Emerging Technologies and regulatory hold-up: The case of shale gas in Europe and North America

The shale gas industry is at the cross-roads. The current regulatory frameworks have not lived up to expectations as the recent experiences in Europe (France) and North America (Quebec) demonstrate. To better understand the reasons for such a performance, this paper examines best practices in nanotechnology and financial industries. Five lessons emerge from this analysis. Generally, disruptive technologies create a “knowledge gap” between the industry and regulatory agencies and this makes the latter less responsive to changing industry models and technologies. It appears that France and Quebec were unsuccessful in making their shale gas regulation credible essentially because they have not taken into serious consideration the environmental, health and equity issues. Unless regulators develop new regulatory frameworks that take into account the five lessons learned from the analysis of other dynamic industries with disruptive technologies, the development of the shale gas industry and a country's growth are at stake.