Fracking Forges Ahead in North Carolina

Written By Brianna Panzica

Posted June 7, 2012

In recent years, hydraulic fracturing—fracking, as it’s more commonly known—has become the main method for natural gas extraction in the United States.

It’s the reason for the 100 years’ supply of natural gas, moving the U.S. toward energy independence.

But concerns surrounding its impact have kept the progress slower than some would hope. Numerous states have imposed moratoria or bans on the process as opponents and supporters go back and forth.

The process involves high pressure injections of water mixed with sand and chemicals into rock to release the natural gas trapped inside. Environmentalist concerns have made for many of the regulations now in place.

But this week, North Carolina started on the path toward natural gas extraction in its Deep River Basin when approval for fracking passed in both a Senate panel and the state Senate.

The Basin

The natural gas in the basin was discovered in 1998 when two vertical test wells showed its presence in an area stretching across the counties of Lee, Chatham and Moore.

Initial studies showed that there might be about 5 years worth of gas in the 92-square-mile region, allowing for a maximum of 368 wells.

On Wednesday, however, results from the U.S. Geological Survey reported slightly less gas content than initially thought. According to the report, roughly the same amount of gas, 5 and a half years’ worth, stretched across 150 miles.

But none of these analyses are completely certain. Trustworthy estimates can only be reached once drilling begins in these regions. As Senator Bob Rucho put it:

They only way you’ll ever know is by actually punching down some wells.”

Two Sides to Every Story

Senator Rucho led the push for approval, referring to the potential boost in state income and jobs fracking could bring and the breakaway from outside energy sources it could promote.

Opposition was led by Senator Josh Stein out of concerns for the environmental risks.

The bill approves fracking and paves the way for environmental and safety regulations, setting up a committee to focus specifically on these regulations. But Sen. Stein believes the regulations should come before approval:

This bill puts the cart before the horse. What’s the rush?”

Sen. Rucho disagrees:

Energy self-sufficiency is going to be critical to this state in terms of economic growth. If we do what Senator Stein says, delay with more studies, then we’ll probably be ready when I’m 90.”

Supporters brought up the economic benefits for the counties and state. Since no drilling has begun in North Carolina, all kinds of gas-related infrastructure would require construction, including pipelines and storage facilities among other things.

Drilling would also create jobs. Williston, North Dakota, the location of the Bakken Shale formation, has an unemployment rate near 1% thanks to drilling.

But opponents cite the environmental concerns that have been heard since fracking began. The impact on drinking water is unclear, and in some areas small earthquakes are suspected to have been caused by fracking.

And the job creation that proponents use in their favor could also be a problem. Williston, North Dakota may have a low unemployment rate, but it has also become a boomtown, with nowhere to house the workers and high traffic concentrations from trucks.

The bill passed in North Carolina’s Senate Commerce Committee on Tuesday in a small, standing-room-only hall. On Wednesday, the state Senate approved it in a 29-19 vote. It will now move on to the House of Representatives, where approval is expected.

The Provisions

Drilling will not begin for at least two years until regulations and safety precautions can be worked out and approved.

The bill will create a Mining & Energy Commission, which will have 9 voting members and 5 non-voting members. The Commission will be in charge of the regulations prior to and during drilling.

Of the 9 voting members, seven will be representatives from the mining and oil and gas exploration industries, and two will be environmental and health representatives. The five additional positions will include the state geologist, the assistant secretary of energy, and other appointees.

The bill removed a previous provision that would prevent town and county governments from imposing local bans and regulations. It also called for a ban on drilling in coastal sounds and the Atlantic Ocean.

State agencies will be required to have regulations together by October 1, 2014.

Proponents are interested in having mostly local companies involved in the gas extraction, and right now it seems unlikely any majors will attempt to partake in the small region.

Angel Publishing Investor Club Discord - Chat Now

Hydrogen Fuel Cells: The Downfall of Tesla?

Lithium has been the front-runner in the battery technology market for years, but that is all coming to an end. Elon Musk is against them, but Jeff Bezos is investing heavily in them. Hydrogen Fuel Cells will turn the battery market upside down and we've discovered a tiny company that is going to make it happen...

Sign up to receive your free report. After signing up, you'll begin receiving the Energy and Capital e-letter daily.