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Increasing Environmental Regulation of Oil and Gas Operations
While other sectors of the petroleum industry have been tightly regulated in the environmental arena for almost two decades, the full weight of air, water, and waste regulations are just being brought to bear on petroleum development and production operations. Offshore Santa Barbara and in central California, increasingly stringent control requirements for air emissions from drillships and platforms are likely to hinder development of areas with significant potential oil and gas reserves. Also in California, Proposition 65’s discharge prohibitions may require new procedures for handling brines and produced waters which are currently discharged to percolation or evaporation ponds. Everywhere, fear of potential – or actual – surface and groundwater contamination from leaking crude oil tanks, injection wells, waste pits, and evaporation and percolation basins is inspiring increasingly rigorous control requirements. As more wastes are deemed “hazardous” by state and/or federal agencies, treatment and disposal requirements for drilling and production wastes are likely to become more stringent. Bans on land disposal of certain hazardous and non-hazardous wastes will pose even greater compliance challenges, especially for remote oil and gas operations. Requirements that former production fields and disposal sites be cleaned up before real property is transferred and developed also will have a significant effect on current waste handling procedures and future potential uses of retired production properties. The significant costs to oil and gas producers of complying with this new wave of regulation will be outweighed only by the even more significant costs of non-compliance. The federal Environmental Protection Agency and many state and local agencies have greatly increased both their enforcement capabilities and activities. More and more environmental laws carry criminal instead of – or in addition to – civil penalties. Many operations personnel and members of senior management of Fortune 500 companies have found themselves on the wrong side of environmental enforcement actions through ignorance of or inattention to the increasingly complex requirements and the severe consequences of violating environmental laws.
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