WJTV News Channel 12 - RALEIGH: Board members met with lobbyist on fracking rules

Board members met with lobbyist on fracking rules

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RALEIGH, N.C. -

Some members of North Carolina's Mining and Energy Commission held private talks with energy industry executives and lobbyists before recommending that the state let drillers keep secret the chemicals they use in the hunt for natural gas.

At least three members of the 14-member board met privately with representatives of energy giant Halliburton and other companies that sell the chemicals used in hydraulic fracturing, according to interviews conducted by The Associated Press.

There is no law barring state appointees from talking with lobbyists, but commission members who didn't participate in the private discussions suggested the industry representatives should have addressed the full board.

"It creates a transparency problem because Halliburton wasn't putting their viewpoint forward through all of the channels available to it," said commissioner Amy Pickle, who also is state policy director at Duke University's Nicholas Institute for Environmental Policy Solutions.

"It was only utilizing that one-on-one lobbying, which creates an appearance of collusion," she said.

Fracking, or hydraulic fracturing, is used by the energy industry to extract oil and gas from rock by injecting high-pressure mixtures of water, sand or gravel and chemicals. North Carolina is believed to have natural gas reserves locked in layers of shale under Chatham, Lee and Moore counties.

Environmental groups have raised concerns about whether potentially hazardous chemicals could contaminate groundwater and wells serving nearby homes and farms. Industry representatives have argued that publicly disclosing the chemicals would reveal trade secrets.

The commission voted in January to recommend that companies be allowed to proceed with fracking without publicly identifying the chemicals used. State lawmakers are now weighing the commission's recommendations.

The commission initially proposed rules last year to require some limited disclosure of the chemicals. That proposal was pulled from board's May 2013 agenda at the last minute by commission chairman Jim Womack, who said he didn't feel the rules were ready.

In an interview with AP, he acknowledged that before deciding to delay the vote, he spoke with a senior Halliburton executive.

"They indicated to me in a phone conversation that there may be other options than what was written in that rule," Womack said.

Womack also meet twice at restaurants in his hometown of Sanford with Bo Heath, a Raleigh-based lobbyist with the firm McGuireWoods Consulting. Records show Heath represents Halliburton and Koch Industries, which has extensive holdings in natural gas drilling and pipelines.

"He wanted to come and talk about chemical disclosure," Womack said. "Both times, I picked up the tab."

Mining commissioner Vik Rao, who worked at Halliburton for nine years, said he spoke briefly with Heath after bumping into him at a restaurant. Rao said he declined later invitations to meet with the lobbyist because "the optics were bad" given his past employment with the energy company.

The meetings first came to light after the environmental group Greenpeace filed a public records request for emails and calendar entries of mining commission members related to contacts with representatives of the oil and gas industry. The AP later received the same documents through a public records request to the state Department of Environment and Natural Resources.

Mining commission member George Howard had two private meetings with the lobbyist, including one listed on his calendar as "Beer with Bo Heath."

"There was a lot of talk with Halliburton," Howard said. "It was actually kind of legal advice, to some degree. But I was also listening to their substantive concerns about the release of proprietary information."

Howard stressed that he also had a private meeting with David Kelly, a lobbyist for the Environmental Defense Fund.

"I like to try to get good public policy, and I've heard plenty from the environmental groups on this subject," said Howard, the CEO of a company that restores degraded wetlands to offset those destroyed by new development.

Records show Howard exchanged emails with Heath, including seeking advice on policy experts who could share information with the board. Heath recommended former Colorado Gov. Bill Ritter, a one-term Democrat who led the process to create rules in his state for the extraction of natural gas using hydraulic fracturing.

Ritter later came to Raleigh and gave a presentation to the board.

"It didn't cost us anything," Womack said.

It was not immediately clear who covered the former governor's travel expenses. Ritter, who leads a nonprofit group called the Center for the New Energy Economy, did not respond to messages left Friday with his office. A form posted on the group's website asks those seeking Ritter as a speaker whether they can offer a cash honorarium and pay his travel expenses.

Bob Lewis, spokesman for McGuireWoods Consulting, would not comment on whether the lobbying firm paid Ritter a fee or travel expenses.

"Mr. Heath and McGuireWoods Consulting have represented our client before the North Carolina Mining and Energy Commission in full compliance with all state lobbying and public disclosure laws and regulations," Lewis said.

Chairman Womack said he is willing to talk with anyone, including private sector representatives who want those discussions to stay private.

"They want to meet privately because there are a lot of sensitive issues they have to deal with (when) their business interests are on the line," Womack said. "So, that's just the way things are done."

Copyright 2014 The Associated Press. All rights reserved.

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