The United States government announced this week that it is ready to give BP the green light to expand its drilling operations on federal property—including in the Gulf of Mexico, where oil from the company’s 2010 Deepwater Horizon spill on occasion still washes up along the coastline. Here’s the Washington Post with the details of the deal that has environmentalists fuming:
The Environmental Protection Agency and BP have reached an agreement that lifts a ban on BP’s ability to hold government contracts that has barred the company from bidding on oil and gas leases on federal lands and waters because of the massive oil spill triggered by a blowout on a BP well in April 2010.
BP, the largest lease-holder and one of the largest oil producers in the Gulf of Mexico, had been pressing for an end to its debarment in order to conduct business more freely and to reassure shareholders that the company could move beyond the accident at its Macondo well. The accident killed 11 workers, sank the half-billion-dollar Deepwater Horizon drilling rig, and spilled as much as 4.2 million barrels into the gulf.
The agreement will mean, in the words of the New York Times, “hundreds of millions of dollars of new business for the company.” Perhaps even more importantly for the oil giant is that it will help it turn the page on the environmental disaster, at least in the eyes of its investors if not those who actually live in the gulf region.
Although, to be clear, while BP had been banned from expanding its operations in the Gulf of Mexico with new leases, it had continued to explore its existing ones even before this ban was lifted. The company had 10 deep-water drilling rigs in the region at the end of last year and had previously indicated that it planned to pour an average of at least $4 billion of investment into such operations every year for the next decade, according to the Times.
The EPA first suspended BP from receiving new federal contracts in the gulf in Nov. 2012 because of what the agency described then as the company’s “lack of business integrity.” The London-based oil company would later plead guilty to criminal charges in connection with the massive oil spill in a $4.5 billion settlement with the Justice Department.
Under the terms of the deal, BP will be allowed to bid for new leases as soon as next week.
***Follow @JoshVoorhees and the rest of the @slatest team on Twitter.***
