RALEIGH, N.C. – Gov. Pat McCrory’s proposed budget includes money for shale-gas surveys that would be done through a public-private consortium, with industry stakeholders picking up most of the overall cost of about $3 million, according to state budget officials.
Art Pope, the budget director, said in an interview Thursday that $500,000 has been allotted in McCrory’s budget to drill in areas believed to have deposits of shale gas reserves. Tests would be done to fine-tune the state’s current estimates of reserves, he said, stressing that the proposed drill sites would not be used for hydraulic fracturing, or fracking, the common drilling method used to extract shale gas.
“It is a geological survey. It is not a fracking well,” Pope said. “It is a geological core hole to explore what is in the substratum. … It is being done as a consortium so the data will be shared, and the state only bears about one-sixth of the cost.”
Most of the state’s current information on potential shale-gas resources comes from the Sanford sub ‐ basin of the Deep River geologic basin, an area that runs about 150 miles from Granville County southwestward to South Carolina, according to the a 2012 report by the state Department of Environment and Natural Resources on shale-gas exploration. Estimates suggest that Chatham, Lee and Moore counties have the largest shal e reserves; Stokes County also may have some reserves.
However, DENR officials said, new surveys are needed because the current geological information is limited, based on data from old wells.
“You’re making a lot of public policy decisions based on really old data,” said Drew Elliot, DENR spokesman. “The idea is to figure out if we’ve got something that the industry is going to be interested in.”
The proposed state-industry consortium would drill three vertical survey holes in the Sanford sub-basin to test for reserves, according to the budget. New data will “serve as a mechanism to attract qualified companies interested in safely and responsibly exploring for natural gas,” the budget says.
The $500,000 allotment would be a one-time expense, Pope said. And it could change as the legislature makes its own proposals on McCrory’s $21 billion budget.
The proposal comes as state lawmakers prepare to set new regulations governing the drilling method known as hydraulic fracturing, or fracking, which has been associated in other states with water and air pollution, as well as earthquakes, according to the 2012 report.
Last month, geologists in Ohio for the first time linked earthquakes in a geologic formation deep under the Appalachians to fracking, leading the state to issue new permit conditions in certain areas that are among the nation’s strictest.
A state investigation of five small tremors in March in the Youngstown area, in the Appalachian foothills, found the injection of sand and water that accompanies fracking in the Utica Shale may have increased pressure on a small, unknown fault, said State Oil & Gas Chief Rick Simmers. He called the link “probable.”