Research examines changing role of patents in natural gas industry

Sep 05, 2013
Research examines changing role of patents in natural gas industry
Production from unconventional -- or deep shale -- gas wells has grown exponentially over the past several years. Credit: Penn State

New research from Penn State and the University of Alberta suggests that patents related to hydraulic fracturing—or fracking—can be used in the industry to limit the availability of information about the fluids expended as part of the natural gas extraction process.

Though a variety of stakeholders have increasingly questioned potential environmental, safety, and health hazards related to fracking, many of the components used during fracking operations cannot be identified because "they are withheld as proprietary or trade secrets," according to the researchers.

Researcher Dan Cahoy, a Smeal professor of business law, and colleagues Zhen Lei from Penn State's College of Earth and Mineral Sciences along with Joel Gehman from the University of Alberta School of Business have found that may be controlling or limiting the release of significant when it comes to certain aspects of fracking.

Though a variety of stakeholders have increasingly questioned potential environmental, safety, and health hazards related to fracking, many of the components used during fracking operations cannot be identified because "they are withheld as proprietary or ."

Cahoy and his colleagues write that disclosure itself will not solve the problem. "Without the ability to analyze the consequences of specific products and processes, the disclosure of their use is largely inconsequential," he said.

Because patents are meant to facilitate the of an and not its impact, patent rights unexpectedly also serve as a potential barrier to learning more about how the components used in the fracking process impact the environments and communities surrounding it.

The research by Cahoy and others indicates there are two primary ways that patents also can be used for information : by limiting follow-on research that can lead to further advancement of the innovation, and by prohibiting third-party use—including testing and analysis—even outside the realm of marketplace competitors.

"Field and laboratory experimentation is necessary to fully capture how the exploitation of shale gasses impacts the environment. Normally, third parties such as NGOs [nongovernmental organizations] and universities would be able to fill this information gap, but patents may play a new and surprising role in limiting this important source of information production," according to the researchers.

In a detailed analysis of the natural gas-related patents over the course of their use, the researchers found that patent activity related to fracking increased dramatically around the time the process was becoming more common. Most of this increase is related to fracking fluids, the researchers discovered. Patents that are related to well completion and horizontal drilling have not seen a similar increase.

"Normally, third parties such as NGOs [nongovernmental organizations] and universities would be able to fill this information gap, but patents may play a new and surprising role in limiting this important source of information production."

Using a search of U.S.-issued patents designed to capture those clearly related to fracking, Cahoy and his colleagues find a dramatic increase in patenting in the last 20 years. The increase is even more pronounced over the last 10 years, and the trend appears to be continuing. The researchers are currently conducting a broader search for fracking patents to get a more complete picture of the players and technology being captured.

The researchers assert that, through litigation and licensing, much information can be controlled. In matters of public concern, it may be important to assess dramatic patent accumulation. But Cahoy and his colleagues aren't necessarily touting patent right reform. They pose several other possible solutions available within the law as it currently stands. For instance, they suggest public universities play a larger role in testing and analyzing compounds because of their increased flexibility in avoiding liability.

The paper is titled "Fracking Patents: The Emergence of Patents as Information-Containment Tools in Shale Drilling."

Explore further: Study finds fracking chemicals didn't spread

More information: ssrn.com/abstract=2065032

add to favorites email to friend print save as pdf

Related Stories

Study finds fracking chemicals didn't spread

Jul 19, 2013

(AP)—A landmark federal study on hydraulic fracturing, or fracking, shows no evidence that chemicals from the natural gas drilling process moved up to contaminate drinking water at a western Pennsylvania drilling site, ...

Germany shelves 'fracking' draft law for now

Jun 04, 2013

German Chancellor Angela Merkel's conservatives on Tuesday dropped plans for a draft law on "fracking" for the time being amid concerns by some coalition allies about the oil and gas extraction technique, ...

Recommended for you

Researchers question emergency water treatment guidelines

16 hours ago

The Environmental Protection Agency's (EPA's) recommendations for treating water after a natural disaster or other emergencies call for more chlorine bleach than is necessary to kill disease-causing pathogens ...

European climate at the +2 C global warming threshold

18 hours ago

A global warming of 2 C relative to pre-industrial climate has been considered as a threshold which society should endeavor to remain below, in order to limit the dangerous effects of anthropogenic climate change.

User comments : 0

More news stories

Melting during cooling period

(Phys.org) —A University of Maine research team says stratification of the North Atlantic Ocean contributed to summer warming and glacial melting in Scotland during the period recognized for abrupt cooling ...

Warm US West, cold East: A 4,000-year pattern

Last winter's curvy jet stream pattern brought mild temperatures to western North America and harsh cold to the East. A University of Utah-led study shows that pattern became more pronounced 4,000 years ago, ...

New clinical trial launched for advance lung cancer

Cancer Research UK is partnering with pharmaceutical companies AstraZeneca and Pfizer to create a pioneering clinical trial for patients with advanced lung cancer – marking a new era of research into personalised medicines ...

More vets turn to prosthetics to help legless pets

A 9-month-old boxer pup named Duncan barreled down a beach in Oregon, running full tilt on soft sand into YouTube history and showing more than 4 million viewers that he can revel in a good romp despite lacking ...