Social License to Operate: Hydraulic Fracturing-Related Challenges Facing the Oil & Gas Industry

The crossroads of urban development and improved technology allowing oil and gas development in new areas can result in contentious community issues. The debate over one of the improved technologies – i.e., hydraulic fracturing – can be highly emotional. Consequently, industry must address community issues, earning trust and therefore a “social license to operate.” This paper provides fundamental knowledge of the social license to operate concept, validates its application to the oil and gas industry, particularly with respect to shale gas development, discusses the current status of social license in the unconventional development sphere, analyzes current ongoing efforts for shale gas developers to monitor and establish a social license, and identifies potential new methods of encouraging, establishing, and monitoring a social license to operate. The paper also proposes a new institutional framework in which to promote the social license to operate, “The Center for Social License to Operate in the Oil & Gas Industry.”