Abstract

A misconception of the environmental site assessment process is that a property owner’s or operator’s liability is reduced by performing an environmental site assessment. In addition, a reduction in environmental liability associated with the property is not gained by following any particular guidance document for conducting environmental site assessments. The environmental site assessment is a tool for quantifying environmental assets and liabilities. Gaining seller or lessee indemnification for environmental impacts that occurred prior to the environmental site assessment evaluation is problematic. However, future liability associated with subsequent environmental degradation of the property may be reduced by a thoroughly conducted environmental site assessment at the time of property transfer. The actual value of an oil and gas property can only be determined by combining environmental economics with the traditional reserves evaluation.