Obama To Overhaul Offshore Drilling Agency

The Interior Department is proposing to split the Minerals Management Service in two. One agency would inspect oil rigs, investigate oil companies and enforce safety regulations. The other would oversee leases for drilling and collection of billions of dollars in royalties.

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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

We begin this hour with news of the massive oil spill in the Gulf of Mexico, now moving closer to the mouth of the Mississippi. As BP struggles to shut down the underwater gusher, authorities are trying to understand what caused the explosion on the Deepwater Horizon oil rig.

On Capitol Hill today, BP and Transocean, which owns the rig, pointed fingers at each other. In a moment we'll head to New Orleans and a public hearing into the accident.

But, first, NPR's Elizabeth Shogren reports that the agency that oversees offshore oil drilling is about to be carved in two.

ELIZABETH SHOGREN: The Minerals Management Agency collects more money for the government than any other agency, except the Treasury Department. It sells leases for oil and gas production and collects billions of dollars in royalties each year. Until now, it was also the chief cop of the oil and gas industry. But Interior Secretary Ken Salazar is changing that.

Secretary KEN SALAZAR (Department of Interior): So that there is no conflict, real or perceived.

SHOGREN: The new office will be in charge of investigating problems and enforcing laws and regulations.

Sec. SALAZAR: And we will ensure the American people that they have a strong and independent organization holding energy companies accountable and in compliance with the law of the land.

SHOGREN: Since the Deepwater Horizon well exploded, there have been lots of questions about whether the Minerals Management Service was doing its job. For instance, the agency gave BP what's called a categorical exclusion before it drilled the Deepwater Horizon well.

Mr. BILL SNAPE (Chief Counsel, Center for Biological Diversity): Which means there's no public review, no scientific analysis, no discussion of alternatives. It's literally a rubber stamp process.

SHOGREN: Bill Snape is the chief counsel for the Center for Biological Diversity, an environmental group. The agency has continued to give out these categorical exclusions, even since the April 20 accident. Snape says the agency has a long history of being too cozy with industry.

A report by the Interior Department's own inspector general two years ago found that agency officials were regularly accepting gifts from industry executives and engaging in sex, drugs and drinking with them.

Salazar says he's been limited by the law in what changes he can make. For instance, the agency has only 30 days to review a request to explore on an existing lease sale. Today, Salazar asked Congress to extend that to 90 days.

Sec. SALAZAR: There is no way that any agency can frankly do an adequate environmental assessment within a 30-day time frame.

SHOGREN: Salazar says the industry should expect more reforms as government learns more lessons from what went wrong with the Deepwater Horizon.

Elizabeth Shogren, NPR News, Washington.

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