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
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
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.
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.
- 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.
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