UPDATE: BP Faces Pressure In US Congress On New Drilling

14th Jul 2010 20:55

(Adds new comment from Speaker Pelosi's office; Rep. Markey; details on energy legislation in the U.S. Senate.) By Siobhan Hughes and Stephen Power WASHINGTON (Dow Jones)--BP PLC (BP, BP.LN) came under new pressure in the U.S. Congress on Wednesday, as the company delayed its latest effort to control a leaking undersea well and Democrats ramped up a push to hold the oil company to account. In the U.S. House of Representatives, a panel voted to ban BP from obtaining new offshore drilling leases or permits for as many as seven years. A separate House panel may vote as early as Thursday on a measure to make it harder for oil companies with a history of violations to drill. A U.S. senator from Florida and a Massachusetts congressman complained that BP hasn't responded to questions about the integrity of the wellbore that are at the center of the company's latest effort to shut the flow of oil from the Macondo well. A BP spokesman declined to comment. The fate of the offshore drilling ban remains unclear, as numerous House panels claim jurisdiction over spill legislation and as the U.S. Senate plans to tie up BP-related measures with a broader energy bill to cut pollution from power plants and boost clean-energy investment. The first clues may come as early as Thursday, when U.S. House Speaker Nancy Pelosi (D., Calif.) meets with the heads of relevant committees to discuss the next steps. The U.S. Senate plans to unveil its own bill next week, and Senate Majority Leader Harry Reid (D., Nev.) will attempt to start debate on the bill the week of July 26. Also Wednesday, the House Natural Resources Committee voted unanimously to establish an independent commission to investigate the Gulf oil spill, amid complaints by lawmakers in both parties that a commission appointed by President Barack Obama lacks expertise in deepwater drilling and includes several figures who have long opposed offshore drilling. The White House has said it doesn't think a second panel is necessary, and that the currently constituted panel will consult industry experts in making any recommendations on drilling policy. Last month, the Senate Energy and Natural Resources Committee also voted to establish a second spill commission. Under an amendment from Rep. George Miller (D., Calif.), companies may not obtain offshore drilling leases or permits if more than 10 fatalities occurred at any of their facilities in the preceding seven years or if they incurred civil and criminal penalties of more than $10 million over the previous seven years. By voice vote, the House Natural Resources Committee added the measure to a broader offshore drilling bill. Rep. Bart Stupak (D., Mich.) said that he wants to bring a similar amendment up for a vote as early as Thursday in the House Energy and Commerce Committee. Speaking at a Platts Energy Podium, Stupak told reporters that BP had hundreds of "willful and egregious" violations over the past several years while the next-worst company had eight violations. "I think we have to give the (Interior) secretary or someone the discretion to say, 'Look, you've got such a history here, such a history here, you're not going to be allowed to drill or exploit our natural resources until you clean up your act.'" Pelosi will meet with the chairman of the relevant committees on Thursday to discuss next steps, spokesman Drew Hammill said in an email. "The Speaker shares Chairman Miller's concerns about BP's dismal record," he added. The maneuvering came as BP said it wasn't ready to perform a test to see if a recently placed sealing cap can completely shut the flow from its leaking well in the Gulf of Mexico. The well integrity test was scheduled for Tuesday but has been delayed because officials believe further analysis needs to be done, said Kent Wells, a BP senior vice president, during a morning teleconference. In early June, Sen. Bill Nelson (D., Fla.) wrote to BP for records of any monitoring that BP was conducting of the structural integrity of the wellbore on the floor of the Gulf of Mexico. He still hasn't received a response, "although we've asked them about it many times since," his spokesman Dan McLaughlin said. Rep. Ed Markey (D., Mass.), who has also asked for information on well integrity, renewed his call on Wednesday. "Everyone is hoping for a successful outcome for this capping system, and for the relief wells," Markey said in a statement. "But given BP's bad track record on all of its efforts thus far, all information about the risks of these tactics must be provided to Congress and to the public." A BP spokesman had no immediate comment. In the meantime, four U.S. senators asked BP to suspend drilling operations in Libya, citing concerns about whether the release of the convicted Lockerbie bomber, Abdel Baset al-Megrahi, was entangled with a $900 million oil deal that BP had signed with Libya in May 2007. BP spokesman Toby Odone said that the company hasn't begun drilling in Libya. He said that BP in late 2007 told the U.K. government that "we were concerned about the slow progress that was being made in concluding a Prisoner Transfer Agreement with Libya. We were aware that this could have a negative impact on UK commercial interests, including the ratification by the Libyan Government of BP's exploration agreement." The spokesman said that "the decision to release Mr. al-Megrahi in August 2009 was taken by the Scottish Government. It's not for BP to comment on the decision of the Scottish Government. BP was not involved in any such discussions about the release of Mr. al-Megrahi." -By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; [email protected] (Susan Daker and Spencer Swartz contributed to this article.) (END) Dow Jones Newswires July 14, 2010 15:55 ET (19:55 GMT)