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BP Spill: Ripples

A plan to split offshore oil agency

Marketplace Staff May 11, 2010
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BP Spill: Ripples

A plan to split offshore oil agency

Marketplace Staff May 11, 2010
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TEXT OF STORY

Kai Ryssdal: The oil slick in the Gulf of Mexico spilled into the halls of Congress today. Executives from BP, and its drilling rig partners, Transocean and Halliburton, each tried to explain to the Senate Energy Committee how the whole thing wasn’t their fault. Fingers were also pointed at the agency that regulates offshore drilling in this country — the Minerals Management Service. It’s been accused of letting the oil industry set safety rules. So today, Interior Secretary Ken Salazar said it is time for a change.

From Washington, Brett Neely has more.


BRETT NEELY: The Minerals Management Service sets offshore safety standards. But it’s also a cash cow that brings in $13 billion a year from oil drilling leases.

Interior Secretary Ken Salazar’s proposal would split the agency in two, following a regulatory model used by Norway and Australia. He said at a press conference today that one part would handle oil leases, the other safety.

KEN SALAZAR: So that there is no conflict, real or perceived.

In the past, safety and environmental regulations took second place to serving industry, says Mandy Smithberger. She’s an investigator with the Project on Government Oversight.

MANDY SMITHBERGER: I would say that the Minerals Management Service is probably one of the agencies of government that is most captured by the industry that it’s supposed to be regulating.

A 2008 Interior Department investigation said the agency had a culture of ethical failure. The report said some employees used drugs and had sexual relationships with energy industry representatives. And it said the agency lacked the money or staff to be effective.

That’s one thing Salazar plans to beef up. But the big question is whether splitting MMS apart will be enough.

HOLLY DOREMUS: I’m skeptical that will solve the problem.

Holly Doremus is an environmental law professor at U.C. Berkeley. She says this model will only work if you really clean the regulatory house.

DOREMUS: You need to get people from a different orientation to start with, or you need some serious leadership from the top.

Salazar said today’s proposed reforms for MMS are just the first of many.

In Washington, I’m Brett Neely for Marketplace.

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