Companies Interested in Fracking in NC

Nine companies have an interest in fracking in North Carolina. They are:

Natural gas companies 1) PSNC Energy and 2) Piedmont Natural Gas;

Electric utilities Progress Energy, 3) Duke Energy (Duke & Progress Energy merged) and 4)  Dominion Resources, which are expanding their use of natural gas to produce power;

5) General Electric, which has invested in natural gas reserves in other states and introduced a mobile evaporator to help gas drillers recycle water;

6) Weyerhaeuser, a major landowner that has invested in shale deposits;

Natural gas producer 7) Koch Industries; and

Railroad companies 8) Norfolk Southern and 9) CSX, which are seeing an increase in fracking-related shipping.

(Indy Week, 5/30/2012)

Fracking, Mineral Rights and Homeowners

For the past two years, Fort Worth, Texas-based D.R. Horton has sold the mineral rights, and the right to drill, mine, store and explore for them, to its Colorado-based energy company on at least 425 of its lots in Raleigh, Cary, Durham, Chapel Hill and other Triangle cities, according to deed records.

Starting at 501 feet below the surface, the mineral rights, ownership of natural gas, oil, geothermal heat, hydrocarbons, even water, belong to DRH Energy, a subsidiary of D.R. Horton, one of the nation's largest homebuilders.

Coincidentally, the transactions began occurring in the summer of 2010, around the time the push began to legalize fracking in North Carolina.  The Consumer Protection Division of the N.C. Attorney General's office is expected to address the issue, and the Horton case specifically, in its upcoming report to the Legislature about fracking, a spokesperson for the attorney general said. The report was due by May 1.

Prospective and current homeowners could face serious financial or legal ramifications for losing their mineral rights: They may not be able to secure a loan or refinance a mortgage.  D.R. Horton operates DHI Mortgage, through which their prospective homebuyers can get loans, but lenders not affiliated with the company may not approve these transactions without the mineral rights.

The value of the manicured lawns at Brightleaf would likely be altered if DRH Energy chooses to exercise its "perpetual right" to drill or build tunnels, shafts or wells—a right, the mineral deed says, the company has "without limitation." Although the deed specifies that the drilling or mining would originate from land other than the homeowner's property, the activities and equipment, which could include tunnels and shafts, would occur beneath it.

The N.C. Housing Financing Agency, which provides first mortgages to low- and moderate-income homebuyers, will not back loans if mineral rights are excluded from the property, according to its online guide. The State Employees' Credit Union will not finance property if a homeowner sells or transfers the mineral rights during the term of the loan. 

Lenders might not grant mineral rights exceptions for loans "due to heightened risk concerns associated with extraction of these natural resources, including hydraulic fracturing technology (otherwise known as fracking or horizontal drilling)."

If natural gas or oil is found beneath the property of mortgage holders who have signed away the mineral rights, they will not get any money from natural gas extraction.

Developers and Mortgage companies are required to disclose the status of the title, including any legal documents such as mineral right. The placement in the sales contract and the timing of the disclosure are also important.  If homeowners know before closing about the mineral rights sale, then they may have little recourse. But, notification at closing, that may not be sufficient. Closing may not be soon enough to make an informed decision.

Anyone who learns that it was in a developer's interest to separate their mineral rights should be very skeptical of statements from them that drilling for gas or other use of the mineral rights is 'unlikely."

Under forced pooling, a company assembles enough properties so that it can drill under your land without your permission—even if you own the mineral rights. It is common in established gas and oil states. Generally, a certain percentage of landowners must agree to lease their property for drilling for forced pooling to be efficient. However, if a company owns the mineral rights under many contiguous properties, it's unclear if homeowners could legally object.

The energy company can "whipstock, directionally drill, redrill, retunnel, maintain, deepen and operate any such wells or mines."

Unless there are special statutory protections that protect the surface owners, which North Carolina does not have at this point, a property owner could have drilling take place on their property and not have recourse to stop it. (Indy Week, 4/4/2012)

EPA Plan For Integrated Risk Information System (IRIS)

The U.S. Environmental Protection Agency (EPA) announced today its plan to address the four draft Integrated Risk Information System (IRIS) assessments that were placed on hold in June 2010, pending a review of some of the underlying studies relied on in the assessments. EPA conducts IRIS assessments to determine the potential impact of specific chemicals on people’s health. The four assessments are methanol, methyl tertiary-butyl ether (MTBE), ethyl tertiary-butyl ether (ETBE), and acrylonitrile. Methanol is used in paints, varnishes, wiper fluid and adhesives. MTBE and ETBE are gasoline additives and acrylonitrile is used in the manufacture of certain plastics.

EPA held the assessments because of a report written by the National Toxicology Program (NTP), a program administered by the National Institute of Environmental Health Sciences (NIEHS). The report outlined a review of research completed by the Ramazzini Institute, a lab in Italy that conducts animal testing to evaluate the potential cancer-causing effects of chemicals. The report discussed findings from an NTP assessment of an animal study on methanol and recommended that further pathology reviews be carried out to resolve differences of opinion between NTP scientists and the Ramazzini Institute in the diagnoses of certain cancers reported in the study.

Out of an abundance of caution and to ensure the agency’s chemical assessments are grounded in the soundest possible science, EPA undertook a thorough review of all ongoing and previous chemical assessments to determine which, if any, relied substantially on cancer testing from the Ramazzini Institute. EPA found six assessments, four of which were in draft form and put on hold pending further review.

EPA and NIEHS decided to jointly sponsor an independent Pathology Working Group (PWG) review, in cooperation with the Ramazzini Institute, of selected studies, including the methanol cancer assessment study. The review has begun and will continue over the next several months. The results will be made public and the cancer assessment for methanol will remain on hold until its completion.

The non-cancer health effects resulting from exposure to methanol are not under review. Therefore, the draft assessment of methanol – IRIS Methanol Toxicological Review (Non-Cancer) – will be released shortly for public comment and peer review. (More information on the peer review of the non-cancer methanol assessment is available on the IRIS website.

The Ramazzini Institute diagnosed leukemias and lymphomas in studies of MTBE and ETBE, and found other tumors in studies of acrylonitrile, MTBE and ETBE. The PWG review of these studies will inform the interpretation of the tumor findings for those three IRIS assessments; however, based on other available data, EPA has determined that reliance on Ramazzini Institute study results is not necessary to continue with assessment development for MTBE, ETBE and acrylonitrile, including an assessment of cancer risks. Therefore, work on the assessments for the three chemicals will continue during the PWG review.

When the four assessments – methanol, MTBE, ETBE, and acrylonitrile – were put on hold in June 2010, two completed and publicly posted assessments – vinyl chloride and 1,1-dichloroethylene – were also identified as relying substantially on Ramazzini data. EPA will evaluate the results of the PWG review to inform conclusions about Ramazzini Institute tumor findings for these two assessments. (EPA)

More information on the non-cancer methanol assessment

EPA Provides Public with Easier Access to Chemical Information

The U.S. Environmental Protection Agency has introduced a new web-based tool that will enable the public to search for and have easy access to health and safety studies on industrial chemicals. As part of Administrator Lisa P. Jackson’s continued efforts to enhance EPA's chemical management program and increase transparency, the chemical data access tool allows users to conduct a chemical-specific search for health and safety studies that have been submitted to the agency under the Toxic Substances Control Act (TSCA). The tool will also be added to Data.Gov, a website developed by the Obama Administration to provide public access to important government information.

The new tool will for the first time give the public the ability to electronically search EPA’s database of more than 10,000 health and safety documents on a wide range of chemicals that they may come into contact with every day.

Under TSCA, companies are required to submit health and safety studies to the agency when they show there may be a substantial risk, when chemical testing is required, or to facilitate EPA's review of new chemicals. The public now will be able to have easy access to these studies simply by searching for the name of a chemical or for a particular word or phrase, such as a health or safety concern addressed in a study.

In addition to making the health and safety studies more accessible, EPA is taking aggressive action to reduce companies' efforts to keep the identity of the chemicals confidential when health and safety studies are submitted to the agency.

More about the new web tool

More on chemicals

CONTACT:

Dale Kemery (News Media Only)
202-564-7839
202-564-4355
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David E. Giamporcaro
Industry and Small Business Liaison, Environmental Assistance Division
Office of Chemical Safety and Pollution Prevention
U.S. Environmental Protection Agency
East Building
1200 Pennsylvania Avenue, N.W. (MC7408M)
Washington, D.C. 20460
Phone: (202)564-8107
Fax: (202)564-8813

Center for Environment, Commerce & Energy: 25th Anniversary

PRESIDENT'S CORNER

By Norris McDonald

Today is our 25th anniversary.  The Center was incorporated on November 20, 1985.

You can see a listing of many of our activities during that time at our original website, which we converted to Multiply when the original Msn Groups platform ended).  There is more activity information at our History page. My career has been very satisfying.  From my beginning in the Fall of 1979 at the Environmental Policy Center (now Friends of the Earth) until today, the adventure has been incredible.  I started out in the Washington, D.C.-based environmental movement.  Jimmy Carter was president and was just finishing a rough 4-year run.  I shook his hand at the Democratic National Convention in New York in 1980 not knowing that Washington was about to get a completely new makeover.  The Reagan era was interesting and quite the challenge for the environmental movement.  I still remember his 'no standard standard' for appliance efficiency standards.  I also remember the Air Florida crash and the Metro subway accident on the day that I was walking back from the U.S. Department of Energy after testifying on appliance standards.

Well, without sounding like the old guy in the room sharing old war time stories that nobody really wants to hear, the situation today is as exciting as ever.  We are embarking on trying to build biomass power plants in Mississippi, California and in Kenya.  The adventure continues and I am having more fun than ever.  Our team is lean and mean and green. 

I have kept the Center small on purpose and will continue to do so.  I almost died from respiratory failure in 1991 and 1996 (intubated for 4 days in ICU each time).  After getting divorced and full custody of my son when he was 2 years old, I decided that I wanted to stick around to see my son grow up.  But I also wanted to continue with my entrepreneurial environmentalism.  So keeping it small worked.  Although I still struggle with a chronic acute asthma that could kill me any day, my son is now 18 and I am still 'doing my green thing.'  Life is good.  Hey, and we just opened a new Center Hollywood blog this week.  Oh, and if you're feeling generous, feel free to click on our Donation button on our sites.

Duke Energy To Spend $93 on Clean Air Act Violations

Emissions to be slashed more than 35,000 tons of sulfur dioxide & nitrogen oxides annually

Duke Energy, one of the largest electric power companies in the nation, will spend approximately $85 million to significantly reduce harmful air pollution at an Indiana power plant and pay a $1.75 million civil penalty, under a settlement to resolve violations of federal clean air laws, the Justice Department (DOJ) and the U.S. Environmental Protection Agency (EPA) announced today. The settlement also requires Duke to spend $6.25 million on environmental mitigation projects.

The agreement, filed in federal court in Indianapolis, resolves violations of the Clean Air Act’s new source review requirements found at the company’s Gallagher coal-fired power plant in New Albany, Ind., located directly across the Ohio River from Louisville, Ky.

The settlement is anticipated to reduce sulfur dioxide emissions at the Gallagher Plant by almost 35,000 tons per year, an 86 percent reduction when compared to 2008 emissions. This is equivalent to the emissions from 500,000 heavy duty semi trucks, which is more than all of the trucks registered in Indiana, Illinois, Kentucky, and Ohio combined. Sulfur dioxide harms the environment and human health.

Duke is required to spend $6.25 million on environmental mitigation projects, including $250,000 for the U.S. Forest Service to address acid rain in downwind national forests, $5 million for one or more additional projects such as conversion to hydro generation or hybrid vehicle fleets, and $1 million for environmental mitigation projects to be allocated among the states that joined the settlement.

As a result of a lawsuit filed 1999, Duke went to trial in May 2009 for related violations. At that time, an Indianapolis jury found that Duke violated the Clean Air Act by failing to obtain required permits and pollution controls before making modifications to Gallagher Units 1 and 3 that caused significant increases in sulfur dioxide. The trial to determine the appropriate remedy for the violations resolved by the settlement had been scheduled to begin on January 25, 2010.

The settlement requires Duke to either repower Units 1 and 3 at Gallagher with natural gas or shut them down to remove all sulfur dioxide pollution. This natural gas repowering will also reduce other air pollutants, including nitrogen oxides, particulate matter, mercury, and carbon dioxide. The combined nitrogen oxide emissions from Units 1 and 3 are expected to decrease by about 2,198 tons per year as compared to 2008 emissions. By using natural gas rather than coal, Duke will eliminate emissions of particulate matter and mercury from the units. The switch from coal to natural gas will also decrease these units’ carbon dioxide emissions by roughly half per unit of electricity.

The settlement also requires that Duke install new pollution controls for sulfur dioxide at the other two units at the plant, Units 2 and 4. The work and projects that are required by the settlement will, when fully implemented, result in substantial improvements to the air quality for the communities that are the most heavily impacted by the Gallagher Plant’s emissions.

This is the 17th settlement secured by EPA and DOJ as part of a national enforcement initiative to control harmful emissions from coal-fired power plants under the Clean Air Act’s New Source Review requirements. The total combined sulfur dioxide and nitrogen oxides emission reductions secured from these settlements will exceed nearly 2 million tons each year once all the required pollution controls have been installed and implemented.

Sulfur dioxide and nitrogen oxides can cause severe harm to human health and the environment. After being emitted from power plants, these pollutants are converted to fine particles of particulate matter that can lodge deep in the lungs, causing a variety of health impacts including premature death. Sulfur dioxide and nitrogen oxides are also significant contributors to acid rain, smog, and haze, which impair visibility in national parks. Air pollution from power plants can travel significant distances downwind, crossing state lines and creating region-wide health problems.

The states of New York, New Jersey and Connecticut, as well as the Hoosier Environmental Council and the Ohio Environmental Council joined the federal government in today’s settlement.

Duke Energy, which is based in Charlotte, N.C., supplies and delivers energy to approximately 4 million customers in the Midwest and the Carolinas.

The proposed settlement was lodged in the U.S. District Court for the Southern District of Indiana and is subject to a 30-day public comment period.

More information

Administrator Jackson Visits Raleigh, Announces $200 Million Investment to Develop Smart Electric Grid in Carolinas, Florida

U.S. EPA Administrator Lisa P. Jackson visited Raleigh today to announce a $200 million grant for a smarter, stronger and more efficient electric system in North Carolina, South Carolina and Florida. The funding, announced at a press conference with Lieutenant Governor Walter Dalton and Raleigh Mayor Charles Meeker, is part of President Barack Obama’s announcement yesterday of the largest single energy grid modernization investment in U.S. history - $3.4 billion in Smart Grid Investment Grant Awards under the American Recovery and Reinvestment Act that will be matched by industry for a total investment worth more than $8 billion.

An analysis by the Electric Power Research Institute estimates that the implementation of smart grid technologies could reduce electricity use by more than 4 percent by 2030. That would mean a savings of $20.4 billion for businesses and consumers around the country, and $500 million for North Carolina alone – or $51 in utility savings for every man, woman and child in North Carolina.

The $200 million grant, which Progress Energy will match with $300 million of its own funding, will fund system and equipment upgrades that will make their grid more efficient, saving consumers money in the Carolinas and in Florida. Progress Energy will also use its funding to install 160,000 smart meters and other technology that will cut energy costs for its customers.

North Carolina companies, serving five states, will receive $403 million total in recovery act funding for smart grid development, which will be matched by nearly $975 million in private funds for a total investment of $1.3 billion. Duke Energy will receive a similar $200 million grant.
More information on EPA and the Recovery Act