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Shale gas regulation and reaction - for Facing the Oil Crisis (Doran)

Shale gas regulation and reaction - for Facing the Oil Crisis (Doran)

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Published by J.J. Stranko
Fall 2011
Fall 2011

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Published by: J.J. Stranko on Feb 25, 2012
Copyright:Attribution Non-commercial

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02/25/2012

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Shale gas regulation and reaction, a survey of the Marcellusexperience with a view towards the future
by: James Strankofor: Facing the Oil Problem: U.S., Canada, OPEC and the Worldwith: Prof. Charles Doran
 
Shale gas, the fuel of the future unearths problems of the past
Shale gas regulation has trailed private sector exploration and development and publicopinion. At the same time, early-stage state regulation approaches have diverged (mostnotably in the attitude towards Marcellus Shale projects in New York and Pennsylvania)and many wildcat developers have come and gone before the development of comprehensive legislation. This has caused environmental degradation, includingwatershed pollution through spills, local air pollution through truck and machine traffic aswell as underground particle escape, and land subsidence through poor well planning. Ithas also raised a number of legal questions around land control, mineral rights, and jurisdictional capacity to govern and regulate. It is becoming evident that irresponsiblemanagement of these early shale plays are fouling public opinion and provoking regulatoryconstraints to future development, limiting the economic development and energy securitypotential of shale gas and oil. Few people doubt the potential of shale if developedresponsibly. Yet the timeframe that developers and regulators have to get the process rightis shrinking and states and local governments are passing laws that will shape the makeupof the industry for years to come.New York State has taken the most aggressive stance against shale development, placinga moratorium on all drilling while officials review the environmental consequences of hydraulic fracturing (fracking). This has left Pennsylvania as the state that has gained themost from shale gas development but also has been most susceptible to the inherent risksand challenges in the young industry. Other states in the Marcellus Shale play, includingOhio, West Virginia, Maryland and New Jersey, have less to gain from smaller reserves intheir territories, but nonetheless are involved in negotiations around watersheds andenvironmental questions of regional importance.
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This patchwork of legislation, cascading from the state down to the municipal level, andthen further complicated by proposed federal rules, has created a sort of jurisdictionalchaos. This disorder in some places, like New York and New Jersey, helped solidifysupport for a moratorium until broader issues could be considered. In others likePennsylvania, Ohio and West Virginia, drillers and developers have seized the opportunityto establish operations before the municipality or the state government could beginregulating and supervising them. Neither approach has been entirely successful ataddressing the new issues that shale gas and fracking bring to policymakers. But thispolicy environment is also serving as national conversation on how to regulate a growingdomestic industry and a promising source of national energy security.
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Energy Information Agency

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