BP Suing US Government Oil Contracts

BP Sues US Government After Contract Ban From Gulf Oil Spill

BP is suing the US government for the right to additional contracts after the disastrous Gulf Oil spill in 2010. The government’s Environmental Protection Agency banned the company from bidding on additional federal contracts in November 2012.

In enacting the ban, the EPA cited the oil giant’s “lack of business integrity” following the Deepwater Horizon blowout, which killed 11 workers and allowed millions of barrels of oil to spill into the Gulf of Mexico.

The suspension doesn’t affect the company’s current contracts it holds with the US government, which Reuters notes amount to more than $1.34 billion.

However, BP contends that the ban unfairly includes 21 of its subsidiaries. In the lawsuit, the oil company cited the fact that the subsidiaries had nothing to do with the oil spill.

The contracts BP is missing out on amount to around $1.9 billion, which would probably help it recover loses from payouts, which so far have amounted to over $42.4 billion.

The Huffington Post notes that BP has already lost an administrative challenge to the suspension. But in the new court papers, filed in Houston federal court on Tuesday, also contend n that the EPA’s ban on new contracts and its continued enforcement of the ban is arbitrary and “an abuse of discretion.”

BP has already pled guilty to charges related to the workers’ deaths, as well as for lying to Congress about how big the spill was. It is estimated that the Macondo well gushed more than 200 million gallons of oil into the Gulf in the months it took to permanently seal it.

A New Orleans-based federal judge accepted the plea in January, along with the company’s decision to pay a record $4 billion in penalties. The trial’s second phase will begin on September 30 and relates to civil claims against BP.

Do you think BP should sue the US government for the right to new federal contracts?

[Image by US Coast Guard via Wikimedia Commons]