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Pro-fracking law makes its way through North Carolina legislature

By Doug Sweeney,  June 11, 2012, 06:16:54 AM EDT

The North Carolina legislature may legalize fracking just in time for Flag Day.

A bill in the Tar Heel State would repeal old bans on lateral drilling and using chemicals in certain ways underground, which would clear the way for fracking - the common term for hydraulic fracturing.

According to The News & Observer , the Clean Energy and Economic Security Act was recently passed by the state Senate and could be heard by the House Environment Committee as soon as Tuesday, with a vote potentially lined up for Wednesday.

Some Democrats in the legislature have made the argument that fracking could potentially harm the environments, while most in the Republican majority have cited the potential economic benefits of bringing natural gas production into the state.

The move by North Carolina comes at a time when many municipalities and states around the country are moving to ban fracking or at least place a moratorium on its practice due to environmental concerns. However, the science may be on the side of the GOP Tar Heels, as a number of studies have shown that the supposed environmental effects of fracking may be overblown.

Earlier this year, a study conducted by the Polish Geological Institute found that groundwater was not contaminated during fracking operations in the Eastern European country, reports Reuters .

"Fluids were under constant control and their uncontrolled leakage to the environment was not possible," the study stated. "The impact of drilling related to hydraulic cracking on the quality of surface water was not observed. Underground drilling has not affected hydrological conditions around the well."

Another study - this one conducted by the University of Texas - also found that fracking did not pose a threat to groundwater. However, UT geology professor Charles Groat did say that the study did not close the book on fracking's safety.

"Shale gas has lots of stories to tell," he told Inside Science News Service . "It's a great resource for this country and many other parts of the world. It's a game-changer in terms of the energy balance. We think it can be regulated effectively and is being done so largely, but certainly there are evolving issues that need more serious attention paid to them."

Still, North Carolina appears poised to legalize fracking although, the question remains: will it matter?

Steve Heron, the south region exploration manager with Cabot Oil & Gas in Houston, said that North Carolina isn't likely to attract any major oil and gas companies due to its underwhelming reserves. In addition, Heron said that the state's lack of natural gas infrastructure would be a hinderance as well.

"We didn't think it was that big, and we walked from it," he told the New & Observer. "You've got a bunch of scattered basins with small reserves, and no infrastructure."

Recently the U.S. Geological Survey estimated that North Carolina's Deep River Basin - which covers 1,250 square miles and stretches from Durham to the state's southern border - could potentially contain nearly 1.7 trillion cubic feet of natural gas. While this may seem like a lot, the U.S. Energy Information Administration estimates that the entire country has about 273 trillion cubic feet.

Regardless of the reserves in the state, it would still take a few years for the law to go into effect, according to the news provider. It would take two to three years for the regulations to be finalized and then they would also have to be approved by the state's legislature.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: News Headlines, Business, Commodities, International

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