Environmental Regulation of the Exploration and Production Industry

Environmental Regulation of the Exploration and Production Industry Oil and natural gas development and production occur at over 860,000 sites in 33 states, and to protect the environment, federal and state governments have imposed regulations on oil and natural gas industry activity in the United States. Numerous environmental agencies have regulations that affect the exploration, development, and production processes.

EPA is the federal regulatory agency for environmental protection. States also have environmental regulatory agencies with rules that must be followed. Additionally, oil and natural gas operations located on federal lands will have to comply with regulations from the Bureau of Land Management.

This section presents some of the general requirements for individual regulatory programs; those on Indian lands will deal with individual Indian Nations and the Bureau of Indian Affairs (Bureau website unavailable because of the Cobell Litigation.) However, for environmental concerns, EPA and applicable state agencies are the primary regulatory agencies.

Waste and ground water protection requirements typically originate at the state level (often implementing federal statues) for exploration and production operations. Water discharge requirements are mostly federal requirements, and air quality regulations are a mixture of state and federal requirements.

The Interstate Oil and Gas Compact Commission (IOGCC) assists states in identifying appropraite requirements that would be suited to conditions in the state and be protective of the environment, and maintains links to the member websites of its member states.

When most people think of the petroleum industry, they think fo the very large, multinational producers such as ExxonMobil, Royal Dutch Shell (Shell), and British Petroleum (BP). But in reality, more than 80% of the companies producing oil and natural gas in the United States are small often with fewer than 10 employees. Numbering in the thousands, these smaller companies usually operate the most marginal wells, and thus, are very sensitive to price and operating cost changes. A large number of proposed environmental regulations are in force or are under consideration and could affect the economic viability of many domestic operators.

Examples of these regulations and API documents that assist the industry in understanding the regulations and in incorporating risk assessment in our day-to-day business are:

The Spill Prevention Control and Countermeasures Plan

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Guidelines for Commercial E&P Waste Management Facilities

Reporting as Required by the Clean Water Act (CWA), the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and the Emergency Planning and Community Right-to-Know Act (EPCRA)


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