Mufson reports: "The Environmental Protection Agency has suspended BP from bidding on any new federal contracts as a result of the company's conduct during the Deepwater Horizon drilling disaster."
File photo, cleanup operations continue for the BP Deepwater Horizon platform disaster off the coast of Louisiana. (photo: Getty Images)
28 November 12
he Environmental Protection Agency has suspended BP from bidding on any new federal contracts as a result of the company's conduct during the Deepwater Horizon drilling disaster that led to 11 deaths and the largest U.S. offshore spill.
The temporary contracting ban came early on the day the Interior Department held a sale of leases on 20 million acres of offshore oil and gas prospects in the western Gulf of Mexico, which the department said attracted $133 million in bids. Sources close to BP said the company did not submit any bids.
The EPA said the suspension would not affect BP's current contracts or leases, which are crucial to the company. The London-based oil giant is the largest leaseholder in the deep-water Gulf of Mexico, with more than 700 leases, and it is the gulf's largest producer of oil and gas from more than 20 fields there.
In 2011, BP was also the largest supplier of fuel to the U.S. military, with contracts worth about $1.35 billion.
The EPA move follows BP's agreement to settle criminal charges for $4.5 billion, the largest such payment ever in a criminal settlement with the Justice Department.
Although the EPA did not say how long the ban would last, regulations generally limit such suspensions to 18 months. However, it could last until the end of legal proceedings, and BP and the Justice Department are still locked in a dispute over civil charges tied to the oil spill.
The EPA said the suspension could be lifted when "the company can provide sufficient evidence to EPA demonstrating that it meets Federal business standards."
The next Gulf of Mexico lease sale is March 20; it will make 38 million acres off Louisiana, Mississippi and Alabama available.
BP said "it has been in regular dialogue with the EPA" and has submitted a "responsibility statement of more than 100 pages and supplemental answers to the EPA's questions based on that submission." BP said the EPA told the company that it was preparing a "proposed administrative agreement" that, if agreed upon, would resolve and lift the suspension.
Fadel Gheit, an oil analyst with Oppenheimer, said the suspension would "not [have] a big impact in the near term but is more negative long term. It essentially puts BP in the penalty box, although it has not been kicked out of the game."
The EPA said in a statement that it was acting "due to BP's lack of business integrity as demonstrated by the company's conduct with regard to the Deepwater Horizon blowout, explosion, oil spill, and response." BP's settlement of criminal charges included guilty pleas on 11 counts of misconduct or neglect of ship officers, one count of obstruction of Congress, one misdemeanor count of a violation of the Clean Water Act and one misdemeanor count of a violation of the Migratory Bird Treaty Act.
Rep. Edward J. Markey (D-Mass.), the ranking member of the Natural Resources Committee, called it "the right thing to do." He said, "When someone recklessly crashes a car, their license and keys are taken away."
Gheit said: "I am not sure why the government is doing that since BP has done everything the government asked and more. The spill cost BP more than $40 billion. Businesses and individuals were generously compensated, and the gulf region is back better than before. BP is the largest operator and investor in the gulf, and banning it from participating in the bid round does not help the government, BP or anyone else."
But, he added, "if it is part of the government strategy to extract more money out of BP, it makes sense."
The EPA was designated as the lead agency for suspension and debarment actions. "Suspensions are a standard practice when a responsibility question is raised by action in a criminal case," the agency said.
BP said that it has made changes since the accident.
The company said it has been implementing all 26 of the recommendations made by an internal investigation immediately after the accident. In addition, it said, it has made "key leadership changes, reorganized its upstream business, created a centralized Safety and Operational Risk organization, and adopted voluntary deepwater drilling standards in the Gulf of Mexico that exceed current regulatory requirements."
In the 21 / 2 years since the Deepwater Horizon accident, the U.S. government has granted BP more than 50 new leases in the Gulf of Mexico, the company added.
