Although drilling can have many negative environmental impacts, there are ways to reduce those negative impacts, such as closed-loop drilling. At a conventional drilling site, drilling fluid is circulated through the well bore, and then often deposited in a reserve pit dug next to the well. This pit is open to the atmosphere, and can thus contaminate soils with hydrocarbons, metals and salts, and leak potentially toxic liquids into surface or groundwater. In pitless drilling, the drilled solids are separated from the mud during the drilling process, and are moved to a storage tank. The fluids are pumped to storage tanks. The drilling mud and water can be re-used throughout the drilling process. And at the end of the drilling process, the remaining water may be transported to the next drill site and used on the subsequent well.

The goals and benefits of piltess drilling include:

-elimination of unsightly and hazardous pits
-a decrease in the need for cuts in sensitive and hilly areas
-a reduction in total surface disturbance associated with a well pad
-elimination of the risk of waterfowl and wildlife mortality related to pits
-elimination of the risk of damaging underground pipelines and utilities
-virtual elimination of drilling waste
-reduction of water consumption by as much as 80%
-elimination of soil segregation, which reduces wind erosion problems
-reduction of truck traffic associated with transporting drilling wastes by as much as 75%

The tanks represent an additional cost, but overall, pitless drilling can save an operator money because there is no need to construct a pit, there is a reduction in the amount of environmental releases, and the closed-loop system results in more efficient use of drilling fluid. A small independent operator in Texas was concerned that reserve pits for drilling fluid were increasing waste management costs and exposing it to liability for surface and ground water contamination due to pit failures. Because the wells to be drilled were relatively shallow and few complications were expected, the operator negotiated with the drilling contractors to use a closed-loop fluid system. The operator saved approximately $10,000 per well because the drill site construction and closure costs were greatly reduced, as were waste management costs. The operator's liability was also reduced.