New York State garnered worldwide media attention on December 17, 2014, when Governor Andrew Cuomo's administration announced after six years of study that it was instating a complete ban on high-volume hydraulic fracturing statewide. Despite the interest this action created, it was certainly not the first example of how states vary in their handling of hydraulic fracturing, whether it is through legislation, regulation, or court rulings. For example, the rules governing the development of natural gas in the Marcellus shale in Pennsylvania through hydraulic fracturing have seen numerous changes over the last several years, pursuant to multiple court rulings, state laws, local zoning, and Department of Environmental Protection regulation.
North Carolina has now joined Texas, Pennsylvania, Ohio, Colorado, and New York in making headlines by allowing hydraulic fracturing within its borders. In 2014, the North Carolina legislature lifted the moratorium on hydraulic fracturing. Although the state has yet to approve any drilling units, two lawsuits addressing the process and makeup of the Mining and Energy Commission in charge of granting such permits have officially delayed any actual activity in the state.
North Carolina Governor Pat McCrory previously filed suit to clarify how much authority the legislature has in appointing the Commission, as opposed to the governor. Earlier this year, a three-judge panel sided with Governor McCrory in the matter of McCrory v. Berger, and the North Carolina Supreme Court is expected to rule on this lawsuit sometime in the summer of 2015.
In addition, earlier this month, Wake County, North Carolina, Superior Court Judge Donald W. Stephens entered a decision staying a separate suit, Haw River Assembly et al. v. Vikram Rao et al., which was brought by environmental groups against the Commission, until the Supreme Court rules on McCrory v. Berger. Judge Stephens held that the Commission was prevented from approving drilling units for hydraulic fracturing until such ruling is made. Pursuant to this finding, Judge Stephens also granted a preliminary injunction to that effect.
In Haw River, the plaintiffs request that the court find the appointments to the Commission to be unconstitutional, thereby voiding all of the Commission's actions, including draft rules related to hydraulic fracturing. According to Judge Stephens, even though McCrory's separate suit was not against the Commission itself, both suits turn on similar legal issues, since both suits turn on the validity of the appointment of the Commission deciding on permits.
As set forth in his May 6 Order, "[b]ased on the decision of the three-judge panel in McCrory v. Berger, Plaintiffs have demonstrated that they are likely to succeed on the merits of their claim that legislative appointment of a majority of the members of the [Commission] is an unconstitutional violation of the separation of powers."
Pending the resolution of McCrory, it is unlikely that any unconventional drilling permits will be issued in North Carolina.
It is unclear how the future of natural gas development will play out in North Carolina.
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