Energy and Environment Reporting for Texas

‘No Oil For You!’ BP Suspended From New Drilling Contracts

Photo by Joe Raedle/Getty Images

Workers clean up oily globs that washed ashore from the Deepwater Horizon oil spill in the Gulf of Mexico July 9, 2010 in Waveland, Mississippi.

Just a few weeks after pleading guilty to felony criminal charges and agreeing to a record settlement of $4.5 billion dollars for the 2010 Deepwater Horizon disaster in the Gulf of Mexico, BP has been “temporarily suspended” from new contracts with the federal government, the Environmental Protection Agency (EPA) announced today.

The spill was the largest environmental disaster in history, killing eleven and spewing 206 million gallons of oil into the Gulf.

“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 says in a statement. The agency says they’re doing this in an effort to conduct business “only with responsible individuals or companies” and the suspension is “standard practice.”

While the suspension only applies to new contracts, it could do some financial damage. This morning, the federal government is holding an sale of more than 20 million acres of offshore oil and gas leases in the Western Gulf of Mexico. Update: BP will not be awarded any leases from today’s auction until the suspension is resolved, the Bureau of Oceanic Energy Management, which is running the sale, confirms to StateImpact Texas. The Bureau says that “unless and until” the suspension is resolved, no leases from today’s sale will go to BP.

The auction in New Orleans today is part of a five year lease program from the Feds, with some dozen companies bidding. The next lease is in March, and it’s possible BP could still be suspended at that time.

As part of its record settlement for the spill and previous agreements, BP is on the hook for nearly 300 million dollars for cleanup and conservation in Texas. While the state was largely spared from the environmental disaster, there were ancillary effects, and a whole host of projects are up for consideration. But as Kate Galbraith reports in the Texas Tribune this week, while funding has been allocated for the other Gulf states, “no Texas projects have been announced, and an official involved with the talks did not sound optimistic about getting dollars flowing quickly to causes like protecting marshland or sealife.”

More from the Tribune:

Texas officials have so far received 188 suggestions from the public on how to spend the money, according to Pitts. The ideas include items such as improving bird habitat at a state park in Harris County to restoring dunes in Brazoria County.

The state has submitted a condensed list of projects to BP for approval, Pitts said. But the oil company hasn’t acted, and Pitts said he “can’t guess what BP is thinking.” The condensed list is not available to the public, and the process could take years.

The EPA hasn’t said how long the suspension will be for, but an agency spokesperson tells StateImpact Texas that “under government-wide suspension and debarment regulations, suspensions generally may not exceed 18 months. However, where there are ongoing legal proceedings at the time a suspension is issued, a suspension may continue until the conclusion of those proceedings.”


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