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Gulf oil spill: Is MMS so corrupt it must be abolished?

Lawmakers are looking at how to reform the Minerals Management Service (MMS), which oversees offshore drilling. Reports before and after the Gulf oil spill show it is deeply intertwined with Big Oil.

By Staff writer / May 26, 2010

Interior Secretary Ken Salazar testifies before the House Natural Resources Committee on Wednesday. The Gulf oil spill has prompted increased scrutiny of the Minerals Managment Service (MMS), the government agency tasked with regulating offshore oil drilling.



The Department of Interior's Minerals Management Service (MMS) is peopled by those who hold the strings on America's natural treasures and is courted by those who, like the Deepwater Horizon drillers, want to exploit those resources.

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Yet in the aftermath of the Deepwater Horizon accident, it is becoming apparent that the firewall that should exist between these two groups – the regulators and the regulated – is closer to a revolving door.

The Gulf oil spill has given fresh urgency to calls to reform the MMS, which has long been accused of having too cozy a relationship with Big Oil. But as the process of reform starts, new reports are revealing just how intertwined the MMS and Big Oil are – and how difficult it will be to separate one from the other.

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Sen. Jeanne Shaheen (D) of New Hampshire went so far as to suggest in a letter to Interior Secretary Ken Salazar Wednesday that the agency be abolished entirely and rebuilt from scratch.

Her exasperation is a response to findings like those of acting Interior Department Inspector General Mary Kendall, who released a report this week that said relationships between MMS and industry officials often date back to kindergarten. The relationships could create a situation where personal connections undermine the MMS's ability to impartially oversee the oil-drilling industry, she told the House Natural Resources Committee during a hearing Wednesday.

"While there's no single right answer to resolving concerns about the MMS, it's clear to me that you can't just focus on restructuring but … reforming the character and culture," she said.

Experts caution against making MMS too much of a scapegoat for the Gulf oil spill. It has not been directly implicated in the Deepwater Horizon disaster, and none of the people in the IG report had been involved with the Deepwater Horizon rig. Moreover, Secretary Salazar noted that the MMS had approved and inspected more than 30,000 wells since its creation in 1982 without a major incident.

Broader factors play into the wild west attitudes around oil exploration, ranging from the Bush administration's pro-oil policy to new Obama administration incentives for oil companies to hurry up their exploration of leased lots – the so-called "use it or lose it" policy.

Yet the MMS is uniquely situated for vilification and reform. It receives billions of dollars a year in royalties from the industry it is supposed to regulate. Employees of the MMS and Big Oil routinely switch sides. And the MMS relies on industry expertise for environmental impact and assessment data that go into approving drilling permits, according to officials.