public policy advocacy for the professional engineer                                       February 18, 2013

Assistant Secretary for the Environment Speaks to Engineers

Speaking at the ACEC/PENC Environmental Networking Event last week Assistant Secretary for the Environment, Mitch Gillespie, stressed the new vision for NCDENR as focused primarily on customer service as he outlined the mission and objectives for the department.  

Gillespie is a former legislator who served as a leading state budget writer for natural and environmental resources and steered the legislation passed in 2012 that launched a modern regulatory program to manage oil and gas exploration in NC.  Gillespie also served as chairman of the state Environmental Review Commission, which studies and recommends actions related to protecting the environment and public health. 

Gillespie confirmed that reorganization of NCDENR is an on-going process and that he had personally called in department heads and staff to get their ideas and recommendations for improving service delivery and streamlining permit applications.  The regional offices, studied last year for justification and/or reorganization, “are funded and will be kept in place” but, Gillespie continued “there are always opportunities to make things better”. 

One of the department’s challenges this year will be to develop the 100+ rules for natural gas extraction or “hydrofracking” in North Carolina.   “Fracking” has recently been put on a fast track due to legislation introduced by Senator “Buck” Newton. 

A Senate committee has already given its approval to SB 76, legislation that would allow state regulators to issue permits for natural gas hydraulic fracturing by March 2015. The Senate Finance Committee approved the bill after making a clarifying change ensuring that local governments could apply property taxes to industry facilities in the same way that they are applied to other property. Besides allowing the permitting of the natural gas wells, the legislation would create a tax structure for the industry. It would allow an initial 1-percent tax on extracted shale gas, with the tax to rise to 6 percent by 2020. The bill would also modify appointments to the Mining and Energy Commission which would include eliminating the State Geologist and the Assistant Secretary for Energy.

Gillespie stated that more staff would be needed to implement hydraulic fracturing rules and that the budget would likely include recommendations for more resources in this area.  Other recommendations that are likely to be included in the Governor’s budget are continuation funding for the Clean Water Management Trust Fund at the currently funded level of $11.2 million (down from a high of $100 million  4 years ago) and full state matching funds for the water revolving funds. 

In less than two months in this new role, Gillespie has spent many hours reviewing current rules specifically in regards to wetlands delineation, the watershed protection act, and water allocation.  He hopes to streamline many of the processes and rules within these programs but is cautious of federal authority and will not risk violations that could jeopardize federal funding.  In his opinion SB 10, which, among other things, reorganizes the Environmental Management Commission and the Coastal Resources Commission, as presently worded, could violate both the Clean Air Act and the Clean Water Act.

Gillespie’s respect for staff within the department was clearly evident as he praised their commitment to the protection of the environment.  He stressed that he shares this same commitment and will work with all stakeholders to develop an improved service delivery model that continues to protect the environment for the citizens of North Carolina.

Senate Bill 10

Environmental advocates and other political activists on Thursday called on Gov. Pat McCrory to halt what they called a Republican power grab in Raleigh. Group leaders converged in Charlotte and called for McCrory to denounce Senate Bill 10, which would allow Republicans to replace members of several state regulatory commissions and boards. They asked the governor to veto the bill and address conflicts of interest he might have. The bill, which was approved by the Senate last week, would allow McCrory and the Republican-led General Assembly to replace – and in some cases reduce – the number of members of the state’s Industrial Commission, Environmental Management Commission and Utilities Commission, among others. The Utilities Commission regulates rates and services for public utilities in North Carolina, including Duke Energy. McCrory worked for Duke Energy for nearly 30 years. But Republicans said the bill would allow the new administration to start fresh with commission members who share their philosophy. It would also save the state $2 million a year by eliminating or downsizing some boards, they said.  (Gavin Off, THE CHARLOTTE OBSERVER, 2/15/13).

PENC has requested that the House amend SB 10 by adding a provision that would require one member of the EMC to be a registered engineer as the existing legislation requires.  Similarly, a request that one member of the Coastal Resources Commission be a registered engineer has also been made.  Speaker Tills indicated last week that SB 10 would likely be split into two bills and that some amendments would be made. 

Fracking Regulation

Local governments shouldn't be permitted to pass regulations on natural gas fracking that are so onerous that the practice is effectively banned, according to the head of a commission writing rules for fracking in North Carolina. Fracking, or hydraulic fracturing, is a controversial method of drilling that uses chemicals, sand and water to fracture rock formations and release natural gas. Scientists think prehistoric rock formations beneath Lee and nearby counties may hold large deposits of the gas. Fracking opponents say they are concerned about potential harm to people and the environment. Supporters say it can be done safely and will bring a much-needed economic boost to the region.

Lee County Commissioner Jim Womack is chairman of the North Carolina Mining and Energy Commission. A study group helping the commission met Friday to talk about local regulations for oil and gas exploration and development. The group discussed setbacks, which are zoning rules that say how close drilling operations could be located to schools, parks or other locations. The members also talked about regulations that would limit noise and light from the efforts. Womack suggested there could be state guidelines on setbacks that local governments could ask to waive. The local governments would have to demonstrate why they wanted their rules to be more stringent than state standards, he said. "I would have a hard time if it was so onerous so a city could use it to preempt drilling," Womack said. Womack said he thinks local enforcement of noise and light regulations is essential. But drilling companies should get waivers for the time it takes for the fracking process, which Womack said is 24 to 36 hours. "It's just a loud and noisy operation," he said. "If you don't allow a waiver, you're basically prohibiting drilling." Another member of the commission questioned whether the rules would be waived if the operation was close to a school or a church. "I think we'll have to think about that carefully," said Marva Price, an associate professor in Duke University's School of Nursing. Womack said the drilling company might be able to do the fracking on a weekend if its near a school or on a day other than Sunday if it's near a church. "If you say there's no waiver, it's never going to pass muster at the state," he said.

Three study groups are scheduled to make recommendations to the commission by October. The other two groups are looking at financing and compulsory pooling, which would compel landowners to sell their mineral rights if their neighbors allow a drilling operation on their land. The commission is scheduled to finish its work by October 2014.(Steve DeVane, THE FAYETTEVILLE OBSERVER, 2/16/13).

Rules Review

The newly formed House Regulatory Reform Committee on Wednesday discussed but took no votes on two different proposals on how to review rules in the N.C. Administrative Code to determine whether they're wanted or needed, including those that deal with health and human services and the environment. House Bill 74 would provide for review of all rules at least once a decade, at which time they would expire unless approved by the Rules Review Commission. Rep. Tom Murry, R-Wake, the bill sponsor, said the measure is the starting point for lawmakers who want to see burdensome regulations taken off the books. "This is a broad, sweeping bill," he said. Under the proposal, Department of Health and Human Services rules would expire at the end of 2016 unless re-adopted. DENR rules would expire at the end of 2017, and rules adopted by occupational licensing boards would expire at the end of 2018. All other rules would expire at the end of 2019. Rules would be reviewed again every 10 years. "It's a rolling review process, so we never get behind again," Murry said.

The N.C. Administrative Code includes nearly 23,000 rules without expiration dates. "Many of them haven't had proper sunsetting or sunshine in many years," Murry said. Bill sponsors acknowledged that the proposal needs work, including possibly using public input as a way to ensure that unwanted rules are targeted for review and those with broad support are not. Republicans lauded the proposal as a way to help businesses by eliminating burdensome regulations. House Speaker Thom Tillis, R-Mecklenburg, said this week that such an extensive review of rules had never been undertaken in the state. He deemed it "one of the most important things we can do for the business environment in North Carolina." Rep. Craig Horn, R-Union, said nothing else would impact more people more quickly and bring about that "at last" response from state residents like House Bill 74. A similar bill has been filed in the Senate.

Democrats quickly raised concerns. Rep. Deborah Ross, D-Wake, said some rules provide regulatory certainty to businesses and have widespread support. Putting those rules up for review could create uncertainty among existing businesses and others looking to come to North Carolina, she said. "I just want to be mindful that if we're sending the message that everything is up for grabs, even the consensus things, that we might do more harm than good," Ross said. She questioned whether there was a way to identify rules that need review, while having a "safe harbor" for others. That way, stakeholders could spend their time on rules that would actually be reviewed.

Rep. Pricey Harrison, D-Guilford, expressed concern about environmental and other rules intended to protect public health and safety. "I hope we tread mindfully there," she said. "I think this is fairly broad in scope and I look forward to your revising this proposal." Environmental groups have questioned whether regulatory agencies would have to spend extensive time and resources reviewing rules rather than enforcing them. "Not all rules are bad," said Dan Crawford, director of government relations at the N.C. League of Conservation Voters. Bill sponsors acknowledged it would require considerable resources of state agencies.

Meanwhile, former Rep. Mitch Gillespie, who is now DENR assistant secretary for the environment, proposed expanding to other agencies a "Rules Modification and Improvement Program" used by DENR's Water Quality division. The proposal would allow any group of 10 or more people to submit a letter to the Office of State Budget and Management in opposition to any rule, which would then trigger a review process. Gillespie said his proposal would expedite reviews and allow the public to have more input in the process. A more detailed explanation of Gillespie's proposal wasn't immediately available.(Patrick Gannon, THE INSIDER, 2/14/13).


If there are questions or you need additional information, please feel free to contact me at bbailey@penc.org or phone 919-834-1144, ext. 1.


Sincerely,

Betsy Bailey
Professional Engineers of North Carolina


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