Minerals Management Service – what went wrong

Feature story in today’s Wash. Post about the MMS. How the Minerals Management Service’s partnership with industry led to failure; Wash. Post, August 24.

The story of how a little-known federal agency became an extension of the industry it oversaw spans three decades and four presidents. It began in 1982 with a major change in the way the nation managed its natural resources, picked up pace with initiatives to streamline bureaucracy in the Clinton and George W. Bush administrations, and ended after the April 20 BP blowout with the Obama administration’s abrupt decision to undo the partnership.

Few in positions of power in Washington paid close attention to MMS and the hard-to-understand world it was charged with regulating. When they did, it was often to pressure the agency to increase the money it earned from leases it sold and the production
that followed. Over its 28-year history, MMS grew to become one the government’s largest revenue collectors, after the Internal Revenue Service.

Senior Interior officials who have spent the past four months trying to manage the ecological and public relations disaster in the gulf said they have run out patience with the [BP] partnership. “That path didn’t work, and the public got let down in an enormous way,” Strickland says. “There is now agreement – whether everyone in the industry agrees or not, because it’s coming, it’s happening – we need more oversight, more regulation.”

Minerals Management Service – Gulf office scrutinized

An in-depth article about the peculiar culture in LA regarding oil drilling and the man who dominated the Gulf Office of the Mineral Management Service. In addition to showing the failings of the MMS, the article also notes a huge failure by Congress — badly written legislation that resulted in a loss of federal income amounting to $60B.  Plenty of candidates to blame for the recent disaster!

Minerals Service Had a Mandate to Produce Results, NY Times, August 8.

In some states, drilling has been seen as a threat to native cultures. In Cajun country, it opened a door to the middle class — even as a typical offshore schedule (two weeks on, two weeks off) let workers still fish, hunt and farm.

“The industry didn’t destroy the old culture — it saved it,” said Diane Austin, an anthropologist at the University of Arizona. What it did largely destroy, through cash and cunning, was significant political opposition. Local groups have typically been weak and small — no match for an industry that Mr. Oynes calls the “900-pound gorilla.”

Oil Spill Disaster-More Conflicts in Regulatory System

David Dykes — the federal regulator now leading his agency’s investigation of the BP oil spill — has spent five years as a senior investigator and office chief enforcing oil industry safety in the Gulf of Mexico. For much of that time, his brother was a top executive at an energy company with significant activities under Dykes’s purview. But David Dykes did not formally recuse himself from matters involving his brother’s company. No rule required him to do so. Unlike many federal agencies that make employees distance themselves from matters involving friends, relatives or former bosses, the nation’s chief oil regulatory agency had no such policy.
Now, in the wake of the BP disaster, Congress is pressing the agency formerly called the U.S. Minerals Management Service to clamp down on potential conflicts of interest. The case of David and Rodney Dykes highlights the challenges of the task. The oil industry of the Gulf Coast is an insular world in which rig foremen and the federal inspectors charged with regulating them sometimes work side by side, or grew up in the same towns and even homes.

Also in the news this weekend–BP’s use of dispersants. From the LA Times on Saturday, July 31 read Gulf oil spill: Did Coast Guard allow excessive toxic dispersants?

From the article:

Documents released by a congressional committee Saturday show that the U.S. Coast Guard appeared to flout a May 25 Obama administration directive that sought to limit the use of chemical dispersants on the surface of the Gulf of Mexico oil spill to “rare cases.”

“BP carpet-bombed the ocean with these chemicals, and the Coast Guard allowed them to do it,” said Rep. Edward J. Markey (D-Mass.), chairman of the House energy and environment subcommittee. “After we discovered how toxic these chemicals really are, they had no business being spread across the gulf in this manner.”

Oil Spill Update – June 18

Latest news this am:

Obama’s spill recovery chief will be part-time.  Yesterday, I noted his lack of experience with long-term recovery from disaster and today we learn he will keep his existing, demanding job. This appointment does not make good sense, in my opinion.

President Barack Obama’s point man charting a new future for the oil-poisoned Gulf Coast  will do the job part-time. Some environmentalists said the job demands someone’s full attention.

His job is no less than rebuilding a region that was still suffering from Hurricane Katrina and beset by decades of environmental problems even before the largest oil spill in U.S. history.

Why Living Wills Fail. NYT June 17.  In my view, this articles points out one more reason not to use template plans for emergency response.

At the Tuesday hearing of the House Subcommittee on Energy and Environment,  the committee posted  the Gulf of Mexico spill-response plans of five companies (BP, Chevron, ConocoPhillips, Exxon Mobil and Shell) “… that demonstrated striking, peculiar and disconcerting similarities.

… it turns out that all the plans were written by the same subcontractor. All contain some goofy details — including how to protect walruses, sea lions and seals, which don’t actually live in the Gulf. More worrying, given the apparent and complete failure of the BP response at Deepwater Horizon, it appears that none of the major oil companies are more (or less) prepared for such events. [The firm was identified as The Response Group.]

President Obama is now experiencing a form of backlash against years of regulatory capture — and against the pathetic nature of “living wills” for failed deepwater oil wells. If he is able to draw any more general lessons — and this remains far from clear — the president would be well advised to reflect on other activities that are simply so dangerous that our obvious and repeated regulatory weaknesses mean we would be better off simply prohibiting those activities (e.g., some kinds of drilling, or having big banks).

BP oil spill: MMS shortcomings include ‘dearth of regulations’. According to the Christian Science Monitor, June 17,  a new report got to the core of problems at the Minerals Management Agency.

The federal agency charged with overseeing the offshore oil and gas industry was ill-prepared to do its job because of a severe shortage of inspectors, a “dearth of regulations,” and a “completely backwards” approach to investigating spills and accidents.
Mary Kendall, acting inspector general for the Interior Department, shown in this May 26 photo, testifying about the BP oil spill in the Gulf of Mexico at the House Natural Resources Committee hearing.