State regulation of unconventional gas development in the U.S.: An empirical evaluation

U.S. production of unconventional natural gas has increased rapidly over the last decade, and triggered public concerns about a variety of related risks. State policymakers vary in how they design regulatory policies to balance the anticipated risks and benefits, few attempts have been made, however, to evaluate the heterogeneity in state unconventional gas regulations. In this analysis, we develop a framework for comparing states based on how intensely they regulate unconventional gas development. We utilize two separate but complementary methodological approaches to investigate regulatory heterogeneity: an expert elicitation survey and principal components analysis. Our results indicate that, even though there is significant heterogeneity in state regulatory systems, there exist clusters of states that are consistently ranked at the top or the bottom along a continuum of regulatory stringency. States such as West Virginia, Colorado, Louisiana, New Mexico and Pennsylvania are found at the top of this scale, while at the lower end we find California, Tennessee, Mississippi and Montana. As states refine their regulatory systems, these rankings can be updated to reflect new policy and regulatory priorities.