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EPA and BP reach agreement on deep-water drilling bids

BP PlcOil and Chemical SpillsU.S. Environmental Protection AgencyDisasters and AccidentsEnvironmental PollutionAccounting and AuditingEnvironmental Politics

WASHINGTON — The Environmental Protection Agency and BP announced Thursday an agreement that would allow the energy giant to bid once again on deep-water offshore drilling leases, reversing a government decision two years ago to bar the company from federal contracts following its massive oil spill in the Gulf of Mexico.

In what became the country's worst offshore environmental disaster, BP's Macondo well blew out in April 2010, killing 11 workers and spewing more than 4 million barrels of oil into the gulf.

BP continued to operate its offshore projects and pursue new ones until November 2012, when it was suspended by the EPA from bidding on federal contracts, including offshore leases. At the time, the EPA cited BP's "lack of business integrity" as demonstrated by the Macondo disaster. BP, in turn, sued the EPA in 2013 in an effort to overturn the ban.

Under the new agreement, BP must retain an EPA-approved independent auditor to conduct an annual review and ensure the company is in compliance with various provisions, including standards for safety, corporate governance and ethics compliance. The EPA retains the right to take "appropriate corrective action" if the agreement is breached, the regulator said.

In return, BP agreed to drop its suit against the EPA.

BP pleaded guilty in 2012 to criminal charges in connection with the spill and agreed to pay $4.5 billion in fines and other penalties. BP and the federal government are still locked in a civil trial over BP's violation of the Clean Water Act.

Penalties could range as high as $4,300 for each barrel spilled, or more than $18 billion in civil fines, if the company is found to have been grossly negligent.

The pact announced Wednesday is a "fair agreement that requires BP to improve its practices in order to meet the terms we've outlined together," said Craig Hooks of the EPA's administration and resource management office. "Many months of discussions and assessments have led up to this point, and I'm confident we've secured strong provisions to protect the integrity of federal procurement programs."

In a statement, John Minge, president of BP America, called the agreement "fair and reasonable."

neela.banerjee@latimes.com

Copyright © 2014, Los Angeles Times
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BP PlcOil and Chemical SpillsU.S. Environmental Protection AgencyDisasters and AccidentsEnvironmental PollutionAccounting and AuditingEnvironmental Politics
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