Fracking bill would set fees
Posted February 13, 2013
Raleigh, N.C. — The Senate Finance Committee gave its approval Wednesday to a bill that would allow the state to start issuing permits for natural gas drilling in March 2015.
The measure, Senate Bill 76, will next go to the Senate Commerce Committee. Members of the finance group only examined parts of the bill dealing with taxes and fees.
"Our country needs the energy, and North Carolina needs the jobs," said Sen. Buck Newton, R-Johnston, the bill sponsor.
During the 2011-12 legislative session, the General Assembly set up a Mining and Energy Commission to set rules for drilling. In particular, the group will set rules for "fracking," the colloquial name given to the process of horizontal drilling and the use of a high-pressure mix of chemicals and water to break apart underground shale deposits to release natural gas. But that earlier bill kept a moratorium on such drilling in place.
This latest bill authorizes the state to issue fracking permits and sets a sliding scale for the taxes to be collected on any natural gas produced. The higher the prices companies get for their products, the more the state will charge in taxes.
During a public comment period, Elizabeth Ouzts, the state director for Environment North Carolina, said the state shouldn't set fees for drilling before it knew the potential environmental costs.
"It's difficult for this body to know whether this severance tax is sufficient," she said.
It would be better, Ouzts said, to wait for the Mining and Energy Commission to report on cleanup costs and other potential problems before setting the rates companies might be asked to pay.