BP Might Stop Paying Claims If Drilling Ban Is Extended
Without permission to continue its offshore drilling operations, BP has warned Congress that it might run out of money to pay for the damages caused by its three-month oil spill.
The debate over whether a six-month moratorium on deepwater oil drilling should be extended and expanded has been rekindled in Washington after the explosion of a second offshore oil rig in the Gulf of Mexico on Thursday.
The production rig, owned by Mariner Energy has already created an oil sheen a mile-long and 100 feet wide in waters that are just west of the site of BP’s massive spill.
The Department of Interior first established a temporary ban on deepwater oil drilling on July 12. The current moratorium is set to expire on November 30.
Opponents to the ban have been reluctant to recant, and most claim that an expanded ban on deepwater rigs like the Deepwater Horizon wouldn’t have affected the Mariner Energy rig, which was located in much shallower water.
What BP Has Already Agreed To Pay:
- $20 billion in an escrow fund over the next four years to pay damage claims and government penalties stemming from the April 20 explosion
- $100 million to a foundation to support rig workers who have lost their jobs because of the administration’s deepwater drilling moratorium
- $500 million for a 10-year research program to study the impact of the spill
Because the BP oil spill fallout will continue to be so extensive in the Gulf Coast, government officials, businesses, and individuals have continued to seek funds beyond the minimum fines and compensation that BP must pay under the law.
Feeling the squeeze, the company has signaled that it may soon stop cooperating with these demands unless it’s sure it will be able to continue operations in the Gulf of Mexico, which accounts for 11 percent of its global production.
A drilling overhaul bill passed by the House on July 30th includes a clever amendment that has BP particularly concerned.
The bill 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 withhold 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 (NY Times).
So far, BP is the only company that fits this description.
Take Action, Sign The Petitions!
Image Credit: Flickr - dsb nola