Monday, July 8, 2013

New Report Compares State Shale Gas Regulation

            Resources for the Future has released a new report, The State of State Shale Gas Regulation, summarizing state shale gas regulation.  The report is authored by Nathan Richardson, Madeline Gottlieb, and Alan Krupnick at RFF, along with Hannah Wiseman at Florida State.  The report compares twenty-five regulatory elements—from well spacing rules to wastewater transportation—across thirty-one states with actual or potential shale gas production.  The report is written in a highly accessible style and format, provides valuable information about an extremely active area of energy and environmental law, offers some important insights, and also expresses its limitations clearly (see, e.g., Figure 3 on page 11).

            One of the key conclusions of the report is that state regulation of shale gas development exhibits considerable heterogeneity across states—that is, states are regulating differently.  This heterogeneity may or may not be a good thing.  On the one hand, with a rapidly developing area like shale gas development, and in which state rather than federal governance predominates, it makes sense that different states are experimenting with different regulatory approaches.  Moreover, physical differences across states may justify different types and levels of regulation.  (Political and economic differences also may lead to regulatory differences; whether politics and economics justify regulatory differences is a thornier issue.)  On the other hand, we should not take for granted that heterogeneity is beneficial—some regulatory approaches may be demonstrably better than others.  Hopefully the report’s comparisons will contribute to thoughtful debate in the states about the relative effectiveness of different regulatory approaches.

--Todd Aagaard

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