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Before fracking begins in N.C., Texas energy company investigates shale gas deposits in Lee County

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Fracking can't begin in North Carolina for 18 months, but a newly formed, Texas-based drilling company is already planning seismic testing in Lee County. And the troubled financial history of one the company's board members may only embolden local fracking opponents, who say the promise of fast cash could attract unstable companies to the area.

Geologist Ken Taylor of the N.C. Geological Survey said he met last week with Tar Heel Triassic Resources Inc. He says the group's tests will provide detailed data on "orientation, structure and depth" of shale deposits in the Triassic basin.

Preliminary estimates have shown North Carolina has enough gas to power the state for five years.

Tar Heel Triassic Resources is a relatively unknown group, whose website features its logo, a photo of a gas well and no identifying information.

Despite its name, Tar Heel Triassic Resources is not a registered corporation in North Carolina, according to N.C. secretary of state records. It was incorporated in Texas in April, according to the Texas Secretary of State's office, and its board of directors includes Texas residents Phil Barnett and Alex Alexandrou, who have connections to gas companies in a state that has long allowed fracking.

Federal court records show Barnett, who did not return a phone call from the INDY, filed for bankruptcy in October 2005. Documents show the proceedings were messy, including a legal filing by a court trustee that accused Barnett of failing to provide proper documentation on his financial records and lying about the value of a coin collection.

Barnett's background may provide cause for concern with fracking opponents, many of whom have publicly stated that the region's relatively limited gas supply may draw small, unstable drillers.

"It makes me think that if they come in here and screw up, they're going to go bankrupt," says Ed Harris, a Lee County landowner and fracking opponent. "They're going to pocket the cash they made and the locals are going to be left with the damn mess."

Several Lee County residents reported recently seeing "thumper" trucks in the area, so named for the sound made when they clap a steel plate against the ground, using the reverberations to pinpoint potentially gas-rich underground rock formations and faults.

The state has performed two-dimensional testing in the past. "The key thing is, most of the time when you begin producing in the field, there will be the need to get the 3-D seismic testing to see if there are any defects or faults to help guide the regulators," Taylor said.

The process does not require an exploration permit from the N.C. Department of Environment and Natural Resources (DENR) if no explosive charges are used, Taylor said, adding that the agency has received no inquiries regarding the use of explosive charges.

But the activity, performed as the state-appointed Mining and Energy Commission continues to craft fracking regulations, has concerned some drilling opponents.

Environment N.C. Director Elizabeth Ouzts said she was unaware that the testing had begun. "It's a disappointment that they're moving forward to test even though it remains an open question as to whether they will be able to frack here," she said.

A state law passed last year prohibits fracking until drilling regulations are finalized. In July, the ban survived a late-session effort by GOP lawmakers in the state Senate to allow drilling permitting in 2015, regardless of the mining commission's work.

Mining commission vice chairman Ray Covington—whose family owns thousands of acres in Lee County—said the testing should not be a concern.

"Seismic testing is one of the smartest things to understand where the shale play is, where the fault lines are, to be able to have within a very small margin of error what our subsurface looks like," Covington said. "I just think that's wise."

This article appeared in print with the headline "Before fracking, testing the waters."

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