The North Carolina Governor has signed the 2014 Energy Modernization Act, which lifts a 2012 ban on hydraulic fracturing in the state.
On June 4, 2014, North Carolina Governor Pat McCrory signed the Energy Modernization Act of 2014 (SB 786) into law, allowing oil and gas extraction using hydraulic fracturing and horizontal drilling methods. The legislation lifts a 2012 moratorium on hydraulic fracturing and requires adoption of hydraulic fracturing regulations by January 1, 2015, facilitating drilling permit issuance in early 2015.
SB 786 includes additional protections for landowners, establishes severance tax for oil and gas activities, and addresses local zoning and state law relationships, among others. It creates the North Carolina Oil and Gas Commission and reconstitutes the North Carolina Mining Commission. Further, the legislation makes it a misdemeanor to unlawfully disclose confidential information regarding hydraulic fracturing chemicals, allowing for civil action and injunction by the information owner.
In June 2012, North Carolina Senate and House approved the Clean Energy and Economic Security Act (SB 820), which would legalize hydraulic fracturing, requiring regulators to formulate regulations and environment-related provisions by October 2014 based on Mining and Energy Commission (MEC) findings. In July 2012, Governor Beverly Purdue vetoed the legislation stating that SB 820 did not adequately protect the environment; the legislature overrode the veto paving the way for hydraulic fracturing in future shale development. Subsequently, in July 2013, the Domestic Energy Jobs Act (SB 76) was passed, preventing permit issuance for oil and gas activities involving hydraulic fracturing until all relevant rules are adopted and requiring MEC to report findings by April 2015.
North Carolina Deep River Basin (USGS)
A June 2012 U.S. Geological Survey (USGS) assessment of undiscovered oil and gas resources in the five East Coast Mesozoic basin shows that Deep River Basin in central North Carolina contains up to 1,660 billion cubic feet of gas and 83 million barrels of natural gas liquids. Based on the state’s 2010 average daily natural gas consumption of 811 million cubic feet, the North Carolina Department of Environment and Natural Resources projected the USGS resource estimate to meet the state’s natural gas demand for 5.6 years.
Originally Published on June 10, 2014
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