Securities Regulation as Gap-Filler: The Example of Hydraulic Fracturing

Abstract

Hydraulic fracturing is a controversial well stimulation process used to maximize the extraction of underground resources like oil and gas. There has been a significant public and scholarly outcry for a federal regulatory response to hydraulic fracturing. Despite the perception of a slow federal regulatory response to hydraulic fracturing, one area of federal regulation has dealt extensively with hydraulic fracturing: securities regulation. In particular, public companies that are engaged in hydraulic fracturing operations must (1) make extensive periodic disclosures under Securities Exchange Act regulations; and (2) comply with the Exchange Act’s regulations regarding shareholder access to company proxy statements. After explaining how the securities laws regulate hydraulic fracturing, albeit indirectly, this Essay concludes with a broader discussion about the gap-filling role of securities regulation within the federal regulatory scheme.

Copyright 2013 by Thomson Reuters. All rights reserved. Reprinted by permission of Thomson Reuters/West from Securities Regulation Law Journal.

Keywords: Securities Regulation, Disclosure, Proxy Access, Regulation, Natural Resources, Oil and Gas