Think tank: US manufacturing firms challenge EPA ban on BP

06 January 2014 00:00 Source:ICIS Chemical Business

A growing coalition of international energy firms, manufacturers and broad general business interests is challenging what is termed “breath-taking overreach” by the US Environmental Protection Agency (EPA) in barring BP from any federal programme indefinitely.

The US Chamber of Commerce, the National Association of Manufacturers (NAM), the American Petroleum Institute (API) and other trade associations – along with the UK government – charge that EPA has grossly overstepped its legislative and regulatory authority in shutting off BP and all of its affiliates and subsidiaries from doing business with the federal government or even with private companies that hold federal contracts.

Deep Water Horizon fire Rex Features

Rex Features

The EPA’s ban on BP arose from the 2010 accident on the Deepwater Horizon rig

The unprecedented EPA punishment of BP grows out of the April 2010 accident involving BP’s Deepwater Horizon offshore drilling rig, which caught fire and took 11 lives, and triggered the worst oil spill in US offshore energy history.

In early 2012, BP Exploration & Production Inc (BPXP) pleaded guilty to a range of criminal violations and other offences, including a misdemeanour violation of the Clean Water Act (CWA), which is enforced by EPA.

Later that year and early in 2013, EPA barred parent company BP, its subsidiary BPXP and 20 other affiliates from entering into any new federal procurement contracts and other transactions.

Soon after, in February 2013, EPA also barred BPXP’s corporate headquarters in Houston, Texas, from federal contracting, contending that the company’s Houston HQ offices constituted a “violating facility” under the Clean Water Act.

BP quickly filed suit, charging that EPA had overstepped its authority under the CWA. In a recently filed amicus curiae suit, the US Chamber, API and NAM, along with others, have sided with BP, arguing that if the EPA action is not overturned by the courts, it will establish a precedent that could do no less than undermine international commerce.

“The breadth of EPA’s overreach in this case is breath-taking and, if left to stand, would set a harmful precedent for manufacturers across the country,” said NAM senior vice president and general counsel Linda Kelly.

NAM recognises that regulations are needed to protect public interests. “But this disbarment ruling seems to be ignoring the confines of EPA’s statutory authority in order to be punitive and to make a point,” she said. “This heavy-handed approach is concerning to all manufacturers.” The 14,000 members of NAM include many chemicals producers.

By Joe Kamalick