EPA bans BP from new contracts

The Environmental Protection Agency temporarily banned BP from entering into new federal contracts last Wednesday. The move came 13 days after BP had reached a $4.5 billion settlement, including more than $1.2 billion in criminal fines, with the federal government related to the April 20, 2010 Deepwater Horizon disaster, which included the largest oil spill in North American history.

EPA officials called the suspension a standard practice that generally does not exceed 18 months.

“The EPA is taking this action 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, as reflected by the filing of a criminal information,” the EPA said in a news release provided by spokesperson Stacy Kika.

The BP suspension will temporarily prevent the company and its affiliates from entering new federal government contracts, grants or other covered transactions until the company can prove to the EPA that it has met federal business standards.

“The suspension does not affect existing agreements BP may have with the government,” the EPA statement said.

“Today’s announcement by the U.S. Environmental Protection Agency regarding BP’s temporary suspension relates only to future potential contracts with the U.S. government,” the company said in a press release provided by BP spokesman Brett Clanton. “The EPA’s action is pursuant to administrative procedures providing for discretionary suspension until a company can demonstrate present responsibility to conduct business with the U.S. government.”

“Whether it’s in the form of tax subsidies or federal contracts, BP doesn’t deserve a single penny from American taxpayers,” Sierra Club Executive Director Michael Brune said in a statement provided by Sierra Club New Orleans office spokesperson Jill Mastrototaro. “BP lied to Congress and lied to the American people about their criminally negligent role in the Gulf Coast oil disaster that killed 11 people and spewed 5 million of oil into the Gulf.”

BP responded to critics by stating it had made “significant enhancements” since the accident and had cooperated with EPA requirements and orders from the U.S. Department of Justice.

“The company launched an internal investigation immediately after the accident … and has been implementing all 26 of the investigation’s recommendations,” the BP statement said.

During the two-and-one-half years since the Deepwater Horizon disaster, the federal government had granted BP 50 new leases in the Gulf of Mexico.

Sen. David Vitter noted that on the same day the EPA ban was issued, BP was blocked from participating in a lease sale involving western portions of the Gulf of Mexico.

Vitter did not offer a direct comment on the BP ban, but identified last Wednesday’s sale as only the third since a 2010 deepwater drilling moratorium was implemented following the Deepwater Horizon incident. The senator said a five-year lease sale plan that had been withdrawn by the Obama administration.

BP noted it had been safely drilling since the moratorium was lifted and has been the largest deepwater leaseholder in the Gulf of Mexico, with more than 700 gross blocks and seven active drilling rigs.

“[During] the past five years, BP has invested more than $52 billion in the United States,” the BP corporate statement said. “The company employs 23,000 Americans and supports nearly a quarter of a million American jobs.”

BP officials said the company had spent more than $14 billion to date on operational response and clean-up costs. It also established a $20 billion trust fund to pay individual and business claims.