State regulation: Regulatory risks in tight oil and gas development

The discovery of “tight” gas and oil resources—reserves in low‐permeability shales, tight sandstones, and coalbeds below US soils 1 —is not new. Indeed, the Railroad Commission of Texas sets 1981 as the field discovery date for the Barnett Shale, one of the most productive low‐permeability formations developed so far. 2 Only recently, however, have oil and gas operators produced these resources in quantities sufficient to force them to the forefront of the US energy picture. As natural gas production, in particular, has expanded, prices have dropped, and gas has become a more prominent fuel for electricity generation. 3