Sustainable Development and the Regulation of the Coal Bed Methane Industry in the United States

Article by: Allan Ingelson; Originally published in JNREL Vol. 20, No. 1

Abstract by: Derek Leslie, Staff Member

This article critiques the regulatory regime in place to facilitate Coal Bed Methane (CBM) development and production in the United States. Applying the principles underlying the concept of sustainable development, Professor Ingelson suggests that the regulations affecting CBM development are to a large degree a mixed bag and are far from being considered an example of regulation that would successfully promote sustainable development.

The article begins by considering both the theoretical underpinnings of sustainable development as well as the CBM regulatory process as it exists under the current framework. The President's Council on Sustainable Development (PCSD), established in 1993 by President Clinton, proposed ten draft sustainability goals that incorporated five widely recognized sustainability principles that provide the necessary metric for reviewing the CBM regulatory regime. These five baseline principles suggest that Sustainable Development 1) respects ecological integrity, 2) is based on an efficient use of natural, manufactured, and social capital, 3) promotes equity, 4) relies on participatory approaches, and 5) requires environmental stewardship by all levels of decision-makers.

The CBM regulatory system advances these principles to varying degrees. The system is only partially successful at respecting ecological integrity. Regulation advancing this principle includes the scheme's incorporation of the Endangered Species Act, an ecosystem management planning approach for federal lands, and environmental impact assessments under the National Environmental Protection Act (NEPA). However, due to constitutional constraints, much of the process is truncated with respect to development on private lands, where significant development is likely to occur. The principle of the efficient use of resources reveals a system that is to some points sustainable. However, it does not seem to provide for an efficient use of capital as neither full-cost accounting, a polluter pays principle, nor the precautionary approach have been fully incorporated. As to the promotion of equity, the regulatory scheme also fails. This sustainability principle suggests costs and benefits should be distributed equally among the current and future generations. However, the legal system now in place does not require CBM developers to compensate owners for "reasonable use" damage caused by CBM operations. Landowners may not receive compensation for loss of crops, soil damage, decreased land values, et cetera. Inter-generational equity is also challenged by the current regime, because of the nature of the development and current consumption of CBM, depriving future generations of this finite resource. The fourth sustainability principle of public participation is largely addressed by the framework in place. The environmental impact assessment process, as well as citizen lawsuit provisions, provides stakeholders with a reasonable opportunity to participate in the decision-making process. The fifth principle, stewardship, suggests the government must promote and advocate the idea of sustainability both to the public and industry. While the EPA's attempt to incorporate some sustainability concepts in the CBM regulatory framework represents to some degree this principle, the Bureau of Land Management, as well as the various state agencies, have shown no effort to provide leadership in pursuing sustainable CBM development.

Looking at these concepts in detail, Professor Ingelson concludes that the CBM regulatory system does not effectively promote CBM sustainability. While aspects of the system certainly aim towards the goal of CBM sustainability, other features of the regime clearly prioritize other policy goals such as economic growth and use of CBM as an energy resource.