Wednesday, May 21, 2014

NC SB786 short version factsheets


S786 ignores the most important risks fracking poses to North Carolina
As approved by Senate Commerce and Finance, S786, Energy Modernization Act, breaks the promise

made by the General Assembly in 2012: that the legislature would review the finished package of

rules before voting whether to allow issuance of fracking permits in North Carolina. Instead, the bill

authorizes issuance of permits starting July 2015 [§3].
S786 does not address the risks that matter most
Fracking threatens public health, communities, and the environment. Yet, S786 does NOT address:
Compulsory pooling. The bill punts on the question of whether North Carolina should allow

drillers to extract gas from unwilling landowners [§25]. It should explicitly prohibit this.
Wastewater disposal. There is no safe way to dispose of the millions of gallons of contaminated

fracking wastewater. The bill does not prohibit surface discharge or require new standards.
Air emissions. SL2012-143(S820) instructed state regulators to develop rules to control air toxic

emissions from fracking. They haven’t. This has been a major problem in other states.
Long term contamination. Nothing in state law, the bill, or proposed state rules provides a

remedy for people whose health or property are destroyed by long-term contamination that

comes to light well after a drilling operation has finished.
Oversight of gathering lines. The lines that move gas from wells to processing facilities are

poorly regulated, and their construction may threaten property rights. The bill punts on this

issue, requesting further study without putting in place protections for landowners or the

environment [§26].

Other missing safeguards include: presumptive liability for damage to private property from seismic

testing [§15 leaves the burden on the injured landowner]; requirements for state regulators to be onsite

during the critical phases of gas well development; any requirement for a water withdrawal permit;

authority for state regulators to levy bonds adequate to pay for well closure; and certification criteria for

gas well contractors and cementers [§16 exempts oil and gas contractors from the current certification

for water well contractors, but does not place them under another authority].
S786 weakens several key protections while adding a few others
These provisions are nominally positive:
Trade secrets. S786 requires the Department of Environment & Natural Resources (DENR)

to keep ‘trade secret’ information (such as: what is in fracking fluid) so it will be available to

emergency responders [§8]. However, the provision establishes a harsh penalty for mistaken

release of the information, doesn’t require that it be held long term, and allows too much

information about local geology to be kept secret. Finally, citizens of North Carolina would like

to know the complete list of chemicals contained in fracking fluid used in their neighborhoods,

and the bill does not go that far.
Bad actor screen. S786 tells DENR to examine the compliance history of fracking permit

applicants, and allows the agency to deny a permit on that basis [§15].
Prohibition on injection of fracking wastewater. S786 reiterates a prohibition already in state

law on the injection of fracking wastewater into the ground [§15].

These provisions take a step backwards:
Weakened protection for groundwater wells. S786 slashes the zone in which drillers are

presumed to be liable for drinking well contamination from 5,000 feet to 2,640 feet (1/2 mile), a

72% reduction in the protected area [§13].
Constraints on local governments. S786 places even tighter constraints on local efforts to

protect residents than the original legislation in 2012 [§14]. That includes assigning the MEC,

rather than a neutral state court, to decide when a local ordinance goes too far.
Exemptions from rulemaking. S786 overrides the normal rulemaking process, shortening the

time legislators will have to review the final package of fracking rules [§2]. As the MEC prepares

to propose more than 120 distinct rules, and continues to discover serious gaps in its proposed

framework, there is no good reason to shorten legislative review.
S786 promises a lot of pie in the sky
Finally, the bill wastes time and money on wishful thinking.

In addition to complicated and speculative severance tax provisions, the bill calls for studies of whether

to site a liquid natural gas export terminal on the coast [§22] and whether to launch a curriculum to

train drilling industry workers at Central Carolina Community College[§24]. Neither of these proposals

makes much economic sense, given the small scale of North Carolina’s resource.

The state has already spent significant resources in pursuit of fracking, with no jobs to show for it

(beyond state government staff hired to write the new rules). If the legislature had spent a fraction of

these resources renewable energy and efficiency, we would already be seeing the payoff in jobs and

income for North Carolinians. It is not too late to redirect future resources to policies and programs that

will actually offer a positive return to the state economy.
For more information, please contact:
Grady McCallie, NC Conservation Network, 919-857-4699 x101

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