Stiffer Penalties Sought for Oil Drilling, U.S. Says
The U.S. offshore-drilling regulator should consider stiffer penalties for companies that break safety rules, part of a suite of proposals from a review board formed in response to the BP Plc oil spill.
The more than 50 recommendations are meant to tighten enforcement of safety and environmental rules at an agency faulted for ethical lapses, Interior Secretary Kenneth Salazar said today. Many of the steps are being adopted, said Michael Bromwich, director of the Bureau of Ocean Energy Management, the unit that oversees offshore drilling.
Oversight of drilling is being scrutinized by Congress after BP’s Macondo well blew out in the Gulf of Mexico April 20, killing 11 workers, triggering the worst U.S. oil spill and halting U.S. deep-water oil exploration. The disaster prompted Salazar to disband the Minerals Management Service, an agency whose workers had received sex and gifts from industry contacts under their charge, government watchdogs said.
“We are remaking a regulatory agency from the ground up,” Salazar said today on a conference call with reporters. “For three decades it was a police department that was told to do its jobs without the equipment, staff or training needed.”
BP today released its internal investigation that faults the company’s engineers and said contractors Transocean Ltd., owner of the Deepwater Horizon rig, and Halliburton Co., which prepared the cement to plug the well, shared the blame.
Deep-Water Ban
President Barack Obama vowed to end a “cozy” relationship between regulators and the oil industry after the BP spill, and temporarily halted deep-water drilling while safety and environmental safeguards are reviewed. The suspension, scheduled to end Nov. 30, might be lifted before all the recommendations are in place, Bromwich said on the call.
The review-board proposals are aimed at removing potential conflicts. In May, the Interior Department inspector general said employees in the Lake Charles, Louisiana, office, some of whom were assigned to inspect offshore platforms, accepted gifts from oil and gas companies. MMS, responsible for promoting drilling and enforcing safety rules, was replaced by three agencies in an overhaul that Salazar said would improve oversight and remove potential conflicts.
The agency watchdog’s investigation followed a 2008 probe that found illegal drug use and inappropriate sexual relationships between staff and industry representatives at an agency office in Lakewood, Colorado.
Conflicts Policy
Last month, bureau employees were barred for the first time from regulating a company where a friend or relative works.
Since the Macondo well blowout, the bureau has adopted safety rules and will release additional regulations at the end of September.
The report also recommends adding more inspectors with better training and re-evaluating penalties to deter violators. Salazar said he has requested $100 million from Congress to add inspectors and implement the proposed reforms.
“It’s obvious to us that we need additional resources,” Salazar said. “When you have 4,000 wells and facilities in the Gulf of Mexico and you have 52 inspectors there’s no way that they can get the job done.”
To contact the reporter on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net
Rate this Page