North Carolina lawmakers are ready to capitalize on what some are calling the “natural gas boom.” A bill lifting the state’s moratorium on fracking — a method for releasing natural gas that environmentalists feel is controversial — passed the state Senate by a landslide recently and is making its way through the House.
If Senate Bill 76 becomes law, the state could start issuing “fracking” permits to drilling companies as early as March 2015. The Department of Environment and Natural Resources is expected to finalize rules and regulations for the practice in October 2014.
Fracking — or hydraulic fracturing — involves drilling an L-shaped well thousands of feet beneath the earth’s surface and blasting a mixture of water, sand, and chemicals into it to create fractures in shale rock formations to release the natural gas trapped inside. The method was invented in 1947, but it wasn’t until 1998 that advancements in the technology made the extraction of shale gas economical.
Pointing to success stories in Texas and North Dakota, Republican lawmakers argue North Carolina can no longer afford to miss out on what they see as an opportunity to turn the state economy around. The bill sets severance taxes on the gas lower than any other state in order to attract the industry.
“It’s estimated there is 42 trillion cubic feet of natural gas in North Carolina,” Sen. Buck Newton said in a floor debate Feb. 27.
Releasing the vast amounts of gas believed to be trapped thousands of feet below North Carolina’s soil, the Republican from Wilson County said, could reignite the state’s stagnant economy and put thousands of people back to work.
Newton said if legislators had welcomed fracking six or seven years ago, the state might not have felt the effects of the national recession so strongly — it might not have had a $2.5 billion debt to the federal government for unemployment insurance or 9 percent unemployment last year.
He pointed to an article in the Houston Chronicle about how shale gas had turned the once-impoverished Karnes County into a gold mine. Landowners there raked in $70 million in royalties in the month of November alone. Newton said he could imagine a similar outcome for Lee County, which, along with Moore and Chatham counties, has been targeted for gas exploration.
Earlier that week, while the bill still was in committee, Republican lawmakers cited a 2.6 percent unemployment rate in North Dakota, which they attributed to increased fracking activity in the state.
“That’s a laudable figure,” said Democratic Sen. Mike Woodard of Durham. “But we didn’t hear the other side of the coin. As people move in to North Dakota to accept those jobs, they’re bringing families with them. A lot of the families are living in trailers, and the rural school districts are crowded. In Durham we’re tired of trailers for our schoolchildren.”
In addition to overcrowded schools, Woodard listed anticipated damage to rural roads, decreased farm production, decreased property values, and orphaned wells as downsides to the economic benefits of fracking.
Senate Democratic Leader Martin Nesbitt of Buncombe County expressed concern about water pollution and property rights. He said North Carolina’s unique geological formations could make the state’s water tables more prone to leaching.
“If we pollute the aquifers, we’ll have a desert in four or five counties in this state,” he said.
Nesbitt also chided Republicans for accepting a plan to “pool” mineral rights, which basically means a landowner who doesn’t want to sell the rights to the gas under his land, who is surrounded by landowners who do, could be forced to.
“That certainly goes against what the other side of the aisle thinks about condemning people’s property, but what I happen to think about it, too,” he said. “It’s kind of tough to tell people, ‘We’re pumping your gas out, and we’ll let you know what you’re going to get for it.’”
Sen. Floyd McKissick, D-Durham, said he didn’t want wells becoming long-term storage facilities for the wastewater associated with fracking.
Newton responded that “the safest way to dispose of it is to put it back down deep in the earth, thousands of feet below the water table. Otherwise, it’s got to go in wastewater treatment plants and streams and ponds and reservoirs.”
“There are more than 170,000 such wells across the U.S. already with really no problems,” he added.
Natural gas vs. ‘renewables’
Sen. Ellie Kinnaird, D-Orange, doubted the quantity of natural gas being stated by supporters as available in North Carolina, and said the state would do better to support “cleaner” sources of energy like solar and conservation and efficiency mandates.
“I’ve spoken with someone in the industry who’s actually very close to this, who says there’s very little gas in North Carolina and that because the price of gas is so low it’s very unlikely that industry will come and try to drill and mine and produce the natural gas here,” she said.
“If there were no gas under the ground, Sen. Kinnaird, they wouldn’t come looking for it,” argued Sen. Jerry Tillman, R-Randolph. “They know where the gas is. The market will dictate that. We believe in free markets, and that’s at play now, and the jobs are at play. We’re only 10 years behind on this, folks. If we listen to the naysayers, we’ll be another 10 years behind.”
Kinnaird went on to say that energy-efficiency measures could reduce North Carolina’s energy usage by 40 percent. “How much better to make all of our buildings energy-efficient than to drill and put all of this fracking fluid in the ground and have trucks tearing up everything?” she asked.
“I feel as though we are moving backwards,” Kinnaird said. “The solar industry in North Carolina is growing very rapidly. We have an industry we can support that doesn’t cause the damage to the environment. We should be nurturing that.”
She said the goal should be to “keep us from using energy in the first place. That’s the best and cheapest energy you can buy.”
Bill sponsor Sen. Andrew Brock, R-Davie, said Kinnaird’s idea of controlling costs through conservation and efficiency only is an “unrealistic approach to the modern world.”
“I have six power strips just to power my office,” he said. “Major industries are using a heck of a lot more power than that. You can only set the temperature down so low and turn off so many lights.”
“The anti-energy people are launching a great fear campaign,” Brock said.
No one is more concerned about making sure fracking is done cleanly and safely than members of the industry, he said, and that’s because it’ll come out of their pockets if they don’t.
He pointed to the fact that drillers are required to post three types of bonds to drill in the state — one to make sure they have adequate financial security so they don’t abandon the project halfway, one that goes to the state in case of an accident, and one that goes to the landowner in case there is any damage to his property.
The bottom line is “economic development follows low-cost energy,” Brock said. “If you’re anti-energy, you’re anti-jobs.”
Independent physicist and fellow at the American Tradition Institute John Droz told Carolina Journal in a recent interview that natural gas is “a known, valuable source of low-cost, reliable electricity.”
Sara Burrows is a contributor to Carolina Journal.