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.

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W. C
W. C5 months ago


William C
William C5 months ago

Not surprising, thank you.

William C
William C5 months ago

Thank you for the information.

jane richmond
jane richmond7 years ago

We knew this was coming it was justa matter of time.

Borg Drone
Past Member 7 years ago

NO DRILLING, how hard can it be !!

Avonne L7 years ago

No drilling, thank you. Yes, simple.

Kathy W.
Kathy W.7 years ago

Even if it puts the company under, you can be sure that the top execs won't deny themselves their excessive pay and benefits. That's really all they care about.

Jennifer Martin
Jennifer M7 years ago

It's only 11%. Screw them! I hope it puts them out of business. And if they don't pay, they should be shut down. Why is that so hard? They are a disgrace to humans.

Wendy L.
W L7 years ago

Shame to all those at the top of British Petroleum who are showing themselves to be liars to a global audience. Are they running scared and using scare tactics now?

Rose McB
Sharyn D7 years ago

Frankly, given all their other lies, I don't believe a word of it. BP's reach is global. They have many other drilling sites still in operation. Disingenuous and typically arrogant. If BP defaults, the solution is simple. We should appropriate all BP drilling platforms and other hard assets within U.S. territorial waters, as well as their offices, their bank accounts and anything else within reach, standing on U.S. soil.