The ecology of regulatory change: The security and exchange commission’s modernization of oil and gas reserves reporting

Abstract

We examine the SEC's Modernization of Oil and Gas Reserve Reporting project (SEC, 2007) to ask the question who is involved and how in the evolution of oil and gas reserve reporting rules? We use this examination to map the regulatory ecology of the various entities involved, and ask further what does it suggest for similar regulatory reform in other jurisdictions in order to support international standardization? We find that the regulatory ecology is split into two linked professional regulatory ecologies: accounting/securities and engineering/geoscience. These two ecologies include professionals, professional bodies, standard setters, and other securities commissions. We also find that there is a gap in these regulatory ecologies, isolating the International Accounting Standards Board (IASB). This leads us to offer three propositions for regulators. First, continued revision is required to achieve international comparability in standards. Second, connecting accountancy and engineering practices serves global harmonization by helping securities regulators leverage these practices as regulations converge globally. And, third, such global harmonization has implications for policymakers concerned with energy policy, as political and practical divergences of reserve calculations can create incomparable oil reserve forecasts.