Backyard Politics, National Policies: Understanding the Opportunity Costs of National Fracking Bans

Some local communities in the United States, particularly in the Northeast, are scrambling to oppose natural gas production enabled by hydraulic fracturing (or fracing, fracking, or hydrofracking) in shale formations. Local opposition to the impacts of fracking is understandable, but recent proposals for national bans ignore a key, more potent threat. Due to a mismatch between the benefits and costs of fracking, on the one hand, and the distribution of political and legal influence, on the other, the voices of those opposed to extraction may drown out the more distant voices of those suffering from the widespread future effects of coal—the primary fossil alternative to gas. Energy policy processes must recognize the opportunity costs of banning gas, including the consequences of continuing to rely on coal as our primary electricity source. The negative environmental impacts of natural gas extraction must be addressed, and our focus on gas ought not to divert attention from the need to develop more sustainable energy alternatives. However, policymakers should not adopt the myopic view advocated by some anti-fracking activists. Rather, policymakers should formulate energy policies that fully weigh the costs and benefits of alternative courses of action and consider the interests of those under-represented in the policy process.The Kay Bailey Hutchison Center for Energy, Law, and Busines

Electricity Markets $64,000 Question

The Kay Bailey Hutchison Center for Energy, Law, and Busines

Administrative Law and Agency Policy-Making: Rethinking the Positive Theory of Political Control

In the last decade, positive political theory (PPT) models of agency policy-making have emphasized the tools politicians can use to control or influence agency decisions. These models are, in part, a reaction to earlier economic and other models of agency policy-making which emphasized the agency losses attendant to the delegation of decision-making authority to agencies by politicians. The more recent PPT works contend that politicians use the tools of ex post and ex ante control to overcome some of the agency problems associated with delegation (such as the inability to foresee the issues the agency will face), in part by enlisting interest groups in the battle to control agencies. These recent PPT models of political control do a good job of illustrating how and why politicians try to influence agency policymaking; but they overstate politicians\u27 ability to do so, for two reasons. First, commonly-employed methodological assumptions in positive models tend to obscure the most important impediments to political control. Second, the antecedents to the current PPT literature posed a false dichotomy between agency autonomy and good government, one which some positive theorists seem to continue to accept, at least implicitly. This article examines these positive and normative biases in the PPT literature on the political control of agencies, and argues that PPT policy models which abandon these assumptions will do a better job of (1) describing the agency policy-making process and (2) accommodating the fact of agency autonomy in the policy process

Regulation, “Republican Moments,” and Energy Policy Reform

During the last half decade, energy policy reform has made its way to the top of the American policymaking agenda, driven by a groundswell of concern over environmental issues (primarily climate change), energy security issues, and the desire for a more efficient and reliable energy delivery system. This groundswell has produced some recent policy changes, but have not been enough to satisfy proponents of reform, who remain frustrated with the unwillingness of Congress to pass legislation aimed at fundamentally changing the way Americans produce and consume energy. This article examines the reasons why fundamental energy policy reform has been so challenging.The Kay Bailey Hutchison Center for Energy, Law, and Busines

Some of the Parties to the Clean Power Plan Litigation are Defying Expectations

The Kay Bailey Hutchison Center for Energy, Law, and Busines

Corporate Social Responsibility in the Oil and Gas Industry: The Importance of Reputational Risk

Modern oil and gas production takes place in environments that are increasingly challenging, environments that pose very high levels of technical risk, as well as political, social, environmental, heal and safety risks. The people of the oil-rich nations of the world are growing more assertive politically and more sensitive to the environmental, health, and safety risks posed by oil and gas development. Governments, nongovernmental organizations (NGOs), and local people seek the means to control oil and gas development so as to minimize the risk of harm and provide redress in the event harm is done. Oil and gas companies have had to adapt to this new political and social environment, in part by developing sophisticated corporate social responsibility (CSR) programs. Learning from some of the industry\u27s high-profile mistakes, oil and gas companies have begun to embrace levels of environmental and social performance that often exceed what is legally required in the host nation. Central to that process is the task of managing relationships with external stakeholders, and incorporating stakeholder interests into company plans. Consequently, oil and gas companies have also begun to participate in multilateral arrangements with NGOs, international organizations such as the World Bank, and national governments to address issues like environmental protection, workers rights, human rights, and corruption. Critics of CSR argue that it undermines the regulatory process and/or cheats shareholders, but oil and gas companies justify these efforts as a way of managing social and political risk over the long term and, thereby, maximizing shareholder return

Regulation and the New Politics of (Energy) Market Entry

This Article examines the dynamics of nongovernmental organization (NGO) opposition to proposed energy infrastructure in the twenty-first century, specifically the tactics and issue arguments used by NGOs to oppose new energy infrastructure. The analysis is built around a data set comprising information more than four hundred NGOs whose missions include active opposition to one or more of nine different types of energy projects, including various types of fossil fuel infrastructure, renewable energy facilities, and smart grid technology. Part I of this Article explains the legal context in which NGOs may challenge the approval of new energy projects. Siting regulation typically hands federal or state energy regulators broad discretion to approve or disapprove new projects, but also requires most projects to secure any of several ancillary, issue-specific environmental approvals. Thus, NGOs opposing energy projects can contest siting decisions on a variety of grounds in a variety of regulatory settings (given sufficient expertise and resources). Part II describes the data set at the heart of this analysis, which includes information about (1) the tactics each NGO uses to oppose energy projects, such as litigation, direct lobbying, mobilizing public participation in siting proceedings, protests, or economic boycotts, and (2) the issue arguments advanced by each NGO to mobilize opposition, such as those based upon the project’s economic impacts, health and environmental risks, or environmental justice. The data are limited to siting disputes arising between 2000 and 2017. Part II also suggests some informal hypotheses about when we might expect to see particular tactics or issue arguments predominate across the different project categories and NGO types. Some key findings from the data are reported in Part III. First, NGOs tend to focus on mobilizing the broader public to lobby decisionmakers (rather than, say, to litigate, boycott, or protest), and to do so around environmental and health risk issues. Interestingly, that conclusion holds true across all project types, fossil fuel and clean energy projects alike. Second, local NGOs were more likely to engage in risk amplification—that is, to advance claims about health risks that lacked solid scientific support—while national groups tended to be more circumspect about the way they discussed risk. Third, the tactical and substantive similarities among NGOs within project categories (particularly fossil fuel project categories) implies the possibility of coordination among NGOs. Together, these findings seem consistent with the twenty-first century hyperpolarized, hyperconnected political environment. Mass mobilization is more efficient and effective than ever: digital communication tools enable NGOs to transmit messages almost costlessly, and to target audiences that are particularly receptive to individual messages. NGOs choose risk-based appeals because they resonate: if local NGOs need to build a broader base of support for their cause in order to improve the probability of victory before government decisionmakers, this approach makes sense. Part III also reports some data on the geographic distribution of NGO opposition to energy projects, which seems to be loosely correlated with both development intensity and political ideology. Part IV places the results described in Part III in the context of ongoing scholarly debates about the politics of regulation. As always, NGOs and firms engage in a tug of war, each seeking to push or pull regulators toward a particular conclusion. In an era of inexpensive renewable energy, many find it untroubling that NGOs can more effectively use risk-based arguments to mobilize the public against new fossil fuel infrastructure. What is worrying is the possibility that those sophisticated digital communication tools enable NGOs (and others) to exploit risk perception biases to more effectively amplify perceived risk, which in turn could push regulators to produce siting decisions that have counterproductive effects. These can include environmentally counterproductive effects, as when opposition to transmission lines can (and does) deny consumers access to cheap, clean wind and solar energy, or when opposition to natural gas pipelines increases both energy prices and reliance on dirtier diesel fuel or coal. As with other policy debates, modern digital politics can enhance misunderstanding, move partisans and activists toward the ideological poles, and make it more difficult for regulators to make sensible decisions about tradeoffs at the heart of any transition to a much greener energy mix

Psychological and Cultural Biases Distort Fracking Debates

The Kay Bailey Hutchison Center for Energy, Law, and Busines