Hydraulic Fracturing Governance, Pennsylvania

Pennsylvania is the second largest national producer of natural gas. Within the natural gas system individuals have the right to lease mineral rights granting production companies the capability to extract the resource. This accessibility coupled with the widespread nature of spillover effects serves as the basis for this common pool resource study, for externalities are not limited to users of the resource.

With the federal government obstaining from hyrdaulic fracturing regulation, Pennsylvania has implemented its own policies regarding natural gas development. Layers of consitutional and policy restrictions are placed on local governments, diminishing their governing capacity. The regulation uniformity presented at the state level limits the ways that municipalities are able to mitigate socio-economic and environmental externalities experienced at the local level. While this diminished capacity does not compromise the robustness of the national or global natural gas market, the inability for localities to address these concerns decreases the overall robustness of the system. Because of the varying scales and perspectives of system success, it is difficult to deem this system as successful or unsuccessful. At the local level municipalities are unable to accurately reflect the preferences of their constituents and mitigate externalities. At this level, the system is failing. However, at the state or federal level the system is successful for the industry not only serves as an economic driver but it is also claimed that natural gas production paves the way for a 'sustainable' energy future and energy independence.