Fracking, Federalism, and Private Governance

Abstract

The United States is in the midst of a natural gas boom, made possible by advances in drilling and extraction technologies. There is considerable disagreement about the relative benefits and costs of the boom, but one thing is certain: it has caught governments flat-footed. The federal government has done little more than commission a study of some associated public health and environmental risks. States have moved faster to address natural gas risks, but with little consistency or transparency. Numerous private organizations are beginning to fill the resulting governance gaps with information-gathering and standards-setting efforts. This Paper documents these efforts and then uses a concrete policy proposal — the development of sustainable shale gas credits — to argue that these private entities are well positioned to facilitate the development and horizontal and vertical diffusion of innovative public governance strategies. In other words, these entities are fulfilling the experimentation function once assigned to states in so-called “laboratory federalism.” The Paper ends on a cautionary note, however. Private governance efforts often suffer from a lack of openness, balance, and accountability. Worse, there is reason to fear that familiar procedural reforms aimed at fixing those problems for public agencies may work far less well in the private context.