HYDRAULIC FRACTURING: PRACTICAL CONSIDERATIONS AND FIRST-HAND EXPERIENCE REGULATORY AND AUTHORITY ISSUES By Richard Whisnant UNC School of Government Thursday, March 29, 2012

State/local division of responsibility: like stormwater regulation of new development  Statewide minima for technical standards: well construction, E&P waste handling, toxics disclosure, monitoring, reporting, etc.  Express local power to strengthen standards if a community wishes  Preservation of traditional land use and development approval authority: it’s essentially an industrial use

State regulation: centered in DENR Entia non sunt multiplicanda praeter necessitatem (entities must not be multiplied beyond necessity). Attrib. William of Ockham (c ). Keep it simple stupid. Kelly Johnson, Lockheed Martin (c. 1994).  SWOT already evaluated by STRONGER report  Lots of coordination challenges with Divisions of Land Resources, Water Quality and Water Resources; with separate agency, are you kidding?  Should be supplemented with specific oil and gas expertise  Separate agency: startup and fixed costs a mismatch with fiscal reality and government-cutting rhetoric

Good vs. bad regulation: why have we lost the idea of good regulation?  Maximize industry self-regulation; that takes a strong external levelling of the field  DENR report conclusion vastly understates the scope of the problem in creating an entire new regulatory structure and standards  The shallowness of current thinking about regulation in general makes the odds of our creating an excellent regulatory structure on the first pass very low