EPA suspends BP from government contracts

The Environmental Protection Agency (EPA) has temporarily banned BP and its affiliates from receiving government contracts in response to the firm’s handling of the 2010 Gulf of Mexico oil spill.

“EPA is taking this action due to BP’s lack of business integrity as demonstrated by the company's conduct with regard to the Deepwater Horizon blowout, explosion, oil spill and response, as reflected by the filing of a criminal information,” EPA said in a Wednesday statement.

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The 2010 well blowout and explosion killed 11 workers and amounted to the largest oil spill in U.S. history. 

BP agreed to settle its case with the Justice Department earlier this month, racking up a U.S. record $4 billion criminal penalty. It also agreed to pay the Securities and Exchange Commission $525 million for separate claims.

The suspension will bar BP from getting new government contracts and grants, but does not affect existing agreements.

“Suspensions are a standard practice when a responsibility question is raised by action in a criminal case,” EPA said.

A pair of senators who strongly back expanded oil drilling questioned the suspension Wednesday. Sens. Lisa Murkowski (R-Alaska) and Mary Landrieu (R-La.) both said they want more information from EPA about the ban.

Murkowski, the top Republican on the Senate Committee on Energy and Natural Resources, questioned whether the move was “reasonable” and said it could have repercussions beyond BP.

“I’d like to know from EPA, what are the criteria that have been applied?,” Murkowski told reporters in the Capitol. “From what I understand, this is pretty precedential.”

Murkowski also said she wanted a more thorough explanation of the conditions under which the ban would be lifted. 

“Is this a subjective determination by EPA?,” she said.

EPA told The Hill that the action taken against BP is not uncommon, and noted that 114 suspensions were issued in fiscal 2012. The agency said the timetable for lifting the suspension against BP is unclear because the company still faces civil charges.

EPA is drafting conditions that, if met, would remove the ban, BP said in a Wednesday statement. The company has nabbed more than 50 new Gulf of Mexico oil and gas leases since the Deepwater Horizon spill, and expressed confidence it could meet whatever terms EPA proposes.

"As BP’s submissions to the EPA have made clear, the company has made significant enhancements since the accident. The company launched an internal investigation immediately after the accident, publicly released the results, and has been implementing all 26 of the investigation's recommendations," BP said.

BP is still facing possible civil penalties for the April 2010 spill. Those could include Clean Water Act claims, state Natural Resource Damages claims, state economic loss claims and private civil claims.

The incident, which dumped 4.9 million barrels of oil into the Gulf of Mexico, led to a regulatory overhaul of offshore oil drilling.

The White House dialed back its offshore drilling plans after the spill by removing oil-and-gas leasing off the Atlantic Coast. It also imposed a temporary freeze on Gulf of Mexico drilling, which riled industry and Republicans.

Rep. Edward Markey (D-Mass.), who in an October 2011 floated the idea of the federal government prohibiting BP from landing contracts, applauded EPA's decision.

“When someone recklessly crashes a car, their license and keys are taken away. The wreckage of BP’s recklessness is still sitting at the bottom of the ocean and this kind of time out is an appropriate element of the suite of criminal, civil and economic punishments that BP should pay for their disaster," Markey, the ranking member on the House Natural Resources Committee, said in a Wednesday statement.

Environmental groups said the ban was the proper medicine for BP, which understated the extent of the oil spill that devastated the Gulf of Mexico's aquatic ecosystem.

"Whether it’s in the form of tax subsidies or federal contracts, BP doesn’t deserve a single penny from American taxpayers. BP lied to Congress and lied to the American people about their criminally negligent role in the Gulf Coast oil disaster that killed eleven people and spewed five million barrels of oil into the Gulf," Sierra Club Executive Director Michael Brune said in a Wednesday statement.

The green group Oceana said the Obama administration acted prudently by handcuffing BP, but criticized the White House for offering 20 million Gulf of Mexico acres for drilling in lease sales Wednesday.

"Overall, President Obama is missing the lesson of the Deepwater Horizon disaster, which is that offshore drilling is inherently dirty and dangerous and needs to be phased out," said Matt Dundas, acting campaign director at Oceana.

— This story was last updated at 5:05 p.m.

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