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Senate votes to legalize gas drilling in NC

Posted June 6, 2012 3:01 p.m. EDT
Updated June 7, 2012 7:56 a.m. EDT

— The state Senate voted along party lines Wednesday to allow a controversial form of natural gas drilling in North Carolina as soon as 2014.

After the 29-19 vote, the legislation was sent to the House, which is expected to make some changes. House Republicans have said they favor a more cautious approach to drilling.

Senate Bill 820 creates a state Mineral and Energy Commission that would devise the necessary regulatory framework to manage oil and gas exploration and development, including the drilling method known as hydraulic fracturing or "fracking."

The process involves drilling horizontally into underground deposits of shale rock and pumping the wells full of a high-pressure mix of water, chemicals and sand to break apart the shale and release trapped gas.

Environmentalists and residents in Piedmont counties are worried there aren't enough protections to prevent fracking from contaminating drinking water and creating pools of toxic wastewater that will be hard to clean.

Sen. Josh Stein, D-Wake, proposed an amendment that would delay legalized gas drilling until more study is done as to the safety of fracking. He and other Democrats said North Carolina's geology increases the risk of contamination and even small earthquakes from fracking.

"What is the rush?" Stein asked, noting that a glut of natural gas on the market has depressed market prices and that the state doesn't have as much natural gas reserves as earlier projected.

The U.S. Geological Survey released an estimate Tuesday that 1,660 billion cubic feet of gas and 83 million barrels of natural gas liquids are in the Deep River Basin under Chatham, Lee and Moore counties. State geologist Kenneth Taylor said that is enough to meet North Carolina's gas demand for more than 5½ years.

"That just reinforces the argument that there's no need to rush into this. We need to take our time and get the regulations," Will Morgan, director of government relations for the North Carolina chapter of the Sierra Club, said after the Senate vote.

Stein also called for reorganizing the proposed Mineral and Energy Commission to reduce the power of industry interests on the board, shorten the leases for drilling rights from 10 years to five years and raising the royalties that drilling companies would pay the state for the gas they extract.

Republican senators were indignant with Stein's proposal, calling it a do-nothing approach that doesn't help North Carolina.

"If we don't start now, 10 years from now, we'll be sitting here wishing we would have done something," said Sen. Jerry Tillman, R-Randolph.

Bill sponsor Sen. Bob Rucho said Stein wanted to relegate North Carolina to "second-tier economic status" by preventing the state from exploiting its energy reserves.

Rucho, R-Mecklenburg, said that lawmakers would have to approve the regulations drafted by the commission before the state could issue any permits for gas wells. Local governments also would be allowed some control over drilling activities, he said.

"We have a clean chalkboard, and we have the opportunity for this (Mineral and Energy) Commission to consider the best (drilling) practices from across the country," he said.

Stein's amendment was voted down, as was an amendment offered by Sen. Neal Hunt, R-Wake, to add to people to the nine-member commission to provide more local input.

Several consumer protections for landowners where drilling may occur were added last week, but Attorney General Roy Cooper said Tuesday that not all of his department's recommended protections were included. Those left out include requiring well operators to compensate landowners for all damages to their property, as well as giving landowners 30 days to get out of a signed oil or gas lease without penalty.

"We have to sometimes take chances. This country would not have been founded if we did not take some chances," said Sen. Brent Jackson, R-Sampson.