Alaska OCS shuttered by interior: BP Gulf accident delays Chukchi, Beaufort drilling.

• Author: Kalytiak, Tracy
• Position: OIL & GAS

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In 1982, U.S. Interior Secretary James Watt used a secretarial order to create the Minerals Management Service, consolidating all of the department's outer continental shelf (OCS) leasing responsibilities into one agency.

The order gave the MMS authority over assessing the nature, extent, recoverability and value of leasable minerals on the OCS.

The MMS collected more than $13 billion in revenue annually over the following 28 years, until a catastrophic oil spill in the Gulf of Mexico spotlighted conflicts between its revenue-gathering and regulatory functions.

The April 20 explosion and subsequent sinking of the Deepwater Horizon drilling platform in the Gulf of Mexico killed 11 people and resulted in an oil spill of massive, still-undetermined proportions. BP owns the well, Transocean owns the rig and Halliburton served as a contractor on the rig.

Despite three reports warning of difficulties associated with deep-water well control, the MMS last year granted BP's Deepwater Horizon drilling operation a "categorical exclusion" from all environmental reviews required by the National Environmental Policy Act (NEPA). The exclusion was one of hundreds MMS has granted each year to drilling operations in the Gulf.

MMS BROKEN UP

U.S. Interior Secretary Ken Salazar on May 19 officially broke the 1,700-employee MMS into three new agencies immediately prior to the release of a federal report revealing how MMS employees accepted hunting and fishing trips, college football and golf tournament jaunts, skeet-shooting invitations, meals and other perks from industry representatives in the Gulf region. An MMS inspector there even conducted four inspections of one oil company's platforms while in the process of negotiating and later accepting employment with that company.

"Of greatest concern to me is the environment in which these inspectors operate, particularly the ease with which they move between industry and government," Acting Inspector General Mary Kendall wrote in the report she submitted to Salazar on May 24.

Kendall noted she was encouraged by MMS's response to her report. She said MMS officials told her they would enhance ethics training for inspectors and establish a two-year waiting period to prevent conflicts of interest.

Salazar's secretarial order separated the MMS's revenue-collecting, enforcement and energy-development functions into three new structures.

* The Bureau of Ocean Energy Management will oversee...