Booming production of oil and gas from shale, enabled by hydraulic fracturing technology, has led to tension between hoped-for economic benefits and feared environmental and other costs, with great associated controversy. Study of how policy can best react to these challenges and how it can balance risk and reward has focused on prescriptive regulatory responses and, to a somewhat lesser extent, voluntary industry best practices. While there is undoubtedly room for improved regulation, innovative tools are relatively understudied. The liability system predates environmental regulation yet still plays an important—and in some senses predominant—role. Changes to that system, including burden-shifting rules and increased bond requirements, might improve outcomes. Similarly, new regulation can and should incorporate modern understanding of the benefits of market-based approaches. Information disclosure requirements can benefit the liability system and have independent benefits of their own. Policymakers faced with a need for policy change in reaction to shale development should carefully consider alternatives to regulation and, when regulation is deemed necessary, consider which tool is best suited.
Common Resources — Jun 23, 2014
Managing the Risks of Shale Gas Development Using Innovative Legal and Regulatory Approaches
At the heart of the US shale gas boom is a tense relationship between the desire for its economic benefits and the fear of its environmental costs....
RFF Live — Sep 24, 2020
Climate Insights 2020: Climate Change and the American Voter
This event is part of the global digital activations for Climate Week NYC 2020 and will focus on US political dynamics, climate change, and American voters’ priorities.
Working Paper — Sep 16, 2020
Supply-Side Reforms to Oil and Gas Production on Federal Lands: Modeling the Implications for Climate Emissions, Revenues, and Production Shifts
An examination of three proposed policies to reform the federal oil and gas leasing program: increased royalty rates, carbon adders, and a ban on new leases on federal lands.