
Senate Bill 820, the Clean Energy &
Economic Security Act passed the North Carolina Senate last
week by a vote of 29-19. The House of Representatives took up the
Senate bill on June 14 and following hours of debate and proposed
amendments passed the measure 66-43. On Thursday, the Senate
concurred with the House version by a vote of 29-15. "Now the
measure goes to Governor Beverly Perdue (D) to sign or veto the
within ten days. At this point it is uncertain as to what the
Governor will do. If the Governor takes no action the bill will
become law.
Key Provisions of the Legislation
Removes existing statutory prohibitions on horizontal drilling.
(GS 113-393)
Creates a sub-commission under the Mining and Energy Commission
to oversee the creation of a regulatory framework (15 members).
(GS 143B-293.1)
Directs the regulatory commission to develop rules and
regulations for exploration, extraction and production of natural
energy resources by October 1, 2014.
Requires future General Assembly action, following the adoption
of regulations before issuance of drilling permits. (GS
113-393)
Includes strict safeguards for landowner and environmental
protections.
Creates new Joint Legislative Commission on Energy Policy for
legislative oversight of the state's energy policy (10
members). (GS 120-285)
Background
In 2011, the NC legislature directed the Department of Natural
Resources (DENR) to study hydraulic fracturing in the state,
including environmental and economic impacts. The DENR study released in May 2012 includes agency
research of other state regulation on the process of hydraulic
fracturing, as well as comment accepted during three public
hearings.
Among its key findings, the DENR study concluded that the
development of natural gas from shale rock could be done in North
Carolina with appropriate environmental safeguards and consumer
protections.
Earlier this month the U.S. Geological Survey (USGS) issued an
assessment of undiscovered natural gas deposits across a large part
of the Eastern United States. The USGS report, "estimates the mean
undiscovered natural gas resources in the Deep River Basin in North
Carolina to be 1,660 billion cubic feet of gas and 83 million
barrels of natural gas liquids.
McGuireWoods Consulting has provided state government relations
and grassroots services to advance this legislation through the NC
legislature. This has included educating key stakeholders,
political leaders, and constituent groups to advocate on behalf of
energy independence, economic growth, and job creation brought by
development of natural gas found in shale rock.
Click here to read the API News Release on NC Senate
action.
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