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Extraction of oil and gas from unconventional sources, such as shale, has dramatically increased over the past ten years, raising the potential for spills or releases of chemicals, waste materials, and oil and gas. We analyzed spill data associated with unconventional wells from Colorado, New Mexico, North Dakota and Pennsylvania from 2005 to 2014, where we defined unconventional wells as horizontally drilled into an unconventional formation. We identified materials spilled by state and for each material we summarized frequency, volumes and spill rates. We evaluated the environmental risk of spills by calculating distance to the nearest stream and compared these distances to existing setback regulations. Finally, we summarized relative importance to drinking water in watersheds where spills occurred. Across all four states, we identified 21,300 unconventional wells and 6622 reported spills. The number of horizontal well bores increased sharply beginning in the late 2000s; spill rates also increased for all states except PA where the rate initially increased, reached a maximum in 2009 and then decreased. Wastewater, crude oil, drilling waste, and hydraulic fracturing fluid were the materials most often spilled; spilled volumes of these materials largely ranged from 100 to 10,000L. Across all states, the average distance of spills to a stream was highest in New Mexico (1379m), followed by Colorado (747m), North Dakota (598m) and then Pennsylvania (268m), and 7.0, 13.3, and 20.4% of spills occurred within existing surface water setback regulations of 30.5, 61.0, and 91.4m, respectively. Pennsylvania spills occurred in watersheds with a higher relative importance to drinking water than the other three states. Results from this study can inform risk assessments by providing improved input parameters on volume and rates of materials spilled, and guide regulations and the management policy of spills.

In the aftermath of the 2020 election, the United States has experienced an anti-democratic crisis, with a chief executive attempting to delegitimize the general election and declare victory in an election that all impartial observers stated he lost. In comparative terms, the U.S. election system has been much maligned – it is highly localized and partisan, and lacks the independent, apex institutions such as electoral tribunals that are characteristic of many modern democracies. This brief essay builds off our recent joint work on federalism to argue that state and local governments, which administer elections and have refuted claims of widespread voter fraud, are serving as important bulwarks against this threat. By separating and dispersing the functions of governance—the day to day work of governing—U.S. federalism provides protection against authoritarianism. The decentralization of authority over elections offers one particularly dramatic example of this dynamic in action. Indeed, the U.S. model of dispersing core functions, although messy and costly in other ways, may have important advantages in some contexts over the alternative model of centralized, apex institutions, especially by reducing vulnerability to capture.

Dividing authority between the federal government and the states is central to the theory and practice of federalism. Division is the defining feature of dual federalism, which predominates in the Supreme Court’s jurisprudence. Recent academic theories of federalism have emphasized overlap and interaction, but still with the assumption that federal and state actors will work within separate institutions. Each approach can be deeply problematic, yet assumptions of separation remain the bedrock of federalism. This Article discusses a different form of federalism, which we label coequal federalism. Under coequal federalism, federal- and state-appointed officials work together within a single agency, and that single agency makes decisions that can bind the federal government and the states. This form of federalism exists, but only within obscure niches of American governance, and it is almost entirely absent from theoretical discussions. We argue that it should receive more extensive attention and use. More specifically, we explain how coequal federalism can function in practice, when it will offer a desirable alternative to more traditional federalism approaches, and why it is constitutional.

Rapid growth in unconventional oil and gas (UOG) has produced jobs, revenue, and energy, but also concerns over spills and environmental risks. We assessed spill data from 2005 to 2014 at 31 481 UOG wells in Colorado, New Mexico, North Dakota, and Pennsylvania. We found 2–16% of wells reported a spill each year. Median spill volumes ranged from 0.5 m3 in Pennsylvania to 4.9 m3 in New Mexico; the largest spills exceeded 100 m3. Seventy-five to 94% of spills occurred within the first three years of well life when wells were drilled, completed, and had their largest production volumes. Across all four states, 50% of spills were related to storage and moving fluids via flowlines. Reporting rates varied by state, affecting spill rates and requiring extensive time and effort getting data into a usable format. Enhanced and standardized regulatory requirements for reporting spills could improve the accuracy and speed of analyses to identify and prevent spill risks and mitigate potential environmental damage. Tran...

Since its introduction in 1967, the account of property rights formation by Harold Demsetz has pervaded the legal and economic literature. Demsetz theorized that as a once-abundant, commonly-shared resource becomes more valuable and sought-after, users will move to more clearly define property rights in the resource. Despite the high transaction costs of this approach, the costs of organizing and enforcing a rights regime become worthwhile in the face of scarcity. And privatization, in turn, leads to more efficient use of the resource by the individuals holding the property rights, with less externalization of the harmful effects of resource use. Modified accounts provide a more nuanced story, in which “governance” — broadly speaking — emerges to address scarcity concerns. This governance can include traditional regulation that draws clearer property rights in the resource and forces cost internalization as well as innovative, less formal regimes such as monitoring and reporting of resource use, voluntary agreements to internalize certain harms, and other commons management tools. But a conundrum remains: in some cases, scarcity does not generate regulation or innovative governance, and the legal scholarship has called for more empirical testing of the reasons for this anti-Demsetzian response. Hydraulic fracturing, or fracking, presents a perfect case study for this sort of test. This oil and gas extraction technique, which has recently boomed in the United States, has identifiable, substantial negative externalities, including, for example, air pollution and overwithdrawals of freshwater during droughts. Yet states and industry actors have not consistently responded with regulations or innovative governance strategies to internalize these externalities. In this Article we explore the responses in three states experiencing a fracking boom and theorize the reasons for the diverse responses of these states to greater fracking externalities, including responses that do not track Demsetz. We conclude that traditional political explanations, often pejoratively referred to as “capture” or “rent seeking,” political culture, and legal institutions — particularly courts — account for the divergence between what we observe empirically and Demestz’s theory.

Demand for high-volume, short duration water withdrawals could create water stress to aquatic organisms in Fayetteville Shale streams sourced for hydraulic fracturing fluids. We estimated potential water stress using permitted water withdrawal volumes and actual water withdrawals compared to monthly median, low, and high streamflows. Risk for biological stress was considered at 20% of long-term median and 10% of high- and low-flow thresholds. Future well build-out projections estimated potential for continued stress. Most water was permitted from small, free-flowing streams and "frack" ponds (dammed streams). Permitted 12-h pumping volumes exceeded median streamflow at 50% of withdrawal sites in June, when flows were low. Daily water usage, from operator disclosures, compared to median streamflow showed possible water stress in 7-51% of catchments from June-November, respectively. If 100% of produced water was recycled, per-well water use declined by 25%, reducing threshold exceedance by 10%. Future water stress was predicted to occur in fewer catchments important for drinking water and species of conservation concern due to the decline in new well installations and increased use of recycled water. Accessible and precise withdrawal and streamflow data are critical moving forward to assess and mitigate water stress in streams that experience high-volume withdrawals.

An oil and gas extraction technique called hydraulic fracturing has been common in the United States for many decades. However, a recent change in this technique—the development of a specific fracturing or “fracking” practice called slickwater or slickwater fracturing—has turned the world of petroleum extraction on its head, opening up massive new deposits of oil and gas in the United States and around the world. This article uses the United States as a case study of the benefits and risks of fracturing and the legal frameworks that apply to this practice, exploring how the legal approach has been largely piecemeal and reactive. US states have been the primary regulatory bodies responsible for controlling risks, and their regulations vary substantially. The federal government also has regulated in limited areas, however—again in a largely reactive and patchwork manner.

The development of natural gas and oil from unconventional formations in the United States has grown substantially in recent years and has created governance challenges. In light of this recent growth, and increasing attention to global shale gas resources, the successes and failures of governance efforts in this country serve as important lessons for other nations that have their own unconventional petroleum resources and are beginning to move forward with development, thus calling for a more in-depth examination of the laws governing shale gas development and their implementation. Governance includes both the substance of laws and the activities of entities that implement and influence laws, and in the case of oil and gas, states are primarily responsible for risk governance. Nongovernmental actors and industry also work with states to shape and implement regulations and standards. This Policy Analysis introduces the role of various actors in U.S. shale gas governance, explaining why the states are primarily responsible for risk governance, and explores the capacity of states to conduct governance, examining the content of their laws and the strength of their regulatory entities. The Analysis concludes that states are, to a degree, addressing the changing risks of development. Gaps remain in the substance of regulations, however, and many states appear to lack adequate support or policies for training industry in compliance matters, monitoring activity at sites, prioritizing certain types of regulatory violations that pose the highest risks, enforcing laws, and ensuring that the public is aware of inspections and enforcement and can therefore monitor state activity.

Facilitating state policy experimentation is an oft-cited justification for the U.S. federalism system. Despite growing recognition of risk aversion, free riding, and other disincentives to state-led experimentation, the mythology of state laboratories still dominates these accounts. We propose a framework that counters this entrenched assumption and enables more productive analysis of policy experimentation. The Article explores a continuum of experimental approaches that differ in terms of the degree of experimental rigor that they incorporate — such as the extent to which they control for confounding variables — and the governance levels at which they are designed and implemented. We apply this new analytical framework to case studies from divergent policy areas, including agricultural, natural resources, and education law. These examples highlight rigorous experiments designed and largely administered by federal agencies. Our framework and case studies turn the concept of the “laboratories of the states” on its head, showing that experimentation can and often does occur at multiple levels, including the federal level. In countering and adding nuance to traditional experimentation accounts, the Article also reveals the benefits of federal involvement in policy experiments, and thus the perils of weakening federal authority in an effort to enhance core federalism values like experimentation. Federal expertise and resources — and even the simple availability of experimental platforms, such as federally-owned and managed lands — often give the federal government a comparative advantage in the policy experimentation field. This is not to say that the federal government should consistently lead and implement experiments, but it calls attention to the importance of understanding experimentation as a multi-level endeavor that extends well beyond the states.

INTRODUCTIONIn the Industrial Revolution of the nineteenth century, the United States was transformed from a largely agrarian nation of farmers to a major center of manufacturing. With industrialization came new risks to public welfare and, ultimately, changes in law to address those. The United States is now undergoing another revolution, an energy revolution that has the potential to transform the United States from a net energy importer into the next Saudi Arabia.1 And like the Industrial Revolution, this energy revolution entails new risks and, by necessity, will produce new legal responses to those risks. It has fomented one of the greatest environmental regulatory challenges of our time, and it calls for an effective solution that must be rapidly implemented. This Article addresses a set of important legal responses that so far have received scant attention from academic commentators and lawmakers-market-based requirements for enhanced bonding and, more importantly, environmental liability insurance for wells.The key to the current energy revolution is innovation in the techniques that allow extraction of natural gas from underground rock formations. Advances in horizontal drilling and hydraulic fracturing- fracing, or, more commonly, fracking-have opened up massive natural gas deposits in several regions of the United States.2 These technologies have driven this revolution by enabling unconventional well development-the production of oil and gas from formations once deemed inaccessible- which we describe as "unconventional development" or "unconventional oil and gas."3 Unconventional development has begun, and will continue, to change the landscape of this country. Wells already dot the surface of many counties4 and this is only the beginning. This development will continue, with tremendous intensity, very likely for several decades at a minimum.5Just as the Industrial Revolution gave rise to new risks, such as risks from industrial air pollution and factory fires, unconventional development has generated new risks to public welfare and will continue to do so.6 These risks are not, individually, as massive as those seen in the Industrial Revolution; public perceptions and environmental protections have changed. But cumulatively, they are likely to be substantial. Some of these risks are relatively certain: We know from past experiences with drilling and mining that there is a large risk that certain well operators-the individuals and companies responsible for well development-will simply abandon wells when they are no longer productive, and that they sometimes will not make the investments necessary to ensure that the wells are safely closed and sites adequately restored and will not become a source of pollution.7 While the rates of abandonment will likely be lower than in the past due to improved state well-plugging regulations, constraints on state enforcement of regulations8 and the sheer number of new wells being developed suggest that abandonment still will occur, as will, perhaps more commonly, inadequate site restoration and clean-up. There is also the relatively near- term risk that while the wells and their associated disposal facilities are operating, there will be major accidents and associated pollutant releases.9 And then there is the long-term risk, a highly uncertain risk-often referred to as "the long-tail risk"-that once all the unconventional development is done, we will discover that this activity degraded the environment and endangered public health in ways that cannot be linked to specific, identified accidents at active well operations.To date, the debate over how to address these various near-term and long-term risks has focused on who should govern, or more specifically, whether state legislators and regulators should be responsible for addressing unconventional oil and gas risks rather than federal legislators and regulators. Various commentators have offered different perspectives and answers to this state or federal question. …

This Article develops a novel theory of energy governance and uses it to assess how institutional innovation can help meet critical challenges. Energy law is substantively complex and deeply fragmented. Each energy sector - including fuel extraction and pipelines, electricity generation and transmission, and transportation - has its own legal regime and federalism approach; confusion often exists at moments of crisis about how much authority federal, state, and local regulators have in these areas. The complexity and fragmentation of energy law are particularly problematic because the energy system faces major transitions due to emerging technology, more unpredictable and extreme weather events, and public pressure for 'cleaner' energy. Regulators struggle to: manage the risks of hydraulic fracturing and deepwater drilling, upgrade our aging electricity grid, and integrate renewable energy sources onto that grid and into electricity markets. Building from our prior work arguing for a dynamic, comprehensive approach to federalism in energy law, this Article proposes a governance model to address modern energy challenges. The Article focuses on the potential of institutions that are 'hybrid' by virtue of including public and private actors from several governance levels, and enabling important interactions among them. Grounding its approach in interdisciplinary governance theory, it argues that these institutions have characteristics that could address structural barriers - such as inadequate, divided regulatory authority, and the complexities of including key private actors in energy decision making - to substantive progress. After introducing its new conceptual model, the Article examines several hybrid institutions with substantial regional components that are working to address the three core substantive energy challenges identified here. It analyzes their progress in meeting these challenges, and how their hybrid governance approach is assisting them in doing so.

The revered status of American home ownership has deep and seemingly impenetrable roots. In our modern mythology/reality, the castles that shelter and nurture our pursuit of the good life are under siege. A narrative common to both popular media accounts and a burgeoning property literature warns that private homeowners’ associations hold dominion over millions of Americans, dictating what they may do with their property and foreclosing when they cannot pay association fees or fines In response to this threat, legislatures, courts, and academics are fighting to stave off these intrusions by constraining servitudes. In focusing on the harms to property owners, these critics have unjustifiably omitted a large and growing segment of the population: renters. Nearly every American rents living space at one stage of life, and rentals are expanding as the real estate market continues on its uncertain trajectory. Tenants have no less lofty life goals than do homeowners, yet they, too, are governed by private rules for property use that severely constrain their freedom and allow termination of their property interest through eviction or sale. The rules in rental communities, moreover, serve fundamentally the same purpose as those set by homeowners association controlling neighbors’ uses to increase property value. The key difference between the two types of communities, beyond simple physical layout, lies in tradition: a woman’s home is her castle, but her apartment is her rickety tenement. Even this distinction is vanishing, however, as private communities with now-familiar, “intrusive” rules continue their decades-old proliferation, objections notwithstanding. If, then, private governance of property is fundamentally problematic, it is no less problematic for renters. But if, as seems more likely, we are generally willing to accept certain private rules in communities as a reasonable response to the interests of both owners and tenants, critics of private governance must explain why traditional notions of property should prevail over a modern approach to property consumers’ demands.

U.S. energy law and the scholarship analyzing it are deeply fragmented. Each source of energy has a distinct legal regime, and limited federal regulation in some areas has resulted in divergent state and local approaches to regulation. Much of the existing energy law literature reflects these substantive and structural divisions, and focuses on particular aspects of the energy system and associated federalism disputes. However, in order to meet modern energy challenges — such as reducing risks from deepwater drilling and hydraulic fracturing, maintaining the reliability of the electricity grid in this period of rapid technological change, and producing cleaner energy — we need a more dynamic, holistic understanding of energy law. Examining the energy system as a whole reveals patterns across substantive areas and allows them to learn from one another. This Article provides the first systematic account of energy federalism, proposing a novel model for understanding the energy system and its federalism dynamics. It begins by describing the U.S. energy system as comprised of interacting physical, market, and regulatory dimensions. The Article next explains why this complex system requires a federalism model that moves beyond disputes over federal versus state authority; it describes the many vertical interactions (those across levels of government, from the local to the international) and horizontal interactions (those among actors within the same level of government) within different types of energy regulation. The Article then considers the governance challenges created by these interactions, with a focus on inadequate regulatory authority, simultaneous overlap and fragmentation of regulation and institutions, and the difficulties of including key public and private stakeholders while avoiding inappropriate regulatory capture, such as when powerful utilities or oil companies gain control of regulatory processes to protect their private interests at the expense of the public. The Article concludes by proposing dynamic federalism principles for designing institutions that are responsive to these governance challenges through (1) creating needed authority; (2) reducing fragmentation; and (3) allowing for high levels of involvement from key public and private stakeholders that allow for meaningful input without capture. It also introduces our companion article, Hybrid Energy Governance, which applies these principles through detailed case studies to assess institutional innovation in areas critical to energy transformation.

An oil and gas extraction technique called hydraulic fracturing (also called fracing, fracking, or hydrofracking) has swept the country and has raised the stakes of the energy policy debate. As operators drill thousands of new wells and inject water and chemicals down these wells in order to fracture underground shale and tight sandstone formations, concerned citizens’ groups and the media have pointed to flaming tap water and have worried about chemical contamination; at the same time, industry representatives and many state regulators have sworn that the practice has never contaminated groundwater. The outpouring of attention to injection — just one stage of a complex well development process — threatens to distract from the core issues of “tight” oil and gas development, and to leave the most pressing concerns unaddressed. Through a comparison of regulation and of alleged violations of environmental and oil and gas laws at hydraulically fractured well sites, this Article illuminates the factors that must inform policy and regulatory changes that guide modern oil and gas development. The examples of violations so far suggest that the most pressing risks may predominantly arise not from the injection of chemicals and water underground but from other stages of the well development process introduced by fracturing, and from the higher rate of well drilling spurred by fracturing. This does not suggest that fracturing itself poses no risks. Rather, we must recognize the new risks introduced by several non-injection stages essential to the fracturing process, as well as the drilling enabled by fracturing, and we must shift our attention to the most problematic stages. Chemicals may spill when transported to well sites, and more and new types of wastes must be stored and disposed of, for example. Furthermore, methane may contaminate underground water sources during the drilling process preceding fracturing. If policymakers and regulators allow drilling and fracturing to continue at their current frenzied pace, it is imperative that they change course to recognize and respond to these core risks. The analysis in this Article offers an initial path forward.

The United States is in the midst of a boom in natural gas and oil production, much of which has occurred in shale formations around the country. As shale development has expanded — largely as a result of new horizontal drilling and “slickwater” hydraulic fracturing (fracking, fracing, or hydofracking) techniques — questions have arisen regarding the environmental risks of drilling and fracturing in shales and how laws, policies, and regulations address these risks. To understand whether and how regulation addresses risks, one must know both the content of regulations and how they are applied through inspections of well sites, notations of violations, and/or enforcement. An accompanying paper by this author, entitled “Regulation of Shale Gas Development, Including Hydraulic Fracturing” addresses the content of federal, regional, state, and local regulations that apply to shale gas development; this paper explores, in a preliminary fashion, how these regulations are applied. It briefly surveys complaints about shale gas and tight sands development (both of which typically require fracturing) lodged by citizens with state agencies, states’ notation of environmental violations at shale gas and tight sands wells both in response to these complaints and as a result of independently-instigated site visits or self-reported violations, and states’ capacity to inspect sites and enforce violations noted. The objective of this “on-the-ground” review of shale gas development regulatory activities is to offer a preliminary picture of the environmental effects of shale gas development and how states address them through citations of violations and/or initiation of enforcement action. Regulations have little effect if they are rarely applied to regulated actors or only sporadically enforced. Looking to both the content of regulations, violations of the regulations, and enforcement therefore provides a more complete regulatory picture. The Energy Institute at the University of Texas funded the research for this paper.

In recent years, the federal government’s efforts to open up competitive electricity markets have transformed how we think about the regulation of energy. In many respects, the Federal Energy Regulatory Commission’s (FERC) broad “deregulatory” efforts, which commenced in the 1990s, might appear to be a case of paradigmatic regulatory exit as defined by J.B. Ruhl and Jim Salzman. But our case study of FERC’s restructuring of wholesale electricity markets reveals some important institutional features that make exit in federalism contexts, and under federal statutory duties, a rich and difficult problem. In the context of energy, exit from one regulatory sphere can create regulatory gaps. This has led FERC, which largely exited the regulation of wholesale electricity rates, to increase regulation in other spheres. It has also invited forms of intergovernmental exchange, as states have emulated or otherwise responded to FERC’s regulatory modifications in the areas in which states have jurisdiction. In this sense, the transition to competitive energy supply markets has involved constrained exit characterized by a hydraulic back-and-forth between regulators and institutions in an effort to ensure that statutory duties are fulfilled and other public needs are met. This assessment of regulatory exchange has a prescriptive implication: a federal regulator seeking to exit specific forms of conventional regulation needs to proactively develop strategies to facilitate regulatory exchange, while simultaneously preserving its authority over important substantive values related to its regulatory mission. Attention to “offsetting” regulations is often necessary to ensure that problematic regulatory gaps will not arise. In the energy context, these strategies might also include the use of mechanisms that give other institutions a voice in implementing exit strategies, as well as better ex ante regulatory planning for market enforcement that will continue after partial exit. We argue that it is not only a good strategy for federal regulators to recognize this hydraulic feature of exit, but that cooperative federalism statutes such as the Federal Power Act often require them to do so.