Chances are good that fracking bill will pass

A Senate commerce committee gave its approval Tuesday morning of a reworked Senate Bill 820 crafted by Senate and House Republicans that opens the controversial legislation up for speedy votes in the full chambers.

The bill, which is expected to pass in both the House and Senate, authorizes fracking in the state. It would require further legislative approval for permitting after a state regulatory structure is built, according to the bill’s primary sponsor, Sen. Bob Rucho (R-Mecklenburg).

Rucho described the bill last week as a “very complicated piece of legislation that could have a great impact on the people of North Carolina.”

Its revision adds consumer protections, including a 12.5 percent minimum royalty payment for landowners and pre-drilling well testing. It also requires developers to assume responsibility for water contamination within 5,000 feet of a well pad or to prove that drilling is not responsible for the pollution.

In a statement Tuesday, N.C. Attorney General Roy Cooper credited the bill with new consumer protections but called for additional steps, including a 30-day window for cancellation of a drilling lease and landowner compensation for loss in real estate value and property damage.

Fracking skeptics pointed to numerous reports in other states of environmental problems—including water and air pollution, spills and increased seismic activity—as reasons to oppose the bill. Critics also lashed out at provisions that would grant regulatory powers to an appointed mining commission.

Seven of nine voting members on Rucho’s mining commission would be representatives of the drilling industry or have experience working within the industry, while two voting slots will be assigned to environmental conservationists.

On Tuesday, Environment North Carolina Director Elizabeth Ouzts called Rucho’s latest measure a “terrible bill.”

“It tasks an incredibly industry-friendly commission with crafting the rules to essentially govern itself,” Ouzts said. “We’ve seen in other states that no other states have been able to allow fracking without water pollution or air pollution.”

To get to the heart of fracking country, leave Raleigh, where irascible state lawmakers shaping energy policy meet in committee rooms stuffed with lobbyists and reporters.

If this policy becomes law, it would open North Carolina to hydraulic fracturing, controversial drilling otherwise known as “fracking” that is key to tapping underground shale rock-encased coffers of natural gas.

Head southwest to prime drilling country in the Lee County seat of Sanford, once regaled as “Brick City” for its tireless brick production in decades past. That was then, this is now.

When the American economy began its grueling downward spiral nearly four years ago, Sanford suffered. Once a city heavily reliant on industry, its factories shed workers or closed altogether, driving the jobless rate into the double digits. In April, the county’s relentlessly sour unemployment figure hovered at 11.4 percent, several percentage points above its neighbors to the north, even as local business leaders promise better times are ahead.

If happier times are en route, some Lee County leaders and state lawmakers say they will be delivered by fracking, a technique touted by advocates as clean, efficient andmost importanteconomically robust. And despite widespread reports of environmental damage from fracking in other states, the economic message is resonating here.

No hard data exists on the jobs fracking would create in North Carolina, but at a raucous March public hearing convened in Sanford by the N.C. Department of Environment and Natural Resources (DENR), scores of boisterous residents wore T-shirts proclaiming “Shale Yes!” Others held a banner that read, quite simply, “We need jobs!”

Sanford Area Chamber of Commerce President Bob Joyce has called fracking a potential “game-changer” for this recession-battered city, comparing it to railroad construction in the 1870s.

But the excitement could be premature. There is no firm data on the number of permanent, well-paying fracking jobs that would go to local workers. Sen. Bob Rucho, the Mecklenburg County dentist spearheading the fracking charge, has declined to offer estimates, but nonetheless he promises drilling would help to power a retooled North Carolina economy for the next half-century.

“It’s an energy source that will allow our businesses to be competitive,” Rucho said. “And it will provide a reliable source of energy for people.”

Job estimates by the N.C. Department of Commerce are also vague. The numbers were bundled into a final fracking report this spring by DENR that frequently alluded to the struggles of forecasting economic impacts based on an unknown supply of natural gas.

Meanwhile, North Carolina is not viewed as a likely drilling destination, according to a December study by economics firm IHS Global Insight.

Last month, Kenneth Taylor, assistant state geologist with the N.C. Geological Survey, dubbed early estimates of North Carolina’s gas potential as “wildly optimistic” in The News & Observer. This week, Taylor told the Indy that he is waiting for a more thorough calculation of the state’s resources from the U.S. Geological Survey this year.

“We don’t know. Flat out, we don’t know,” Taylor said. “The key thing it comes down to is if someone says ‘We have better data than you’ve got,’ then show it to me.”

The DENR report projected drilling activities in the 59,000-acre Sanford sub-basin would sustain an annual average of 387 jobs over seven years, peaking with 858 jobs in year six. Commerce chiefs noted the drilling jobs are temporary, and the demand will dry up once the maximum number of wells has been drilled.

Pittsboro Mayor Randy Voller pointed out that Chatham County’s school system offers more jobs than the peak fracking job estimate. Will Morgan, director of government relations for North Carolina’s Sierra Club, said the job tally is less than impressive for a state badly in need of economic adrenaline.

“That’s nothing compared to the 14,800 jobs already sustained by renewable energy businesses in North Carolina,” Morgan said.

Environment North Carolina Director Elizabeth Ouzts said solar energy creates nine times as many jobs while producing the same amount of energy as coal and gas.

“If we’re really doing this for energy independence and jobs, there are many, many, many more things we could be doing for both our environment and our economy,” she said.

Furthermore, critics say the majority of the jobs would ultimately be filled by experienced drilling workers from outside North Carolina.

Jonathan Williams, assistant secretary of energy for the Department of Commerce, said his agency simply does not have enough data to make reliable employment predictions.

“Many of the skilled workers using the drilling technology are from out of state and would travel with the specialized equipment,” Williams said. “On the other hand, many jobs in site preparation and material transportation would be locally hired.”

Nevertheless, Williams said, evidence from other states suggests “some individuals and local economies” could reap an economic benefit.

State projections include both the immediate and secondary employment benefits of natural gas drilling. The bulk of the jobs would relate to gas drilling, although the report also counted modest gains for the food service industry and real estate establishments, as well as trade organizations, health practitioners, engineers, hospitals, lawyers, trucking companies and residential-care facilities.

The cash boons for a budget-strapped state are harder to pinpoint. The Department of Commerce estimated that just 36 percent of drilling investments would be spent in North Carolinameaning corporations would most likely spend their dollars in states already outfitted with a developed fossil fuel drilling industry.

Commerce officials say the state’s economic output would see an increase of roughly $453 million over the seven-year drilling cycle, although the report did not outline the local income in the works for job-starved communities like Sanford.

Meanwhile, the unknowns leave many fracking skeptics questioning whether the job boosts are worth the environmental headaches.

“The amount of them that will actually be here in the state are not guaranteed,” Ouzts said. “The bigger question is: Why are they putting everything at risk?”

This article appeared in print with the headline “Doing the fuzzy math.”