Monday, July 05, 2010

BP's Defense Department & Other Federal Gov't Contracts

The U.S. Defense Department purchases aviation fuel and other petroleum products from BP under contracts worth at least $980 million in the current fiscal year, according to the Defense Logistics Agency. In fiscal 2009, BP was the Pentagon's largest single supplier of fuel, providing 11.7 percent of the total purchased, and in 2010, its contracts amount to roughly the same percentage.

The Environmental Protection Agency is considering debarring BP from all federal contracts -- including those with the Defense Energy Support Center (DESC), which buys all fuel for the military services. The EPA plays the lead role in debarment proceedings related to the Clean Water Act and Clean Air Act, and its probe was sparked by BP's 2006 oil spill in Alaska and a 2005 explosion at a refinery in Texas. The EPA's deliberations, however, are suspended until the gulf spill investigations conclude. The Defense Logistics Agency has communicated to the EPA that there are adequate procedures and processes to protect the U.S. military missions should EPA determine that BP should be debarred. None of BP's current energy contracts are in direct support of operations in Iraq and Afghanistan and that the department could meet its requirements without BP fuel. Conversely, other estimates put BP as supplying approximately 80 percent of the fuel being used to move U.S. forces in the Middle East. But the Pentagon will not take such action in the absence of an EPA decision.

Several federal agencies have continuing contracts with BP, although none worth as much as the Pentagon's. Since 2008, the Federal Aviation Administration has contracted to spend at least $2.26 million to station weather, communications and aerial surveillance devices on several BP platforms in the gulf, including the Atlantis oil production platform roughly 100 miles from Deepwater Horizon's former location. (Wash Post, 7/5/2010)

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