Environmental

BP sues EPA in effort to recover new drilling contracts in Gulf of Mexico

BP 435x292 BP sues EPA in effort to recover new drilling contracts in Gulf of MexicoBP’s legacy of environmental destruction, which started long before it created the biggest oil spill in U.S. history, has earned it a criminal record and a reputation as a big polluter that will stop at nothing to boost profits. But rather than adopting a genuinely responsible corporate culture and addressing its deficiencies, the oil giant has instead invested millions in deceptive commercials and newspaper advertisements designed to evoke public sympathy and recast itself as a company that Americans can count on to do the right thing.

But little of that has worked so far, and now BP may be taking a tougher approach to recover some of what all its bad business lost.

On Tuesday, the company filed a lawsuit against the Environmental Protection Agency (EPA) seeking to overturn a ban the agency imposed on BP last November for its “lack of business integrity.” Concerned that the Gulf of Mexico’s leader in deepwater leases could create another environmental catastrophe like the 2010 Deepwater Horizon oil spill, federal regulators banned BP from new drilling contracts “until the company can provide sufficient evidence to E.P.A. that it meets federal business standards.”

BP said the EPA ban was crippling its ability to keep pace with competitors Royal Dutch Shell and Chevron.

“We believe that the E.P.A.’s action here is inappropriate and unjustified as a matter of law and policy, and we are pursuing our right to seek relief in federal court,” BP said in a statement. “At the same time, we remain open to a reasonable settlement with the E.P.A.”

“We want everyone to know that we are digging in and are well prepared for the long haul on legal matters,” BP CEO Robert Dudley said.

BP also underestimated how much it would cost to resolve claims by businesses and individuals harmed by the massive oil spill. After reaching a settlement agreement with plaintiffs’ lawyers in March 2012, BP projected that it would cost $7.8 billion to resolve all the outstanding financial-loss claims, but the company said that figure will likely be “significantly higher” than its latest revised estimate of $9.6 billion.

Some analysts think that BP’s more aggressive approach to recovering losses could backfire.

Oppenheimer oil analyst Fadel Gheit told the New York Times that BP risks further backlash. “You need to be aggressive but not too aggressive,” he said. “The regulators will put you in the penalty box.”

Source:

New York Times