On fracking

Not written very well, but informative.

“Professor Merrill also doubts industry structure has much to do with fracking’s rise either. However much major oil companies like to tout their commitment to innovation, the majors played a minor role in developing this technology. It was largely developed by smaller players in the industry.

“A more likely factor is the way U.S. law treats subsurface rights. The U.S. is something of an outlier in that subsurface minerals are the property of the landowner, and not the government. This results in decentralized ownership and control over subsurface rights facilitates experimentation and innovation in figuring out how to exploit and manage subsurface resources.

“Further decentralization, and experimentation, results from the federalist regulatory structure. Different states have different regulatory approaches than others, creating opportunities for further innovation and the opportunity for jurisdictions to learn from one another. The existence of a few jurisdictions that will allow a new technology to be tried provides a laboratory from which others may learn, whereas under a more centralized regulatory structure such innovation is unlikely to get off the ground.”

http://www.volokh.com/2012/11/16/merrill-on-fear-of-fracking/

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