Sen. Rucho's fast track to fracking | North Carolina | Indy Week
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Sen. Rucho's fast track to fracking 

Sen. Bob Rucho, R-Mecklenburg (left); Rep. Mitch Gillespie, R-Burke, McDowell

Sen. Bob Rucho, R-Mecklenburg (left); Rep. Mitch Gillespie, R-Burke, McDowell

Somewhere in Mecklenburg County, miles from the believed natural gas trove beneath rural Chatham County and job-starved Sanford, is a dentist with drilling on the brain.

Bob Rucho, the six-term state senator with the Matthews dentistry practice, holds tremendous sway in Raleigh. In 2011, his fingerprints were all over Senate redistricting; he also authored a controversial drilling study bill savaged by environmentalists and Democrats, who viewed it as a Viking battle cry for advocates of hydraulic fracturing, best known as fracking.

And in 2012, Rucho is just as adamant about the need to open North Carolina to fracking within the next two years. His Republican House counterpart, McDowell County Rep. Mitch Gillespie, also thinks North Carolina could be drilling in a handful of years.

The swell of fracking support in Raleigh has put opponents ill at ease about the prospects of drill pads dotting the North Carolina landscape like ticks on a dog.

A drilling method pumping millions of gallons of a pressurized stew composed of water, sand and chemicals to crack shale deposits and guzzle their believed natural gas store, fracking is seen by advocates as a game-changer in a state besieged by billion-dollar budget deficits and stubbornly gloomy unemployment.

Rucho isn't shy about espousing its benefits, either. "Our energy plan is very critical in that retooled economy that will allow North Carolina to prosper for the next 50 years," Rucho says.

The drilling will bring jobs, he says, and its effects will ripple across the economy. The gas trapped in underground shale deposits in central North Carolina will offer a reliable source of energy for decades, backers argue, and its impacts will allow businesses to compete.

All of that is debatable, critics say. An N.C. Department of Environment and Natural Resources (DENR) draft report issued in March acknowledges the boom-and-bust cycle of drilling could top out at just more than 800 jobs statewide.

Rucho declined to offer specific numbers on the jobs he expects, although he argued the boost would be "significant."

"There's no question that we'd be diversifying our economy with this energy sector," he says.

Meantime, speculation about the extent of the shale gas resource is, as DENR notes, speculation. Estimations are based on a paltry few wells in central North Carolina with varying results.

Environmental advocates fear that nefarious, irresponsible gas hawks with leaky drill casings will inject more than just economic momentum into the state—also toxic chemicals below the earth and ultimately the groundwater.

Rucho doesn't believe it. "Do you recognize that shale gas exploration and production has been done for 30 years in this country?" Rucho says. "Do you also recognize that, over those 30 years, likely everything that could go wrong has gone wrong?"

The mistakes, according to Rucho, will be fodder for a stolid, burnished regulatory structure cherry-picked from states like Pennsylvania, Texas and Colorado where fracking, and its environmental consequences, have surged for years.

"We're very positive about moving forward on this," he says. "But in a very careful manner, to make sure when we do rules and regulations before the first well is drilled that we have the state of the art best practices in place. And that may take two years."

"This is a draft and is not ready for introduction," reads a header atop Rucho's proposed bill.

Perhaps not, but it has already received unanimous support from Rucho's Senate study panel, albeit with lukewarm interest from Gillespie.

Among its tenets, Rucho's draft bill would authorize fracking permitting on July 1, 2014. It would enlist a newly created Oil and Gas Board of appointees to regulate the industry. It would establish a joint legislative commission on energy policy. And it would order state and school offices to mass a fleet of natural gas-powered vehicles as a means to bolster the market demand.

Both chambers of the General Assembly and the governor would appoint the nine members of the Oil and Gas Board. The roster includes a geologist, a gas industry worker, an attorney with experience in mineral leasing, an environmental scientist, a landowner, an engineer, an economist and a handful of local government leaders.

However, officials say local governments would be hamstrung if the bill passes, despite Rucho's assertions that municipalities and counties will have their say in the process. The draft specifies that local ordinances aimed at blocking the drilling will ultimately be invalid.

In Pittsboro, stakes are high for a town ripe for drilling if fracking is legalized. Town Mayor Randy Voller calls the Rucho bill's local provisions "disappointing."

"This is unfortunate," Voller says. "Because folks who support local control and local options, at least when they run for office, when the opportunity comes to do it, they take it away."

Voller says municipalities will face a number of questions about fracking impacts, not the least of which being the expected road wear from hundreds of heavy gas company trucks streaming in and out of drilling sites daily.

"Given the direct and indirect effects of the hydraulic fracturing process will be visited on residents and tenants, they should be given a lot more say in how the industry is handled," he says.

Agreed, says Joe Hackney, the Orange County lawmaker now presiding over a diminished minority of Democrats in the state House. "Local governments have a legitimate place in the regulatory scheme that gets adopted," he says. "And I think it's not wise to leave them out."

Hackney went on to chide the Rucho draft as a "full-speed ahead bill."

"I think North Carolina folks in my area really aren't ready to move in that direction and certainly not that quickly," he added.

Rucho's Oil and Gas Board, according to Hackney, is "stacked" with industry insiders.

"If your starting place is, as the case would stand to Rucho, that we need to get going on this and do it as soon as possible and brush aside the concerns that have been expressed by [DENR] and the citizens, if that is your mindset, it makes sense," Hackney says. "But if that's not your mindset, it doesn't make much sense."

Will Morgan, spokesman for the North Carolina chapter of the Sierra Club, described Rucho's Oil and Gas Board as little more than a puppet for gas industry fatcats.

"They would get to make up the rules for their own industry, which doesn't make a lot of sense," Morgan says. "It's kind of like the fox guarding the henhouse."

Meanwhile, there's an uneasy truce between Rucho's draft and the plans of Gillespie, a seven-term lawmaker who issued a bipartisan-backed study bill last year ordering a now culminating DENR study.

Gillespie is measured when he talks about Rucho, never criticizing him, but offering alternatives to the senator's bill.

Gillespie says it could be a "heavy lift" to expect the state to be ready for fracking by 2014. Instead, his plan would eschew legislative pressure of a "ticking clock" deadline of July 2014, but would push to ready rules and regulations for the industry over the next two years.

"A ticking clock means you've got to get it done by that date," Gillespie says. "And if you don't get it done by that date and the legislature doesn't extend that date, then the natural gas extraction could take place on that date and potentially not have all the regulations you need in place."

Gillespie also takes issue with rulemaking powers of the proposed Oil and Gas Board, offering instead that lawmakers set the standards and the board clean up any loose ends.

Meanwhile, Gillespie dismisses accusations of a pro-industry slant to the board. "You need folks that are familiar with the process way more so than you need a bunch of environmentalists on that board," he says.

Gillespie added that, while his process would allow for a year of local government input, local ordinances should be limited in their authority when it comes to fracking, especially if local leaders move to pass outright bans.

"Everybody's trying to grasp at straws trying to delay this," he says. "In my mind, I've heard everything under the sun."

Hope Taylor, executive director of Clean Water for North Carolina, is a former Duke University biochemistry researcher. She lists the concerns facing green-minded North Carolinians as they digest the possibility that fracking could be legal as soon as summer 2014.

There's the threat of groundwater contamination and the challenge of treating millions of gallons of fracking wastewater. And then there's the headache of pondering the long-term health and environmental impacts of pumping chemical cocktails filled with unspecified materials inside the earth.

"We haven't seen a state that has yet done this safely," Taylor says.

Taylor says fracking threatens groundwater in a state where the buffer between the shale gas deposits and the aquifer is thousands of feet smaller than in other states.

A 2011 Duke University study found raised levels of potentially explosive methane in well water near drilling sites in northeastern Pennsylvania and New York. Methane is not believed to be toxic, although it can pose a risk of explosion in high concentrations.

Meanwhile, Pennsylvania has also fielded reports of gas bubbling in the Susquehanna River, a problem some have blamed on the widespread drilling.

Interested parties are awaiting the results of a U.S. Environmental Protection Agency study on the long-term health impacts of drilling, which could take months or years to be released.

On Tuesday DENR issued a much-awaited final fracking report, although a draft released in March has already drawn alternating praise and criticism.

The novel-length report, which was ordered by state lawmakers last year, concluded fracking can be done safely in North Carolina, provided the proper protections are in place.

Republican lawmakers enthusiastically complimented the DENR study. Critics blasted its conclusion as irresponsible.

DENR recommendations included a call for baseline water monitoring data, enhanced well construction standards, creation of a gas regulatory program and public disclosure of fracking chemicals aside from identified "trade secrets."

Air pollution is also an issue. As noted in the DENR report, a recent environmental impact statement in New York determined that statewide nitrogen oxide emissions could jump by 3.7 percent due to fracking operations. In the heavily drilled upstate New York area, the increase is as much as 10.4 percent, inciting worries about drilling's role in ozone concentrations.

DENR's draft report acknowledged the limitations of estimating the gas deposits in the state's Sanford sub-basin. This area comprises what geologists believe to be prime drilling land: roughly 59,000 acres in central North Carolina with shale formations 2,100 to 6,000 feet below the surface.

Yet questions remain about the extent of the underground resource. A December study by economic experts at IHS Global Insight reported six likely drilling destinations nationwide that would absorb 90 percent of the country's shale drilling by 2035.

North Carolina did not make the cut, and with natural gas prices expected to remain relatively low through 2023, industry leaders are less likely to invest in unproven drill sites, DENR reported.

All told, the agency estimated drilling in the Sanford sub-basin to inject an average of 387 jobs annually over a seven-year period, peaking one year with the addition of 858 jobs, and at completion adding an estimated $453 million to the state's economy.

Taylor is not impressed with the 800-plus jobs outlook.

"That's about three large grocery stores," she says dryly. "This is not an economic engine for North Carolina."

Mayor Voller agrees.

"That's less people than there are working for the Chatham County school system," Voller says. "You're telling me that we're going to rip up our environment and potentially endanger our watershed for less than 900 jobs? Somebody needs to really question the economic validity of this."

Despite the critics, Rucho maintains that state policies will offer a clean, reliable source of energy and commerce if fracking comes to pass, although he could not predict when drilling would start if the permitting process is opened in two years. In Rucho's mind, there's no benefit to stalling when the state can craft regulations today that prepare for gas exploration tomorrow. "It's the chicken and the egg," he says. "You need to have the rules and regulations in place to first drill the hole to see if you have sufficient reserves to make it worth the effort."

But Morgan says the sheer economics of low natural gas prices combined with the state's relatively slight gas cache are likely to doom any hopes of tapping the state's energy reserves anytime in the next decade.

"This is a decision that we need to get right the first time," Morgan says. "The risk of what could happen if we get this wrong is great."

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