Energy Policy, a leading academic journal, recently published an article by GSPIA associate professor Jeremy Weber and PhD student Max Harleman. The piece, which explores how natural resource ownership affects local financial gains, presents a typology for understanding different ownership regimes (private-absentee, public-absentee, private-local, and public-local). The article was largely informed by Harleman's fieldwork in the UK, where he spent several weeks during summer 2016 UK talking to key stakeholders about that the policies and politics of shale gas development there.
The UK government, which owns the natural gas in the ground, has created policies to share shale-related revenues with communities hosting wells. Weber and Harleman compare these revenues with those accruing to local residents in Pennsylvania, where the gas in the ground is generally privately owned and often by local residents.
According to the study, in the Pennsylvania case, residents of the host county capture an estimated 8.5 percent of the value of production of the typical well, more than twice the percentage associated with revenue-sharing policies in the UK. The comparison further suggests that ownership regimes in the two locations have different implications for resource governance. In Pennsylvania, the process is more localized and decentralized, as resource owners can negotiate leases that contain terms which regulate the development of each parcel. However, the authors point out that in the UK, approval and regulation occurs through a public process where the interests of residents living near well sites are diluted with those of individuals living farther away.
The article, Natural Resource Ownership, Financial Gains, and Governance: The Case of Unconventional Gas Development in the UK and the US, is a valuable addition to the scholarship on natural resources and local well-being, which currently has few studies focused on who receives and sets the terms for extraction revenues. Moreover, Dr. Weber and Harleman’s typology of ownership regimes provides a framework for further analysis, opening the door to future studies on this timely topic.