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Page added on March 31, 2014

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Getting BP back into the good graces of the US government

Getting BP back into the good graces of the US government thumbnail

Tucked near the back of a 45-page agreement lifting the ban on BP’s participation in US federal contracts is a section that could very well bear the headline: Back to the Future.

Instead, the paragraph has the cumbersome title: “Resolution of debarment, suspension, or statutory disqualification.”

That short section alone is likely worth more to BP than all the rest of the agreement, which ends the moratorium on the company’s ability to win lucrative offshore leases or supply fuel to the military in contracts worth millions of dollars.

The language in the section essentially turns back time and expunges from memory the list of prior offenses that have haunted BP for years and played a major role in the US decision to issue a sweeping disbarment that covered nearly every BP business unit operating in the US.

Those prior offenses include the 2005 Texas City refinery blast that killed 15 workers and a 2006 pipeline accident that spilled more than 6,000 barrels on Alaska’s North Slope.

The US issued the temporary suspension in 2012 and the more serious debarment in early 2013 after BP agreed to plead guilty to charges stemming from the 2010 Deepwater Horizon disaster in the Gulf of Mexico. One of those charges was a violation of the Clean Water Act, which results in an automatic debarment.

The suspension and debarment process is not meant to be punitive. It is designed to protect the US from unscrupulous contractors. The goal is to get the company to resolve the issue that led to the debarment, after which the ban should be lifted.

After nearly a year elapsed however, BP took the EPA to court saying the agency was violating the letter and spirit of the process, especially by extending the ban to nearly every BP subsidiary operating in the US, not just the business unit that operated the Macondo well in the Gulf.

An exhibit contained in BP’s lawsuit explained EPA’s thinking. The agency had dipped into BP’s past and decided to debar the company in large part because of earlier “empty promises” the company made after previous disasters.

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In 2009, after BP was convicted of violating the Clean Air Act in connection with the Texas City explosion, the company submitted a lengthy document to the EPA explaining why it shouldn’t be banned from US contracts. The EPA was in the midst of digesting the argument when the Macondo well blew out in April 2010.

In a report explaining the reasons behind the EPA’s decision to debar BP after its 2013 conviction for Macondo, suspension and debarment official Richard Pelletier wrote that the company had not shown why he should accept the most recent pledges to increase safety “when the promises and changes in the April 2009 presentation proved to be ineffective.”

“The promises of the April 2009 presentation apparently were nothing more than window dressing,” Pelletier wrote.

Fast forward to the March 13 deal that finally lifted the debarment.

In that document, the EPA promises to wipe BP’s slate clean, absolve it of any lingering responsibility for the 2007 conviction related to an oil spill in Alaska, the 2009 conviction for Texas City, and the 2013 conviction for Deepwater Horizon.

In short, if BP should ever be considered for suspension or debarment in the future, the company will be judged on the basis of the act that precipitated the deliberation, and not the accumulated guilt associated its past sins.

That absolution is contingent, of course, on an enormous number of conditions and can be revoked if new information comes to light about the company’s role in Deepwater Horizon or if the company fails to comply with any of the provisions of the reinstatement agreement.

One of the more interesting provisions is that BP start tracking safety-related leading and lagging indicators.

That requirement gives a big boost to the fledgling efforts of the US Bureau of Safety and Environmental Enforcement (BSEE) to establish a voluntary “near miss” reporting system, similar to the one that has been run successfully for years by the Federal Aviation Administration.

BP will be required to track and report within 90 days any losses of primary well containment, injuries on rigs, and other safety-related metrics. The goal for BSEE is to be able to spot trends and patterns to help identify areas that need attention, up to and including new regulations.

The BSEE effort, which was originally scheduled to launch sometime this spring, is voluntary. Data will be collected on an anonymous basis by the Transportation Department’s Bureau of Transportation Statistics.

Requiring BP, one of the Gulf’s biggest operators, to participate gives the BSEE program a huge head start.

Platts



6 Comments on "Getting BP back into the good graces of the US government"

  1. Makati1 on Mon, 31st Mar 2014 1:17 pm 

    BP was never NOT in the governments ‘good graces’. After all, BP paid/pays for a lot of Congress’ and the Prez’ campaign lies … er … expenses. The government fights wars on behalf of BP. The government subsidizes BP to the tune of billions annually. BP can do no wrong.

  2. DC on Mon, 31st Mar 2014 9:30 pm 

    You beat me to it Billt, I was like, WTF, BP practically RAN the uS govt during the GOM crisis. Govt harassment and intimidation of independent journalists, scientists and lower level govt officials that departed from the party line(ie told the truth, or wanted it) was widespread. Every agency in the uS gov, as well as the corporate media, were more or less at BPs disposal and discretion. The only reason BP was hit the cosmetic ‘punishments’ they did receive, was all about optics and perception management. In a just world, BP would have been seized by the govt, its assets either liquidated(or nationalized) and its upper management jailed and stripped of all their private fortunes as well.

    That would be an example of punishment fitting the crime. A temporary ban on ‘new’ uS gov contracts-lol! Tuff justice in the united states of Coal and Oil….

  3. Davy, Hermann, MO on Mon, 31st Mar 2014 10:18 pm 

    Sorry DeeC, your ideological motivations are getting the best of your judgments on the whole BP deal. Your BP/US thesis may have been true early on with BP many years before Deep Water event. Lately they have been causing so many stinks with pipelines and refineries deaths and accidents that they actually become a pariah. That is tough to do being an oil company and having a relationship with the US Gov as a pariah. Nope don’t buy it DeeC.

  4. Makati1 on Tue, 1st Apr 2014 1:55 am 

    Davy, BP will prevail. No question there. How much ‘stink’ is not going to make a difference. Wait and wee.

    BTW: The Exxon Valdez incident has still not been settled 25 years after it happened. They are never going to pay full restitution. Lawyers are cheaper. Corporations run the US today, not the voter.

  5. DC on Tue, 1st Apr 2014 5:11 am 

    Is that so DavHe? Since when has the uS ever stayed mad at any of the private for-profit western oil corporations? Remember, your govt is run by oil corporations. The uS toppled Irans legitimate govt back in the 50’s for BP and pretty much did the same to Iraq(not that BP was intended to the sole beneficiary there, far from it, but you get the general idea-right Daveehee? I haven’t see lick of evidence to suggest BP is regarded as a pariah by the uSgov. In the publics mind-yes, so the gov had to make some minor concessions to public sentiment. But dont conflate, or confuse what joe-6pack thinks of BP and what the uS corporate overclass thinks.

  6. Davy, Hermann, MO on Tue, 1st Apr 2014 10:56 am 

    Sorry DeeC, disagree. I am American and you are not. I am not bent on political propagandist ideologue and you are. BP may have a few people paid off still but their influence is greatly reduced. Oil firms with competence at the helm (Exxon) have influence. I would agree with your big oil influence thesis in those cases but not BP. I would also say that big oil is one of many industries with lobbyist in DC. Big oil gets whipped around and used as a political football when Joe 6pack gets pissed at the pumps. Anyway, glad I got a rise out of you. You have been ignoring me lately. Deec I like your environmental comments always but your political economic ones rub me wrong but hey, that what makes life go around. Diversity is the spice of life. But don’t think I will lay down and let you kick my country. I don’t spend my waking moment figuring out how I can kick Quebec. I loved Montreal and all the French Canadian history.

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