Fenner L. Stewart

Regulating energy innovation: US responses to hydraulic fracturing, wastewater injection and induced seismicity

This article focuses on how hydraulic fracturing activities – including wastewater injection – generated, and are still generating, a spectrum of regulatory responses. These regulatory inconsistencies are due to many variables, including: differing opinions on how regulators ought to manage new technologies with unknown environmental impacts; the promise of economic benefit; how politically contested hydraulic fracturing is in the jurisdictions in question; and the fact that much is still unknown about the environmental impacts of hydraulic fracturing. Part I provides an overview of the emerging science on the connections between hydraulic fracturing, wastewater injection and induced seismicity. Part II maps the responses of state-level regulators in the United States to this issue. Part III provides a refresher of the environmental governance theories and practices that help administrative agencies cope with the risks, which energy systems have created, and which agencies are mandated to manage. Part IV evaluates the US state-level responses using the introduced theories and practices. Finally, the conclusion provides some additional reflections.

More than merely a practitioner's guide: a review of Shale Gas: A Practitioner’s Guide to Shale Gas and Other Unconventional Resources

Shale Gas: A Practitioner’s Guide to Shale Gas and Other Unconventional Resources offers essential insight into the comparative legal, political and economic determinants that are driving the trans...

Unconventional Risk Allocation: Managing the Life Cycle of Shale Projects

Model contracts play a principal role in reducing transaction costs. They offer parties a series of rules, which allocates risk so that delays, disagreements, over-expenditures, and under-capitalizations can be managed (or avoided altogether). The best model contracts are highly responsive, quickly adapting to new realities. Accordingly, top drafters are pressed to doggedly re-evaluate whether or not their model rules are optimal in light of the ever-changing nature of law and technology. Modern hydraulic fracturing is a disruptive technology that shifts the incentives within oil and gas joint venture projects. Drafters are adjusting their contracts to adapt. Experimentation with model rules is presently occurring in jurisdictions such as the United States, Canada and Australia, where unconventional resources abound. This adaptation of model contracts (e.g. the third industry draft of the proposed updates to the 2007 CAPL Operating Procedure) has created a debate as to which model rules will be best for unconventional shale projects. As a contribution, this article first introduces how modern hydraulic fracturing has changed risk allocation in joint ventures, and then considers a couple of the central debates over what changes might need to be made so that model contracts can successfully adjust to this new reality.