Constitutional Protections For Mineral Interest Holders: Oil and Gas Regulation and the Takings Clause
The recent growth of oil and natural gas production in the United States has been nothing short of astonishing. Technical advancements that allow producers to identify promising sources of oil and gas and to extract hydrocarbons from previously inaccessible geologic formations, combined with the entrepreneurial ingenuity of American industry, have resulted in American energy companies reaching production levels once thought impossible. This “new paradigm of abundant low-cost” oil and gas resources has transformed conventional understandings of the energy landscape, allowing some to predict “millions of new jobs and the ‘reindustrialization of America’” as well as imminent American energy independence.
But the effects of burgeoning oil and gas development have not been universally lauded. As development rapidly expands into parts of the country not traditionally associated with oil and gas production, states, cities, and towns have struggled with whether to permit oil and gas development within their communities and, if development is to be permitted, what conditions should be applied to producers’ operations. The aspect of development that has raised the greatest concern in recent years has been the controversial well stimulation technique of hydraulic fracturing: the procedure by which oil and gas producers inject water, sand, and certain chemicals into tight-rock form
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This article appears in:
61st Annual Institute Proceedings (2015)