Category Archives: Uncategorized

Workshop for landowners scheduled in Sanford, Dec. 14th

Just passing notice of this workshop for concerned landowners scheduled for December 14th at the McSwain Center in Sanford. The workshop is being organized by RAFI and the Southern Environmental Law Center. Click the link below for the official flyer for more information.

RAFI & SELC Landowner workshop flyer

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Sanford/Lee County talk of fracking impacts

I noticed this little piece in the Sanford Herald a couple weeks ago in which MEC Chair/Lee County Commissioner Jim Womack spoke to a Chamber of Commerce luncheon focused on public policy. I want to tease out a few parts of this, and include some letters to the editor int he same newspaper discussing what was said at that event and related concerns about fracking development in the region (and let me say kudos to those who took the time to write and submit those comments).

By November or December, seismic testing trucks known as “thumpers” will be seen around Lee County, Womack said. Preliminary drilling for core samples could begin by next spring or summer…

I borrow from what my good friend at Golder Associates told me about thumpers, enhanced by the description Seamus McGraw included in his book, these are devices that shoot a pulse into the ground and measures the sound waves of its echo(s). The different strata of rock will reflect the sound waves differently, allowing geologists to better delineate how deep and thick those strata are. These should not too invasive as firms may regularly use these to find groundwater. The preliminary drilling should enhance knowledge of the strata as well, not only on depth, thickness, and orientation of the rock formations, but also allow analysis on the porosity and chemistry of those formations. Remember I talked about the estimate on the amount of natural gas ‘trapped’ in the Cumnock Formation by the geologist at Clemson University, which he did via a “back of the envelope” calculation based on the dimension of the formation? Getting the details on porosity and chemistry will refine that estimate, and though those test wells themselves may be a minor nuisance, it is a valuable step to help clarify how much gas we really have, and how feasible it will be to extract it. Perhaps a good analogy is getting a biopsy. I don’t know if it is reassuring or not about the timing of the exploratory wells: DENR Assistant Secretary Mitch Gillespie predicted back in March that such wells would be drilled in late 2013.

Keely Wood, a Lee County horse farm owner and fracking opponent, said five Texas towns have been left without water in the wake of natural gas drilling. She asked how Lee or Chatham counties would fare any different, and Womack responded that the N.C. Department of Environment and Natural Resources did a study and found that in just half a day, enough gallons flow through the Deep River to provide for all the water local drilling operations would ever need.

Based on the formula that DENR used to calculate water supply, which I am paraphrasing from the 2012 Shale Gas Report, I believe the Deep River does have sufficient flow to supply water to fracking operations. The calculation is something like 20% flow during the lowest recorded 7-day period of flow. As we should remember too well, the drought of 2007 was beyond severe, and we have good record of that flow. If flow in the Deep River during that drought met these minimum standards, than there is sufficient water supply to support this industrial use. The supply of raw water for fracking does not concern me the way that storage, treatment, and disposal of “return” or “produced” water does – and clearly, others are concerned enough to voice it.

I am glad Keely Wood submitted a full letter to the editor after this luncheon to express items not fully addressed there – the comments, though relatively few, show how polarized our society has become, particularly how individuals gloss over nuance and go straight to categorizing individuals at end points of the spectrum. This is a void of leadership – and I must say, in my observation of Jim Womack during MEC and study group meetings, I say he has been very level-handed. But somebody needs to step in between to say that supporting an initiative should not be done by knocking down those with an opposing perspective.

A similar letter begs the question of how widespread the “riches” of fracking will be, and I couldn’t but think on that a bit more this morning. His insights deserve an explanation of how the fees and taxation of fracking will benefit Lee County as a whole. I thought on the back-of-the-envelope calculations (cited above) ranging from potentially $200 million to $5 billion: when comparing that estimate against the DENR projection of 378 wells in the Triassic Basin, that ranges from $530,000 to $13.2 million per well. Remember that the development of a well is approximately $3 million. Of course, each well would have different results, some bringing up much more than average resources, while others bring much less.

“I think you’ll see our median family income go up 50 percent,” he said. “I think you’ll see that instead of the highest unemployment rate in central Carolina, we’ll have the lowest.”

Given what we know of the situation in Lee County: the inequal holdings of mineral rights, the number of property owners bound to unfavorable lease agreements, the relatively short duration for drilling development (all 378 wells in 8 years), and the lesser period of time for high labor demands (not to mention the question of qualified local workforce for this industry), the community deserves a thorough explanation on how development of natural gas extraction will boost median family income and how unemployment will fall.

BT

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Compulsory Pooling Study Group to discuss draft report, Aug 28

Note that the Compulsory Pooling Study Group will meet this Wednesday in Raleigh to discuss the draft report. The agenda is posted online and has a link to the draft report. Apologies for the lack of activity on here – not due to a lack of interest, but for being swamped with other pressing items.

-BT

SB 76, the compromised version, heads to the Governor

The compromised version of SB 76, aka the Fracking Bill, passed its final votes and now heads to the Governor. Here’s the write up from WRAL.com on the contents of the bill:

The final compromise version of Senate Bill 76 is far more modest than the original measure, which would have allowed fracking to move ahead March 1, 2015, without an additional vote by state lawmakers.

That provision is absent from the final measure, which reinstates the original requirement for legislative approval of the rules for fracking before permits can be issued and drilling can begin.

The Senate version also abolished the “landmen registry” for agents handling mineral rights leases for landowners, while the House version put the registry back in. In the final version, the state Mining and Energy Commission is directed to study the concept.

The final version still allows the secretary of the state Department of Environment and Natural Resources to replace the state geologist on the Mining and Energy Commission with another designee of his or her choice. It also removes requirements that commission appointees from the Environmental Resources Commission and Commission for Public Health have respective expertise in water and air resources and waste management.

it also still creates an Energy Policy Council and puts new emphasis on offshore oil and gas exploration.

The compromise, which was closer to the House’s version of the bill overall, won approval in the House with little debate Monday by a vote of 70-40.

The Senate followed suit Tuesday, albeit with less enthusiasm.

“We did the best we could,” said Sen. Buck Newton, R-Wilson, the bill’s original Senate sponsor. “The House didn’t want to go along with some of the improvements we wanted to make.

“It’s a small step forward. It’s not quite as far as we wanted to go, but it’s the best we could do.”

No one spoke against the measure in the Senate. The vote was 37-11.

Taking away local rule-making authority

Proposed bill to prohibit local governments from setting restrictions that exceed state or federal regulations passed the Senate Commerce Committee this morning, and will apply to the Mining and Energy Commission if passed into law.

technology working backwards

A terrible bill, SB 612, to repeal local rules and restrictions that exceed state and federal standards passed in the Senate Commerce Committee this morning. This bill represents the repeal of home rule, something the state has prided itself on. Planning and zoning authority provided to local governments give those locations valuable tools to control the type of growth and redevelopment that fits into their long term master plans. Repealing these efforts of local governments to build the community their leaders envision is just plain backwards. The bill stinks of greedy developers upset they cannot build in a floodplain.

Environmental rollback heads for Senate vote

What really bugs me is the worn-out mantra from sponsors of these short-sighted bills that they want to make the state more “business friendly.” Last I knew, the state was ranked in the top 3 business friendly states in the country, and that we…

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NC Attorney General’s office issues report on fracking

The NC Attorney General’s office has released its recommendations for landowner and consumer protection regarding the development of hydraulic fracturing in North Carolina. Here is the press release:

AG’s Office issues consumer protection report on fracking

Release date: 5/2/2012

More legal protections needed if NC pursues oil and gas exploration
Raleigh: Landowners and homebuyers need additional legal protections if North Carolina is to pursue fracking, according to a report issued  by Attorney General Roy Cooper’s Office.
Cooper’s Consumer Protection Division studied legal and consumer protection issues relevant to shale gas extraction and the leasing process, including impacts on landowners, ownership of oil and gas rights, and existing legal protections. The report issued Tuesday recommends several legislative changes to strengthen protections and identifies areas needing further study.
“Property owners need to be protected if North Carolina is going to move forward with fracking,” Cooper said. “Consumers who are considering leasing their land for gas exploration need to be aware of the risks, and they also deserve to have critical legal protections in place.”
The General Assembly is currently considering whether or not to allow fracking, or hydraulic fracturing, in North Carolina. Fracking is a method of extracting natural gas from underground rock formations.
Issues for consumers
The report outlines a number of issues that landowners need to consider before they agree to sell or lease their mineral rights and allow fracking to occur on their land. Entering into an oil and gas lease may violate the terms of the landowner’s mortgage and make it difficult to refinance. Some lenders will not issue loans on properties where the mineral rights have been leased or sold.
Oil and gas exploration can also damage land, homes, crops and water supply, damages for which the landowner may not be fully compensated.
In addition, the report describes the practices of “landmen” who often use high-pressure tactics to try to get landowners to enter into leases to allow oil and gas exploration on their property. Landowners may not get all the information they need before entering into a lease and may be rushed to make a decision.
Consumers who are buying real estate need protections, too, the report found.  Most property owners in North Carolina own both the surface land and the minerals underneath, but in split estates, the mineral rights can belong to someone other than the landowner. The report finds that current law does not specifically require a seller to disclose, at the time of a purchase offer, that the mineral rights are not included.  If another party owns the mineral rights, that gives them access to the property and could also decrease its value. Cooper recently issued a consumer alert on this topic.
 
Recommendations
In the report, Cooper’s office recommends that legislators enact a number of additional protections for consumers, including:
  • Written disclosures for consumers and approval by mortgage lender
Notice should include that the lease may adversely impact their mortgage and their ability to refinance, that they should take sufficient time to review and understand the lease, and that oil and gas extraction will likely disrupt and possibly damage their land, among other disclosures. The oil and gas company should also be required to notify the mortgage lender and obtain their approval.
  • Mandatory cooling off period for landowners who sign a lease.
To combat high-pressure sales tactics, landowners should get 30 days to cancel their lease without penalty if they decide to cancel after further examination. Notice of the cancellation period should be prominently disclosed in the lease.
  • Registration of landmen or lease brokers. 
Landmen or others who solicit leases should be required to provide basic information about their employment or agency status to the landowner, and should be required to register with the NC Department of Environment and Natural Resources or the NC Secretary of State’s Office.
  • Encourage prompt payment to landowners
Require initial payments to landowners for oil and gas leases to be made within 30 days, or landowners can cancel.
  • Better legal protection for landowners.
Oil and gas well operators should be required to reasonably accommodate landowners’ use of the land, give them as least 30 days notice if the surface will be disturbed, and offer landowners reasonable compensation.
  • Expanded compensation for damages to land, water.
Require oil and gas well operators to compensate landowners for all damages, including taking out a bond to cover potential damages. Provide greater protection for landowners against water contamination or decreased water supply, restore the surface, and protect landowners against claims related to the operator’s activities.
 
  • Notification for property buyers if mineral rights aren’t included.
If the mineral rights aren’t included in the property for sale, the seller should be required to provide prominent written disclosure no later than the time the buyer makes an offer to purchase.
  • Better records and notification of lease transfers
Require all oil and gas leases to be recorded with the register of deeds in the county where the property is located, within 30 days of the date of the lease’s execution, and require landowners to be given written notice when a lease is transferred or assigned to another party.
In preparing the report, Consumer Protection attorneys attended public hearings and met with stakeholders and experts, including from NC DENR and the Rural Advancement Foundation International.

The complete report is available at www.ncdoj.gov.

The NC DENR Shale Gas Study Final Report

The final report is available for download (albeit still without the section from the Dept. of Justice). Here is the press release: 

State Environmental Agency Issues Final Report on Hydraulic Fracturing

 

RALEIGH – Hydraulic fracturing can be done safely in North Carolina only if the General Assembly adopts state-specific regulatory standards and invests sufficient resources in compliance and enforcement prior to issuance of any permits for the practice, according to a report issued today by the N.C. Department of Environment and Natural Resources. The report also notes the need for additional research on North Carolina’s geology and hydrogeology to identify conditions under which hydraulic fracturing can be done without putting the state’s water resources at risk.

 

The report issues the department’s findings following an eight-month study of the potential environmental, social and economic impacts of shale gas exploration and development in North Carolina. This study was directed by Session Law 2011-276, which required DENR to study the issue of oil and gas exploration in the state and to specifically focus on the use of horizontal drilling and hydraulic fracturing to extract shale gas. DENR issued a draft report in March and held three public meetings to receive comment on the draft; written comments were accepted through April 2. The final report to the General Assembly is due May 1.

 

After reviewing other studies and experiences in oil and gas-producing states, DENR concludes that information available to date suggests that hydraulic fracturing can be done safely as long as the right protections are in place. Hydraulic fracturing can only be done safely in North Carolina if the state adopts regulatory standards specifically adapted to conditions in North Carolina and invests sufficient resources in compliance and enforcement. Those protective measures should be in place before the state changes statutes and rules that currently prohibit horizontal drilling and hydraulic fracturing.

 

As part of the report, DENR developed a set of initial recommendations in consultation with the Department of Commerce in the event the General Assembly acts to allow horizontal drilling and hydraulic fracturing in North Carolina. The recommendations, which have been revised from the draft report in March based on public comment, include:

  • Provide funding for any continued work on the development of a state regulatory program for the natural gas industry.
  • Address the distribution of revenues from oil and gas excise taxes and fees to support the oil and gas regulatory program, fund environmental initiatives and support local governments impacted by the industry.
  • Collect baseline environmental quality data including groundwater, surface water and air quality information.
  • Require oil and gas operators to operate in compliance with a DENR-approved Water and Wastewater Management Plan, which should place limits on water withdrawals and prohibit withdrawals during times of drought and periods of low flows.
  • Develop a state stormwater regulatory program for oil and gas drilling sites.
  • Require full disclosure of hydraulic fracturing chemicals and constituents to regulatory agencies and to local government emergency response officials prior to drilling. The state should encourage the industry to fully disclose the same information to the public and require public disclosure of hydraulic fracturing chemicals and constituents with the exception of trade secrets already protected under state law.
  • Prohibit the use of diesel fuel in hydraulic fracturing fluids.
  • Develop specific transportation, storage and disposal standards for management of oil and gas wastes.
  • Develop a modern oil and gas regulatory program, taking into consideration the processes involved in hydraulic fracturing and horizontal drilling technologies, and long-term prevention of physical or economic waste in developing oil and gas resources.
  • Enhance existing oil and gas well construction standards to address the additional pressures of horizontal drilling and hydraulic fracturing.
  • Develop setback requirements and identify areas (such as floodplains) where oil and gas exploration and production activities should be prohibited.
  • Close the gaps in regulatory authority over the siting, construction and operation of gathering pipelines.
  • Identify a source of funding for repair of roads damaged by truck traffic and heavy equipment.
  • Keep the environmental permitting program for oil and gas activities in DENR where it will benefit from the expertise of state geological staff and the ability to coordinate air, land and water permitting.
  • Improve data management capabilities and develop an e-permitting program that is easily accessible by the public.
  • Ensure that state agencies, local first responders and industry are prepared to respond to a well blowout, chemical spill or other emergency.
  • Clarify the extent of local government regulatory authority over oil and gas exploration and production activities.
  • Address the natural gas industry’s liability for environmental contamination caused by exploration and development, particularly for groundwater contamination.
  • Provide additional opportunities for public participation in the development of detailed standards to govern gas exploration and development.
  • Complete additional research on:
    • closed-loop systems and the potential for prohibiting open wastewater pits;
    • the ability of the air toxics program to protect landowners who lease their land for natural gas extraction and production activities;
    • air emissions from hydraulic fracturing operations;
    • the shale gas resource; and
    • groundwater resources in the Triassic basins.

These recommendations do not take into account information from the N.C. Department of Justice’s section of the report on consumer protection, because DENR had not received that section of the report in time for preparation of the recommendations and final report. For information on consumer protection related to shale gas exploration and production, please contact Noelle Talley at NCDOJ at 919-716-6484.

 

DENR’s report can be found online on a website created to provide an overview of the shale gas issue; describe current regulations associated with shale gas exploration; and provide the study results. This website can be found by visiting DENR’s home page – www.ncdenr.gov – and clicking on the “Shale Gas” tab near the center of the page.