Regulatory Obsolescence Through Technological Change in Oil and Gas Extraction

Extraction of oil and gas from unconventional resources, recently enabled by technological innovations, revolutionized national and global markets. However, exploration and production still proceeds under legacy regulations, mostly promulgated at the state level. The mismatch of modern production realities and historic regulatory structures creates opportunities for reducing conflicts that diminish economic value. This paper identifies regulations that originated under conventional extraction and often enhance productivity in that setting, but create waste when applied to unconventional resources. Then I identify contractual solutions that have evolved as resource owners and extraction firms have adapted to new technologies. Contractual innovations help inform directions for regulatory reform