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North Carolina governor signs law paving way for fracking

By Marti Maguire

RALEIGH N.C. (Reuters) - North Carolina's governor signed a law on Wednesday that will lift a longtime state ban on hydraulic fracturing, or fracking, allowing shale gas exploration to begin as early as next year.

The Republican-led state legislature moved quickly last week to fast-track permits for fracking, in which rock formations are cracked and infused with chemical-laced water to extract natural gas.

The technology has led to a nationwide boom in domestic gas production, and North Carolina is believed to have untapped reserves of shale gas in a massive underground rock formation. In 2012, regulators estimated the state had 83 million barrels of natural gas liquids, or roughly a five-year supply for the state.

"We have watched and waited as other states moved forward with energy exploration, and it is finally our turn," said Republican Governor Pat McCrory. "This legislation will spur economic development at all levels of our economy, not just the energy sector."

Fracking is exempt from the federal Clean Water Act, and is regulated largely at the state level.

A 2012 North Carolina law cleared the way for fracking to begin, but called for a separate vote after rules were drafted to protect the environment. The new law allows permits to be issued without further legislative action two months after state regulations are completed, likely early next year.

Fracking opponents say the drilling practice contaminates groundwater and air, among other problems. State Representative Pricey Harrison, a Democrat, said the extra vote required by the earlier law was a crucial safeguard.

"We promised the people of North Carolina we were not going to move forward with fracking until we have rules in place to protect the public health and the environment," said Harrison. "This bill violates that promise."

But House Speaker Thom Tillis, the Republican seeking to unseat Democratic U.S. Senator Kay Hagan this fall, said the change was needed to jump-start exploration in the state.

"We need to get the industry interested in doing the research and necessary steps to really determine the extent to which this is a viable industry in North Carolina," Tillis said last week. "What we’re trying to do is provide certainty to the industry."

The energy measure also prohibits local governments from outlawing fracking and makes it illegal to reveal the chemicals used to extract oil or gas from wells using fracking.

(Editing by Colleen Jenkins and Doina Chiacu)

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