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Keywords:

  • disclosure;
  • energy;
  • environment;
  • governance;
  • natural gas;
  • pollution;
  • policy;
  • risk;
  • states

Abstract

U.S. energy firms are increasingly expanding their production of natural gas oftentimes by relying on a controversial extraction technique known as hydraulic fracturing. While proponents cite a litany of benefits including economic development and reduced carbon emissions, opponents articulate concerns typically centering on environmental quality. Caught between these opposing points of view, states are turning to disclosure requirements. Yet all disclosure statutes are not created equally. In order to better understand this variation, I utilize Abel, Stephan, and Kraft's (ASK) 2007 performance model, which evaluates the effectiveness of information-based disclosure rules for industry. The model here, however, is applied in an attempt to understand why disclosure regulations emerge and vary across states. Results generally validate the ASK approach but with one caveat. I find that in the context of differing disclosure regulations, the ASK model's pollution severity/risk measure may be refined by including risk perception.