BP Drilling Ban Would Cost U.S. Jobs, Company Says
David Nagel BP America Executive Vice President
Chip Somodevilla/Getty Images
David Nagel, BP America Executive Vice President, said proposed legislation would have a "drastic Impact" on jobs.
David Nagel, BP America Executive Vice President, said proposed legislation would have a "drastic Impact" on jobs. Photographer: Chip Somodevilla/Getty Images
BP Plc objected to legislation that would bar the oil company from operating new drilling leases in U.S. waters, saying it could trigger job losses and threaten the nation’s energy security.
Commenting for the first time on Congress’s response to the Gulf of Mexico oil spill, BP said in letter to House leaders that the ban in a bill to be taken up tomorrow may have a “drastic impact” on a company that is the largest producer in the deep waters of the Gulf.
House and Senate leaders presented legislation July 27 imposing tougher offshore drilling rules on safety and environmental protection after the BP spill in the Gulf, the worst in U.S. history. The House version would also bar BP from new leases, based on its safety record.
“BP does not fit Americans’ expectations of how a responsible company should act,” Representative George Miller, the California Democrat who drafted the safety measure, said today in an e-mail. “This provision would ensure that only responsible and safety-minded companies drill in American waters.”
Congressional Democrats have said their legislation is necessary in response to the spill, which followed an April 20 explosion on the Deepwater Horizon drilling rig leased by London-based BP. House Speaker Nancy Pelosi, a California Democrat, said today that the measure would be taken up by the full House tomorrow.
Chamber’s Opposition
The U.S. Chamber of Commerce today opposed the measure in a letter to lawmakers, saying its unlimited liability for spills and restrictions on drilling “would have serious and negative impacts on U.S. energy and economic security.”
Among provisions cited by the Washington-based Chamber, the largest U.S. business lobbying group, were new fees on oil companies and a requirement that oil company chiefs personally attest to the safety of their operations.
Under Miller’s provision, drillers with safety violations greater than five times the industry average over the past seven years wouldn’t be eligible for new leases. Companies must also certify to the Interior secretary that they have fewer than 10 fatalities at exploration and production facilities and were assessed less than $10 million in environmental fines over the period. He has said BP would be barred under those terms.
Energy Independence
“If this provision were to limit our ability to develop new and existing energy sources, it would harm the ongoing effort to increase America’s energy independence,” David Nagel, executive vice president of BP America, said in the July 28 letter to Pelosi and House Republican Leader John Boehner of Ohio.
A Senate version of the bill would disqualify companies that fail to meet “due diligence or environmental requirements on other leases,” or that fail to meet obligations under the 1990 Oil Pollution Act. It would be up to the Interior secretary to determine if a company complies.
BP “has a flagrant history of taking risks to boost profits that has resulted in deaths of workers, destruction of the environment and economic chaos in local communities,” Miller said in a statement when he introduced his proposal on June 30.
Before the blowout at BP’s Gulf of Mexico well, which killed 11 workers, a 2005 explosion at the company’s refinery in Texas City, Texas, killed 15 workers, and a 2006 pipeline leak dumped 200,000 gallons of crude at Prudhoe Bay, Alaska.
While BP supports stronger drilling regulation, it is concerned that the provision in the House measure “could have profound consequences for the Gulf Coast economy and jobs, and for the nation as a whole,” Nagel said in the letter.
The House measure is H.R. 3534. The Senate bill is S. 3663.
To contact the reporters on this story: James Paton in Sydney jpaton4@bloomberg.net; Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net.
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