Environmental Repair in the Energy Transition

Abstract

For nearly a century, American laws have required mines, oil and gas companies, and other potentially hazardous industries to restore land affected by their activities to a safe condition when they are done with it. These laws represent a grand bargain—they allow operators to make profitable but damaging use of land today in exchange for the promise of expensive remediation tomorrow. However, this bargain has proven hard to enforce. Dozens of “zombie mines” scar mountains in Kentucky. Unrecorded “orphaned” wells poison groundwater in Texas. Over the past century, these laws have become the center of a legal arms race. Fossil fuel companies attempt to dodge, delay, or abandon their obligations while regulators attempt to stop them. When companies escape their obligations, the public must bear the costs of environmental repair or suffer catastrophic harm.

This Article offers the first comprehensive account of this century-old doctrine: the law of environmental repair. In doing so, it documents a regime in crisis, and identifies a new systemic risk to environmental repair law: the global transition to renewable energy. The energy transition threatens to destroy the fossil fuel companies liable for environmental repair obligations, while simultaneously undermining the legal tools that enforce those companies’ environmental promises. In response to this threat, and to the longstanding failures of environmental repair law, this Article proposes a new model of environmental law, the “environmental earnout.” Environmental earnouts are conceptually simple: they hold back part of the profits from damaging land uses until environmental repair is complete. While simple, environmental earnouts reshape the fundamental bargain of environmental repair, and offer a new and sophisticated tool to protect the public from the environmental harm caused by abandoned fossil fuel infrastructure.

Keywords: decommissioning, climate change, oil and gas, energy, environmental law, abandonment, remediation, restoration, environmental repair