Interior seeks more resources to oversee offshore oil and gas activities

Interior Secretary Ken Salazar on Wednesday said the department would seek an additional $100 million in budget authority in 2011 to bolster its ability to police oil and gas industry operations offshore.

"We are remaking a regulatory agency from the ground up," Salazar said in describing the Bureau of Ocean Energy Management, Regulation and Enforcement. BOEMRE was created to replace the now defunct Minerals Management Service following the Deepwater Horizon oil rig explosion in the Gulf of Mexico on April 20. The accident and subsequent spill killed 11 and released 4.9 million barrels of oil into the Gulf.

Salazar said the bureau is crafting its request for more resources in response to a report issued Wednesday by the Outer Continental Shelf Safety Oversight Board. Salazar created the board following the spill to recommend ways to strengthen the permitting process, inspections, regulatory enforcement and environmental stewardship.

BOEMRE Director Michael R. Bromwich also released the bureau's plan for implementing reforms the board recommended.

"We know there is no magic wand that will make the shadow of the past disappear, or that will magically usher in a new era for this agency," Bromwich wrote in a memorandum to Salazar released with the plan. Bromwich said various ongoing reviews of the failings of MMS prior to the April rig explosion threaten to overshadow the reforms BOEMRE is undertaking.

"It is critically important that as our reform efforts continue, the department and the outside world acknowledge those efforts and recognize the enormous transformation the agency is undergoing," he said.

In a teleconference with reporters and senior officials, Assistant Secretary for Land and Minerals Management Wilma Lewis said the board's recommendations should be considered a blueprint for ongoing reforms.

"Our goal is a culture of safety where protecting human life and preventing environmental disasters are the highest priorities, while making leasing and production safer," Lewis said.

Shortages of qualified engineers, inspectors and investigators present a major challenge for the bureau, Bromwich and others said. Offshore oil and gas development has increased 200 percent since the early 1980s, while the number of federal oversight personnel has decreased nearly 40 percent, the report noted.

The imbalance between government and industry resources has put enormous pressure on inspectors and other staff. While the oil and gas industry works around-the-clock, BOEMRE district offices in the Gulf of Mexico task a single engineer with handling industry requests after business hours, and those engineers are handicapped because they cannot access government databases outside their offices for security reasons. In addition, a lack of standardization among districts leads energy operators to sometimes "shop around" for regulatory approval, the report said.

The report found that 90 percent of inspectors surveyed said more unannounced inspections of industry operations were required, yet they were rarely performed. In some cases, Coast Guard security restrictions inhibit surprise inspections. In other cases, the board found documentation indicating "special notification arrangements" between BOEMRE and certain companies.

In total, the board made 59 recommendations for improving oversight.

"I embrace the recommendations and we'll move forward with every ounce of energy we have to implement them," Salazar said.

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