State Regulatory Policies for Shale Oil and Gas

Petroleum has been a primary source of energy over the decades. These past several years saw continuous price hikes and a steady diminishing supply of both unprocessed crude oil and petroleum products from refined crude oil. To solve this crisis, federal governments and private companies in many countries have started to search for alternative energy sources which they could use in place of petroleum. Shale, a rich bank of shale oil and gas deposits, is a source recently discovered that gained steady popularity, especially in the Western continents. The increasing demand for shale oil and gas, as an alternative source of energy to the more conventional petroleum in the United States, requires the federal government to set standard guidelines to regulate shale development activities .The federal government then passes these regulations onto the states where shale mines are developed. This allows them to modify the rules based on their individual situations and needs. The states, in turn, coordinate with their local units to ensure that the state regulatory policies are followed by the companies involved. The recent spike in shale oil and gas development is predicted to affect global economy, particularly in the setting of future market price of oil products and by-products. Studies have been made that support the hypothesis that shale energy sources will upset the production of crude oil in the upcoming years. However, one positive effect of the spike is an improvement in the gross domestic product, or GDP, of most net oil import countries, like Japan and India. It is therefore important for net oil export countries, such as Saudi Arabia and Russia, to adjust their petroleum production and discover their own shale resources, if they wish to prevent being left at the bottom of the global economic ladder.

Keywords:

state , regulatory , shale , price