I’m a firm believer in 2nd chances. Everyone makes mistakes. And depending on the seriousness of said mistake, one act shouldn’t necessarily define the character of a person or a corporation. But what if a person or company keeps making the same mistake, over and over and over again? Some say that a definition of insanity is doing the same thing over and over again and expecting different results. If that’s true, than it’s time to introduce BP to a straight jacket and a padded cell.
Today we filed comments in an enforcement proceeding at the Federal Energy Regulatory Commission where 4 different BP subsidiaries are accused of manipulating the Houston Ship Channel-Katy Hub natural gas price spread over several months in late 2008. FERC has proposed a $28 million fine, plus disgorgement of $800,000 in unjust profits.
Here’s the problem: at the time of the natural gas price manipulation alleged here, BP was under at least two different special monitoring programs as a punishment for other market manipulation.
On October 25, 2007—less than one year before the violations outlined in the August 5, 2013 Show Cause order detail—BP had to pay a $7 million civil fine, and agree to a “compliance monitoring plan,” which, among other duties, required BP to report to FERC Enforcement Staff “a detailed update of all compliance training administered and compliance measures instituted.” This was required to settle allegations that BP engaged in “thousands” of anti-competitive practices by its natural gas units.
Also in October 2007, the US Department of Justice required BP to pay $303 million to settle allegations that the company manipulated propane markets. In addition, Justice forced BP to hire an outside “compliance monitor” to ensure that the company’s energy trading divisions were behaving themselves.
BP has demonstrated a consistent pattern of market manipulation. Past remedies ordered by the US Department of Justice have included third-party compliance monitors—to no avail. It is clear that FERC must consider suspending or revocation of BP’s blanket natural gas marketing certificates. It’s time to stop the insanity.
Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @tysonslocum