HARRIS, JOHN J., Demetriou, Del Guercio, Springer & Moyer, Los Angeles, CA

ABSTRACT: Cleaning up the Oil Patch: Legal and Practical Problems in Remediating and Abandoning Oil and Gas Leaseholds

Historically, the primary environmental concerns involved in the operation of oil and gas leaseholds were typically housekeeping matters, that is, cleaning up surface oil spills and taking steps to prevent the pollution of nearby streams, ponds, or crops. Environmental remediation was typically limited to cleaning up the surface around the well when it was plugged and abandoned, and leveling the soil back to original grade. However, as the environmental awareness of governmental authorities and the population in general has increased over the last 20 yr, the scope, the extent and, particularly, the costs and problems relating to the environmental remediation of oil and gas leaseholds has increased dramatically. Also, as urban growth has encroached upon the formerly rural areas in whic oil and gas production operations were conducted, there has been greater governmental, public, and private pressure to replace oil and gas exploration, production, and storage uses of property with commercial and residential uses of the property. Faced with the prospect of remediating the environmental impact from oil-production operations, operators, nonoperating working interest owners, and surface and mineral owners face an almost bewildering array of federal, state, statutory, regulatory, and common law requirements as to who will clean up the property, when it will be cleaned up, how clean will it be after the remediation and. most importantly, who will pay for all the work.

This presentation will provide an overview of the legal aspects of the environmental remediation of oil and gas leaseholds, as well as the practical ramifications of those requirements. The presentation will also discuss the liability for environmental remediation under oil and gas leases, operating agreements, and other oil industry agreements.

AAPG Search and Discovery Article #90992©1993 AAPG Pacific Section Meeting, Long Beach, California, May 5-7, 1993.