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- Title
REGULATION OF FRACKING IS NOT A TAKING OF PRIVATE PROPERTY.
- Authors
Lynch, Kevin J.
- Abstract
The oil and gas industry should lose most, if not all, takings claims they might bring as a result of regulation on fracking, even regulation that bans fracking in specific communities or even statewide. Many in government and in the oil and gas industry think otherwise, and therefore when industry threatens takings claims, the assumption is they will win. These threats act to scare off government officials from enacting protections demanded by their constituents. This Article lays out the many difficulties faced by those who would bring fracking-takings claims in an attempt to show that governments should not be deterred from enacting regulations to protect against the worst harms of fracking. As the use of fracking has spread during the recent oil and gas boom, inevitable conflicts have arisen between industry and its neighbors, particularly as fracking has moved into densely populated urban and suburban areas. Concerned over the impacts of fracking--such as risks to health and safety, diminished property values, air and water pollution, as well as noise, traffic, and other annoyances--many people have demanded a government response. Government regulation of fracking has struggled to catch up to the changes in industry, although, in recent years, many state and local governments have taken steps to reduce the impacts of fracking in their communities or to ban the practice outright. This article focuses on government restrictions in New York and Colorado, two of the key battlegrounds in the fight over fracking. New York recently prohibited fracking across the entire state after several towns had enacted their own bans. In Colorado, the people have used the ballot initiative process to enact restrictions on fracking directly in a handful of local communities, and a few statewide measures are expected to be on the ballot this Fall. The industry has responded, not only with public relations spending to improve fracking's damaged reputation, but also with legal challenges to these efforts to rein in oil and gas development. In addition to suing local governments, often arguing they do not have authority to regulate fracking, the industry threatens to bring costly takings claims for compensation due to alleged economic harms. This Article examines the numerous legal and factual issues that should make it difficult for the industry to succeed on fracking-takings claims. First, regulation of fracking, even including outright bans, almost always can be defended as necessary to prevent a nuisance or other background principle of law that justifies government regulation. Second, even if a nuisance defense could be overcome, industry would have difficulty proving that regulation has destroyed all economic value in their property, and are thus unlikely to be able to take advantage of the categorical takings rule. When fracking-takings claims are considered under the default balancing test, takings are unlikely to be found except in rare outlier cases. Finally, because requiring governments to pay compensation in fracking-takings cases would risk creating a windfall for industry at the expense of the public, particularly if the oil and gas eventually is extracted, courts should resist the temptation to rule against government restrictions to protect public health, safety, and the environment. Fracking-takings claims should therefore only succeed in rare circumstances where the regulation of fracking is patently unreasonable or unnecessary, and therefore government officials and policymakers should not be dissuaded from regulating fracking based on threats of takings liability.
- Subjects
HYDRAULIC fracturing; PROPERTY rights; PETROLEUM industry; GOVERNMENT policy
- Publication
University of Cincinnati Law Review, 2016, Vol 84, Issue 1, p39
- ISSN
0009-6881
- Publication type
Article