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MMS Faulted Over Deepwater Horizon Oil Spill Probe

Jun 17, 2010 | Parker Waichman LLP

The Minerals Management Service (MMS), the regulatory agency charged with policing offshore oil drilling, is facing criticism over its investigation of the Deepwater Horizon oil spill. According to Reuters, Mary Kendall, the Interior Department’s inspector general, will tell a Congressional panel today that MMS is conducting its probe in a “completely backwards” manner.

According to Kendall, MMS has only five paragraphs of regulations covering accident investigations. As a result, its joint investigation with the U.S. Coast Guard is relying on the Coast Guard’s regulations, which Kendall says are not adequate.

In testimony she will deliver at a Hearing of the House Natural Resources Committee today, Kendall will assert that the Coast Guard regulations are “are comprehensive, but in my view, completely backwards, gathering evidence via public hearing, rather than developing evidence to culminate in a public forum.”

According to The Washington Post, Kendall will also call for the imposition of ethics rules on oil and gas companies that do business with the federal government.

Last month, Kendall issued a report that found that staff at MMS in Louisiana accepted tickets to sports events, lunches and other gifts from oil and gas companies. According to the report, individuals involved in the fraternizing and gift exchange — both government and industry — often knew one another since childhood. In a letter to Interior Secretary Ken Salazar, Kendall said their relationships took precedence over their jobs.

Her report also expressed concern at the ease with which minerals agency employees moved between industry and government.

“Perhaps it is time to impose some ethics requirements on companies doing business with the government,” Kendall says in the prepared testimony she will give today.

Finally, her testimony will also address staffing at MMS. According to Kendall’s MMS inspectors are underpaid and inadequately trained, and oversee too many rigs. Kendall’s testimony will note that 60 MMS inspectors oversee 4,000 facilities in the Gulf of Mexico, while the Pacific Coast has 10 inspectors for 23 facilities, the Post said.

In addition to regulating offshore drilling, MMS is also charged with collecting royalties from companies that produce petroleum in the outer continental shelf. Following the Deepwater Horizon oil spill, as well as criticism that its dual mission created a conflict of interest, the Obama administration announced plans to break up MMS and separate those functions.

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