Regulating hydraulic fracturing in shale gas plays: The case of Texas

The ability to economically produce natural gas from unconventional shale gas reservoirs has been made possible recently through the application of horizontal drilling and hydraulic fracturing. This new technique has radically changed the energy future of the United States. The U.S. has shifted from a waning producer of natural gas to a growing producer. The Energy Information Administration forecasts that by 2035 nearly half of U.S. natural gas will come from shale gas. Texas is a major player in these developments. Of the eight states and coastal areas that account for the bulk of U.S. gas, Texas has the largest proved reserves. Texas' Barnett Shale already produces six percent of the continental U.S.' gas and exploration of Texas' other shale gas regions is just beginning. Shale gas production is highly controversial, in part because of environmental concerns. Some U.S. states have put hydraulic fracturing moratoriums in place because of fear of drinking water contamination. The federal government has gotten involved and some states, like Texas, have accused it of overreaching. The contention over shale gas drilling in the U.S. may be a bellwether for other parts of the world that are now moving forward with their own shale gas production.