diff --git a/src/ert/config/parsing/config_schema_item.py b/src/ert/config/parsing/config_schema_item.py
index bdcf23cabe9..ff1d5053c50 100644
--- a/src/ert/config/parsing/config_schema_item.py
+++ b/src/ert/config/parsing/config_schema_item.py
@@ -87,8 +87,10 @@ def token_to_value_with_context(
 
         if not self._is_in_allowed_values_for_arg_at_index(token, index):
             raise ConfigValidationError.with_context(
-                f"{self.kw!r} argument {index + 1!r} must be one of"
-                f" {self.indexed_selection_set[index]!r} was {token.value!r}",
+                (
+                    f"{self.kw!r} argument {index + 1!r} must be one of"
+                    f" {self.indexed_selection_set[index]!r} was {token.value!r}"
+                ),
                 token,
             )
 
@@ -104,8 +106,7 @@ def token_to_value_with_context(
                 return ContextBool(False, token, keyword)
             else:
                 raise ConfigValidationError.with_context(
-                    f"{self.kw!r} must have a boolean value"
-                    f" as argument {index + 1!r}",
+                    f"{self.kw!r} must have a boolean value as argument {index + 1!r}",
                     token,
                 )
         if val_type == SchemaItemType.INT:
@@ -113,8 +114,7 @@ def token_to_value_with_context(
                 return ContextInt(int(token), token, keyword)
             except ValueError as e:
                 raise ConfigValidationError.with_context(
-                    f"{self.kw!r} must have an integer value"
-                    f" as argument {index + 1!r}",
+                    f"{self.kw!r} must have an integer value as argument {index + 1!r}",
                     token,
                 ) from e
         if val_type == SchemaItemType.FLOAT:
@@ -161,8 +161,7 @@ def token_to_value_with_context(
 
             if os.path.isdir(absolute_path):
                 raise ConfigValidationError.with_context(
-                    f"Expected executable file, "
-                    f"but {token.value!r} is a directory.",
+                    f"Expected executable file, but {token.value!r} is a directory.",
                     token,
                 )
 
diff --git a/src/ert/config/queue_config.py b/src/ert/config/queue_config.py
index 7d07c6c7f42..edfff7eaadf 100644
--- a/src/ert/config/queue_config.py
+++ b/src/ert/config/queue_config.py
@@ -91,6 +91,14 @@ def from_dict(cls, config_dict: ConfigDict) -> QueueConfig:
                     f"Valid choices are {sorted(VALID_QUEUE_OPTIONS[queue_system])}."
                 )
             if values:
+                if option_name == "LSF_SERVER" and values[0].startswith("$"):
+                    raise ConfigValidationError(
+                        "Invalid server name specified for QUEUE_OPTION LSF"
+                        f" LSF_SERVER: {values[0]}. Server name is currently an"
+                        " undefined environment variable. The LSF_SERVER keyword is"
+                        " usually provided by the site-configuration file, beware that"
+                        " you are effectively replacing the default value provided."
+                    )
                 queue_options[queue_system].append((option_name, values[0]))
             else:
                 queue_options[queue_system].append(option_name)
diff --git a/tests/unit_tests/config/test_queue_config.py b/tests/unit_tests/config/test_queue_config.py
index f2bfd54dff1..a76c16c4c12 100644
--- a/tests/unit_tests/config/test_queue_config.py
+++ b/tests/unit_tests/config/test_queue_config.py
@@ -8,7 +8,12 @@
 import pytest
 from hypothesis import given
 
-from ert.config import ConfigValidationError, ErtConfig, QueueConfig, QueueSystem
+from ert.config import (
+    ConfigValidationError,
+    ErtConfig,
+    QueueConfig,
+    QueueSystem,
+)
 from ert.job_queue import Driver
 
 
@@ -160,3 +165,23 @@ def test_overwriting_QUEUE_OPTIONS_warning(
         f"Overwriting QUEUE_OPTION {queue_system} {queue_system_option}: \n Old value:"
         " test_0 \n New value: test_1" in caplog.text
     )
+
+
+@pytest.mark.usefixtures("use_tmpdir", "set_site_config")
+def test_undefined_LSF_SERVER_environment_variable():
+    filename = "config.ert"
+    with open(filename, "w", encoding="utf-8") as f:
+        f.write("NUM_REALIZATIONS 1\n")
+        f.write("QUEUE_SYSTEM LSF\n")
+        f.write("QUEUE_OPTION LSF LSF_SERVER $MY_SERVER\n")
+    with pytest.raises(
+        ConfigValidationError,
+        match=(
+            r"Invalid server name specified for QUEUE_OPTION LSF LSF_SERVER: "
+            r"\$MY_SERVER. Server name is currently an undefined environment variable."
+            r" The LSF_SERVER keyword is usually provided by the site-configuration"
+            r" file, beware that you are effectively replacing the default value"
+            r" provided."
+        ),
+    ):
+        ErtConfig.from_file(filename)