Following General Assembly ratification in July 2012 of the “Clean Energy and Economic Security Act,” or Session Law 2012-143, the Energy Program in the Land Quality Section of the Division of Energy, Mineral, and Land Resources will assist the N.C. Mining and Energy Commission in developing a modern regulatory program for the management of oil and gas exploration and development in the state, including the use of horizontal drilling and hydraulic fracturing.
Current technology allows “shale gas” to be recovered from shale formations with a high organic content. Modern exploration and gas production technology, such as horizontal drilling and hydraulic fracturing, has enabled the extraction of shale gas in similar formations in other states. Hydraulic fracturing, also known as hydrofracking or fracking, is a process used to stimulate production of natural gas from shale or other impermeable rock formations. The process involves drilling a well into rock that contains natural gas; injecting fluids under pressure to fracture the rock; and extracting the natural gas from the fractures that are created.
North Carolina’s laws (Article 27, G.S. 113-378 through 113-423) regulating oil and gas exploration and production are dated and do not address the technologies commonly used in shale gas exploration and production, such as horizontal drilling and hydraulic fracturing. Additional information on the current regulations involved can be found here.
While development of this resource could be an economic benefit to North Carolina, other states have found that shale gas production also has impacts that need to be carefully managed. The possible environmental impacts of shale gas exploration include the use of high volumes of water during drilling; potential contamination of groundwater aquifers by chemicals, water or wastewater during drilling or hydraulic fracturing of the shale layers; clearing of access roads and the drilling area; and storage of chemicals used in the process.
Over the next few months, DENR will be conducting a study of the potential environmental and economic impacts of shale gas exploration and development in North Carolina in response to Session Law 2011-276 (House Bill 242). The law directs DENR to study the issue of oil and gas exploration in the state, and to specifically focus on the use of directional and horizontal drilling and hydraulic fracturing for that purpose. During the study, DENR will conduct at least two public meetings in the area of the state where exploration for natural gas through directional/horizontal drilling and hydraulic fracturing may occur. The department’s proposed outline for this study can be found here.