NC Passes Legislation To Allow Hydraulic Fracturing, Awaits Action By Governor

Last week, after months of speculation and study, the North Carolina General Assembly passed legislation to allow for the exploration and development of natural gas resources from shale rock formations through the process of hydraulic fracturing. Previously the state had operated under a law adopted more than six decades ago that prohibited horizontal drilling, which is a critical component of the hydraulic fracturing process.

JUNE 25, 2012

Senate Bill 820, the Clean Energy & Economic Security Act passed the North Carolina Senate last week by a vote of 29-19. The House of Representatives took up the Senate bill on June 14 and following hours of debate and proposed amendments passed the measure 66-43. On Thursday, the Senate concurred with the House version by a vote of 29-15. "Now the measure goes to Governor Beverly Perdue (D) to sign or veto the within ten days. At this point it is uncertain as to what the Governor will do. If the Governor takes no action the bill will become law.

Key Provisions of the Legislation

Removes existing statutory prohibitions on horizontal drilling. (GS 113-393) Creates a sub-commission under the Mining and Energy Commission to oversee the creation of a regulatory framework (15 members). (GS 143B-293.1) Directs the regulatory commission to develop rules and regulations for exploration, extraction and production of natural energy resources by October 1, 2014. Requires future General Assembly action, following the adoption of regulations before issuance of drilling permits. (GS 113-393) Includes strict safeguards for landowner and environmental protections. Creates new Joint Legislative Commission on Energy Policy for legislative oversight of the state's energy policy (10 members). (GS 120-285) Background

In 2011, the NC legislature directed the Department of...