Externalities and Rent Seeking caused by Fracking

     This article describes how in recent years the development of new drilling methods (i.e. fracking) have allowed oil companies to tap into places never thought possible.  While this has brought increased profits to companies, it has brought negative externalities (stemming from production) to neighboring landowners who have to deal with the hazards and annoyances of oil wells.  

     The Coase theorem (or some application of it) appears to have been used in cases where landowners also own mineral rights and can thereby demand royalties from the oil companies.  However, in many cases, landowners do not own the mineral rights, and so they do not receive royalty payments.  In cases where landowners lack mineral rights, Coase might suggest paying the oil companies not to drill or to at least put up sound barriers.   

     Interestingly, the article mentions a nonprofit group (i.e. a special interest group) that looks to "preserve quality of life and protect the environment while helping the economy." Those affected by the externality and without mineral rights could have much to gain from an interest group like this one.  Rent seeking could result from this situation if disgruntled landowners begin going head to head with oil companies by spending money on this or other interest groups in an effort to lobby local and state governments for a share of the profit.