Benefits and Dangers of Private-Governance Responses to Fracking

By Will Cranch—May 20 at 2:51 p.m.

A fracking operation
(Photo credit: J. Doubek, Wikimedia; CC BY-SA)

The United States’ current natural gas boom has brought hydraulic fracturing, known as “fracking,” to the forefront of the public environmental consciousness. Unlike other environmental issues, however, fracking has not received much in the way of federal regulatory attention. State responses to the new technology, meanwhile, have varied in effectiveness. In the absence of public regulation, a system of private governance has sprung up.

In Fracking, Federalism, and Private Governance, published in the most recent issue of the Harvard Environmental Law Review, Professor Amanda Leiter surveys the various nongovernmental organizations (“NGOs”) that have attempted to address the environmental and public health risks of fracking. By placing these NGOs’ efforts in the context of private environmental governance theory, Prof. Leiter explains the benefits of private governance to fracking in particular, as well as its potential negative spillover effects.

One of the most important private entities that Prof. Leiter examines is FracFocus. FracFocus bills itself as a national fracking chemical registry that provides a platform for unconventional well operators to self-report their drilling activity and chemical use, allowing the public to access important information about nearby fracking. Even though FracFocus is a private organization, various states have begun to explicitly incorporate the platform into their fracking regulations. At the time of publication, eleven out of the eighteen states that currently mandate public disclosure of fracking chemicals require or allow operators to use FracFocus.

Prof. Leiter concludes that FracFocus has had a positive effect on information collection because disclosure on the private platform is a win-win for operators. Disclosure on FracFocus allows operators to earn public goodwill through the appearance of openness, while preserving their trade secrets and avoiding the risk of regulatory oversight, which might detect incomplete or inaccurate information.

However, according to Prof. Leiter, FracFocus and similar NGOs suffer from a “problem of fit.” FracFocus provides a blanket approach to public disclosure which cannot be modified to match individual state requirements. States that would normally prefer to collect more information than the platform allows—such as distances between wellheads and surface waterbodies—are incentivized to reduce reporting requirements, which may limit states’ abilities to address environmental and public health problems. Similarly, it is FracFocus, not the states, that decides how the platform operates in other regards, including modification to its software, how long data is stored, and what fees are charged for its service.

Thus, while Prof. Leiter acknowledges the benefit of having private nonprofit entities step in quickly to address the environmental risks associated with new technology, she concludes that more work remains. If the goal of environmental regulation of fracking is ultimately a public governance regime, such as cooperative federalism, private governance, more than being a temporary measure, can actually hinder that goal. Prof. Leiter concludes that private organizations should therefore focus on enforcement of standards, working closely to complement rather than inhibit fledgling state regulations, while preventing industry capture and promoting national uniformity.

Interested in learning more about FracFocus? Check out the Harvard Environmental Law Program’s report, co-written by former ELR Editor-in-Chief Meg Holden and former Technical Editor Alexa Shasteen.