The Journal noted the plan could make the administration and BP “partners of sorts” in Gulf development.
“Under the latest negotiations, BP would use production payments from its producing Gulf wells as collateral for the fund and would provide quarterly production updates to the government. The collateral requirements would be reduced as BP pays money into the fund,” the Journal reported, citing an administration official who called it an “option.”
The Natural Resources Defense Council is also criticizing the idea.
“We do need BP to remain solvent to fund the escrow account, but what the Journal reports is a bad idea which will, if implemented, cast a shadow on the legitimacy of future regulatory activity in the Gulf by the Bureau of Ocean Energy (formerly the Minerals Management Service), NOAA, and every other federal agency charged with watching over BP’s Gulf operations,” said NRDC’s David Pettit in a blog post Tuesday.
A Justice Department spokeswoman declined comment to The Hill, referring instead to a statement Monday by Associate Attorney General Tom Perrelli on negotiations to establish the escrow fund.
“We have made clear that the company still needs to ensure that the necessary funds will be available if something happens to the subsidiary that established the trust and we look forward to completion of an appropriate security arrangement in the near future,” he said.