The Tech - Online EditionMIT's oldest and largest
newspaper & the first
newspaper published
on the web
Boston Weather: 50.0°F | Rain Fog/Mist
Article Tools

BP is warning Congress that if lawmakers pass legislation that bars the company from getting new offshore drilling 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.

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.

The provision was written by Rep. George Miller, D-Calif., who is a strong environmental advocate and a close ally of Nancy Pelosi, the House speaker.

It was specifically designed to punish BP for its past transgressions, including the Deepwater Horizon explosion, and deny the company access to U.S. offshore oil and natural gas.

BP said that the House bill would stymie new drilling and cripple the company’s existing gulf operations.

David Nagle, BP’s executive vice president for BP America, said BP had discussed the matter with House leaders, and that company executives intended to discuss the matter with Senate leaders after the summer recess.