MMS blasted for lax offshore drilling scrutiny

McClatchy NewspapersJune 17, 2010 

WASHINGTON — The Minerals Management Service, the beleaguered regulator caught in the crosshairs over its faulty scrutiny of BP's runaway oil well in the Gulf of Mexico, has been lax in its inspections of deep-sea drilling, an independent watchdog said Thursday.

Mary Kendall, the Interior Department's acting inspector general, told a congressional committee that the MMS has been historically lenient on enforcing regulations, has an undertrained staff and has a "dearth" of regulations on how to conduct a post-incident investigation. The MMS is part of the Interior Department.

Last November, 19 MMS employees were disciplined for unethical behavior, including receiving gifts from and engaging in drug use and illicit sex with employees of the oil companies they regulated. These gifts included golf outings, drinks, and meals.

Kendall's criticisms come after another house hearing on Tuesday where four top oil companies said BP wasn't drilling on the Deepwater Horizon in accordance with industry norms and ensuing speculation that the MMS isn't effectively overseeing and inspecting the drilling of oil on federally owned lands.

"In the operations and safety arena, we question whether the civil penalty regulations are tied appropriately to the seriousness of the violation and the threat to human safety, property and the environment," Kendall said.

The MMS is responsible for overseeing the government's royalties and making sure oil companies pay for drilling in those royalties.

Kendall also criticized the MMS for not creating regulations to deal with evolving technology and for lacking influence over the oil industry.

The IG also said that the MMS relies too heavily on oil companies "to document and accurately report on operations, production and royalties." Kendall said she's launched an investigation of those practices in the wake of the explosion of the Deepwater Horizon well and the subsequent spill.

Kendall criticized the MMS for having only five paragraphs in its regulations on how to investigate such an incident. She said the MMS investigation of the Deepwater Horizon spill is required to follow Coast Guard regulations, which are "completely backwards".

"MMS inspectors, at least in the Gulf of Mexico region, operate relatively independently, with little direction as to what must be inspected, or how," Kendall said.

These inspectors are guided how to deal with non-compliance primarily by a handbook written by the operators they are inspecting.

While the MMS has 10 inspectors for the 23 facilities in the Pacific Ocean, it has only approximately 60 inspectors for the nearly 4,000 facilities in the Gulf.

Additionally, Kendall said that the MMS training program, developed between 1984 is "out of date", resulting in employees conducting faulty inspections.

Kendall said the Office of the Inspector General is continuing to identify holes in the MMS in order to improve its effectiveness of underwater inspections.

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McClatchy Newspapers 2010

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