Abstract

The public’s concern for the environment has resulted in the passage of numerous environmental laws that affect the oil and gas industry. One of these laws is the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or the Superfund Act), which contains provisions defining financial and cleanup responsibility for owners of contaminated property even if they did not cause the contamination. Pollution caused by crude oil, saltwater, and other wastes commonly used in the exploration and production of oil and gas are not necessarily exempt from regulation under CERCLA or other state and federal laws. Prior to the acquisition of oil and gas properties, judicious buyers will likely require an environmental assessment of the property to evaluate the risks associated with potential site contamination or from conditions that may limit the intended use of the property. Prudent sellers may request their own environmental assessment to evaluate current site conditions prior to ownership transfer to provide a degree of protection against future liability claims for contamination that occur after the sale. An Environmental Site Assessment (ESA) can be designed to identify these potential environmental and financial liabilities by investigating the history of the site, current site conditions, and regulatory status of the property. When conducted by personnel experienced in oil and gas operations, the ESA process, and regulatory issues, the ESA can be used to identify the risks associated with the property in terms of potential cleanup liabilities in addition to issues that could restrict the intended uses of the property.