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Ethics rules for fracking board? (includes list of new state energy board members)

The State Ethics Commission [1] will likely wait until November to decide if members of the state’s new rule-making body for fracking will have to follow state ethics rules.

The delay comes as questions are being raised publicly by the environment community about potential conflicts of interest with a board member who runs a company that stands to profit off of hydraulic fracturing.

Hydraulic fracturing, or fracking, is the controversial method of extracting natural gas from layers of shale by blasting large quantities of water and chemicals into the ground.

The N.C. Energy and Mining Commission is expected to have its first meeting later this month or in early September, though no exact dates have been set.

“It appears that the (energy and mining) commission could be seated and start discharging their duties without questions of conflict of interest being addressed,” said Molly Diggins, the director of the North Carolina Sierra Club. “The public relies on the ethics committee to flag conflicts of interest.”

The N.C. state legislature, over a veto by Gov. Bev Perdue, passed legislation this summer creating the new energy and mining commission and paving the way to allow the controversial natural gas mining process known as fracking in North Carolina. Fracking byproducts are generally laden with chemicals and gas, and issues have popped up in other states where waterways have been contaminated and natural gas has seeped into private water wells.

Supporters of frocking say it will bring needed energy jobs to the state and help the country assert more independence in the energy market.

Diggins says she has concerns about the appointment of Ray Covington by N.C. House Speaker Thom Tillis to a seat that was supposed to be for members of a conservation group.

Covington owns land in Lee County and is a part-owner of N.C. Oil and Gas, a company that hopes to negotiate contracts with natural gas companies on behalf of landowners in the Sanford area. N.C. Oil and Gas would take a cut of the money, and look out for the interests of landowners, according to its website [2].

In comments he made about a WRAL investigation [3] that first brought up conflict of interest concerns, Covington said he didn’t see any problems with his sitting on the regulatory committee. A previous WRAL story, available here [4], said that Covington served the Lee County Agricultural Advisory Board and a project to restore a historic site in the area.

“Help me out a little bit. Where do you see the conflict of interest?” he told WRAL in a July 25 piece.”I’m a landowner. Are you saying that we should exclude all landowners (from the commission)?”

Public documents obtained by N.C. Policy Watch indicate that Covington, who lives in Guilford County but manages land his family owns in Lee County, joined the Lee County agriculture board just two months ago, in June.

(Note: N.C. Policy Watch left several messages this week to speak Covington for comment on this issue, but he was not immediately available. We hope to speak with him later and will update this post with his comments when we do.)

Perry Newson, the staff director of the ethics commission, said the new Energy and Mining Commission can meet regardless of whether the ethics groups has decided if appointment members are subject to the state ethics act.

He anticipates that designation happening in November, and said it’s likely the new committee will be subject to the state ethics law, which requires commission members to fill out annual statements of economic interest, and abide by the state’s ethics law.

“We just have to go through the process that’s set up,” Newson said. “In the meantime, they can just go about their business sand do what they’re supposed to do.”

The new committee’s predecessor, the N.C. Mining Commission, was subject to the ethics act, and Newsom said he suspects the new commission will as well.

Below are a list of committee members, provided by the N.C. Department of Natural Resources.