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Culminating a whirlwind 36 hours, the North Carolina legislature
has voted to override Governor Beverly Purdue's veto of Senate
Bill 820, the Clean Energy & Economic Security Act, and pave
the way for hydraulic fracturing and future shale gas development
in North Carolina. In another key development, the speaker of the
House of Representatives and Senate president pro tempore have made
their appointments to the newly reconstituted Mining and Energy
Commission, which will develop the new modern regulatory framework
for oil and gas development in the state.
Veto Overridden by General Assembly
On Sunday, July 1, Governor Perdue vetoed the legislation,
asserting in her Veto Statement general support for shale gas
as part of a comprehensive mix of energy sources, but finding that
Senate Bill 820 did not adequately protect the environment.
Legislative action to override the governor's veto requires
a two-thirds majority vote in both chambers of the General
Assembly. On Monday, July 2, the North Carolina Senate voted 29 to
13 to override the governor's veto. The Senate vote was soon
followed by a late evening 72 to 47 vote in the House of
Representatives that concurred in the veto override and enacted Session Law 2012-143 into law, effective
August 1, 2012.
Click here to view statements of gubernatorial
candidates Pat McCrory (R) and Walter Dalton (D) on governor's
veto.
Key Provisions of SL 2012-143 Impacting Shale Gas
Development
As described in a recent McGuireWoods Consulting
bulletin on the legislature's passage of Senate Bill 820,
the Clean Energy and Economic Security Act has the
following key provisions:
Removes existing statutory prohibitions on horizontal drilling.
(G.S. 113-393)
Reconstitutes the current Mining Commission as the Mining and
Energy Commission as well as re-forms the Department of Environment
and Natural Resources' Division of Land Resources into the
Division of Energy, Mineral, and Land Resources. (G.S.
143B-293.1)
Directs the Mining and Energy Commission to develop rules and
regulations for exploration, extraction and production of natural
energy resources by Oct. 1, 2014.
Requires future General Assembly action following the adoption
of regulations before any drilling permits can be issued.
(G.S. 113-393)
Includes strict safeguards for landowner and environmental
protections.
Creates a new Joint Legislative Commission on Energy Policy for
legislative oversight of the state's energy policy (10
members). (G.S. 120-285)
McGuireWoods and
McGuireWoods Consulting have provided legal, state government
relations, and grassroots services to advance this legislation
through the NC legislature. This has included educating key
stakeholders, political leaders, and constituent groups to advocate
on behalf of energy independence, economic growth, and job creation
brought by development of natural gas found in shale rock.
Newly Appointed Members of Mining and Energy
Commission
The 15-member Mining and Energy Commission will have the
authority and responsibility to develop and oversee North
Carolina's new regulatory framework for oil and gas development
in the state. Four members are to be appointed for three-year terms
by the governor, Senate president pro tempore and speaker of the
House of Representatives, respectively, with the remaining three
members being ex officio members. In Session Law 2012-141, the Senate president pro
tempore and speaker of the House of Representatives made their
respective appointments to the Mining and Energy Commission.
Governor Perdue's appointments are expected to be made in the
near future.
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