ADVANTAGES

In short, in the decades preceding the shale gas boom, producers looking to exploit shale gas and other unconventional reserves enjoyed regulatory exemptions that might have tipped cost–benefit analyses in favor of such activities. By analogy with the “infant industry” exception to arguments for free trade, one can envision an “infant technology” argument for such favorable regulatory treatment as a means to encourage a critical mass of early stage activity when broad-scale commercial feasibility is still in doubt and the activity in question is economically marginal enough that it is at great risk of being snuffed out. Further, at least while activity levels are low in such a period of infancy, one might expect that the costs of regulatory exemptions will be relatively small and isolated.

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