Lee County at epicenter of NC's gas drilling
Posted May 19, 2014
Updated June 6, 2014
Sanford, N.C. — For almost two centuries, miners dug coal out of the hills of Lee and Chatham counties.
It was dangerous work. Scores of workers died in explosions, the most horrific in 1925 when three rapid explosions tore through a tunnel and killed 53 miners.
In each case, workers unwittingly ignited coal dust or methane, the primary component of natural gas. The mine was abandoned in 1951 and sealed eight miles north of Sanford.
That gas trapped deep in the Sandhills – once a menace to coal miners – is what now promises to spark a new boom in energy development in North Carolina.
No one knows for sure how much natural gas and other minerals lie hidden in the 150-mile Deep River shale basin of central North Carolina.
But what is certain is that Lee County will be at the center of this new industry, which has transformed other rural communities across the U.S. with sudden wealth from landowner royalties, new jobs and millions in new revenue for local governments.
Yet with those promises of economic revival come risks. And even some in Lee County who stand to reap the most from drilling fear the consequences of gambling with uncertain odds.
Fractured North CarolinaThis is the second part of a six-day series on gas drilling and hydraulic fracturing, which could begin in North Carolina as early as next spring. Follow the complete series at fayobserver.com/fracking, and tell us what you think by email to firstname.lastname@example.org or by calling 910-486-3565.
Lee County is not that different from other American communities where fracking has allowed gas companies to tap previously unattainable minerals. In many ways, it is similar to Bradford County, Pennsylvania, where 2,000 wells have been drilled since 2008.
Some farmers there have received $5,000 to $100,000 or more per month in royalties from gas companies. The tax base has soared by $100 million over the past four years, and unemployment fell below the national average.
A 2012 study of a region of gas production in Arkansas found that sales tax receipts rose 20 percent over five years, which was four times the state average. The study also noted the average pay in the gas field: $74,555 in 2010, or twice the state average.
It's easy to see why the prospect of that kind of wealth appeals to many in mostly blue-collar Lee County, a farming and industrial community of 60,000 people.
Wages have been stagnant over the past five years. Manufacturing remains the county's biggest sector, providing paychecks to 5,700 people, but those jobs have declined by 20 percent since before the recession.
Unemployment is above 8 percent and has been higher than the state average for a few years.
"Yeah, I wouldn't mind the extra money," said Worth Pickard, an 85-year-old retired water well-driller.
He signed a lease in 2010 to allow gas drilling on his 50 acres west of Sanford. He has gone to anti-drilling meetings and heard from the critics. "I don't think they realize what they are talking about," Pickard said.
Another drilling advocate is Russ Patterson, who lives atop shale gas off U.S. 421 north of Sanford.
"For the money," he said. "Why else?"
Patterson, 68, is chief geologist of Patterson Exploration Services, a Sanford-based business that explores for rock, sand and gravel used in construction materials. In his office, Patterson has a copy of Texas Monthly's "Oil Boom" cover story and a bumper sticker pinned to a wood-paneled wall that says: "If you think coal is ugly, wait until you see poverty."
Fracking approved in 2012
The Republican-controlled General Assembly, which also sees economic promise in gas, intends to allow drilling in the state. It approved fracking in 2012 but placed a moratorium on well permits until the state updates its mining regulations, a process that is nearing completion.
The 14-member Mining and Energy Commission has drafted the rules, which lawmakers may approve by early next year. In the legislature's "short" session that began last week, lawmakers may adopt several fracking-related rules as part of a broad energy bill.
State regulators estimate five wells will be developed by 2015, probably in Lee County, then 15 wells by 2016.
By 2017, gas companies could be fracking 55 wells in the state.
For each well, 3 million to 6 million gallons of water are trucked to the site. Regulators estimate drilling each well and building its concrete and metal casing, then fracking gas, could require as many as 1,200 truck trips.
A 2012 report by the state Department of Environment and Natural Resources predicted the gas industry would directly employ as many at 39 people in the first year of well development, 169 in the second year and 229 in the third year.
Drilling would sustain jobs in other fields, too, such as restaurants and hotels - as many as 350 jobs in the first three years.
"With natural gas exploration comes a lot of things," said Charles Taylor, a Sanford city councilman who sits on the Mining and Energy Commission. "You'll see a shift in wages and more customers at restaurants."
That would especially benefit Sanford, with its red-brick downtown and a commercial strip that is home to nearly all the county's retailers and businesses, including its five hotels. About 1 in 5 workers in the county are employed in food services, lodging, retail and entertainment - the types of businesses that would see a boost from gas workers and extra cash in people's pockets.
Taylor said drilling would help the city of 30,000 residents fix roads and meet other expenses. Last fall, Sanford residents voted to allow the city to borrow $14.5 million for sidewalks, streets, parks and greenways, even though it will likely mean a tax increase.
And the county government has had to dip into its savings for the past several years to make up for revenue losses and avoid raising taxes. Last year, the county cut spending and trimmed payrolls in social services, youth services and environmental health.
"I think it's a good potential economic boost for our county," Charlie Parks, chairman of the county Board of Commissioners, said of drilling. "If we've got resources in the ground, why are we paying millions of dollars to a Middle East country that wants to kill us, and not take advantage of our resources?"
For all the debate over fracking since 2009, when state officials began talking about shale in Lee County, some residents in Sanford still are not clear about what's coming.
"Would it mess the earth up?" asked James Johnson, a 51-year-old fence builder who stopped at Yarborough's Homemade Ice Cream & Grill downtown for lunch. "If it would do that, I don't want it to come down here."
Zeke Judd, a 43-year-old custodian and maintenance worker for Central Carolina Community College, expressed skepticism while getting a trim at Headen Barber Shop on West Main Street, a strip of old brick storefronts across from a warehouse-like church.
"I think there are other ways to find resources," Judd said. "They don't have to do that fracking stuff for natural gas. I mean, science is coming up every day with other alternatives for gas and stuff."
At another Sanford barbershop, Wayne Womble says many of his customers have not taken a strong stance on drilling.
"All they tell you is they want clean water. That's about the biggest thing they'll say," Womble said, sweeping up hair at the shop a block from where two railroad lines cross through town.
He said he doesn't know much about fracking. But public officials need to make sure drilling is safe, he said.
"You try to do something without water, and you see what you've got," Womble said.
It's the kind of fears that advocates try to assuage.
Jim Womack, a Lee County commissioner who is chairman of the state Mining and Energy Commission, says fracking is safe and has been unfairly maligned. State officials could do more to correct misperceptions, he said.
"This industry in particular has gotten more urban legends, more rumors that are so easy to disprove, but we make no attempt to do it," said Womack.
Fracking wells has not caused earthquakes, he said, but states have recorded seismic activity where operators are allowed to dispose of fracking wastewater into injection wells in deep caverns. North Carolina does not allow injection wells, and the mining commission fought off an attempt by the Senate to change the law last year.
He and others also say North Carolina will have standards for well casings to protect ground water closer to the surface.
In Lee County, nearly 85 percent of homes and businesses have access to Sanford's treated drinking water, which comes from the Cape Fear River. Some county residents have wells for irrigation or livestock.
Just outside the city, the debate focuses less on the potential for jobs and more on the land.
About 3,300 acres have been leased to gas companies. But other rural landowners are holding out, for now. They worry about potential contamination by spills, leaks or mishaps at drilling sites, which would be concentrated west of Sanford.
This month, a billboard advertising "Keep NC Frack Free" went up with the help of local donations along U.S. 1 south of Sanford. Anti-fracking signs appear in yards.
Some people say it is a bad idea to bring up the issue with neighbors or customers. They treat fracking like politics or religion.
Julie King-McDaniel avoids the debate with her regulars at JR Moore & Son, a general store about 11 miles north of Sanford in a crossroads community called Gulf.
"Because they know it's very divisive," she said. "People are really for it or they are really against it."
To her, drilling would bring new business to the little store that has sold groceries, overalls and hats since 1935. Gas workers will need fire-retardant clothing, steel-toed boots and tools, King-McDaniel said. Some wholesalers have already contacted her.
In much of the northwestern part of the county, where drilling would start first, farmers raise beef cattle and chickens and grow timber. Some smaller farms sell tomatoes and strawberries. The bucolic landscape also has attracted retirees and entrepreneurs who want to promote agri-tourism, and the county has marketed itself as part of the thriving Triangle region.
Vince and Jeanne Rhea picked Lee County when they retired in Raleigh in 2010. They wanted a small community and first scouted Arkansas. But they decided not to move there because that state has fracking, the Rheas said.
The couple instead bought a $280,000 house on 3.5 acres southwest of Sanford. At the time, they were unaware that Lee County has natural gas.
Vince Rhea, a 66-year-old retired civil engineer, said he has seen mostly negative coverage of fracking. He believes it would benefit only a few.
"But not the little people," Rhea said. "The little people are going to get screwed."
Staff writer Andrew Barksdale can be reached at email@example.com or 486-3565.