Advocates of the rush to frack are feeling the pinch of North Carolina’s dysfunctional rulemaking laws and diminished agency resources. This week in CIB:

• Administrative Watch: Maybe Those Awful Environmentalists Had a Point…
• Legislative Watch: Anti-Clean Energy Bills Introduced; Energy In-Efficiency Bill Advances
• Nuclear Update: Fading ‘Renaissance’
• Education & Resources: Follow the Bouncing Drill Rig

Administrative Watch: Maybe Those Awful Environmentalists Had a Point…

The folks in charge of the rush to start fracking in North Carolina seem to be starting to realize that environmentalists weren’t crying wolf in recent years when we’ve pointed out that new laws and budget cuts are making the development of needed new rules practically impossible.

As CIB reported last Monday, the state Mining and Energy Commission (MEC) met March 7, and MEC Chair James Womack suggested that they may need to ask the legislature to exempt them from several steps of the rules review and public comment process. That’s of concern to conservationists because of its implications to the fracking issue itself, of course. Interestingly, it also denotes just how dysfunctional our current rulemaking laws are–and that even some industry-oriented folks are finally starting to understand this.

Here are some of those issues that the awful environmentalists warned you about:

• Compressed time frames: MEC members have realized how much they have to do, and how little time their October 2014 rules adoption deadline provides in which to do it. The issues are complex: What to do with wastewater? Well injection? Then, how do federal rules impact that? How about reconciling private property rights with “compulsory pooling” that permits drillers to go under property without the surface owners’ permission? And what happens if SB 76 is adopted requiring that permitting begin March 2015? Model permit language can only be prepared after the rules are finalized, and individual permits drafted only after the model language is generated. And on top of that, can the “severance tax” issue of how to finance all the needed local infrastructure and state oversight be resolved in time?
• Stripping expertise out of the rulemaking process: SB 10 would take away two of the MEC’s key experts: Amy Pickle of the Environmental Management Commission and chair of the MEC’s Rules Committee; and Ken Taylor, the state geologist. Hey, wait a minute, says Chair Womack–we need those guys! And by including new marching orders on issues like a severance tax (in SB 76), is the legislature just going to bypass the work of the three special study groups it set up last year (Compulsory Pooling, Funding Levels and Potential Funding Sources, and Local Government Regulation)?
• Limited staff resources: How will the rules be enforced? Womack and Vickram Rao (chair of the Water and Waste Management Committee) noted the absence of on-staff expertise in oil and gas economics, needed for the preparation of required fiscal impact statements. Womack wants outside consultants hired–but of course there is no funding available. Rao also asked how the rules would be enforced, since (says Rao) the number of inspectors which would be needed to enforce them would be cost prohibitive.
• Twisting, lengthy rules review process: After all the debate, public hearings/comment, and careful technical work by the MEC, the whole package of rules will go through the Rules Review Commission for a review from scratch, and ultimately back to the legislature for review and approval (unless the General Assembly specially decrees otherwise). And if the rules stand up through that process, the bouncing ball comes back to DENR and MEC to start the permit-drafting process.

In other words, the General Assembly is asking the environmental agency (Dept. of Environment and Natural Resources, DENR) and the rulemaking commission (MEC) to do more, faster, and with fewer resources. Yep, turns out that’s a problem. Could the growing recognition of this reality among some industry advocates be leveraged to encourage less heavy-handed intervention and more caution from the legislature? That’s a notion worth exploring.

Legislative Watch: Anti-Clean Energy Bills Introduced; Energy In-Efficiency Bill Advances

Many members of this year’s General Assembly seem determined to torpedo the advancement of clean energy in North Carolina in as many ways as possible. Did North Carolinians last year understand they were voting to turn over state policy to the advancement of the oil and gas industry? We don’t think so, but you wouldn’t know that from a look at what legislation is coming in and moving thus far.

Anti-Clean Energy Bills Introduced: Two new bills have been introduced that would undercut North Carolina’s growing move toward the development of renewable energy resources. HB 298, the so-called “Affordable and Reliable Energy Act” (ha!), would outright repeal North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS). REPS is the law that requires electric utilities to obtain designated minimum percentages of their power from renewable resources (e.g., wind, solar) and energy efficiency. REPS is creating new jobs and economic investments around our state, and even utility executives appreciate its value. For certain legislators, however, the concept of favoring clean energy and energy efficiency is anathema. They’re only interested in favoring the oil and gas industry. Meanwhile, SB 171, “Limit Regulation of Greenhouse Gas Emissions”, would take aim at any state agency or local government rule or ordinance intended to limit human activity with the purpose of reducing greenhouse gas emissions. It’s a sweeping, ideologically-driven rejection of the very concept of cutting carbon emissions. Well…at least its title is honest.

Energy In-Efficiency Bill Advances: HB 120, “Building Inspections/Local Consistency”–which would block any comprehensive update to the state energy code until 2019–received final House approval last week and was sent to the Senate.

Nuclear Update: Fading ‘Renaissance’

As the Washington Post observed last week, it was only five years ago that nuclear power enthusiasts were proclaiming the imminence of a “nuclear renaissance” of new reactor construction in the United States.

No more. The attempted comeback of the American nuclear power industry is stalled and sputtering. That’s partly due to renewed safety concerns associated with the Japanese Fukushima nuclear disaster and resulting economic meltdown of the nuclear industry in Japan. Largely, though, the fading of the over-hyped nuclear ‘renaissance’ is tied to the same albatross which sunk the old nuclear boom in the 1980s: nuclear power’s enormous costs.

Both natural gas and wind systems are now recognizably cheaper to build and operate than new nuclear units. And even with existing, aging nuclear reactors, the costs of necessary upfits or repairs alone can be so high as to make their continued use uncompetitive.

As a result, no net gain in nuclear plants is in sight. As the Post reports, only five new reactors are under construction (not the 20 or more of nuclear industry dreams), while at least that many old units are scheduled for closure or are already shut down indefinitely due to problems.

The entire article can be found here

Education & Resources: Follow the Bouncing Drill Rig

Interested in the fracking issue but still confused by what relevant processes are underway now in North Carolina?Here’s a short summary of the mission of the Mining and Energy Commission (MEC), together with links to other pages such as member bios, info on the related subcommittees and study groups working on different parts of the issue, other resource pages, and meeting agendas and minutes.

That’s our report for this week.