Senate hits gusher with quick approval of drilling bill

Senate Bill 786 passed a second reading of the full Senate by a 33-13 vote. A final vote is expected Thursday before the bill moves to the House.

Under the legislation, the state Mining and Energy Commission would have an extra three months – until Jan. 1 – to adopt regulations for drilling, but it also grants exemptions from the state's normal approval process for such rules. That would allow the Department of Environment and Natural Resources to start issuing drilling permits by July 2015.

Sen. Bob Rucho, R-Mecklenburg, said gas companies need to have that date certain to plan their investments and activities, and he and co-sponsor Sen. Buck Newton, R-Wilson, dismissed Democrats' calls for more time to ensure that drilling, especially hydraulic fracturing, will be done safely in North Carolina.

Often called "fracking," hydraulic fracturing involves horizontal drilling into deposits of shale and then pumping a high-pressure mix of chemicals, water and sand into the well to break up the rock and release trapped natural gas. Environmentalists argue that the process has contaminated water supplies elsewhere.

"We don't need a drop-dead date," said Sen. Floyd McKissick, D-Durham. "If it takes an extra year to get it right, we ought to take that time."

"It's time for us to move forward. It's time for us to move beyond talk," Newton said, noting that DENR has examined the potential for fracking in North Carolina for five years.

The GOP majority easily beat back several Democratic amendments, including proposals that would provide for more local control over fracking, restrict forced pooling and eliminate any criminal charges for revealing the chemicals used by drillers.

"Local people need to have a voice in the process," said Sen. Gene McLaurin, D-Richmond, noting they have no control over health or safety issues under the existing bill.

Newton said North Carolina needs a uniform system to attract drillers, not a "patchwork of local zoning."

Forced pooling allows drilling companies to extract gas from someone's land without permission if a majority of surrounding landowners approve it. The bill calls for more study of the issue.

Sen. Mike Woodard, D-Durham, said a study of pooling is a "pretty thin" response to a property rights issue that concerns many. Rucho noted it's already legal in North Carolina, and further study would alert lawmakers to any needed changes.

Under the bill, the chemicals used by drilling companies in fracking would remain confidential, although drillers would have to submit the list to the state so first responders could access it in an emergency. Absent an emergency, any disclosure of the chemicals would be a felony offense.

Sen. Josh Stein, D-Wake, questioned why criminal charges would be pursued in such cases, saying exposing trade secrets is usually a civil matter. People have a right to know what chemicals are being used in nearby wells, just like they can read the ingredients of their food on the side of a box.

Sen. Ben Clark, D-Cumberland, was able to win Republican support for an amendment calling for more water monitoring near gas wells. He refuted Rucho's claim that North Carolina would have the strictest drilling rules in the country, noting that Illinois calls for more tests of nearby groundwater and mandates that they be performed by independent testing firms.

"We owe it to the citizens to test more frequently," Clark said.

In the end, Democrats put up little fight to the bill, which has been on a fast track since the General Assembly convened a week ago and which supporters framed as an economic development issue.

"This is a continuation of the process to make North Carolina energy independent and diversify our economy," Rucho said.

A U.S. Geological Survey study in 2012 noted, however, that natural gas reserves in North Carolina would meet the state's demands for less than six years before being exhausted.

"North Carolina needs the jobs, and America needs the energy," Newton said. "I'd like to see new millionaires in Lee County than more gazillionaires in Saudi Arabia."

Gov. Pat McCrory is reviewing various provisions in the bill but is by and large encouraged by it, spokesman Josh Ellis said.

"Harnessing our state’s onshore and offshore energy resources to create jobs in an environmentally responsible manner is a major legislative priority for the governor," Ellis said in an email. "We are still considering the implications of several provisions regarding governance and the potential impact on city and county governments. We will work with the Senate and the House to ensure that the final bill protects the environment and promotes responsible exploration of our energy and mineral resources.”