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Tuesday, May 10, 2011

Drill bill: SB 709 passes, focuses on oil and gas

Posted by on Tue, May 10, 2011 at 7:13 PM

Call it by its proper name, the Energy Jobs Act; call it the Drilling Bill, call it birdcage liner, but Senate Bill 709 passed the Senate Tuesday 38-12.

The bill now goes to the House.

Its passage marks a significant shift in state lawmakers’ attitudes toward energy and mirrors a national push by conservatives to ramp up fossil fuel production in lieu of renewable energy, conservation and efficiency.

As Sam Pearsall, a senior scientist with the Environmental Defense Fund, put it, “It has a pro-industry slant so steep that I can’t climb it.”

It was just four years ago when North Carolina became the first state in the Southeast to pass a Renewable Portfolio Standard. While imperfect, the REPS nonetheless requires investor-owned utilities to generate or provide 12.5 percent of their power from renewable energy or energy efficiency by 2020.

Now, with Republicans at the helm, the Legislature’s focus de-emphasizes clean energy in favor of fossil fuels. Although there are some obligatory references to renewable energy in SB 709, those sources are explicitly downplayed in favor of gas, and implicitly, oil.

The pro-oil and gas stance is underscored in SB 709, “the Energy Jobs Act,” which, like two other bills, calls for the N.C. Department of Environment and Natural Resources to conduct a fracking study. The measure also reconfigures the Energy Policy Council to be more fossil-fuel friendly and reverses the state’s long-time reluctance to allow oil and gas exploration and drilling in federal waters off the coast.

That reluctance is justified: Few eyesores could kill state tourism faster than a belching refinery in Wilmington or Manteo. Few disasters could harm the state’s sensitive coastal wildlife and fish habitats more than an oil spill.

State lawmakers are gambling that accidents like Deepwater Horizon are rare. But as Doug Rader, the chief oceans scientist at the Environmental Defense Fund, told the Indy shortly after the gulf disaster, “North Carolina shouldn’t assume an accident couldn’t happen here.”

There were several misstatements during the Senate’s floor debate Tuesday afternoon. At least one senator remarked that the drilling and exploration would focus on natural gas and conveniently omitted references to oil. But current laws don’t limit exploration to one specific fuel. If a drilling company finds oil offshore in its leasing block, it is entitled to retrieve it.

Republican Sen. Bob Rucho of Mecklenburg County and one of the bill’s primary sponsors, claimed that North Carolina needs to drill because high gasoline prices are raising food and transportation costs. But energy experts, including those with the Bush administration have said that activity would not affect gas prices for another 20 years.

Bill supporters are also counting on the federal government to change royalty laws in order for North Carolina to reap the estimated $500 million in annual revenues lawmakers say we would receive. Currently, federal law limits such revenue sharing to the Gulf states and Alaska.

The bill will be a hard sell to Gov. Bev Perdue, who in 2008 said she was “100 percent opposed to offshore drilling.” Her administration has focused on clean energy, yet SB 709 requests that Perdue join a compact with other states “to develop and implement a strategy to increase exploration and production of offshore oil and gas.”

“North Carolina will be at the table determining how the products would be removed from the ground and utilized for our energy needs,” said Rucho from the Senate floor. He added that the state needs to replace the loss of several major industries, including tobacco. “Another industry should be brought forward and there’s nothing better than the energy industry.”

Environmental groups counter that the clean energy industry is a more sustainable and equitable way to create jobs.“One concern I have is there is no focus on these green industries that could support economies across the state,” said Kristen Coracini, an energy policy specialist with the Environmental Defense Fund. “Fracking and offshore drilling is limited to parts of the state.”

SB 709 opens the door to onshore fossil fuel exploration, specifically, fracking, which comes with a long list of environmental perils.

Democratic Sen. Doug Berger, who represents Vance and Granville counties, voted against the bill, citing a recent Duke University study that found high levels of methane in drinking water wells near fracking sites in Pennsylvania.

Bill co-sponsor Sen. Harry Brown, who represents Jones and Onslow counties near the coast, said he supports the bill and has no concerns about safety. “We have a lot of safeguards in this bill with council we’ve created to make sure we don’t have problems,” he said.

What appears to be merely a matter of a name change—rechristening the Energy Policy Council to Energy Jobs Council—underscores the majority’s intent to redirect the state’s focus.

The membership is reduced from 16 to 12; only two positions would specialize in renewable energy. An environmental management slot was created on the council, but as Molly Diggins, state director of the N.C. chapter of the Sierra Club pointed out, “environmental management” generally translates to “industry consultant.”

“There’s no one with a role that would ensure environmental protection is taken into consideration,” Diggins said. “Or whose job it is to evaluate environmental impacts.”

The Senate vote happened at an auspicious time for fans of fossil fuels. Just last week, the U.S. House resurrected three bills that would promote offshore drilling. House Bill 1230, the “Restarting American Offshore Leasing Now Act,” sponsored by Doc Hastings, a Republican from Washington state, would open areas that are currently closed to offshore drilling—including waters off the Virginia coast.

Days later, U.S. Sen. Richard Burr of North Carolina proposed merging the Department of Energy with the Environmental Protection Agency, all but neutering the already weak EPA of its power.

If both state and federal measures should become law—a long shot—they could work in tandem to open the state and region to drilling as if it were the new wild west.

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