Interior rebuffs call to bar BP from lease sale

A top Interior Department offshore drilling regulator said Thursday that officials considered blocking BP from bidding in the upcoming December Gulf of Mexico oil-and-gas lease sale but decided against it.

“We are not going to suspend or de-bar BP from that lease sale. We have considered and thought about this issue quite a lot and we don’t think it is appropriate in these circumstances,” said Michael Bromwich, head of Interior’s Bureau of Safety and Environmental Enforcement, at a House hearing on the BP oil spill.

Interior alleges that BP and its major contractors violated offshore drilling regulations in connection with last year’s massive Gulf oil spill.

But Bromwich, in stating the company may participate in December's sale, cited factors including BP’s commitment to adhere to additional, voluntary drilling safety standards that go beyond federal safety rules that have been beefed up since last year's spill.

Bromwich later told reporters that "they don’t have a deeply flawed record offshore." He said that when companies' relative safety records are examined over time, BP is "close to the top group."

“The question is, do you administer the administrative death penalty based on one incident, and we have concluded, I have concluded, that that’s not appropriate in these circumstances,” Bromwich said.

Rep. Edward Markey (D-Mass.), the top Democrat on the House Natural Resources Committee and a BP critic, said Bromwich should consider barring BP from bidding on new Gulf leases in December.

“I think we should take another look at whether or not BP should be allowed to participate,” Markey said at the hearing on the BP spill. “It is still in my mind an open question that should be dealt with as part of this entire process.”

In addition to last year’s Macondo well blowout, BP has been plagued with other safety woes in recent years. A 2005 explosion at BP’s Texas City refinery killed 15 people, and the company also had an oil spill from a pipeline at its Prudhoe Bay field in Alaska in 2006 that temporarily shut down production there.

The company has vowed, however, major safety improvements for offshore and other operations.

A BP official, in testimony submitted to the committee for the hearing (available here), notes the company has worked “intensively” to improve safety, including last year’s creation of a centralized safety and operational risk organization.

— This post was updated at 12:40 p.m.