Energy

Splitting energy agency won’t solve the problem

Sarah Lee Contributor

It takes a back seat to larger, sexier stories, but Interior Secretary Ken Salazar’s statements about splitting the agency that handles components of offshore drilling in response to the Gulf Coast oil spill presents an interesting study in potential versus pattern.

The Minerals Management Service, the agency Salazar has proposed bisecting, has two (some say opposed) core services—safety, inspection, and regulation of oil rigs and companies; and overseeing the leases for drilling while collecting billions of dollars in oil royalties. Some of the justification for separating the two functions seems to be that there is an inherent conflict of interest within the agency—ultimately, they are asked to regulate and police an industry and then turn around and look to that same industry for payment.

The decision comes as a result of the Gulf Coast oil spill, a legitimate tragedy that claimed 11 lives, yet not quite the ecological disaster (yet) of the Exxon Valdez accident of 1989. It is, however, being used to justify Obama’s recent decision to suspend permitting of new well permits pending an investigation of what happened on the Deepwater Horizon rig as it drilled on behalf of British oil company BP. It is also being used as justification to split an agency critics say had shifted much of the regulatory and safety responsibility onto the oil industry over the last 10 years.

So, ostensibly, this represents an effort, backed by a legitimate tragedy, to decrease big bureaucratic offices into smaller, more efficient ones. Or does it?

Apparently, in order to split the agency into one that presents “no conflict, real or perceived,” according to Salazar, he will be asking for $29 million in new funding, to be used for greater regulatory powers of inspection and enforcement. He will also press for a longer period of time in which regulators can review oil-exploration plans, a move designed to appeal to, if not appease, environmental concerns.

More telling are Salazar’s words indicating that his decision is part of a broader “reform agenda.” Pay close attention to those words. He is not indicating that his efforts are an attempt to reform problems in the oil industry that may have led to the accident in the Gulf. Rather, he links the efforts to split the agency to a “reform agenda” that the American public has witnessed in several sectors since the election, to varying degrees of success, but almost always with a huge price tag attached.

Truthfully, the seemingly not-so-exciting news that the MMS might be split is actually a microcosm of a greater progressive agenda and what happens as a result will be very worth attention because it could fundamentally change the way oil companies interact with government agencies.
Ultimately, what’s most interesting in this case, and is nearly unprecedented in this administration’s attempts at reform, is that there is a potential for real reform here and real minimizing of the inefficient bureaucratic red-tape that, more often than not, leads to oversight problems.

However, as has been reported, this does not appear to be the direction things will go as the hearing exchange between the Coast Guard and an MMS regional supervisor clearly outlines.

“It’s my understanding that [the blowout preventer is] designed to industry standard and it’s manufactured by the industry, installed by the industry, with no government witnessing or oversight of the construction or installation. Is that correct?”

“That is correct,” replied Michael Saucier, an MMS field supervisor for the Gulf.
Had government been allowed some oversight here, at least as far as this exchange would have one believe, this accident may have been preventable. Another $29 million and a brand new autonomous federal agency should be just the thing to cap the well. Smaller is sometimes really bigger.

Sarah Lee is an Atlanta native and freelance writer living and working in Washington, D.C.