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What preliminary environmental authorisations are required before commencing oil and gas-related activities?
Required environmental authorisations from federal, state and local government agencies for oil and gas-related activities depend on where the activities are occurring and the types of activity. Federal environmental laws will set minimum standards for environmental permits, but the states may impose more restrictive standards and require authorisations to address local interests. There also are multistate commissions with responsibility for protecting river basins that may require a project to obtain authorisation before commencing oil or gas-related activities within their jurisdiction.
The National Environmental Policy Act and similar state laws require federal and state agencies that provide land or permits for oil or gas-related projects to evaluate the environmental effects of that action. State or local government permits will likely be required for drilling and installing wells. The applicable governmental authorities may require additional authorisations, disclosures, and public notifications if hydraulic fracturing is used to develop or stimulate the well. Depending on the extent of the project, general or individual permits under the federal Clean Water Act and state laws would be required for impacting jurisdictional waters, including wetlands. The potential impact on species and cultural resources may be assessed in connection with such permits. Additional authorisations may be required if the project is proposed for an area subject to flooding or near a waterbody. Permits and plans for the management of storm water during construction may be required depending on the type of activity the construction supports and the amount of land disturbed. Often, a project that requires a permit for air emissions from operations will need to have its initial permit before commencing construction. The withdrawal, use and discharge of water for a new project can be subject to significant, time-consuming regulatory authorisations from federal, state and river basin agencies.
What environmental protection requirements apply to the operation of oil and gas facilities?
Discharges of pollutants to water, including from an oil or gas facility, are prohibited unless authorised by a permit. A wastewater treatment plant will require that an oil and gas facility obtain the treatment plant’s authorisation before discharging wastewater to it. Federal, state, or regional agency approvals may be required for the withdrawal of water from groundwater or surface water bodies for processing and cooling, depending on the location and amount of water withdrawn. Air emissions from the facility will require a permit, depending on the amount of actual or potential emissions.
The storage of hazardous substances, oil and other petroleum products is typically subject to requirements for storage tanks and basins, including plans for protecting against releases of the stored materials and responding to releases. The storage, transportation and disposal of certain waste generated by oil and gas facilities are subject to requirements to ensure that the waste is appropriately managed, including disposal authorisations or generator registrations.
What are the consequences of failure to adhere to the relevant environmental regulations and to what extent can operators be held liable for environmental damage?
Violations of environmental requirements can result in civil penalties, revocations of approvals required for a project and criminal penalties. Violations that occur during the development of a project can result in a regulatory agency halting all development activities until the violation and any resulting harm are cured. Parties responsible for a discharge of a hazardous substance can be required to:
- remediate the discharge;
- reimburse an agency or private party for the costs of responding to the discharge; and
- pay for natural resource damages and the costs of assessing that damage.