Oil and Water

Posted June 22, 2010, at 5:33 p.m.

The Obama administration Monday reorganized the Minerals Management Service, the beleaguered agency faulted for its poor oversight of BP’s Deepwater Horizon, and appointed a new director. This may be a good start, but it will take more than rearranging bureaucrats to return the service to its mission of overseeing, not rubber-stamping, oil and gas exploration and development.

According to an extensive article in the current issue of Rolling Stone, despite tough-sounding promises from the Obama administration, the service is still too cozy with the energy industry. The magazine goes so far as to say that the service’s failings are the reason for the April 20 explosion on the Deepwater Horizon and the resulting oil spill, which continues to grow by the day.

In 2008, an Interior Department inspector general found that MMS personnel were literally in bed with oil industry officials. They also did drugs and accepted ski trips from oil company employees, under the guises of gaining “market intelligence.” Another report found that the service neglected to collect billions of dollars in royalty payments from oil and gas companies.

The service was derailed during the Bush administration, but despite its claims, the Obama folks haven’t put in back on track.

Ken Salazar, the head of the Interior Department, which oversees the Minerals Management Service, called himself the new “sheriff in town” and pledged to clean up the agency. He fired some employees, referred others for criminal prosecution and stopped the practice of allowing companies to make their royalty payments in oil rather than cash. This gave the veneer of a cleanup.

However, “long-serving lackeys of the oil industry” were left in charge of MMS, according to Rolling Stone. The magazine wrote of an agency director who served a cake decorated with “Drill baby, drill,” at a staff meeting shortly after the gulf disaster began.

Worse, this cavalier attitude carried over to regulations. The Bush administration did away with environmental studies before drilling permits were issued, a practice that continues largely unchanged today.

BP’s application for the Deepwater Horizon, submitted in the early days of Barack Obama’s presidency, said that a spill was unlikely and would have no adverse impact on coastal animals and wetlands. Its response plan was a cut-and-paste job that included references to walruses and a Japanese home shopping network website as a spill response resource, the magazine reported.

Its application was approved in less than a month.

Fixing such problems will take more than dividing the MMS into three entities, one euphemistically called the Bureau of Ocean Energy Management, Regulation and Enforcement, and appointing a new man to direct it, which the administration did Monday.

A Senate subcommittee that is investigating the service and its reorganization must focus on real solutions, not window dressing. The Senate Appropriations Subcommittee on Interior, which includes Sen. Susan Collins, is holding a hearing on the service today. Expect the main witness — Ken Salazar — to be on the hot seat, as he should be.

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