regulation

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I study both business law issues and shale oil and gas regulation, and I see a lot of overlaps between the two. Big business, is after all, big business.

The political intensity related to shale oil & gas development, is a concentrated version of many other types of regulation, such as we related to securities and publicly traded corporations.  I am currently finalizing an article regarding the Pennsylvania Supreme Court’s decision in Robinson Township v. Commonwealth, which overturned Act 13, the state’s law designed to promote hydraulic fracturing and horizontal drilling.  In major part, Act 13 largely eliminated local zoning of oil & gas development.  

David B. Spence’s article, Responsible Shale Gas Production: Moral Outrage vs. Cool Analysis, provided one good source for analyzing the regulatory backdrop of shale law and regulation.  I recommend it highly. 

Here’s the abstract:      

The relatively sudden boom in shale gas production in the United States using hydraulic fracturing has provoked increasingly intense political conflict. The debate over fracking and shale gas production has become polarized very quickly, in part because of the size of the economic and environmental stakes. This polarized debate fits a familiar template in American

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As a resident of West Virginia, I am especially appalled at the disastrous chemical spill into the Elk River that has left 300,000 without safe water. My family and I are fortunate that we live well north of the spill and we have not been burdened by a lack of safe water. Still, our state, our friends, and our environment have been, and we can sense the suffering. 

In the wake of disasters, there often follow what are known as “policy windows” that create opportunities for new legislation. G. Richard Shell describes the concept like this in Make the Rules or Your Rivals Will (Amazon link) :  

Policy windows “open” in the wake of a high visibility event such as an expose, a scandal, a public-health crisis, or a disaster.  They “close” when the legislature acts to address the problem or when some other news event pushes the issue off the front pages and diverts public attention elsewhere.

Some have noted that the disaster in West Virginia has not gotten its due on some of the news shows (see, e.g., Sunday Shows To West Virginia: Drop Dead!”, but the disaster has still been a high-profile media event. 

This chemical…

Last week, I had the pleasure of being part of the Second Annual Searle Center Conference on Federalism and Energy in the United States.  (I had the good fortune to be part of the first one, too.)  The conference covered a wide range of energy issues from electricity transmission siting to hydraulic fracturing to natural gas markets.  One paper/presentation struck me as particularly interesting for markets generally (I am told an update version will be available soon at the same site: “The Evolution of the Market for Wholesale Power” by Daniel F. Spulber, Kellogg School of Management, Elinor Hobbs Distinguished Professor of International Business and Professor of Management Strategy & R. Andrew Butters, Kellogg School of Management, Northwestern University.

Here is the conclusion: 

A national market for wholesale electric power in the US has emerged following industry restructuring in 2000. Tests for correlation and Granger Causality between trading hubs support the presence of a national market. Going beyond pairwise analysis, we introduce an array of multivariate techniques capable of addressing the national market hypothesis, including the common trend test. Although there is strong evidence of integration between the series, the analysis suggests a division between the eastern and western parts of the

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