Reconsidering the Use of Forced Pooling for Shale Gas Development

Hydrocarbons can be produced more efficiently ihen neighboring landowners work in cooperation, rather than in competition. Yet market failures often make it difficult for landovners and the well operators iwith whi om they contract to reach agreements for the cooperative development of hy drocarbon reservoirs. Therefore, some states have enacted forced pooling provisions, vhich allow states to compel cooperative development under certain criteria. While forced pooling is generally acceptable for traditional oil and gas resources, state legislatures and regulators should reassess their forced pooling provisions as they are applied to shale gas resources. Based on the unique characteristics of shale gas, including the modern technologies used to produce it and strong environmental opposition to its development, forced pooling may not be appropriate for shale gas development. If states maintain forced pooling for shale gas resources, they should consider altering the procedures that are used to compel pooling