U.S. Rep. Chellie Pingree of Maine has introduced a bill to force BP to pay royalties on the oil that’s spilling from its deepwater well in the Gulf of Mexico.
Pingree’s legislation was introduced Friday, with lawmakers due back in Washington, D.C., after a break and Congress and President Obama turning up the heat on BP.
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“Not only does BP need to pay for the incredible economic and environmental damage they’ve done,” Pingree said in a written statement Monday announcing her bill, “they also owe the American people for the millions of gallons of oil they have spilled into the Gulf of Mexico.”
Oil companies pay royalties on oil they collect and sell from offshore wells. BP’s lease agreement with the government requires it to pay an 18.75 percent royalty. That would likely amount to more than $10 million for the oil already spilled, assuming a price of $70 a barrel.
BP is expected to pay royalties on the oil it is now recovering and processing with a funnel-like device that diverts some of the spilled oil to a ship on the surface.
But current law doesn’t require royalties on spilled oil unless there is a finding of negligence, Pingree said.
Pingree said her bill would require royalties on spilled oil as well, and could ultimately force BP to pay tens of millions in royalties for the lost oil.
“We need the force of law to make sure they pay every penny they owe us,” she said.
Pingree has been urging BP to pay the royalties since last month but has not received any assurances from the company, said Willy Ritch, her spokesman. She also has called for using the money to pay environmental fees for offshore wind and tidal power projects, although that is not part of the legislation.
The issue of royalties is one reason federal officials have criticized BP for understating the size of the spill. It also may be a factor in the U.S. Department of Justice’s investigation into BP’s handling of the spill.
Pingree isn’t the only lawmaker who believes that BP owes American taxpayers royalties regardless of any official finding of negligence.
The chairman of the House Natural Resources Committee, Rep. Nick Rahall, D-W. Va., wrote letters this month to U.S. Attorney General Eric Holder and Interior Secretary Ken Salazar, saying the nation is entitled to the payments.
“There should be no question that the American people, who are already suffering through an environmental disaster of historic proportions, will receive every cent they are entitled to,” Rahall wrote to Salazar.
In his other letter, Rahall reminded Holder that the federal law passed in 1990 after the Exxon Valdez spill allows the U.S. to collect damages equal to royalties that are lost because of a spill.
“I urge you to ensure that the Department of Justice also takes legal action to recover damages owed to the United States for lost royalties as a result of this disaster,” he wrote.
A Department of Justice spokesman said the agency will review the letter before responding.
Staff Writer John Richardson can be contacted at 791-6324 or at: jrichardson@pressherald.com
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