VOLUME 12 • ISSUE 1 • PRINT
GOLDEN SHARES AND SOCIAL ENTERPRISE
Naveen Thomas
Social enterprises—for-profit companies with public-interest missions— are now ubiquitous, yet few have emerged from the realm of small business. The main obstacle to their growth is a gap in trust between managers and investors, with each side lacking any legal assurance that the other will pursue both profits and purpose. Too often, these misgivings limit businesses’ access to capital.
VOLUME 12 • COLUMNS
BROWN ASSETS FOR THE PRUDENT INVESTOR
Alon Brav1Peterjohn-Richards Professor of Finance, Fuqua School of Business, Duke University, ECGI, and National Bureau of Economic Research. and J.B. Heaton2Managing Member, One Hat Research LLC.
Most commentary on climate-themed investment treats climate change as a one-way risk to brown assets from a hoped-for transition to a low-carbon economy. But the converse holds as well. Brown assets could turn out to be highly valuable if the world fails to transition out of the high-carbon economy. This is true both because sentiment for green assets may cause brown assets to be underpriced (generating higher expected returns) and because brown assets may provide a valuable hedge against the costs of climate change in a world that failed to transition to a low-carbon economy. Given the lack of progress to date toward transition to a low-carbon economy, we argue that institutional investors subject to fiduciary duties of prudent investment (including the duty to diversify) cannot yet justify divestment from brown assets.
VOLUME 9 • ISSUE 2 • PRINT
WOKE CAPITAL: THE ROLE OF CAPITALISM IN SOCIAL MOVEMENTS
Jennifer S. Fan
VOLUME 6 • ISSUE 1 • PRINT
THE CONFLICT MINERALS EXPERIMENT
Jeff Schwartz
In Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress instructed the Securities and Exchange Commission (SEC) to draft rules that would require public companies to report annually on whether their products contain certain Congolese minerals. This unprecedented legislation and the SEC rulemaking that followed have inspired an impassioned and ongoing debate between those who view these efforts as a costly misstep and those who view them as a measured response to human rights abuses committed by the armed groups that control many mines in the Democratic Republic of the Congo.
VOLUME 5 • COLUMNS
WHEN IS RENEWABLE NOT RENEWABLE? THE CONSTITUTIONALITY OF STATE LAWS DENYING NEW LARGE CANADIAN HYDROELECTRIC PROJECTS TREATMENT AS RENEWABLE RESOURCES
Harvey L. Reiter
Over the past fifteen years, many states—twenty-nine at last count—have adopted renewable portfolio standards (RPS) as a means both to reduce their dependence on imported fossil fuels and to combat climate change. To comply with these standards, electric utilities must demonstrate that a significant minimum percentage of their supply portfolios will consist of renewable resources by the various target dates specified in state law. Most states affirmatively describe what counts as renewable resources—wind, geothermal, and solar energy are commonly referenced in RPS legislation. But some state RPS laws also contain negative provisions, excluding from eligibility what otherwise would surely be considered renewable resources. Laws of this type amount to hidden barriers to power imports from Canada, the only source of electricity from new large-scale hydroelectric facilities. This article explains why the restrictions are unconstitutional under the Commerce Clause and bad for consumers and the environment, and why other states should follow the lead of Vermont and Wisconsin and modify their statutes to permit power from large hydroelectric projects to be treated as a renewable resource under their RPS laws.
VOLUME 4 • ISSUE 2 • PRINT
SOCIAL ENTERPRISE INNOVATION: DELAWARE’S PUBLIC BENEFIT CORPORATION LAW
J. Haskell Murray
Delaware has innovated in the benefit corporation area by creating its own statutory framework to compete with the Model Benefit Corporation Legislation (the “Model”), and when Delaware talks, other states listen. This Article provides a comparative analysis of Delaware’s Public Benefit Corporation (“PBC”) law and the Model, and suggests that Delaware’s approach is superior in most areas. Despite Delaware’s superiority, this Article also calls for policymakers to consider amendments to Delaware’s PBC statute, including clarifying the priority of the specific public benefit purpose, requiring a partial-asset lock, imposing a charitable giving floor, providing more effective enforcement mechanisms, and reconfiguring the current re- porting requirements. Social enterprise legal forms are extraordinarily recent additions to the list of possible business entity types. While Delaware’s PBC law is likely to have significant influence on social enterprise statutes, continued innovation in this field, from inside and outside of Delaware, is both likely and necessary.
VOLUME 4 • COLUMNS
THE REGULATORY CHALLENGE OF DISTRIBUTED GENERATION
David B. Raskin
Recent published reports point toward a growing conviction that the demand for utility service from the U.S. electric grid may soon decline, perhaps substantially, due to the expanding use of distributed generation. If distributed generation comes to play a significant role, the loss of demand for service from the grid may eventually make it difficult for the owners of grid assets to recover their costs, creating what the utility industry calls “stranded costs.”
VOLUME 4 • COLUMNS
INVESTING IN U.S. PIPELINE INFRASTRUCTURE: COULD THE PROPOSED MASTER LIMITED PARTNERSHIPS PARITY ACT SPUR NEW INVESTMENT?
Linda E. Carlisle, Daniel A. Hagan & Jane E. Rueger
This Article explores combining the traditional oil and gas pipeline structure with solar electric generation to: (1) increase the return on pipeline investments by making the income from a solar electric generation business available to pipeline operators; and (2) lower the cost of operating the pipeline.
VOLUME 3 • COLUMNS
WHY ARE FOREIGN INVESTMENTS IN DOMESTIC ENERGY PROJECTS NOW UNDER CFIUS SCRUTINY?
Stephen Heifetz and Michael Gershberg
CFIUS now actively reviews and sometimes alters transactions that result in foreign control of U.S. energy companies. There are three primary drivers behind this recent scrutiny.
VOLUME 3 • COLUMNS
UNREASONABLE DELAYS: CFIUS REVIEWS OF ENERGY TRANSACTIONS
Joshua C. Zive (April 18, 2013)
Unfortunately, delays and burdens associated with CFIUS are playing an increasingly significant and frustrating role in energy transactions. These delays frustrate the intended role of CFIUS review and make it unnecessarily difficult for energy transactions to be designed and executed in an efficient manner.
VOLUME 3 • COLUMNS
THE PRIVATE ROLE IN PUBLIC FRACTURING DISCLOSURE AND REGULATION
Hannah J. Wiseman
Recent domestic growth in oil and gas natural gas production from shales and sandstones called “tight” formations—largely enabled by a modified technology called slickwater hydraulic fracturing—has driven both economic growth and environmental concerns. Public concerns have often focused on the chemicals used in the fracturing process, yet federal regulations requiring disclosure of chemicals are weak. In the midst of initial “threats” of federal intervention, industry—along with state regulators—developed a website that enabled chemical disclosure. State regulations later mandated disclosure through this website, or allowed it as one option within a mandatory disclosure regime. Independently, gas companies also have begun to experiment with less toxic fracturing chemicals and to take other substantive efforts toward identifying and limiting the risks of tight oil and gas development. This example of a public-private effort to enhance informational access in fracturing, and to make limited substantive changes, may offer important lessons for other oil and gas regulation moving forward.
VOLUME 3 • COLUMNS
SIXTH CIRCUIT PUSHES BACK ON EPA OIL AND GAS SOURCE AGGREGATION UNDER THE CLEAN AIR ACT
William Bumpers and Paulina Williams
On August 7, 2012, the United States Court of Appeals for the Sixth Circuit (Sixth Circuit) issued an opinion that has significant Clean Air Act (CAA) regulatory implications for oil and gas development projects. In Summit Petroleum Corp. v. EPA, the court vacated an Environmental Protection Agency (EPA) determination that Summit Petroleum Corporation’s natural gas sweetening plant and sour gas production wells spread over forty-three square miles constituted a single stationary source for CAA permitting purposes. The Summit Petroleum case is encouraging for oil and gas developers whose operations are often spread over substantial areas, though EPA indicates it does not intend to extend the decision’s reach beyond the Sixth Circuit at this time.
VOLUME 3 • COLUMNS
SHALE GAS DEVELOPMENT: THE IMPLICATIONS OF THE SHALE GAS REVOLUTION FOR THE NATURAL GAS INDUSTRY
Mark R. Haskell and Levi McAllister
Shale gas has the potential to create new producing regions, but it requires the creation of new infrastructure or the redesign and redeployment of existing infrastructure to access markets. Shale gas also carries with it the potential for the transformative disruption of existing supply and transportation networks. This article explores some of the implications of the “shale gas revolution.”
VOLUME 3 • COLUMNS
AMERICA’S NATURAL GAS: FROM SHALE GAS TO LNG EXPORTS
Susan Sakmar
According to the U.S. Energy Information Administration’s (EIA) Annual Energy Outlook 2012, U.S. natural gas production is expected to increase almost twenty-nine percent from 21.6 trillion cubic feet in 2010 to 27.9 trillion cubic feet in 2035. Much has been written about shale gas being either an “energy game changer” or an environmental hazard depending on whom you ask. In contrast, far less attention has been focused on whether the U.S. should export its newfound abundance of shale gas as liquefied natural gas (LNG) to foreign countries.
VOLUME 2 • COLUMNS
CONFLICT MINERALS AND SEC DISCLOSURE REGULATION
Celia R. Taylor
Mention the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank” or the “Act”), and most people think of legislation aimed at “fundamental reform of the financial system” focused on regulation of Wall Street practices and complex financial products. But tucked within the voluminous text of the Act (which consists of 2,300 pages and stipulates the passage of 387 rules by 20 different agencies) is a provision having nothing to do with these issues or anything remotely related to them. Instead the “conflict minerals” provision of the Act requires companies that are subject to the reporting requirement of the federal securities laws to disclose whether they manufacture products using so-called “conflict minerals” sourced from the Democratic Republic of Congo (“DRC”) or contiguous countries.