BP Can Do Business With Uncle Sam Again

Oil is seen in the water off a beach June 14, 2010 on Grand Isle, Louisiana.
National Journal
Ben Geman
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Ben Geman
March 13, 2014, 12:44 p.m.

The En­vir­on­ment­al Pro­tec­tion Agency is end­ing BP’s sus­pen­sion from re­ceiv­ing new fed­er­al con­tracts that was im­posed after the oil gi­ant agreed to guilty pleas over the 2010 Gulf of Mex­ico rig ex­plo­sion and spill.

But there are a few strings at­tached to re­mov­al of the sanc­tion im­posed in late 2012. Ac­cord­ing to EPA’s an­nounce­ment Thursday, the five-year agree­ment has spe­cif­ic pro­vi­sions on BP’s “eth­ics com­pli­ance, cor­por­ate gov­ernance, and pro­cess safety.”

“This is a fair agree­ment that re­quires BP to im­prove its prac­tices in or­der to meet the terms we’ve out­lined to­geth­er,” EPA As­sist­ant Ad­min­is­trat­or of Ad­min­is­tra­tion and Re­sources Craig Hooks said in a state­ment Thursday.

Ac­cord­ing to EPA, the deal re­quires BP to re­tain an EPA-ap­proved aud­it­or who will con­duct an an­nu­al re­view and re­port on BP’s com­pli­ance.

BP, a ma­jor fuel sup­pli­er to the De­fense De­part­ment, has been bat­tling the sus­pen­sion in court while it ne­go­ti­ated with EPA. The com­pany is drop­ping the law­suit.

BP noted Thursday that the agree­ment will en­able the com­pany to again enter in­to new deep­wa­ter drilling leases in the Gulf of Mex­ico.

The April 2010 Deep­wa­ter Ho­ri­zon dis­aster killed 11 work­ers and touched off a months-long spill that even­tu­ally dumped more than 4 mil­lion bar­rels of oil in­to the Gulf of Mex­ico.

The agree­ment to lift the sus­pen­sion drew quick cri­ti­cism from the watch­dog group Pub­lic Cit­izen. The group noted that the Gulf dis­aster fol­lowed a 2006 pipeline spill in Alaska, and the 2005 ex­plo­sion at a BP re­finery in Texas that killed 15 work­ers.

“BP has not ad­dressed the cul­tur­al prob­lems that led to the ban in the first place,” said Tyson Slo­cum, dir­ect­or of Pub­lic Cit­izen’s en­ergy pro­gram.

“We treat cor­por­ate crim­in­als far more le­ni­ently than we do hu­man crim­in­als, and that is a sad state of af­fairs,” said Slo­cum, who also ex­pressed doubt that the in­de­pend­ent mon­it­or will ef­fect­ively po­lice BP.

But John Mingé, chair­man and pres­id­ent of BP Amer­ica, called the agree­ment “fair and reas­on­able.”

“Today’s agree­ment will al­low Amer­ica’s largest en­ergy in­vestor to com­pete again for fed­er­al con­tracts and leases,” he said in a state­ment.

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