by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor, John Locke Foundation
The passage and governor’s signing of the Energy Modernization Act has North Carolina poised to join the shale gas and oil revolution that has boosted state economic growth, significantly increased good-paying jobs, and led to improved air quality.
Among other things, the Act extends the rulemaking deadline for gas and oil exploration to January 1, 2015 (formerly it was October 1, 2014); expedites the rulemaking process for the management of oil and gas; authorizes issuance of permits for oil and gas exploration, development, and production 60 days after the rules become effective; creates an Oil and Gas Commission; blocks local prohibitions on oil and gas exploration, development, and production; and reiterates a prohibition against injecting related wastes into the subsurface or groundwater via wells.
The biggest public and media concern regarding the act seems to be over water quality, but numerous studies have found no link between hydraulic fracturing ("fracking") and groundwater contamination. In May 2011, the U.S. Environmental Protection Agency administrator Lisa P. Jackson, testifying under oath before Congress, admitted she was "not aware of any proven case where the fracking process itself has affected water, though there are investigations ongoing." Last year, a comprehensive, year-long federal study by the Department of Energy found no evidence of hydraulic fracturing contaminating groundwater.
As reported last summer (emphasis added):
A landmark federal study on hydraulic fracturing, or fracking, shows no evidence that chemicals from the natural gas drilling process moved up to contaminate drinking water aquifers at a western Pennsylvania drilling site, the Department of Energy told The Associated Press.
After a year of monitoring, the researchers found that the chemical-laced fluids used to free gas trapped deep below the surface stayed thousands of feet below the shallower areas that supply drinking water, geologist Richard Hammack said.
Although the results are preliminary — the study is still ongoing — they are a boost to a natural gas industry that has fought complaints from environmental groups and property owners who call fracking dangerous.
Drilling fluids tagged with unique markers were injected more than 8,000 feet below the surface, but were not detected in a monitoring zone 3,000 feet higher. That means the potentially dangerous substances stayed about a mile away from drinking water supplies.
Other concerns about hydraulic fracturing have likewise been dismissed by research, as the Associated Press reported last year. Those include cancer risks, air pollution, and radioactivity in drinking water supplies.
Another concern is whether hydraulic fracturing contributes to a rise in seismic activity. The research here is ongoing, but it seems that any earthquakes possibly attributable to hydraulic fracturing are very low-magnitude quakes (3.0 or below on the Richter scale, with 3.0 being the "worst-case scenario").
Andrew Miall, a Univerity of Toronto geologist who has studied the link between hydraulic fracturing and earthquakes, said quakes caused by fracking were "rare" and explained why the fear was "exaggerated":
The fracking process of course itself is explosive and does trigger tiny earthquakes. And when I say tiny, they are about strength one or two, and even if you were standing right on top of the well as they were doing it, you wouldn’t feel it.
For comparison’s sake, the U.S. Geological Survey defines quakes of the magnitude of 1.0 to 3.0 as "Not felt except by a very few under especially favorable conditions."
Stanford University’s School of Earth Sciences recently highlighted Stanford geophysicist and Obama administration energy advisor Mark Zoback’s work on the environmental impacts of natural gas production. Zoback recently showed that "roughly 150,000 wastewater injection wells have been safely operating in the U.S. for many decades with no earthquakes being triggered." Zoback also discussed the "extremely small microseismic events" of hydraulic fracturing (emphasis added):
A typical hydraulic fracturing operation involves pressurizing a relatively small volume of rock for a short period of time, typically about two hours, which generates extremely small microseismic events. "The energy released by one of these tiny microseismic events is equivalent to the energy of a gallon of milk hitting the floor after falling off a kitchen counter," Zoback says. "Needless to say, these events pose no danger to the public."
In several cases, however, larger, but still very small earthquakes have been associated with hydraulic fracturing operations. Out of the hundreds of thousands of hydraulic fracturing operations carried out over the past few years, there have been only a few reports of triggered earthquakes that might have been large enough to be felt by people living in the region and none were reported to have caused significant damage.
The more immediate concern over the act should instead be process rather than outcome. The expedited rulemaking procedure precludes some actions by the General Assembly and creates certain exemptions for new oil and gas rules from the Administrative Procedure Act.
The biggest change along these lines was a provision requiring an affirmative action by the General Assembly to allow issuance of permits for oil and gas exploration and development. The effect of the change means legislators would have to take action to block, rather than allow, permits to proceed after the rules are in place.
The difficulty for legislators to use the ponderous process of legislation to stop agency rules — and agencies being able to exploit that — is why a state REINS Act would be such a crucial reform for good government in North Carolina.
Another aspect of the bill has been little remarked upon but could hold promise for North Carolinians, depending on, as with so many other things, its implementation. It calls for a study to recommend to the legislature by year’s end a "long-range State energy policy to achieve maximum effective management and use of present and future sources of energy."
The study would look at "environmental and economic impact of base load power generation of electric public utilities" and compare "base load power generation alongside all other forms of energy used for power generation, including renewable and alternative sources of energy, and the environmental and economic impact of all forms of power generation."
The inclusion of economic impact in the study could be crucial, again depending upon how it is done. Too often discussions of competing sources of energy are made without consideration of their impacts on costs to people at the flip of the switch.
Furthermore, nondispatchable energy sources (i.e., "renewable" sources such as solar and wind) are dependent upon the fickleness of the resource at any given moment — when the sun shines and the wind blows — and require dispatchable energy sources (i.e., gas, coal, and nuclear) always at the ready. This fact of renewables raises their actual costs and their emissions profiles, which a properly conducted study would account for.
The study would also examine the environmental as well as economic impacts of SB 3, which saddled the state with its costly, counterproductive, and potentially unconstitutional renewable energy portfolio standards (RPS) mandate. It would furthermore look at potential grid and economic effects of allowing third-party sales of electricity, but just for military bases.
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