OIL AND GAS:

As BP resolves some legal woes, GOP split on its offshore drilling fate

BP PLC's settlement yesterday in an Alaskan pipeline case marks the second high-profile legal battle the company has ended since capping its Gulf of Mexico gusher. But that leaves Republicans facing a quandary: Should BP be the exception to their push for more and faster offshore drilling?

On a policy level, BP's resolution of the civil lawsuit over 2006 oil spills from its Alaskan pipelines and the federal worker-safety case over a fatal 2005 blast at its Texas City refinery have little connection to its future as a Gulf driller. The politics of the issue are deeply murky, however, with the GOP staking its summer energy agenda on a push to speed permits for offshore production -- an effort that would theoretically include BP.

"They're still on the watch list," Rep. Mike Simpson (R-Idaho), the House Interior Appropriations Subcommittee's chief, said yesterday of BP.

Simpson acknowledged that the prospect of Republicans singling out BP for bad-appledom even as they push for faster offshore drilling permits is "a little awkward." Still, he added, the company's Gulf safety record is too poor to allow the money it is set to spend settling its pipeline and refinery cases -- a total of $135 million -- to increase its chance of getting offshore drilling permits.

Sen. Lindsey Graham (R-S.C.), however, was not prepared to leave BP on the sidelines in his party's clamor for more domestic oil production. "I think it's time to open up offshore drilling to BP and others," he said yesterday.

Nor was Rep. Rob Bishop (R-Utah), who drew a bright line of his own between BP's pipeline and refinery settlements and its status as an offshore driller. There is a difference, Bishop said, between how companies might "clean up the past" and "make [extraction] technologically safe for the future."

Asked if BP could meet what he described as "criteria to move ahead" after misdeeds, Bishop said: "I personally think they can."

Other Republicans, perhaps conscious of the challenge posed by potential new BP drilling in the Gulf, deflected the question of whether the company should be exempted from their pro-drilling press. Rep. John Shimkus (R-Ill.) said only that "we should bring on more supply" and end the Gulf "permitorium," while Rep. Pete Sessions (R-Texas) dipped only a rhetorical toe in the anti-BP pool.

"Companies that follow the law, that provide revenue to our country -- that live by our laws and properly follow our laws -- should always be important to us," Sessions said. "Those that do not should not receive any advantage."

To permit, or not?

House Republican leaders are heavily promoting two offshore drilling bills, which could pass the chamber as soon as tomorrow, that would require faster approval of offshore permitting bids and the restoration of federal offshore lease sales that were canceled after the Gulf spill one year ago (E&E Daily, May 2).

Meanwhile, BP told investors last week that it aims to restart Gulf drilling by later this year, provided that federal regulators certify it has met newly heightened safety standards sparked by its Deepwater Horizon spill. Winning that permit "would mark a big symbolic success" for the company, The Wall Street Journal noted in first reporting that news.

The GOP bills set for consideration this week require Interior to approve offshore drilling permit applications within 60 days and limit legal challenges to energy projects. They neither force the government to grant or deny any specific company's permits nor single out any driller for a higher safety standard.

Nonetheless, some Republicans said yesterday that BP should have to clear a higher bar in order to start drilling in the Gulf.

Rep. John Sullivan (R-Okla.) praised the company for settling its Alaska pipeline suit and its Occupational Safety and Health Administration case over the Texas City refinery, deeming it a "baby step" toward showing that a new era is possible.

Echoing Simpson's description of BP as a negative outlier in Gulf drilling safety, Sullivan pointed to "a culture in the company" that pushed to "cut costs to make profit margins larger."

"If they can show the processes are different, show that they're doing what they need to do," he added, BP's drilling operations should be considered for approval and monitored more closely than other firms'. "Until they show us years of doing the right thing, there needs to be trust and verification."

Rep. Allen West (R-Fla.), a freshman class standout whose pro-drilling support makes headlines in his home state, sounded a similar note.

After calling for independent safety certification of offshore rigs and a system similar to the United Kingdom's tightly regulated North Sea, West said that such strong safeguards would allow him to support putting BP in the mix for drilling permits.

"I don't want to go back and reopen old wounds," West said. "If they can rectify things they have done in the past, we should move on. ... I do believe in redemption."