North Carolina Shale opens up for fracking

Welcome to North Carolina sign
Source: DollarPhotoClub

With low oil and gas prices and falling rig counts in most U.S. shale plays, this might not be the best time for opening up new frontiers in shale development.

However, that’s exactly what happened this month in North Carolina. The state – which has seen some coal production in the past but is virtually a stranger to oil and gas exploration – has introduced a bill that might see shale companies fracking the land in as little as 90 days.

On March 16, North Carolina Gov. Pat McCrory signed new hydraulic fracturing rules which will allow companies to apply for fracking permits – effectively ending North Carolina’s fracking moratorium, in force since 2012.

The new regulations are designed to fast-track permission process. Thanks to the new laws, approving new shale exploration projects  by the state Mining and Energy Commission could take as little as 61 days. Also, the bill makes regulating air pollution associated with the drilling required only if the N.C. Environmental Management Commission deems the state and federal air toxics program inadequate to protect public health.

The North Carolina supporters of shale exploration welcomed the new bill, hoping it will boost the state’s economy.

“This is just an opportunity for North Carolina to get into the game of energy development and to do it in a safe and responsible way,” said David McGowan, North Carolina Petroleum Council (NCPC) executive director.

Rep. Buck Newton, Wilson County, told TWC News that shale exploration will bring to North Carolina “thousands of jobs, millions of dollars of investment, tax revenues and cheap energy. And cheap energy leads to other jobs,” .

Not everybody, however, shares his enthusiasm. Opponents of the new law are concerned that it was passed too quickly and without introducing necessary provisions to protect the environment. With such a short timeline many ask if appropriate safeguards will be in place for particular sites.

It is not only the rushed process between application and production that worries people. According to North Carolina laws, the contents of fracking fluid will remain a trade secret, which the companies may – voluntarily – disclose, but can not be compelled to do so. This is contrary to the global tendency towards greater transparency in shale operations.

Another contentious point is the fact that – while exploration companies are not exactly poor – according to the Institute for Southern Studies, the state Senate’s proposed budget includes $1.2 million to help companies with drilling and analysis. The Jacksonville Daily News reports that Governor McCrory’s budget includes $500,000 to drill three test wells in Lee County. This, on top of $550,000 in fracking incentives, approved last year.

Ultimately, nobody’s sure if there’s anything to be arguing about. Seven years ago, the North Carolina Geological Survey published evidence of natural gas trapped in the state’s Triassic-era shale rock formations. However, as no exploration wells have been drilled yet, these deposits remain unconfirmed.

Experts are doubtful whether the lifting of the moratorium will result in a shale boom in a state which has no history of oil-and-gas drilling, and no infrastructure of pipelines to move the fuel to market. Despite that, the North Carolina lawmakers remain optimistic. According to a report to the legislature submitted by the N.C. Mining and Energy Commission in February, the adoption of fracking rules will end a major uncertainty, potentially clearing the way for the state’s first application for a drilling permit.

“I genuinely believe a horizontal well will get started this year,” said James Womack, the lead author of a report.

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