Senate Bill sets path for new jobs, N.C. energy development

Feb 11, 2013

Raleigh, N.C. – A comprehensive energy bill introduced in the North Carolina Senate Monday paves the way for a flourishing onshore and offshore energy sector that would attract thousands of new jobs and generate billions of dollars in state revenues.

Senate Bill 76, the Domestic Energy Jobs Act, authorizes the Department of Environment and Natural Resources (DENR) and the Mining and Energy Commission to begin issuing permits for shale gas exploration and development on March 1, 2015 – five months after regulatory and safety standards are mandated to be in place.

The bill, sponsored by Sens. Buck Newton (R-Wilson), Bob Rucho (R-Mecklenburg) and Andrew Brock (R-Davie), provides an incentive for energy companies to hire workers and begin production by implementing a one percent state severance tax on shale gas resources that gradually increases to six percent by 2020. Revenues would be used to fund DENR’s oil and gas regulatory program, create a $10 million energy planning and management fund and contribute to North Carolina’s General Fund.

Comparisons to other locations across the Southeast suggest that two of North Carolina’s largest possible exploration sites hold a potential of between 5 and 15 trillion cubic feet of natural gas.

“We know North Carolina’s abundance of clean and inexpensive natural gas brings the promise for thousands of new jobs,” said Newton. “Companies will now be able to apply the latest technologies and safety standards to see just how far our resources extend, putting North Carolina on track for a vibrant energy jobs sector.”

The bill authorizes Gov. Pat McCrory to begin negotiating a tri-state pact with the governors of Virginia and South Carolina. The pact would urge the federal government to open the east coast for energy exploration.

North Carolina’s offshore energy reserves are predicted to be mostly clean natural gas. The state has 64 million federal offshore acres, the most on the East Coast and the fourth largest acreage in the country.

Senate Bill 76 also encourages the governor to work with North Carolina’s Congressional delegation to advocate for state revenue-sharing. Nearly half of the revenues derived from offshore energy exploration and production would go to jobs training, energy research and conservation.

The Southeast Energy Alliance calculates that production of offshore resources would create more than 6,700 new jobs and add more than $659 million annually to North Carolina’s economy over three decades.

“Our country needs increased domestic energy production, and our state needs jobs and revenue,” said Senate President Pro Tempore Phil Berger (R-Rockingham). “North Carolina will no longer be a spectator when it comes to the production of clean natural gas.”

The bill also:

Provides additional resources to DENR for operation of the Mining and Energy Commission.

Replaces the state’s Energy Policy Council with an Energy Jobs Council – a 13-member body that includes the secretaries of DENR and Commerce. The Council will develop a comprehensive energy plan with a focus on creating new jobs.

Urges the governor to join the Outer Continental Shelf (OCS) Governors Coalition while also working with the federal government to take steps to, among other things, 1) amend the federal government’s five-year OCS leasing plan to include North Carolina, and 2) allow revenue-sharing to occur for East Coast states.

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