Fracking the Unconventional Energy Response to Climate Change: Implications for the Real Estate Industry

Abstract

Climate change caused by human activity is well established from scientific, economic, social and legal perspectives. Production of energy to meet human needs has been identified as the main source of Greenhouse Gas (BHG) emissions of CO2 that causes climate change.Yet energy is something real estate and transactional attorneys know little about. Just as transactional /business lawyers are not expected to know federal tax law, but are expected to know enough to ask the right questions from tax attorneys to structure a transaction, transactional attorneys need to know the basics of energy sources, regulation and the second order effects of energy generation and production. The 14th Kratovil Conference on Real Estate Law & Practice focused on "Fracking, Energy Sources, Climate Change & Real Estate" for the symposium issue of the John Marshall Law Review. This article is part of the symposium issue. It provides basic information about sources of energy including coal, oil, natural gas-collectively known as fossil fuels and renewables that do not cause CO2 emissions. Fracking or Fracturing is the unconventional fossil fuel that produces reduced GHG emissions but that may have other second order effects. Part I considers implications of evidence that climate change is principally due to human activity.Part II looks at the relatively new business of fracking, which relets the successes of innovation and the limits of this relatively new industry. Part III provides a primer of basic real property law about land that may be suitable for fracking or that may be affected by fracking. Separation of ownership between surface and sub-surface mineral rights is achieved by contract, leases and government intervention. Yet regulation of privately owned real estate and fracking is by state and local government, rather than federal law. Part IV reviews the three categories of risks associated with fracking: environmental, social and economic in the context of implications for those owning, developing, financing, leasing and using real estate. Part V provides a conclusion: may questions remain on the real estate implications of fracking.