Federalism, Institutional Design, and Environmental Compliance Possibilities for Hybrid Mechanisms
| Author | Hari M. Osofsky & Hannah J. Wiseman |
| Profession | Professor of Law and the 2013-14 Fesler-Lampert Chair in Urban and Regional Affairs at the University of Minnesota Law School/Assistant Professor at the Florida State University College of Law |
| Pages | 23-53 |
23
Chapter 2:
Federalism, Institutional
Design, and Environmental
Compliance Possibilities
for Hybrid Mechanisms
Hari M. Osofs ky* & Hannah J. Wiseman**
Most of the chapters in this collection focus on how to create Next
Generation compliance mechanisms in situations where the U.S.
Environmental Protection Agency (EPA) or a state equivalent has
clear authority to regulate. is chapter takes a somewhat dierent approach.
It instead considers compliance diculties that emerge because no entity
has adequate authority. In many areas critical to environmental protection
and energy transition, overlapping a nd fragmented authority across multi-
ple levels of government makes constructing functional compliance regimes
dicult. is chapter argues that in those circumstances, eective Next Gen-
eration compliance may involve the construction of innovative governance
approaches that involve key public and private actors in hybrid arrangements.
It draws from scholarship that we have done on hybrid energy governance,
with a specic focus on the examples of deepwater drilling and hydraulic
fracturing, to illustrate these possibilities.1
As private actors develop new technologies2 to satisfy America ns’ endur-
ing thirst for an unlimited and uninterrupted energy supply—and, increas-
ingly, a demand for domestic sources —onshore unconventional oil and gas
1 Specically, this chapter contains an edited portion of Hari M. Osofsky & Hannah J. Wiseman,
Hybrid Energy Governance, 2014 I. L. R. 1, and is reprinted with permission. at article also
explores the examples of maintaining grid reliability in the transition to a computerized grid and of
integrating renewables onto the smart grid. See id.
2 Even technological progress in the extraction is far from purely private. e government subsidizes
the expensive technologies needed for unconventional development through tax exemptions or other
subsidy mechanisms, and it also directly funds research—often public-private ventures—through
organizations such as the National Energy Technology Laboratory. See, e.g., Press Release, Natl.
Energy Technology Laboratory, Obama Administration Announces New Partnership on Uncon-
* Hari M. Osofsky is a Professor of Law and the 2013-14 Fesler-Lampert Chair in Urban and Regional
Aairs at the University of Minnesota Law School.
** Hannah J. Wiseman is an Assistant Professor at the Florida State University College of Law.
24 Next Generation Environmental Compliance and Enforcement
development3 and deepwater drilling4 have emerged as prevalent technolo-
gies. ese have introduced new risks and new environmental justice con-
cerns, often in rural contexts,5 and have pushed at the boundaries of existing
environmental and energy governance. However, as this chapter explores,
EPA and other federal agencies strugg le with compliance in these contexts in
part due to a combination of incomplete knowledge and incomplete regula-
tory authority. With respect to deepwater drilling, the federa l government
has extensive authority, but critical overlaps and gaps remain. e hydraulic
fracturing context is even more dicult from a federal compliance perspec-
tive because substa ntial authority lies w ith local, state, a nd regional entities,
and the federal government has a more limited role.
Managing the risks and fairness concerns more eectively in both con-
texts poses critical compliance issues for t he diverse governmental entities
that regulate them because the pressures to augment domestic supply and
achieve energy independence are unlikely to decline. Even if we produced
all of our fuel domestica lly, a scenario that has become more realistic with
recent technological advances, we could not avoid the inevitable echoes of a
global fossil fuel market6 and would not be immune from price swings and
certain ongoing trade disputes.7 is chapter focuses on possibilities for cur-
ventional Natural Gas and Oil Research (Apr. 13, 2012), http://www.netl.doe.gov/publications/
press/2012/120413_obama_administration.html.
3 See, e.g., Will Smale, Shale Will Free U.S. From Oil Imports, Says ex-BP Boss, BBC, July 13, 2012,
available at http://www.bbc.co.uk/news/business-18828714 (last visited July 16, 2012) (describing
the large amounts of unconventional oil and gas obtained from onshore shales in the United States
using hydraulic fracturing); I. E A, W E O 75-76 (2012)
(describing rising U.S. oil and gas production from shales and likely net energy self-suciency as
a result of this production and other factors); U.S. E. P. A, F S: P
A A R O N G I 2 (2011), http://www.
epa.gov/airquality/oilandgas/pdfs/20110728factsheet.pdf (explaining that approximately 11,400 new
gas wells are fractured in the United States each year and that approximately 14,000 are refractured).
4 John M. Broder & Cliord Krauss, U.S. in Accord with Mexico on Drilling, N.Y. T, Feb. 20, 2012
(explaining a U.S.-Mexican agreement on the regulation of oshore drilling in the gulf may “open
more than a million acres to deepwater drilling”).
5 Cf. Hannah Wiseman, Urban Energy, 40 F U. L. J. __ (for thcoming 2013), available at
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2284459 (describing unconventional gas develop-
ment in urban and suburban areas like Fort Worth and the conicts that it can create).
6 See J S. D, O B: T C U.S. F O D 27 (2008).
Dueld notes that even if the United States did not import any oil, our “economy could still be
greatly aected by developments abroad” because of the linkage between domestically produced oil
and global markets—including global prices.
7 See id. Ultimately, regardless of where we produce oil and gas, these are global goods. If we extract
more here and rely less on imports, we might enjoy short-term energy security by avoiding the need
to intervene in foreign countries in order to secure current access to fuel. But if we remain concerned
about price spikes, other countries’ reliance on enemies’ fuel sources, and the maintenance of a rela-
tively steady global supply of fossil fuel for our allies, expanded domestic production may do little to
change America’s foreign policy stance and its interest in overseas supplies. at said, if we became a
net energy exporter, this would certainly give us more bargaining power in a number of disputes and
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