North Carolina Enacts Hydraulic Fracturing Law Over Governor's Veto

Culminating a whirlwind 36 hours, the North Carolina legislature has voted to override Governor Beverly Purdue's veto of Senate Bill 820, the Clean Energy & Economic Security Act, and pave the way for hydraulic fracturing and future shale gas development in North Carolina. In another key development, the speaker of the House of Representatives and Senate president pro tempore have made their appointments to the newly reconstituted Mining and Energy Commission, which will develop the new modern regulatory framework for oil and gas development in the state.

Veto Overridden by General Assembly

On Sunday, July 1, Governor Perdue vetoed the legislation, asserting in her Veto Statement general support for shale gas as part of a comprehensive mix of energy sources, but finding that Senate Bill 820 did not adequately protect the environment.

Legislative action to override the governor's veto requires a two-thirds majority vote in both chambers of the General Assembly. On Monday, July 2, the North Carolina Senate voted 29 to 13 to override the governor's veto. The Senate vote was soon followed by a late evening 72 to 47 vote in the House of Representatives that concurred in the veto override and enacted Session Law 2012-143 into law, effective August 1, 2012.

Click here to read news account of override.

Click here to view statements of gubernatorial candidates Pat McCrory (R) and Walter Dalton (D) on governor's veto.

Key Provisions of SL 2012-143 Impacting Shale Gas Development

As described in a recent McGuireWoods Consulting bulletin on the legislature's passage of Senate Bill 820, the Clean Energy and Economic Security Act has the following key provisions:

Removes existing statutory prohibitions on horizontal drilling. (G.S. 113-393) Reconstitutes the current Mining Commission as the Mining and Energy Commission as well as re-forms the Department of Environment and Natural Resources' Division of Land Resources into the Division of Energy, Mineral, and Land Resources. (G.S. 143B-293.1) Directs the Mining and Energy Commission to develop rules and regulations for...