Importing Energy, Exporting Regulation

47 Pages Posted: 2 Apr 2014 Last revised: 25 Mar 2015

James W. Coleman

Southern Methodist University - Dedman School of Law

Date Written: April 1, 2014

Abstract

This Article identifies and addresses a growing contradiction at the heart of United States energy policy. States are the traditional energy regulators and energy policy innovators — a role that has only grown more important without a settled federal climate policy. But federal regulators and market pressures are increasingly demanding integrated national and international energy markets. Deregulation, the rise of renewable energy, the shale revolution, and new sources of motor fuel precursors like crude and ethanol have all increased interstate energy trade.

The Article shows how integrated national energy markets are driving states to regulate imported fuel and electricity based on how it was produced elsewhere. That is, states that import energy are now exporting their energy regulations to cover production in their trading partners. But exported regulation has its own problems: it threatens to splinter interstate markets, undercutting the federal push for integrated and efficient energy markets; and it violates the Constitution’s dormant commerce clause. Indeed, these innovative exported regulations are now caught up in litigation across the country.

The Article argues that, to preserve states’ role, while also maintaining a national energy market, Congress should empower the Federal Energy Regulatory Commission to immunize non-discriminatory state laws from commerce clause scrutiny if, and only if, they do not threaten to splinter interstate energy markets. The project considers how these federal regulators might assess state energy laws in three salient areas: regulation of imported electricity, regulation of imported fuel, and regulation of energy export and supply chains.

Keywords: Energy Law, Energy Trade, Federalism, Oil Imports, Electricity Imports, Federal Energy Regulatory Commission, Interstate Trade

Suggested Citation

Coleman, James W., Importing Energy, Exporting Regulation (April 1, 2014). Fordham Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2419288

James W. Coleman (Contact Author)

Southern Methodist University - Dedman School of Law ( email )

P.O. Box 750116
Dallas, TX 75275
United States

HOME PAGE: http://www.law.smu.edu/professor-profiles/coleman

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