Friday, May 14, 2010

Interior to split Minerals Management Service into two agencies

WASHINGTON - The U.S. Interior Department announced on May 11 its intent to split the Minerals Management Service into two divisions, one
focusing on gathering royalties from oil and gas companies and another focused on safety inspections.
Interior Secretary Ken Salazar made the announcement at 1 p.m. EDT.
The reorganization comes amid the vast Gulf Coast oil spill that has called into question the efficacy of the government's regulation.
The tiny agency currently plays dual roles, focusing on collecting money as well as on ensuring the safety of oil rigs. Some former employees have
said that amounts to a conflict-of-interest, as employees must focus on keeping oil revenue flowing while also focusing on safety.
A Wall Street Journal examination of the MMS's track record last week found several instances of the agency identifying potential safety problems
and then either not requiring follow-up or relying on the industry to craft a solution. In some cases, the industry didn't do its part.
The Journal also found that the safety record of U.S. offshore drilling compares unfavorably, in terms of deaths and serious accidents, to other
major oil-producing countries. Over the past five years, an offshore oil worker in the U.S. was four times more likely to be killed than a worker in European waters, and 23 percent more likely to sustain an injury, according to International Association of Drilling Contractors data, which
is adjusted for man-hours worked.
The U.K., home to one of the largest offshore-drilling industries in the world, has already adopted a regulatory structure similar to the one that the Obama administration is moving toward. In 1998, after a fire aboard a North Sea platform killed 167 people, the U.K. separated its offshore safety-oversight agency from the revenue-gathering side.

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