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Monday, June 10, 2013

Things that make you go hmmmmm:Part II

Things that make you go hmmmmm:Part II

Good morning to all of you. There is so much material from last week's Mining and Energy Commission (MEC) meetings that  if  I were to try and combine all of the interesting comments and conversations into one post, it would be exceedingly lengthy. To that end, I am breaking it up into several; the chemical disclosure controversy was already reported. Today's post is on the direction the MEC seems to be heading in rule development.

Keywords: Excessive. Red flag. Accelerating. Industry. Industry. Industry.Oh-and Industry.

In 2012, the North Carolina General Assembly passed legislation (S820) that legalized fracking in North Carolina. That legislation directs the operator to test all water supplies within 5000 feet of a wellhead.

Session Law 2012-143, SB820 reads:

"Pre-Drilling Testing of Water Supplies. – Any lease of oil or gas rights or any other conveyance of any kind separating rights to oil or gas from the freehold estate of surface property shall include a clause that requires the oil or gas developer or operator to conduct a test of all water supplies within 5,000 feet from a wellhead that is part of the oil or gas developer's or operator's activities at least 30 days prior to initial drilling activities and at least two follow-up tests within a 24-month period after production has commenced."

At the June 7 meeting of the North Carolina Mining and Energy meeting there was much discussion on what should be included in the required baseline water testing. Some Commissioners expressed care and concern that the comprehensive testing could be "onerous" for Industry (translate expensive). Some of the remarks:

George Howard (GH): "[We might have to] turn another knob, either a shorter reach, or reduce [the] constituents tested for." Howard then mentioned that testing requirements which were too comprehensive would be a "red flag to industry."

Charles Holbrook (CH): "Some of the rules we are developing are excessive compared to other states." Holbrook remarked that the MEC should be vetting the draft rules with industry, and that there should be more formal outreach.

Dr. Ken Taylor (KT): "The Legislature said 5000 feet, the Legislature said ALL [emphasis mine]. The legislation (S820) set it in stone."

CH: "Laws can be changed."

Chairman Jim Womack remarked later that the MEC may have to go to the General Assembly with recommendations, to get needed statutory authority, or other issues.

Hmmmmm. The MEC can't ask for statutory authority in relation to trade secrets or chemical disclosure, but can ask for laws  that established certain baseline testingto be changed? Commissioner Holbrook, don't think you need worry about Industry vetting the rules. I think they already have.

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