BP has nerve. It’s forcing the US government to make a choice. Does it want revenge? Or does it want the money? Sure the US government could punish BP (BP) by taking away its drilling privileges in the Gulf. And it would be easy to argue that the company deserves the punishment. Ah, but there’s the money part. And the $20 billion that BP has put into its gulf fund is not chump change. It needs those drilling revenues to help pay for the costs of the spill. From the New York Times…
BP is warning Congress that if lawmakers pass legislation that bars the company from getting new offshore drillling permits, it may not have the money to pay for all the damages caused by its oil spill in the Gulf of Mexico.
The company says a ban would also imperil the ambitious Gulf Coast restoration efforts that officials want the company to voluntarily support.
BP executives insist that they have not backed away from their commitment to the White House to set aside $20 billion in an escrow fund over the next four years to pay damage claims and government penalties stemming from the April 20 explosion of the Deepwater Horizon drilling rig. The explosion killed 11 workers and spewed millions of barrels of oil into the gulf.
The company has also agreed to contribute $100 million to a foundation to support rig workers who have lost their jobs because of the administration’s deepwater drilling moratorium. And it pledged $500 million for a 10-year research program to study the impact of the spill.
But as state and federal officials, individuals and businesses continue to seek additional funds beyond the minimum fines and compensation that BP must pay under the law, the company has signaled its reluctance to cooperate unless it can continue to operate in the Gulf of Mexico. The gulf accounts for 11 percent of its global production.
BP is particularly concerned about a drilling overhaul bill passed by the House on July 30. The bill includes an amendment that would bar any company from receiving permits to drill on the Outer Continental Shelf if more than 10 fatalities had occurred at its offshore or onshore facilities. It would also bar permits if the company had been penalized with fines of $10 million or more under the Clean Air or Clean Water Acts within a seven-year period.
While BP is not mentioned by name in the legislation, it is the only company that currently meets that description.
Sorry Congress. You can’t have it both ways. What will it be? The money or revenge?
