Recent court decisions pose risks for oil and gas companies, whether they are involved in exploration, production, refining or marketing of petroleum.

The oil and gas industry has been sheltered from the overwhelming environmental liabilities that have faced other industries. As a result of successful lobbying efforts, a petroleum exclusion was enacted in the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), and a drilling fluids exemption was enacted in the Resource Conservation and Recovery Act (RCRA). The result of these exemptions left the petroleum industry relatively sheltered from liability.

Recent decisions in the federal courts have made significant inroads into the protections afforded to the petroleum industry under federal environmental law. As a result of these decisions there has been a recent expansion in lawsuits against oil companies and retail petroleum marketers as a result of spills or leaks of petroleum-based products.

This paper will survey some of the new case law developments and offer some suggestions for minimizing or avoiding liability.

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