North Carolina – Both chambers of the North Carolina legislature mustered the 3/5th majority necessary to override Governor Beverly Purdue’s July 1, 2012 veto of legislation that would have allowed for horizontal drilling and hydraulic fracturing in the state. The legislation (S.B. 820) does not contain prescriptive rules governing hydraulic fracturing, but instead creates a Mining and Energy Commission (MEC) that is tasked with developing such rules. S.B. 820 directs the MEC and the Department of Environment and Natural Resources to promulgate rules that address the full landscape of concerns with hydraulic fracturing, including environmental and safety issues, water use, landowner protections, and infrastructure concerns. Critics of the bill, including Governor Perdue, felt that requiring the agencies to promulgate rules (and thereby, allow drilling to commence) by 2014 did not provide sufficient time for deliberation. Critics also objected to the inclusion of a forced pooling provision. While North Carolina’s Deep River Basin does not hold a significant portion of the nation’s shale gas reserves, the passage of a fracking law in North Carolina shows that states unaccustomed to oil and gas operations are transforming their regulatory frameworks to meet a transformative technology.
New Jersey – The New Jersey State Senate voted on June 26, 2012 to ban the treatment, discharge, disposal, and storage of flow-back and other fracking waste streams in New Jersey. New Jersey currently has a moratorium on hydraulic fracturing in the state - a relatively meaningless moratorium in that, with the exception of a tiny section of the state’s westernmost counties, New Jersey does not have any natural gas. A ban on fracking waste disposal, however, could be significant as New Jersey’s considerable waste disposal infrastructure is very close to hotly developed sections of the Marcellus Formation. The bill is currently on Gov. Chris Christie’s desk.
California – California’s Senate Natural Resources Committee recently voted out by a 5-3 margin A.B. 972, a bill that would place a moratorium on all hydraulic fracturing in the state until Division of Oil, Gas and Geothermal Resources (DOGGR) promulgates rules regulating the practice. While California has fairly robust well construction standards, it currently does not have any frack-specific standards. The bill now goes to the Senate Environmental Quality Committee. Despite its recent movement through committee, the bill is expected to meet the same headwinds faced by other fracking bills – headwinds fed by the fact that California is one of the states where companies have been fracking since the 1950s. Recently, a bill that would have required companies to notify neighbours before fracking failed in the Senate by a 17-18 vote. Another frack fluid disclosure bill has stalled in committee. California is home to a number of significant shale plays, including the San Joaquin and Monterey Oil Shale Formations.
Indiana – On July 1, 2012, Indiana’s frack fluid disclosure law went into effect. The law essentially subjects oil and gas wells to the regulations already in existence for coal bed methane extraction. These rules require operators to disclose: (1) volumes and descriptions of water and additives ; (2) MSDS for additives; (3) amounts and identity of proppants; and (4) injection pressures. Information is posted on the Department of Natural Resources’ website. Companies will be permitted to deem chemical identities as trade secrets and protect them from disclosure.