North Carolina returns EPA grant for hydraulic fracturing study

On September 3, 2013, the State of North Carolina, through its Department of Environment and Natural Resources (“DENR”), rejected a $222,595 federal grant for water quality monitoring in areas where hydraulic fracturing is likely to occur in the future. The grant would have been administered through the U.S. Environmental Protection Agency and was likely to cover research in the Sanford Basin of Lee County, located south of Raleigh. The DENR also returned a $359,710 federal grant for wetlands monitoring in the region.

Tom Reeder, Director of the Division of Water Resources, noted that the state will conduct a study to examine the potential impacts of hydraulic fracturing on groundwater, but at a later date. He also said the study would be conducted by a different agency than that which applied for the funding from the EPA. The Program Development Unit, which housed experts in aquatic ecosystems, would have received the grants, but that unit will no longer exist due to the Division of Water Resources’ reorganization.

At the request of the North Carolina Mining and Energy Commission, which is charged with developing rules on hydraulic fracturing, the DENR explained its return of the EPA funds at a meeting on September 27, 2013. At that meeting, Drew Elliott of DENR stated that although DENR had a “deep background knowledge” of the Sanford Basin, more information would be needed from the Mining and Energy Commission in order to conduct a detailed baseline study of hydraulic fracturing. Mr. Elliott stated that such information would include when and where hydraulic fracturing would occur first, the specific constituents of concern, and what, if any, groundwater could be potentially impacted. The federal grant contained no mention of coordination with the Mining and Energy Commission or the Department of Energy, Mineral and Land Resources. Mr. Elliott also stated that the DENR would be open to suggestions from the Commission about where and how the baseline study can be conducted in the future.