Chile’s environmental review of large energy projects has been a repeated source of conflict for communities, companies, and the government. Large and harmful projects, such as the Bio Bio dams in the 1990s, the Barrancones coal plant in 2010, and the current proposed HidroAysén mega-dam complex in Patagonia, were evaluated under a fundamentally flawed system. This inadequate system does not conform to international standards and it often fails to fully assess the environmental impacts or improve the quality of projects. The Chilean parliament revised the environmental review law in late 2010 to address some of the most problematic issues. But these changes are limited and came too late for the controversial proposed HidroAysén dam project, which is fatally flawed and should not be built. Chile should further reform its environmental review system to bring it in line with international standards and reduce potential risk around future projects.