North Carolina Edges Closer to Safe, Responsible Fracking

Mark Green
Posted August 20, 2014

North Carolina is about to join America’s energy revolution. This week the state’s Mining and Energy Commissions (MEC) conducted the first of four scheduled public hearings on proposed hydraulic fracturing regulations, the final adoption of which could allow fracking as early as next spring.

The MEC hearings mark the close of a two-year process to lift a 2012 moratorium on hydraulic fracturing in North Carolina. The presence of vast shale reserves and the marriage of safe, responsible hydraulic fracturing and horizontal drilling launched the U.S. energy revolution – with stunning results. The U.S. is now the world’s leading natural gas producer and could become No. 1 in oil output next year, according to the International Energy Agency – generating thousands of new jobs and boosting the national economy.

While North Carolina doesn’t have energy-bearing shale deposits as large as those in Texas, North Dakota, Pennsylvania and other states, it has enough to create jobs and help its economy. The first MEC hearing in Raleigh attracted a mix of the usual anti-fossil fuel crowd, as well as those with more constructive suggestions on the state’s proposed rules to protect the public, workers and the environment. The N.C. Energy Forum’s Algernon Cash applauded the approach of state regulators, noting that “North Carolina can expand energy development in a way that protects and preserves our communities.”

David McGowan, North Carolina Petroleum Council executive director, also spoke at the hearing and commended the MEC for diligence in developing “rigorous” regulations to govern oil and natural gas development:

“We believe these proposed rules establish the basis of a modern regulatory program that appropriately incorporates the components necessary to permit safe, responsible exploration and production of the state’s onshore oil and natural gas resources.”

McGowan said effective regulations must evolve as technology, science and processes improve. He called for “strong, knowledgeable and fair enforcement” when the rules go into effect. Before the MEC’s Sept. 30 comments deadline, he said, the petroleum council will offer recommendations on specific aspects of the rules including well construction standards, setback distances, casing and equipment requirements and blowout prevention requirements. McGowan:

“In addition, we will also offer suggested improvements to terms of reference and definitions, proposed variance procedures, exploration and production waste management plan requirements and well permit application procedures. All of these recommendations have been developed by incorporating industry standards promulgated by the American Petroleum Institute, regulations from other producing states, best management practices and the significant technical and operational expertise of our members.”

Oil and natural gas development already is making positive contributions to North Carolina’s economy. According to a PwC study, the state was among the top 15 in the country in total employment impact in 2011 with 146,100 direct and indirect jobs supported by oil and natural gas operations, $6.7 billion in labor income and $12.4 billion in value added – consisting of employee compensation, proprietors' income, income to capital owners from property, and indirect business taxes (including excise taxes, property taxes, fees, licenses, and sales taxes paid by businesses. All of these numbers could increase once hydraulic fracturing begins in the state.