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Keywords:

  • state rulemaking;
  • fracking;
  • Colorado;
  • New York;
  • Ohio

Abstract

  1. Top of page
  2. Abstract
  3. Setting the Foundation: Rulemaking in the United States
  4. Interviews with State Rule Writers and Stakeholders
  5. State Processes and Analysis of Stakeholder Involvement
  6. Defining the Process: Stakeholders in Colorado, New York, and Ohio
  7. Discussion: A Second Glance at Stakeholder Involvement
  8. Conclusion
  9. References
  10. Biographies

Rulemaking is an integral component of environmental policy at both the federal and state level; however, rulemaking at the state level is understudied. With this research, we begin to fill that gap by focusing on rulemaking regarding the issue of hydraulic fracturing (fracking) in three states: Colorado, New York, and Ohio. This policy issue is well suited to begin exploring state-level rulemaking processes because the federal government has left fracking regulation to the states. Through semistructured interviews with a range of actors in the rulemaking process across these states, we establish a foundation from which future research in this area may build. This exploratory research yields some valuable insights into the roles different stakeholders are playing in regulating fracking in these three states, and our findings may be useful for explaining state-level rulemaking more generally.

Hydraulic fracturing, or fracking, has become a particularly useful policy area to analyze state-level administrative policy-making (Davis, 2012; Rabe & Borick, 2013)1 because states find themselves overseeing this policy area because of the federal Energy Policy Act's so-called “Halliburton Loophole” in 2005 which exempted fracking oversight from the U.S. Environmental Protection Agency (EPA) (42 U.S.C. §15801).2 As might be expected, states have managed the regulation of fracking and natural gas extraction quite differently (McFeely, 2012). For example, the public disclosure of fracking chemicals varies by state and, of the 14 states that require base fluid volume reporting, only 8 states require industry to identify what the base fluid is composed of (McFeely, 2012).3

Although some research focuses on how states create fracking policy legislatively (Davis, 2012; Rabe & Borick, 2013), scholarship that assesses why administrative policy varies in the fracking arena is understudied. This gap is not just present in the fracking policy area but is indicative of the current state of research on state-level rulemaking. Much of the scholarship that does examine rulemaking focuses on the federal level (Kerwin & Furlong, 2011; West, 2005, 2009), whereas state-level literature has not kept pace (Renfrow & Houston, 1987). These federal analyses have increasingly suggested that interest groups play a role in shaping the outcomes of notice and comment rulemaking (Cook & Rinfret, 2013; Golden, 1998; Naughton, Schmid, Yackee, & Zhan, 2009; Rinfret, 2011). In comparison, some research at the state level suggests that these groups can also be influential on state rulemaking (Woods, 2009), but it is unclear how this participation is materialized. Thus, in this study, we endeavor to investigate: (1) state rulemaking processes with regard to fracking, and (2) how stakeholders attempt to participate in this process for the creation of state fracking rules in Colorado, Ohio, and New York.4

This research provides original interview data from the perspectives of state rule writers and stakeholders to better understand state approaches to fracking and rulemaking processes. We contextualize the interview data in theories of issue definition (Baumgartner, Berry, Hojnacki, Kimball, & Leech, 2009; Cobb & Elder, 1975; Kamieniecki, 2006). The goal here is to assess why state fracking regulations may vary, with a particular focus on the participation of organized interests. Thus, the following pages provide an in-depth analysis of the rulemaking processes used in each of the three states to provide the basis for comparison. Then, we assess the role of different stakeholders within each process in order to evaluate the similarities and differences across the cases. We conclude that stakeholders clearly are involved throughout the rulemaking process in each state, and interviewees from this study suggest that the earlier they participate, the more likely they are to be influential. However, we argue that how, and which, stakeholder groups are influential often depends upon the role of gatekeepers such as the governor, agency staff, and in some cases, the legislature. Therefore, future analyses assessing state regulatory policy should evaluate the role of gatekeepers as well as stakeholders in their research.

Setting the Foundation: Rulemaking in the United States

  1. Top of page
  2. Abstract
  3. Setting the Foundation: Rulemaking in the United States
  4. Interviews with State Rule Writers and Stakeholders
  5. State Processes and Analysis of Stakeholder Involvement
  6. Defining the Process: Stakeholders in Colorado, New York, and Ohio
  7. Discussion: A Second Glance at Stakeholder Involvement
  8. Conclusion
  9. References
  10. Biographies

We begin our discussion by describing federal rulemaking processes and the role that stakeholders have played within this process. This overview is important for our understanding of state-level processes as most of these processes have roots in this federal structure. The U.S. Administrative Procedure Act (APA) of 1946 provides the loose structure of the federal rulemaking process. The APA requires federal agencies to provide notice and a public comment period for all significant federal rulemaking procedures (5 U.S.C. §553). More specifically, the rulemaking process can be broken down into three basic stages. Stage 1, the preproposal stage, consists of informal communication between interest groups and agency personnel. During this stage, the agency discusses and drafts language for a proposed rule. These informal interactions lead to Stage 2, when the agency formally drafts a proposed rule and publishes a notice of proposed rulemaking (NPRM) in the Federal Register. During this stage, individuals can submit comments on a proposed rule. Stage 3 of the rulemaking process begins once the comment period ends. At this juncture, agency personnel review the comments to determine the language and substance of the final rule and publish it in the Federal Register (Kerwin & Furlong, 2011).

In examining influence during federal rulemaking processes, many scholars conclude that business and industry groups dominate Stage 2, in which participants can submit comments to an agency regarding a particular rule (cf. Fritschler, 1989; Golden, 1998; Magat, Krupnick, & Harrington, 1986; West, 2005). More recently, scholars have turned to the preproposal stage in an effort to examine the relationships between an agency and stakeholders during rule development and have found that interest groups are indeed influential (cf. Hoefer & Ferguson, 2007; Rinfret, 2011; West, 2009; Yackee, 2012). In particular, Rinfret and Furlong (2012) posit that this is where the policy-making agenda is set for rulemaking processes because an agency can work with stakeholders off the record and craft the language of the NPRM.

Applying Federal Theory to States

As previously noted, much of the research regarding administrative rulemaking focuses on federal processes and the impact of interest groups during that process. This is not to say that scholars have ignored state-level administrative policy making in general. Rather, there has been significant research assessing institutional impacts (state legislature, state courts, and the governor's office) on rulemaking (cf. Gerber, Maestas, & Dometrius, 2005; Poggione & Reenock, 2009; Shapiro & Borie-Holtz, 2011; Woods, 2009; Woods & Baranowski, 2006). Yet the process used by states to develop rules and how stakeholders participate in this process is generally absent from this institutional focus, and Woods (2009) suggests that stakeholder influence could impact how state agencies produce policy, which needs additional study. We suggest that understanding stakeholder participation during state-level rulemaking processes is important for not only fracking policy but additional policy areas as well.

Importance of Issue Definition

In order to assess the role of stakeholder participation in fracking policy, this research applies theories of issue definition. Kamieniecki (2006) argues that theories of issue definition (e.g., agenda setting, agenda building, agenda blocking, framing) are useful for evaluating stakeholder participation because they offer a conceptual framework to analyze interest group involvement in environmental policy making. More specifically, Kamieniecki (2006) suggests that theories of issue definition (Cobb & Elder, 1975) help to identify the ability of groups to define an issue through the use of language or symbols during rulemaking processes. More importantly for this research, he argues that, “[t]heories of agenda building also help identify strategies pursued by firms in the rulemaking process. In cases where business interests most strongly oppose the adoption of a new rule, they tend to engage in agenda blocking” (p. 132). Yet as we demonstrate in the following pages, we also need to remember the role that gatekeepers play in defining public policy issues. Essentially, the gatekeeper opens (i.e., institutional actor asking for input regarding public policy) the door to receive feedback on a particular issue (Baumgartner et al., 2009; Cobb & Elder, 1975).

We build upon the aforementioned rulemaking research and theories of issue definition to offer a better understanding of why states' regulatory policies may vary in the fracking policy arena. Recall, we elected to focus on fracking policy because it is a current and controversial topic in which states have full control over policy development (Clarke, Boudet, & Bugden, 2013).5 Though the findings from this research are focused on fracking policy, they may be useful in explaining some of the factors behind state-level rulemaking variation more broadly, especially in those areas where states have complete authority.

Interviews with State Rule Writers and Stakeholders

  1. Top of page
  2. Abstract
  3. Setting the Foundation: Rulemaking in the United States
  4. Interviews with State Rule Writers and Stakeholders
  5. State Processes and Analysis of Stakeholder Involvement
  6. Defining the Process: Stakeholders in Colorado, New York, and Ohio
  7. Discussion: A Second Glance at Stakeholder Involvement
  8. Conclusion
  9. References
  10. Biographies

In order to advance our understanding of fracking regulatory policy, this research focuses on fracking policy across three cases: Colorado, New York, and Ohio.6 We selected these three states for comparison in part because they are geographically disparate as these cases should provide a more illustrative analysis of agency rulemaking, including similarities and differences across the United States, as opposed to relying on one region of the United States alone.

In addition, these states were selected because of their significant variation in natural gas production. Colorado represents one of the top energy producers in the country, Ohio is a moderate producer of energy, and New York produces some energy but is considered an emerging energy producer (EIA, 2011b). Accordingly, the findings of this research provide important insights on how a variety of stakeholders influences the process as opposed to just potentially the entrenched players.

State Register documents and semistructured interviews were the primary sources of information for this study. First, State Register data were used to provide a skeleton structure of the rulemaking process within each state. Then, the interview data were used to explain in more detail the stages of the state process and stakeholder involvement. The interviews were conducted with agency staff and stakeholders. Initial agency interviewees were selected from a review of each agency's webpage and its employee directory. Stakeholder groups were selected through a review of each State Register7 and agency lists of recurrent participating parties in the rulemaking process. The snowball method8 was used to construct a larger sample size and assure that the key players were interviewed for this study.

A total of 529 agency staff and interest groups were questioned via telephone interviews during the fall of 2012 and spring of 2013. Those agency staff interviewed for this study included personnel that focus specifically on rule writing. Similarly, stakeholder groups that participate in the oil and gas policy area were interviewed and included a range of trade associations, industry representatives, environmental organizations, and citizen groups. Interviewing these agency personnel and stakeholders allowed for inquiry into the types of arguments groups use, the relationship between agency officials and interest groups, and the differences across cases. The goal is to evaluate how each state creates fracking regulations from the perspective of those directly involved in the process. This analysis yields important insights regarding how state-level rule writing processes and stakeholder involvement impact fracking policy, which is missing from the literature.

State Processes and Analysis of Stakeholder Involvement

  1. Top of page
  2. Abstract
  3. Setting the Foundation: Rulemaking in the United States
  4. Interviews with State Rule Writers and Stakeholders
  5. State Processes and Analysis of Stakeholder Involvement
  6. Defining the Process: Stakeholders in Colorado, New York, and Ohio
  7. Discussion: A Second Glance at Stakeholder Involvement
  8. Conclusion
  9. References
  10. Biographies

Before delving into our interview data, it is important to begin with a brief description of the state rulemaking processes under investigation in Colorado, New York, and Ohio. Much like the federal level, state rulemaking is governed by the Model State Administrative Procedure Act of 1946 (Renfrow & Houston, 1987). As Renfrow and Houston (1987) note, “this act serves as a model for state administrative procedures” (p. 657). The different states can vary a great deal in how they produce rulemakings (cf. Kerwin & Furlong, 2011).

State Processes

Beginning with Colorado, administrative agencies, including the Colorado Oil and Gas Conservation Commission (COGCC), which regulate the oil and gas industry in Colorado,10 must comply with the Colorado Administrative Procedures Act of 1959. This act requires agencies to provide a notice of a proposed rulemaking and conduct a public hearing (C.R.S. 24-4-103).

Similar to the federal process, Colorado's rulemaking entails three stages. First, during stage 1 of the process, the COGCC actively promotes the use of stakeholder meetings to discuss draft language for a proposed rule. Interested parties can participate in these meetings before the more formal hearing processes begin (COGCC, 2013a). Stage 2 of the process begins when agency personnel develop a draft proposal. The commission11 calls for a public hearing, and the agency submits a NPRM in the Colorado Register. Any individual can provide testimony at these hearings, but he/she may be subject to cross examination from other parties (COGCC, 2013a). After the first public hearing, the commission can call for further hearings.

If the commission does not produce a decision within 180 days regarding a rule, the agency must publish a termination notice in the Colorado Register (C.R.S. 24-4-103). Stage 3 of the process begins when the commission determines whether a proposed rule should be finalized, discarded, or rewritten. If the rule is approved by the commission, the rule is on record for that legislative year and expires the following May 15 (OLLS, 2012). Annually, the Office of Legislative Legal Services (OLLS), an arm of the legislative branch, reviews all administrative rules to determine whether any given rule is within an agency's statutory authority (OLLS, 2012). If the OLLS finds a problem with a rule, the Legislative Committee on Legal Services will review the rule, and if they agree with the OLLS, they can vote to not renew that rule. For those rules not called into question by the OLLS, they are typically voted on within an annual package to extend the expiration date by 1 year (OLLS, 2012).

Similar to Colorado, New York must follow the State APA (SAPA), and the process unfolds over three stages. For the purposes of this paper, the New York Department of Environmental Conservation (DEC) is responsible for energy development, which oversees fracking regulations.

The DEC process begins with an internal agency review to determine if rulemaking is the best or most appropriate action to address a particular problem. Within this internal review process, the DEC, as required by the Environmental Conservation Law, has an obligation to protect the environment. If a DEC action could impact the environment, the agency is required to complete an environmental impact statement (EIS). After an EIS process is completed, the rulemaking process can begin. Thus, agency staff discusses and prepares a proposed rule. Often at this stage, agency staff will also reach out to stakeholder groups to receive input on the issue. Next, stage 2 of the process unfolds when the agency submits a formal proposed rulemaking in the New York State Register. After the agency publishes the NPRM, the public comment period begins. The agency has 180 days to review and respond to public comments, as well as determine what action to take on a rule.12 Stage 3 of the rulemaking process begins when the agency provides a complete text of the rule to notify the governor, the president of the senate, the speaker of the assembly, and the Administrative Regulations Reviews Commission (within the New York State Senate) that a rule is being finalized.13 Therefore, at this stage, the filing of the final terms of the rule is published in the New York State Register.

Like the rulemaking processes in Colorado and New York, Ohio has its similarities and its own unique features. The Ohio Administrative Code provides the legal basis for the process. In Ohio, within the Department of Natural Resources (DNR), Division of Mineral Resources Management has jurisdiction over fracking regulations.14

To begin stage 1 of the process, the ODNR conducts an internal review process that solicits feedback and discussion concerning policy areas. Changes were made to this stage under Governor John Kasich in 2008, and agencies are now required to conduct early stakeholder outreach (ESO). After ESO, the agency begins drafting the rule. At this time, the agency must also comply with Governor Kasich's 2011 Executive Order 2011-01K, the “Common Sense Initiative” (CSI) which intends to reduce red tape and regulatory burdens on business, providing another procedural requirement during stage 1 of the process. Briefly put, the CSI requires agencies conducting rulemaking to solicit input from stakeholders before the first word of a new or revised rule is drafted. Stage 2 of the process begins after an agency produces the draft rule and submits it to the Register of Ohio. The publication of the draft rule opens the comment period, which typically lasts 30 days but may be amended depending on the circumstances. After the review of public comments, the CSI requires the agency to develop a “Business Impact Analysis” for the proposed rule including an explanation of the reasoning and scientific data behind the rule and complete an extensive questionnaire regarding the cost burdens of the proposed rule.

Stage 3 of the process begins when the agency completes these documents and submits the proposed rule and ancillaries to the Lieutenant Governor's CSI Office for review. Part of this review process includes another public comment period as well. Afterward, the CSI Office makes a recommendation as to whether the process has been followed, and the draft rule should continue toward finalization or if procedural errors warrant additional actions. Once the CSI Office has signed off on the rule, the agency then submits the rule package to the Joint Committee on Agency Rule Review (JCARR). During this point in the process, there is a public hearing on the proposed rule, and the process lasts at least 65 days. After the hearing, JCARR votes on a recommendation to support the rule or invalidate the rule. Once JCARR recommends moving the rule forward, then it takes effect based on the effective date stipulated.15

Defining the Process: Stakeholders in Colorado, New York, and Ohio16

  1. Top of page
  2. Abstract
  3. Setting the Foundation: Rulemaking in the United States
  4. Interviews with State Rule Writers and Stakeholders
  5. State Processes and Analysis of Stakeholder Involvement
  6. Defining the Process: Stakeholders in Colorado, New York, and Ohio
  7. Discussion: A Second Glance at Stakeholder Involvement
  8. Conclusion
  9. References
  10. Biographies

This description of state rulemaking processes provides an overview of how each state can operate with regard to state administrative procedures. Next, we discuss the results from 52 interviewees across the three states, examining how stakeholders and agency personnel defined the process from their own vantage point. The following helps to explain that the way in which groups frame or define an issue helps to identify variance across state rulemaking approaches for fracking.

First, we begin with a discussion of fracking policy in Colorado. Energy development in Colorado is nothing new, but the state has seen enormous increases in the amount of oil and gas produced with the proliferation of fracking technology. In fact, energy production from natural gas is at all-time highs (COGCC, 2013b). As a result, the COGCC has been permitting anywhere from 1,250 to 4,443 new wells annually since 2002 (COGCC, 2013c). To provide some perspective, the COGCC manages oil and gas development at over 50,000 active wells and growing (COGCC, 2013c). In addition, Colorado has split estate laws in which surface owners may not necessarily own the resources below their feet, which can often cause conflicts over land use and development, especially for new wells (Davis, 2012).

Because of the recent energy boom and the increasing number of well sites in urban areas, the Colorado legislature approved significant legislative changes governing how oil and gas development is regulated in the state. The legislature, with strong support from former Governor Ritter, amended the Colorado Oil and Gas Conservation Act (Conservation Act) (2007) and the Habitat Stewardship Act (2007) to address oil and gas policy across the state. The goal behind this legislation was to give the COGCC a more balanced mission with regard to environmental protection, wildlife, and energy production (Robinson, 2007).

In order to adjust to this balanced approach, the amendments to the Conservation Act required a restructuring of the composition of the commission. The Conservation Act moderated the role of industry specialists on the commission by including environmental specialists and a local designee (C.R.S. 34-60-104). In comparison, the Habitat Stewardship Act of 2007 required the COGCC to reduce the impacts on wildlife caused by oil and gas development and reclamation (C.R.S. 34-60-128). Finally, the agency was required to overhaul its regulatory process to include more stakeholder input, and these changes are reflected in the rulemaking process we discussed earlier (COGCC, 2013a).

Assessing the Process in Colorado: Balance or Insiders-Only Club?

Since the agency made these regulatory changes, the agency has moved forward with fracking regulations. In December 2011, the COGCC implemented a disclosure rule for the chemicals used in the process (Jaffe, 2011).17 More recently, the COGCC published a rule increasing the setback requirements for new oil and gas drilling sites from homes, businesses, and high-occupancy buildings, as well as requiring groundwater monitoring both up and down slope from these wells (COGCC, 2012a, 2012b). Therefore, Colorado has conducted many of these rules under their new regulatory framework with increased stakeholder participation. Thus, we turn to an analysis of the Colorado process and stakeholder influence.

The main difference from the old rulemaking process to the new one used at the COGCC is the advent of the stakeholder meeting process. One agency employee argued that they use these meetings to “try and find where we have consensus on policy issues and where we do not.” The agency also uses these meetings as a listening session “to hear what the concerns are and to see if we can reflect those concerns in the rule” (personal communication with authors, 2013).

Most of the stakeholder interviewees across perspectives from industry to environment argued that adding these meetings have improved the overall COGCC rulemaking process. As noted by one environmental interviewee “the agency seems to produce rules in a more rational and empirical manner than previously.” Moreover, one industry interviewee suggested that “these stakeholder meetings are inherent to the process, they drive the process, and they are the process.” Therefore, in the case of Colorado, interested stakeholders are invited into the earliest stages of the rulemaking process, and these groups find these meetings helpful in producing more effective rules.

However, outside of this basic agreement on the usefulness of the overall structure of the process, many of the interviewees disagreed quite substantially on their role in that process. For example, despite environmentalists' support for the stakeholder meetings, one environmental representative suggested “sure we are at the stakeholder meetings, and they listen to us, but we aren't always invited to the deal-making meetings where the real policy gets decided.” Similarly, another interviewee noted: “the only rules that come out of the agency are pre-approved by industry so for better or worse the deck is stacked in favor of industry.” Therefore, though these environmental groups are present at the stakeholder meetings, they do not believe that the agency is weighing their input equally to that of industry.

Conversely, industry officials were much less willing to discuss involvement in the process, or as one official noted, “it is really hard to determine influence because there are so many groups that impact the process.” However, one industry group was willing to say that “sometimes it appears that there is behind the scenes lobbying either on the environmental or the industry side at the last minute that swings the pendulum one way or another and changes dramatically the rule language proposed by the agency.” Though it would appear that industry may have the upper hand, one governmental official commented “it is incorrect to assume that the agency is controlled by industry, if environmentalists come in with the position that anything but a fracking ban is a failure, then sure they won't think they have influence on the process.”

New York: Just Kick the Can Down the Road18

Many suggest that New York (and parts of Ohio) sits on top of the “motherload” of natural gas reserves in the United States, the Marcellus and Utica Shale. Although New York might have had the first natural gas well in the United States (in Fredonia, New York), when it comes to fracking regulations, one interviewee succinctly noted, “New York is the new kid on the block and is being cautious about it.” To better understand the sentiments expressed by this interviewee and others investigated, it is important to first briefly examine the history of how fracking has evolved in New York.

In 2009, the NY DEC issued a draft supplemental generic EIS (SGEIS) analyzing the potential impacts of horizontal fracturing of natural gas in the Marcellus Shale. The agency received extensive comments (13,000) on this draft SGEIS, and because of the high level of controversy, illustrated by the quantity of comments, both the legislature and governor interceded in this policy area. First, in 2010, the New York state legislature prohibited the NY DEC from granting drilling permits until more research could be compiled or a revised SGEIS was completed. Then, in 2011, former Governor Patterson issued Executive Order 41, which put a moratorium on horizontal fracking, mandating horizontal drilling would not be allowed until the completion of a final SGEIS.

Upon taking office in January 2011, Governor Andrew Cuomo continued the horizontal fracking moratorium (Executive Order 41). However, here is where the story gets interesting: the NY DEC continued to finalize its efforts with the SGEIS asking for additional public comments by January 2012 in order to gain more input from the public regarding the potential economic and health impacts. Though it is common for public comment periods to last 30–60 days, in this instance, NY DEC kept it open for a full year, closing it just recently in January 2013. Because of the extended length of the public comment period, the Commissioner of NY DEC, Joseph Martens, filed a notice of continuation with the NY Department of State to extend the rulemaking process in order for the NY State Commissioner of Health, Nirav Shah, to determine if NY DEC was adequately addressing potential health impacts for the public.

Furthermore, in March 2013, the New York State Assembly passed S4046 which continued the moratorium on fracking for at least an additional 24 months or until Shah finalized his review. On top of this, the DEC is prohibited from finalizing the SGEIS until the Geisinger Health System Study,19 and U.S. EPA complete their analyses on the possible effects of fracking on the population (Ayers, 2013).

The interview data from New York provides a variety of ways in which NY DEC, industry organizations, and environmental organizations defined the state rulemaking process. For the agency's perspective, one of the driving messages is that the NY DEC offers a “good government model” when writing environmental rules for their state. Under this approach, the goal is to be transparent with those being affected by a regulation. As one agency official noted, “We examine each and every public comment by hand, ensuring that everyone is considered.” Yet many of those stakeholders interviewed for this project revealed that for fracking regulations, the NY DEC did not follow a good government model or an open and transparent process. To explain this point, we turn to interview data from stakeholder groups.

As the aforementioned literature suggests, participation does matter during the stages of the rulemaking process, especially at the federal level. The stakeholder groups interviewed could not agree more with this conclusion when asked about rulemaking processes more generally. Over half of the stakeholder groups interviewed for New York noted that in their experience working with previous NY DEC rules, being involved earlier in the process, is the most productive. One interviewee noted, “Sure, submitting public comments are important, but working with the agency during the drafting of the rule is key.” In turn, many of the agency officials interviewed noted that the draft stage of rulemaking is essential because groups can provide supporting documents. Yet as one agency official noted, “Submitting public comments is also important to making changes to a final rule as well.”

Although being involved early on in the process was duly noted, industry and environmental representatives argued that this was not the case for fracking regulations. According to one prominent industry stakeholder, “Being involved early is important, but I don't think the agency wanted to discuss this with anyone. We were rarely asked to participate.” To reiterate this point, one environmental representative stated, “A few years ago the agency had an open door policy [good government], but now this is shut. The NY DEC has become a fortress of secrecy.” A member from another environmental group echoed this claim, by stating, “These perspectives really result in a lot of dissatisfaction with the NY DEC and its transparency about the process.” Moreover, an industry official succinctly claimed, “DEC used to reach out to groups, they asked us for our input, this time we really could only just participate by submitting public comments.” It appears that many define the New York rulemaking process for fracking regulations as a process that lacks inclusivity. Others were even more critical, as one representative for an industry organization argued, “The state continues to kick the can down the road, with a decision about the future of fracking to be a mystery.”

Ohio: More Red Tape or Business as Usual?

Ohio is taking a multipronged strategy to dealing with fracking within its boundaries, principally a legislative approach. As noted, the Ohio DNR has primary responsibility for regulating fracking. More specifically, the Division of Oil and Gas Resources Management oversees all aspects of oil and natural gas drilling. ODNR has approved 375 natural gas drilling permits; 134 have been drilled, and a significant uptick in permits is expected by 2015 (Hunt, 2012a, 2012b). Also, under the auspices of ODNR is the permitting of fracking disposal wells. After a moratorium on permitting new disposal wells as a result of several earthquakes in December 2011 in Eastern Ohio, the agency has recently begun approving new permits after new rules took effect October 1, 2012.

In terms of hydraulic fracturing in Ohio, a series of earthquakes near Youngstown, Ohio in December 2011 propelled fracking onto the political agenda. In the spring of 2012, the Ohio House and Senate passed Senate Bill 315. The law mandates public disclosure of chemicals used during the fracking process, establishes fines for well operators who violate the laws, and mandates testing of private wells in close proximity of natural gas drilling operations. This law also expressly removes any jurisdiction Ohio EPA might have over fracking and related concerns. Some interviewees from environmental groups contended that the law did not go far enough in protecting the public's health and water supply, and the law allows many loopholes that will thwart the disclosure of fracking chemicals as protected by trade secrets. They contend that ODNR, the agency that does have some oversight with fracking-related practices, is in the pocket of industry, so removing Ohio EPA from any oversight further jeopardizes the environment.

With this legislation, rulemaking specifically focusing on fracking is not occurring in Ohio. Instead, existing rules regarding drilling and other operations surrounding extraction are being revised per the usual legislatively mandated timelines, in particular, rules that deal with the construction of wells. Revised well construction rules took effect during the summer of 2012 and came about after much input from the public and industry representatives, a fairly uncommon experience for rule writers in ODNR. These rules, dealing with both horizontal and vertical wells, garnered protests outside government buildings in Columbus and culminated in local law enforcement being called. Additionally, there are rules being drafted on underground injection controls. It remains to be seen if and when Ohio will use rulemaking to address fracking head on. Even though specific fracking rulemaking is not occurring in Ohio, the interviews uncover a couple of important themes.

Interviews with state agency staff and members of interested stakeholder organizations reveal that the CSI is simply rebranding involvement of steps already taken during rule writing in Ohio, at least as far as ODNR's process is concerned. A repeated theme among interviewees is a similar definition regarding the process is that ODNR routinely reaches out to interested parties, but specifically the mining and oil and natural gas industries for input during early stages of rulemaking. From the perspective of the agency, this involvement is a key to ensuring the successful development and implementation of a rule.

Despite agency arguments that they are already reaching out to stakeholder groups early in the process, environmental groups questioned the agency motives. In fact, one environmental interviewee argued that stakeholder input on ODNR rules is heavily weighted toward extraction industries. Another interviewee remarked that ODNR “is next to impossible to deal with” as the agency's general retort is to get a lawyer. From the perspective of the governor's office, which is responsible for the CSI, ESO is further evidence of Governor Kasich's determination to ensure the economic recovery of Ohio and that government is not hostile to business interests.

Discussion: A Second Glance at Stakeholder Involvement

  1. Top of page
  2. Abstract
  3. Setting the Foundation: Rulemaking in the United States
  4. Interviews with State Rule Writers and Stakeholders
  5. State Processes and Analysis of Stakeholder Involvement
  6. Defining the Process: Stakeholders in Colorado, New York, and Ohio
  7. Discussion: A Second Glance at Stakeholder Involvement
  8. Conclusion
  9. References
  10. Biographies

Stakeholders are involved in the rulemaking processes of fracking regulations, but there are apparent themes across these three states to help unpack some of the similarities and differences. On the surface, each state agency examined here reportedly promotes collaborative mechanisms in order to work with stakeholders to develop rules: Colorado's consensus building, New York's good government, and Ohio's common sense.

Although these agency outreach mechanisms are noteworthy, additional explanation and qualifications are needed. For instance, stakeholders in Colorado reported that the agency had consensus building meetings, but from the stakeholder perspective, there were “deal-making” meetings when all groups were not at the table. We posit from the interview data here that many industry groups were more involved in these deal-making meetings, impacting fracking regulations for the state.

In comparison, New York stakeholders argued that NY DEC has had a rich history of including groups “early and often” during the development of rules, but for fracking, this was not the case. More specifically, industry and environmental groups argued that they were not sure who was at the table during rule development for fracking regulations. Thus, the question becomes why the NY DEC would not utilize their good government model. For some interviewees, the answer was that there was a lack of staff or so much agency turnover that NYDEC did not have enough institutional memory to work with stakeholders on this issue like they had in the past. Therefore, this left many vested interests disgruntled concerning early involvement in the process, thus turning to submitting comments to make their voices heard.

Ohio, much like Colorado and New York, has a governor that promotes a “common sense” approach for collaborative efforts. Indeed, ODNR continues to update regulations related to wells as it would in its other statutorily delegated areas of oversight, without commenting on what is driving this new regulation, notably fracking technology. Furthermore, some interviewees speculated that the dominance of the oil and natural gas industry and Republican control of state government has enabled fracking concerns to be stifled. Also, Ohio EPA has been explicitly directed not to get involved with fracking, limiting the environmental oversight of this process. This leaves ODNR the sole state agency responsible for anything pertaining to fracking. Some ODNR interviewees commented that they are not used to being in such a public position as fracking is generating a level of protest not seen in other areas.

Yet we argue that the deal making in Colorado, the lack of outreach in New York, and the indirect rulemaking in Ohio are explainable by considering the involvement of the governor or state legislature. In the case of Colorado, one additional message is the important role of the governor in shaping the boundaries of debate and thus the language of the fracking rules. More specifically, one industry representative suggested that in the case of the disclosure rule, “the governor actually came into our first meeting and said, we will have fracking in the state, now figure out how it's going to happen, and that really set the debate on the disclosure policy.” Outside of this direct influence, the governor also has more impacts on the process. For example, one former governmental official asserted that “the governor has a great deal of influence on the Commission he appoints everyone, and he picks the COGCC staff director.” Moreover, an environmental representative concluded “the best way to influence the agency is to lobby the governor's staff, but this influence depends upon the position of the governor, and we had a lot more influence on the previous governor than the current one.” By contrast, one industry official noted “we have a great leader in the governor's office right now.” This may not be very surprising considering that the current governor used to work as a geologist for the industry (Rubino, 2013).

In contrast, New York and Ohio are confronted by restraints by their state legislatures. Recall, New York's rulemaking processes were halted for a final decision by the state legislature until more was understood concerning the human health and environmental effects. In turn, Ohio to date has largely deflected the criticisms of fracking as it continues despite increasing concerns regarding the health and environmental risks it poses. Moreover, the Republican-controlled Ohio General Assembly has preempted the Ohio EPA from involvement in fracking as the growing protests in the state show the public is increasingly concerned about the risks of fracking.

As a result, these players in Colorado, New York, and Ohio are strong gatekeepers regarding how stakeholder groups can impact the process and on what terms (Baumgartner et al., 2009; Cobb & Elder, 1975). Although Kamieniecki (2006) argues that stakeholder influence should be assessed regarding their efforts to set or block agendas, this does not provide the full picture. For example, if an industry group is successful in limiting the agenda or the scope of an issue, scholars should not suggest that they are just inherently better at impacting agency policy making. Rather, researchers should provide an assessment of the structural components of the rulemaking process, and in particular the roles of gatekeepers, which can more effectively illustrate why interest groups have more access in some cases and why state policy varies.

This is not to say that stakeholders are simply at the whim of the agency, legislature, or governor's directive or that they just give up if there seems to be too much opposition to their desired outcome. Cobb and Elder (1975), Kamieniecki (2006) and others are correct in that advocacy, scientific information, and professional advice can all be used by stakeholders successfully to define problems and set the agenda. In addition, this study provided some perspectives on how different groups tried to do just this. However, it is important not to forget that these actions do not occur in a vacuum, and scholars need to look toward structural limitations and political influences on agency actions when assessing these efforts to be involved in the process.

Conclusion

  1. Top of page
  2. Abstract
  3. Setting the Foundation: Rulemaking in the United States
  4. Interviews with State Rule Writers and Stakeholders
  5. State Processes and Analysis of Stakeholder Involvement
  6. Defining the Process: Stakeholders in Colorado, New York, and Ohio
  7. Discussion: A Second Glance at Stakeholder Involvement
  8. Conclusion
  9. References
  10. Biographies

The goal of this research is to analyze just how agencies within these three states are creating fracking policy through state rulemaking processes. First, from the discussion above, it is clear that each state has had different factors that impact their own state rulemaking processes. It seems that the COGCC in Colorado has the most discretion in managing fracking though the governor has a strong position in determining just who has this discretion. In both New York and Ohio, the legislature has placed significant burdens on agency personnel in terms of what the agencies must do before producing any rules, with New York's external analyses of impacts and Ohio's review of agency outreach efforts and “common sense” requirements to consider economic impacts.

Despite these constraints, most agency personnel argued that stakeholders are important to the process, but exactly what this means varies by state. The deal-making meetings in Colorado and the CSI office review in Ohio suggest that politics is playing into just which stakeholders are important to include within the process. Finally, New York appears to be the anomaly as stakeholders argued that they were shut out of the early stages (preproposal stage) of the process entirely. This may be a short-lived difference because the sheer volume of public comments New York received could make these personnel rethink this position in the future and return to their previous position of including this participation during the preproposal stage.

This analysis aids in our understanding of how fracking regulations are developed across these three states and it may also provide some insight regarding state rulemaking processes more generally. For example, many interviewees across the three cases highlighted the strong role of the governor or legislature in shaping the administrative agenda. In addition, there was a general agreement among stakeholders that being involved early and often in the rulemaking process is important.

However, more work is needed to evaluate whether these claims are truly applicable across policy areas. Future studies assessing the role of the governor and legislature in the rulemaking process could apply similar methods to those described here outside of the fracking policy arena. Yet assessing stakeholder influence in the earliest stage of the rulemaking process is more problematic because many of the interactions between agencies and stakeholders at this point are “off the record” or behind the scenes. Future research could adopt Kaufman's (1960) approach and focus exclusively and in depth on an individual agency to provide a firsthand account of the impact stakeholders have on the language of a proposed rule. Researchers could immerse themselves within this agency and observe how the preproposal stage unfolds.

Nevertheless, the goal of this research was to assess what may explain differences in fracking policy across the states. In this regard, we argue that gatekeepers are critically important in shaping the boundaries of debate while determining when and how stakeholder groups will be invited into the process. However, stakeholder groups can be influential during the process even with these constraints and also may account for differences across the states. Therefore, this research provides some starting points for determining why states differ in terms of regulating fracking and may provide insight regarding why they regulate differently across a wide range of policy areas.

Notes
  1. 1

    Fracking refers to the process in which a mix of water, chemicals, and, oftentimes, sand are injected into wells to fracture rock formations and allow natural gas to be captured. With fracking, oil and gas developers can reach these resources in much deeper rock formations. Moreover, the use of horizontal drilling allows the developer to access a much larger pool of natural gas. After the process is complete, much of the fracking fluid (also known as frack water) returns to the surface as produced water that generally contains additional natural minerals and metals as well as the original chemicals used in the process. It is worth noting that the mixture of chemicals and other substances to dislodge the rock formations is generally considered proprietary information (much to the chagrin of fracking opponents), and disclosure of the mixture's contents is not required by law. This produced water is stored in tanks or pits then treated, disposed of, or recycled back into the process. In some cases, it is injected back into the ground, and in other cases, it is treated by wastewater treatment facilities (EPA, 2013a). The use of hydraulic fracturing has increased over time because the technology has improved, making the extraction of shale gas rather cost-effective. Though this process has made this extraction cost-effective, there are significant environmental concerns around this process including groundwater contamination (EIA, 2011a; EPA, 2013b) and air pollution (EPA, 2013a; Zeller, 2011).

  2. 2

    The Bureau of Land Management is considering rules to regulate fracking on public lands, but states would still have exclusive jurisdiction over fracking on state lands (Crandall, 2012).

  3. 3

    Base fluid refers to the mix of chemicals and water used to fracture the rock formations (McFeely, 2012).

  4. 4

    In this article, we use stakeholder and interest group interchangeably to remain consistent with the rulemaking literature (Kerwin & Furlong, 2011). Moreover, stakeholders and interest groups represent organizations such as industry and environmental representatives.

  5. 5

    At center of the fracking debate is economic and environmental concerns. One side of the argument is that fracking will aid economic growth in the United States. In turn, the environmental concern is that the extraction of natural gas through hydraulic fracturing practices should cause pause because of issues such as drinking water contamination (EPA, 2013b).

  6. 6

    Rabe and Borick (2013) extensively outlined the role of Pennsylvania in the state fracking debate, and to build upon this research, we have elected to focus on additional states to broaden our state perspective. More specifically, as Rabe and Borick succinctly note, “Pennsylvania alone cannot represent a full test of how multiple states might respond to the opportunities and challenges posed by massive shale discoveries” (p. 323).

  7. 7

    Each state has a state register that is similar to the Federal Register, which lists all the rulemaking actions produced in the state (Kerwin & Furlong, 2011).

  8. 8

    The snowball method refers to the process of requesting interviewees to provide names of other key players in the policy area. The idea is that the researcher will gain a larger list of interviewees and that new names to the list will decline over time as interviewees begin to name the same players.

  9. 9

    On average, 12–20 individuals were interviewed per state to capture the rulemaking processes and creation of fracking rules. Because of Institutional Review Board requirements, the explicit numbers for each case are not revealed to protect the anonymity of the interviewees for this project as promised to them.

  10. 10

    The COGCC is a division of the Colorado DNR (COGCC, 2013a).

  11. 11

    The commission is composed of a representative of the executive director of the Colorado Department of Public Health and Environment, a representative of the executive director of the DNR, a local government designee, a wildlife expert, and three private individuals with specific knowledge of oil and gas development (C.R.S. 34-60-104).

  12. 12

    An agency can file for a 30-day extension.

  13. 13

    This stage allows for an agency to provide notification of adoption and the complete text of the rule for additional institutional actors (See Section 202, 5 [“notice of adoption”] NY SAPA).

  14. 14

    There is some speculation that Ohio Environmental Protection Agency might become involved down the road if water regulations are needed; but for now, Ohio DNR is principally responsible for fracking as they oversee mining operations.

  15. 15

    If JCARR recommends a rule for publication, a vote can be taken in the House and Senate to invalidate that rule.

  16. 16

    Please keep in mind that the focus of this paper is to address the regulatory process and those involved. Although the topic of fracking is controversial and emotions have increased in states like Colorado and New York over local jurisdictions and in Ohio over what to do with fracking waste, the point here is explaining the regulatory process.

  17. 17

    This rule requires oil and gas developers must disclose chemicals used to an independent internet database, FRAC Focus. Oil and gas developers do not have to publish the chemicals that they deem as trade secrets (Jaffe, 2011).

  18. 18

    Please note the majority of the interview data for New York with regard to fracking originated from a variety of interest groups. NY DEC officials would only comment concerning the rule writing process but not fracking more specifically.

  19. 19

    Healthcare provider in the region analyzing data to determine impact of fracking on the health of those who live near the Marcellus Shale.

References

  1. Top of page
  2. Abstract
  3. Setting the Foundation: Rulemaking in the United States
  4. Interviews with State Rule Writers and Stakeholders
  5. State Processes and Analysis of Stakeholder Involvement
  6. Defining the Process: Stakeholders in Colorado, New York, and Ohio
  7. Discussion: A Second Glance at Stakeholder Involvement
  8. Conclusion
  9. References
  10. Biographies

Biographies

  1. Top of page
  2. Abstract
  3. Setting the Foundation: Rulemaking in the United States
  4. Interviews with State Rule Writers and Stakeholders
  5. State Processes and Analysis of Stakeholder Involvement
  6. Defining the Process: Stakeholders in Colorado, New York, and Ohio
  7. Discussion: A Second Glance at Stakeholder Involvement
  8. Conclusion
  9. References
  10. Biographies
  • Sara Rinfret is an assistant professor of political science at Hartwick College (Oneonta, NY). She specializes in environmental policy, public administration, and environmental regulation. Her work has been published in Society and Natural Resources, Environmental Politics, Review of Policy Research, Journal of Environmental Studies and Sciences, PS: Political Science and Politics, and the Oxford Handbook of U.S. Environmental Policy. Most recently, she co-authored the Lilliputians of Environmental Regulation: Perspectives from States with Michelle Pautz.

  • Jeffrey J. Cook is a doctoral student in the Political Science Department at Colorado State University. He specializes in regulatory and energy policy. His research has been published in Review of Policy Research, Society and Natural Resources, Journal of Environmental Studies and Sciences, Environmental Policy and Governance, and Journal of Public Affairs.

  • Michelle C. Pautz is an assistant professor of political science at the University of Dayton. She specializes in environmental policy and regulation, public policy, and public administration. Her research has been published in Administration & Society, Policy Studies Journal, Review of Policy Research, Administrative Theory & Praxis, Journal of Environmental Studies & Sciences, and PS: Political Science & Politics, among others. Most recently, she co-authored The Lilliputians of Environmental Regulation: The Perspective of State Regulators with Sara Rinfret.