By Joel Gehman, Dror Etzion, and Miron Avidan Both the information about fracking and the know-how about how best to employ it is available. Should they choose to do so, regulators can easily and cost-effectively adopt disclosure practices that will benefit Canadians and their communities. This article appeared in The Hill Times, August 15, 2016. It summarizes research contained in: https://ssrn.com/abstract=2784468

1. Hydraulic fracturing
(“fracking”) is a technolo-
gy employed in the production
of oil and gas from uncon-
ventional shale formations.
The technology has become
ubiquitous, with tens of thou-
sands of fracking wells drilled
worldwide over the past
decade. Fracking often takes
place in relatively populated
areas, thus posing an array
of risks to public health such
as water contamination and
induced seismicity. In addition
to inspecting and monitoring
these risks, regulators now
face the challenge of keeping
the public well-informed about
their extent.
In order to shed light on
how best to address this chal-
lenge, we recently published a
report on“The Effectiveness of
Fracking Disclosure Regimes
in Canada.”Our research was
funded by the Social Scienc-
es and Humanities Research
Council of Canada as part of
its Imagining Canada’s Future
Initiative. Overall, our re-
search had three phases.
First, we searched prior
studies to identify factors
which have been shown to
influence the effectiveness
of public information disclo-
sure policies and regulations.
Research by Weil, Fung,
Graham and Fagotto (2006)
seemed especially relevant,
and we chose to extend their
typology into a conceptual
model comprised of four main
criteria: Accessibility: How
easy is it for the end-user to
access the information? Com-
prehensibility: How under-
standable are the data to the
average user? Granularity: At
what spatial and temporal res-
olutions are the data provid-
ed? Timeliness: How quickly
are data provided?
Second, because oil and gas
development in Canada is regu-
lated at the provincial level, we
researched existing regulations
in the four Canadian provinces
where fracking currently takes
place: Alberta, British Columbia,
Manitoba, and Saskatchewan.
As a point of comparison, the
provinces of New Brunswick,
Newfoundland and Labrador,
Nova Scotia, and Quebec have
various regulatory prohibitions
on fracking. Given the breadth of
oil and gas regulations involved,
we focused on analyzing disclo-
sure regulations related to four
key fracking concerns: water
consumption, water contami-
nation, induced seismicity, and
quality of life.
Third, we evaluated the
fracking disclosure regula-
tions in the four provinces
using our information
disclosure effectiveness
framework. Overall, we found
that while oil and gas compa-
nies are required to disclose
a variety of information to
provincial regulators, there are
almost no regulations requir-
ing this information to be
disclosed to the public. In fact,
we found only two regulations
requiring a regulator to dis-
close information of any kind
to the public, both in British
Columbia.
We concluded our report
by recommending that reg-
ulators be more proactive in
disclosing data they are already
collecting.This would entail
very little additional effort or
cost, and could dramatically
increase transparency.We also
suggested that regulators adopt
a more precautionary stance,
and report on a wider array of
environmental and health indi-
cators, even if certainty about
the effects of fracking on these
indicators requires further
scientific study.
Moreover, we believe that
our model is applicable to
other settings where govern-
ment provides information to
the public, whether in envi-
ronmental contexts (such as
public disclosure of factory
toxic releases via the National
Pollutant Release Inventory),
or in day-to-day situations
(such as information regard-
ing urban traffic). Assessing
current disclosure practices
in these contexts using our
framework may reveal useful
insights both for information
providers and their audiences.
A good example for Canadian
regulators to emulate might
be the World Air Quality Index
project (WAQI) which uses
clear language, real-time mea-
surements and easily naviga-
ble maps to help users quickly
comprehend and act upon
complex data. In addition, our
model can be further devel-
oped using a behavioral per-
spective, which examines how
people make decisions when
confronted with information
formatted in different ways.
Both the information about
fracking and the know-how
about how best to employ it is
available. Should they choose
to do so, regulators can easily
and cost-effectively adopt
disclosure practices that will
benefit Canadians and their
communities.
Joel Gehman is assistant pro-
fessor of strategic management
and organization in the Alberta
School of Business at the Uni-
versity of Alberta. Dror Etzion is
associate professor of strategy
at McGill University’s Desautels
Faculty of Management. Miron
Avidan is a doctoral student at
McGill University.
The Hill Times
Sharing a wealth of information:
how regulators can improve
fracking disclosure practice
Both the information
about fracking and the
know-how about how best
to employ it is available.
Should they choose to do
so, regulators can easily
and cost-effectively adopt
disclosure practices that
will benefit Canadians
and their communities.
twenty-Seventh YEAR, NO. 1362 Canada’s Politics and Government Newspaper Monday, August 15, 2016
Hill Times Publishing • www.hilltimes.com • circulation@hilltimes.com • 613-288-1146
opinion fracking
DROR ETZION, and JOEL
GEHMAN and MIRON AVIDAN