BP Won’t Face Moratorium Claims Over Oil Spill, Judge Says

U.S. Coast Guard Photo

By Margaret Cronin Fisk and Laurel Brubaker Calkins

(Bloomberg) — BP Plc won total dismissal of claims by energy and oilfield service companies for losses they blamed on the U.S. offshore drilling ban following the 2010 Gulf of Mexico oil spill.

BP has denied liability for potentially billions of dollars in claims by companies that had to shut down drilling operations and stall work crews and supply chains for months after the Obama administration halted deep-water drilling and slowed permits for new wells in reaction to the largest offshore spill in U.S. history.

BP claimed the federal law governing liability for such economic losses required them to have “resulted from” the spill itself, not from the action of a third party like the federal government. U.S. District Judge Carl Barbier agreed.

“There is nothing to suggest that Congress intended the OPA to go so far as to hold a discharger liable for the financial consequences of subsequent government actions aimed at preventing similar tragedies in the future and which broadly affect an entire industry,” Barbier said in a 17-page ruling referencing the Oil Pollution Act passed in the wake of the Exxon Valdez spill of 1989.

Barbier said his logic was supported by the fact the U.S. Coast Guard, which is tasked with administering the federal fund to compensate victims of oil spills, has been denying all BP spill claims that are “a direct result of the moratorium, not a result of an oil discharge.”

Geoff Morrell, BP’s spokesman, had no immediate comment on the ruling.

The case is In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico on April 20, 2010, 10-md-02179, U.S. District Court, Eastern District of Louisiana (New Orleans).

© 2016 Bloomberg L.P

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