As North Carolina prepares to open the state to natural gas exploration, the process of making rules to regulate hydraulic fracturing is still in flux.
By Gabe Rivin
This year’s hydraulic fracturing law allows the state to adopt strict environmental rules for natural gas drilling, a power that was previously limited by the General Assembly.
At the same time, the provision gives citizens additional power to request new rules, which, as one environmental group showed last week, could fill a gap left by state regulators.
At issue is this year’s gas drilling law, the Energy Modernization Act. The bill, which Gov. Pat McCrory signed in early June, was decried by environmentalists and anti-drilling advocates. Environmentalists criticized the rapid speed in which the bill moved through the legislature. They also warned that the bill left several significant health issues unresolved, including the rules governing drilling’s air pollution and wastewater.
“S786 does not address the most significant risks that shale gas development poses to our health, communities, and the environment,” a brief from the N.C. Conservation Network said.
Yet tucked into the bill was a short provision that could give comfort to environmentalists because it bypasses the restrictions of a 2011 law.
That law, Senate Bill 781, prohibited the state from adopting any environmental rules that are stricter than any federal rules. But this year’s drilling bill provided an exception to that law.
Natural gas drilling rules, the provision says, are exempt from the 2011 restrictions. That exemption applies to rules adopted by several state commissions, including the Environmental Management Commission and the Mining and Energy Commission, which is developing the majority of drilling rules to be used in the hydraulic fracturing process, also known as fracking.
That means state regulators have the ability to develop drilling rules that are more environmentally protective than federal rules.
Sen. Buck Newton (R-Wilson), a primary cosponsor of the bill, said that legislators included the exemption in case federal rules prove to not be stringent enough.
“We want our rules to be the best that they can be,” Newton said. “The federal rules, whatever they may be, may be less.”
And that could lead regulators to adopt new rules for drilling’s toxic air pollution.
Impact on air rules
The restored power to regulators could have wide-reaching effects.
State regulators at the Environmental Management Commission, for example, are not writing new rules to address drilling’s air pollution. That decision came amid a growing body of research that has linked drilling to the spread of air toxics.
Gas wells produce large volumes of volatile organic compounds such as benzene, which is known to cause leukemia, according to the U.S. Environmental Protection Agency.
Volatile organic compounds also contribute to the formation of smog, which can cause respiratory diseases.
Yet, instead of writing new rules for drilling’s air pollution, the EMC chose to rely solely upon federal rules, a decision that has raised several concerns about the public’s exposure to air pollution.
Benne Hutson, chairman of the EMC, maintained that his commission is limited by the 2011 regulatory-reform law.
“The legislature has also imposed restrictions on when environmental regulations in North Carolina can be more stringent than federal regulations that are on the same point,” he said. “We obviously have to abide by the law that the General Assembly establishes for the development of our regulations.”
Jim Womack, who recently finished his tenure as chairman of the Mining and Energy Commission, offered the same argument.
“The will of the legislature is that we will be incorporating whatever EPA does, but no more so than what EPA requires going forward,” he said.
But the provision in this year’s drilling bill suggests a sharp difference from these views.
Newton noted that the EPA currently does not regulate the process of hydraulic fracturing, in which water and sand are injected at high pressures into gas wells in order to break apart shale and release natural gas.
“We needed to make sure that that was clear, that our rules could be more stringent,” said Newton.
In doing so, the provision could open up the state to new environmental protections from drilling.
Still, the question remains: Will it?
The provision affects citizens’ involvement in rule-making too.
State rules – as opposed to state laws – are issued by executive-branch agencies. Under the state’s Administrative Procedure Act, North Carolina citizens have the power to directly influence agencies’ rules.
Citizens, and citizen groups, can petition agencies to issue new rules or to change existing rules. That power extends to environmental rules issued by the Environmental Management Commission.
“A private party has every right under state law and the regulations to bring a petition for rule-making,” said the EMC’s Hutson.
Yet citizens’ petitions must meet several requirements. For one, citizens must prove that an agency has the legal power to issue a new rule. (Though agencies have the power to regulate activities throughout the state, they receive their power from the General Assembly’s laws.)
Petitions for environmental rules are relatively rare. The N.C. Department of Environment and Natural Resources receives about one or two each year, according to Jeff Manning, the supervisor of the standards and rules review branch at the Division of Water Resources in DENR.
Citizen petitions, when they’re filed, receive the department’s attention.
“In the last few years, it’s probably been about 50/50 for granting or denying the petition,” Manning said. In May, for example, the EMC received a citizen petition to update the rules for petroleum storage tanks and agreed to initiate a rule-making process.
Opening the door
Under the 2011 regulatory-reform bill, citizens would have been barred from petitioning the EMC to adopt air rules that are stricter than the EPA’s rules. This year’s drilling law, however, could open the door to new citizen petitions.
And one environmental group has already taken advantage of its new power.
On Aug. 8, the Blue Ridge Environmental Defense League filed a petition for several new rules to address drilling’s air pollution. Among their requests was the requirement that drillers monitor a number of their air pollutants.
Therese Vick, an organizer with Blue Ridge, said that the EPA’s rules will not do enough to protect North Carolinians’ health.
“We have a brand-new industry that we’ve never had before,” Vick said. “Instead of our state being proactive and ensuring that the public’s health is protected by requiring monitoring at the fence line, by requiring modeling … they’ve just thrown their hands up and said, ‘We’ll just do what EPA does.’”
But her organization’s petition, and that of others like it, might be stalled by a technical problem. Though the Environmental Management Commission is responsible for writing air rules, Vick’s group petitioned the Mining and Energy Commission, which is required to issue its own set of recommendations for air rules.
The Mining and Energy Commission though has not finalized its initial batch of rules. Those rules include procedures for accepting citizen petitions. The commission is accepting public comments on its draft rules until Sept. 30 and has a January 2015 deadline for finalizing the rules.
When asked whether citizens could petition the commission right now, Walt Haven, the supervisor of DENR’s oil and gas program, was noncommittal.
“The MEC is always glad to receive written comments from members of the public,” he wrote in an email. “As far as the [Blue Ridge] petition itself is concerned, it is under consideration by the Department. However, I have no other details right now.”
Blue Ridge’s petition may hit a technical snag. Nonetheless, citizens can petition the EMC, which has final say over the rules that govern drilling’s air pollution.
According to Vick, strict rules for air pollutants are a must.
“Once somebody’s exposed, they can’t be unexposed,” she said.
Rose Hoban contributed reporting to this story.