Farrell Moose is keeping an eye on his water.
When the North Carolina General Assembly voted in July to legalize hydraulic fracturing, or fracking, in the state, he paid more than $300 for a baseline test of his well. He scheduled tests for inorganic compounds, which cost $33 each.
Though lawmakers initially called for a statewide moratorium on fracking while the North Carolina Mining and Energy Commission assesses the potential effects of shale gas extraction in areas over the Triassic Basin, recent political shifts have brought fracking to the legislative forefront. Moose wants to clearly establish his water quality before the commission completes its study in October 2014.
“If you don’t have a baseline test, you have no way of knowing if it was the gas companies that put the chemicals in your water,” Moose said.
Moose owns and operates Dutch Buffalo Farm in Pittsboro. He is one of many Chatham County farmers who fear the possibility of groundwater contamination or shortages as a result of fracking, a controversial method of natural gas extraction from subterranean shale formations. During the fracking process, the shale formation is drilled horizontally and then injected with pressurized fluid to release the gas within the rock.
For many Chatham County farmers, fracking breaks open a box of unknowns. It raises concerns regarding water quality, organic certification and agricultural sustainability. And such questions may be answered in as few as two years.
On Feb. 13, a state senate finance committee passed a bill to lift the fracking moratorium and allow natural gas companies to apply for drilling permits on March 1, 2015. Although the bill must clear several other legislative hurdles, its preliminary passage signaled to some that fracking is all but imminent.
“I think the bill is a motivational force moving across North Carolina to get things going,” said Jim Womack, MEC chairman and a Lee County commissioner. “The more we put off a target date for going live with drilling, the more likely it is to drag out. It puts a mark on the wall. We’re going to get this done.”
Womack said he has no reservations about moving forward.
“I’m not cavalier; I’m an engineer,” he said. “I want to make sure all interests are being served. We will have a very cautious regulatory framework to make sure we’ve safeguarded everything that can be safeguarded.”
He said an exploratory well might be drilled in Lee County within the next six months.
The state debates pros, cons of fracking
The debate over fracking has split the state of North Carolina. Some balk at the environmental risks of drilling near groundwater aquifers and using large amounts of water in the process, while others bank on the economic prospects of creating more jobs and strengthening North Carolina’s energy market.
Senate Bill 820, the legislation that legalized fracking in the state, established the MEC to thoroughly examine both sides of the issue and update the state’s antiquated laws and regulations regarding vertical drilling for natural gas and related industrial developments.
In a report released last April, the North Carolina Department of Environment and Natural Resources (DENR) asserted the need for stringent oversight of gas drilling operations to ensure the safety of North Carolina’s groundwater and surface water reserves. The MEC was charged with the task of obtaining additional information about the fracking process in order to minimize the risk of water contamination, shortages and other fracking-related concerns.
The DENR report acknowledged several instances of groundwater contamination near hydraulically fractured wells in other states, although it noted some water quality problems were the result of industrial accidents that happened either before or after the fracking process was complete. The MEC will compare the policies and experiences of other states to determine the best set of natural gas regulations for North Carolina.
“Here, we have laws governing natural gas exploration that were written in the 1940s,” said Ray Covington, a Lee County property owner, Mining and Energy commissioner and owner of North Carolina Oil and Gas, a company that educates landowners about their mineral rights. “Let’s sit down and update the laws to make sure whatever we do is helpful to the citizens of North Carolina.”
Fracking promotes economy, green energy
There are possible economic benefits to fracking, and the MEC is examining the degree to which natural gas extraction will boost the state’s economy.
Using the IMPLAN model, the DENR report estimated drilling activity in the Durham-Sanford sub-basin will sustain an average of 387 jobs per year over a seven-year time period, and after all drilling activity is completed, the report estimated the state’s economic output would have increased by $453 million.
Fracking activity in other states is strengthening the natural gas market. The 2012 Annual Energy Outlook, published this summer by the U.S. Energy Information Administration, predicted natural gas exports would overtake imports in 2022. A recent revision said exports would overtake imports in as little as 4-5 years.
Some regard natural gas as the first step on the path toward green energy.
“This could be energy for the next 50 years,” Covington said. “It’s renewable hydrocarbons. We need natural gas to make sure we have the bridge fuel for moving toward renewables. It’s so much cleaner than coal, and there is an abundant supply.”
Shale gas also promises to strengthen North Carolina’s role in the global market. Although the price of natural gas has decreased in recent months, it remains a viable domestic energy source.
“The technology to extract it is changing rapidly and progressing rapidly to the point it’s almost unbounded,” Womack said. “What it means on the macroeconomic scale has enormous implications. We’re going to pull ourselves out of the economic doldrums that we’ve been in for the last several years; we’re going to self-extract it, and we’re going to help the world economy.”
But even if the MEC arms North Carolina with a comprehensive and proactive set of regulations to govern the safe extraction of natural gas through fracking, it is uncertain whether the industry will ever take root in the state. Many states have larger shale plays than the one in North Carolina, providing gas companies little incentive to burrow into a relatively small expanse of shale.
The bill passed by the senate finance committee was partly intended to entice natural gas companies to consider drilling in the Triassic Basin. The bill proposes to base severance tax rates on the market price of natural gas.
If the moratorium was lifted, it remains unclear how many wells would be drilled in Chatham County, where there is a lesser concentration of shale than in Lee and Moore counties.
“If you look at the map. Chatham has a reasonable swath of land included in the Triassic Basin,” Womack said. “How much of that proves to be reserves remains to be seen.”
Still, Covington said its necessary to fairly assess the possible risks and rewards of fracking in order to best prepare for the future.
“If you have the right rules and regulations, and if you fund it correctly, it can be done safely, but those are two mighty big ‘ifs,’” he said. “I will be the first to recommend no one does it if we can’t get it right.”
What’s in the water?
In the eyes of some Chatham County farmers, fracking is a threat to their land, their water and their livelihoods. Many are closely watching the commission, for if the moratorium on fracking is lifted, the regulations the commission suggests may affect the vitality of their farms.
Moose began following the progression of the nationwide fracking debate when hydraulically fractured wells began appearing in Pennsylvania, where several of his friends live and farm. Norma Burns, who owns and operates Bluebird Hill Farm in Bennett, also has friends in Pennsylvania who keep her updated on the gas industry’s activity in the state.
Burns said one of her friends, an environmentalist in Pennsylvania, told her there are instances of water contamination and other problems generally associated with natural gas extraction that sometimes occur without official explanation.
Stephen Cleghorn, a farmer in Jefferson County, Pa., said he knows of one such occurrence. He regularly transports water buffaloes from his farm in Reynoldsville to Woodlands, a small community outside Zelienople, Pa., that began experiencing problems with its water quality in late 2010.
After Rex Energy drilled at least 15 wells in the Zelienople area between July and December 2010, members of the Woodlands community fell ill after drinking and using their water, which was drawn from private wells, as reported by the Pittsburgh Post-Gazette.
Rex hired a third-party firm to test the wells for contaminants, and the Pennsylvania Department of Environmental Protection conducted tests, too. The third-party firm found no contaminants in the water, and the DEP could not trace the contaminants it found to the drilling activity in the Zelienople area. Because no baseline tests had been conducted on the wells prior to the drilling activity, members of the Woodlands community could not challenge the claim.
“Even the DEP has no proof the water had been fouled by drilling activity, but water was fine until the drilling came in,” Cleghorn said. “They had to discontinue using it for drinking, cooking and showering, and all they use it for now is their toilets.”
Womack said he was unaware of any proven accounts of water contamination caused by fracking.
“There have been more than a million wells drilled around the world, and there has been no proven contamination,” he said.
The DENR study found the distance between North Carolina’s groundwater and shale reserves is significantly less than that of other states, and the MEC is now working to understand how the complexities of the shale layer could affect the risk of water contamination. Still, some environmentalists remain concerned.
“There is not a single state that has demonstrated that they can avoid problems, even with really deep shale formations,” said Hope Taylor, executive director of Clean Water for North Carolina. “There is certainly an increased risk due to the shale formations in North Carolina being so shallow, and a number of studies have drawn attention to the fact that it’s shallow and faulted, which is an additional conduit for contamination.”
Though North Carolina’s shale play is unique in many ways, Covington said the development of shale gas drilling in other states provides North Carolina with a particular advantage.
“Pennsylvania was the first state to start drilling for oil back in the 1800s, and their oil and gas laws have evolved over time,” he said. “I know there are laws Pennsylvania would like to have that are very difficult to implement at this point in time because of how their laws have evolved. I’m hoping that in North Carolina, we can assess the best laws in the country and bring recommendations to the legislature that will be the best laws in the country.”
For some, even a slight risk of contamination is a major cause for concern.
“There’s nothing you can do once the groundwater is contaminated,” Moose said. “I live off my well and farm off my well, and the risks outweigh any potential benefits.”
He said he plans to schedule another baseline water test soon.
COMING UP: In Part 2 of this story, Chatham County farmers fear the agricultural costs of hydraulic fracturing.