Does Unconventional Gas Require Unconventional Ownership? An Analysis of the Functionality of Ownership Frameworks for Unconventional Gas Development

Abstract

The implementation of a responsive and coherent property framework, capable of effectively supporting the progression of a rapidly expanding unconventional gas industry is proving to be a complex and intricate process for many countries. The theory of mineral ownership that underpins any regulatory framework represents its point of departure. It is increasingly clear that the problems associated with the expansion of unconventional gas development have challenged both private and state based models. This article examines how the core principles that form the foundation for land and mineral ownership in both the United States and Australia have responded to the rapid expansion of the unconventional gas industry. The conventional inertia associated with institutionalized property frameworks has meant that the frameworks are largely resistant to external change. Hence, whilst the transformation that has occurred in the energy industries following the advent of unconventional gas development has been remarkable, ownership frameworks have struggled to cope. Many principles that evolved in a period when unconventional gas was inconceivable are now proving ill-equipped and non-responsive to the new energy environment. This Article argues that the stasis that afflicts ownership frameworks has precluded many of the conventional principles from adapting to meet the needs of this new energy revolution. This has generated an increasing imperative, in both the United States and Australia, to develop and implement legislative initiatives that revise or alter the way in which the schema of orthodox ownership principles applies to unconventional gas. Focused legislative development will promote adaptable, consistent, and structured principles, which in turn will allow ownership frameworks to respond to the operational demands of a new energy era.