TO: (1) ESTABLISH AN OIL AND GAS BOARD WITH JURISDICTION AND AUTHORITY OVER MATTERS RELATED TO OIL AND GAS EXPLORATION AND DEVELOPMENT IN THE STATE, INCLUDING THE USE OF HORIZONTAL DRILLING AND HYDRAULIC FRACTURING FOR THAT PURPOSE, AND TO DIRECT THE BOARD TO CREATE A MODERN REGULATORY PROGRAM FOR MANAGEMENT OF OIL AND GAS EXPLORATION AND DEVELOPMENT IN THE STATE, INCLUDING THE USE OF HORIZONTAL DRILLING AND HYDRAULIC FRACTURING FOR THAT PURPOSE; (2) AUTHORIZE THE PROCESSES OF HORIZONTAL DRILLING AND HYDRAULIC FRACTURING FOR THE PURPOSE OF OIL AND GAS EXPLORATION AND DEVELOPMENT IN THE STATE AND PLACE A MORATORIUM ON PERMITTING RELATED TO THOSE PROCESSES UNTIL JULY 1, 2014; (3) ENACT VARIOUS OTHER PROVISIONS RELATED TO MANAGEMENT OF OIL AND GAS EXPLORATION ACTIVITIES, INCLUDING PROVISIONS RELATED TO LOCAL GOVERNMENT AUTHORITY OVER THESE ACTIVITIES; (4) ESTABLISH THE JOINT LEGISLATIVE COMMISSION ON ENERGY POLICY WITH LEGISLATIVE OVERSIGHT OF ALL MATTERS RELATED TO OIL AND GAS EXPLORATION AND DEVELOPMENT IN THE STATE, AND OTHER ENERGY-RELATED ISSUES; (5) DIRECT THE DEPARTMENT OF PUBLIC INSTRUCTION TO PURCHASE SCHOOL BUSES THAT OPERATE ON COMPRESSED NATURAL GAS (CNG); (6) DIRECT THE DEPARTMENT OF TRANSPORTATION TO PURCHASE NEW THREE-QUARTER TON PICK UP TRUCKS AND NEW ONE-HALF TON PICK UP TRUCKS THAT OPERATE ON COMPRESSED NATURAL GAS (CNG) OR COMPRESSED NATURAL GAS (CNG) AND GASOLINE; (7) CREATE AN INTERAGENCY TASK FORCE TO ESTABLISH PUBLIC-PRIVATE PARTNERSHIPS FOR THE CONSTRUCTION AND DEVELOPMENT OF COMPRESSED NATURAL GAS (CNG) FUELING INFRASTRUCTURE; (8) ESTABLISH CRITERIA FOR THE OPERATION OF ELECTRIC VEHICLE CHARGING STATIONS LOCATED AT STATE-OWNED REST STOPS ALONG THE HIGHWAYS; (9) ENSURE THE USE OF FUEL-EFFICIENT AND COST-EFFICIENT RETREAD TIRES ON STATE VEHICLES; AND (10) AMEND THE ENERGY JOBS ACT OF 2011 IF THE ENERGY JOBS ACT OF 2011 BECOMES LAW, AS RECOMMENDED BY THE LEGISLATIVE RESEARCH COMMISSION ENERGY ISSUES POLICY COMMITTEE.
Establish Oil and Gas Board. Enacts new Part 4, Oil and Gas Board, in Article 27 of GS Chapter 113 to establish the nine-member NC Oil and Gas Board (Board), which has jurisdiction and authority concurrent with that of the Department of Environment and Natural Resources (DENR) in the administration and enforcement of oil and gas exploration and development activities and related laws. Details the Board’s access to information related to oil and gas exploration and development, and directs the Board, by December 31, 2013, to adopt rules to regulate oil and gas exploration and development in NC and the use of horizontal drilling and hydraulic fracturing, as specified.
Authorizes the Board to exercise quasi-judicial powers in accordance with the Administrative Procedure Act. Provides that the Board makes the final agency decision in contested cases arising from civil penalty assessments made, and rules adopted, under Article 27 (Oil and Gas Conservation) of GS Chapter 113. Permits penalties based on listed factors. Requires the appointment, from members of the Board, of a Committee on Civil Penalty Remissions, which makes the final agency decision on remission requests, as detailed. Authorizes the Attorney General to commence a civil action if the violator does not pay the civil penalty within 30 days. Lists the residency and qualification requirements for the nine Board members, and sets out term, meeting, and leadership details. Requires initial appointments to the Board by August 1, 2012, and makes the first quarterly report due January 1, 2013.
Sets out the Board’s reporting requirements to the Joint Legislative Commission on Energy Policy.
Enacts new GS 132-11, requiring all information obtained by the Board and DENR, related to oil and gas exploration and development, to be available for public inspection and examination two years after the Board receives the information, provided the information is not confidential or a trade secret.
Statutory and Rule Changes; Moratorium. Amends GS 113-389 to add four defined terms, including hydraulic fracturing fluid and hydraulic fracturing treatment. Makes conforming changes to GS 113-391 (DENR’s jurisdiction and authority over oil and gas conservation) to make DENR’s authority concurrent with that of the newly-established Board, and to remove restrictions on horizontal drilling and hydraulic fracturing. Makes conforming changes to GS 113-393(d) (development of lands as drilling units) and GS 143-214.2(b) (prohibited discharges in state waters). Prohibits DENR from enforcing any rule that would ban horizontal drilling and hydraulic fracturing treatments and related activities, as described. Establishes a moratorium on the issuance of permits for horizontal drilling and hydraulic fracturing in North Carolina through July 1, 2014.
Misc. Provisions. Enacts new GS 113-388A, authorizing cities and counties to impose a one-time impact fee, up to $30,000, for each oil or gas well; the fee must be calculated as detailed, and may be appealed. Enacts new GS 113-415A to make invalid any local ordinance that prohibits oil and gas exploration and development activities, and the use of horizontal drilling or hydraulic fracturing. Provides a Board hearing process when exploration and development activities would be prevented by a local ordinance, and sets out the procedure to appeal the Board’s decision. Renames the Division of Land Resources in DENR as the Division of Energy, Mineral, and Land Resources.
Energy Policy Oversight Commission. Enacts new Article 33 in GS Chapter 120, creating a ten-member Joint Legislative Commission on Energy Policy (Commission) to oversee energy policy in North Carolina. Details the membership, term limits, organization, and powers of the Commission.
Compressed Natural Gas-Fueled Equipment. Directs the Department of Public Instruction to purchase, in specified phases, school buses that operate on compressed natural gas (CNG), beginning July 1, 2013. Directs the Department of Transportation (DOT) to purchase, in specified phases, new 3/4 ton and 1/2 ton pickup trucks that operate on CNG or on CNG and gasoline, beginning July 1, 2013. Provides for the creation of an interagency task force to establish public-private partnerships with the CNG industry to develop infrastructure supporting the CNG vehicles. Includes reporting requirements.
Electric Vehicles and Retread Tires. Authorizes the DOT to operate electric vehicle charging stations at state-owned rest stops, provided two detailed conditions are met. Sets out reporting requirements.
Amends GS 115C-249.1 (concerning the purchase, repair, or refurbishment of school bus tires) to prohibit contracts executed on or after July 1, 2012, from including any specification for retread rubber formulations. Also requires the contracts to require pre-cure fuel efficient rated retreaded tires. Amends GS 143-63.2 (concerning the purchase, repair, or refurbishment of state vehicle tires) to require all contracts executed on or after July 1, 2011, excluding contracts in place for future purchases, to comply with the statute. Makes conforming changes.
Energy Jobs Act of 2011. Makes several changes to the Energy Jobs Act of 2011 (SB 709) if the Act becomes law, as follows. Makes clarifying changes to the provision requiring the development of a regional energy strategy (was, regional energy compact) for the exploration and development of offshore energy resources and requires final recommendations by December 31, 2012. Repeals provision requiring DENR’s report on onshore shale gas resources. Amends GS 113B-3 to change the deadline for appointments to the Energy Jobs Council to September 1, 2012 (rather than October 1, 2011). Amends Council membership qualifications. Makes additional clarifying changes.
Includes legislative findings and statements of intent, and incorporates specified recommendations from DENR’s March 2012 draft report on oil and gas resources.
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