Watching Government: Funding BOEMRE

Nov. 29, 2010
The US Department of the Interior and the US oil and gas industry may disagree on recent actions by the Bureau of Ocean Energy Management, Regulation, and Enforcement—the former US Minerals Management Service, which was renamed and reorganized following the Apr. 20 Macondo well accident.

Nick Snow
Washington Editor

The US Department of the Interior and the US oil and gas industry may disagree on recent actions by the Bureau of Ocean Energy Management, Regulation, and Enforcement—the former US Minerals Management Service, which was renamed and reorganized following the Apr. 20 Macondo well accident.

DOI and industry agree on one major point, however: BOEMRE needs a decent budget to do its job.

It hasn't had one in the past, which partially explains why the agency's safety and regulatory expertise failed to keep pace with industry's technology. Deputy BOEMRE Director Walter D. Cruickshank was succinct as he testified before President Barack Obama's independent oil spill commission on Nov. 9: "We were starved."

BOEMRE and Interior Sec. Ken Salazar are working to develop a legislative strategy for the new Congress, Director Michael R. Bromwich told the commission. Encouraging approval of additional funding and resources for the agency is a central concern, he said. The Obama administration has submitted a $100 million amendment to BOEMRE's fiscal 2011 budget for this purpose, he added.

"Additional resources are absolutely critical to our ability to accomplish meaningful and lasting change in the way in which [DOI] manages the nation's offshore energy resources and provides effective oversight," Bromwich said.

Pressing needs

Eight days later, the American Petroleum Institute and five other oil and gas associations wrote US House and Senate appropriations leaders asking that more money be budgeted to BOEMRE to do more than simply hire additional inspectors.

"As a result of the new safety and environmental standards created for offshore drilling following the unprecedented accident in the Gulf of Mexico, it is imperative that BOEMRE is provided the necessary resources to review and process permits…and to maintain a vibrant [Outer Continental Shelf] leasing program," the letter said.

"The permitting of both shallow and deepwater exploration activities, including seismic testing, is proceeding at a slow pace, leading to less home-grown energy and US jobs," it added.

The associations, which also included the Independent Petroleum Association of America, National Ocean Industries Association, International Association of Drilling Contractors, American Exploration & Production Council, and US Oil & Gas Association, noted that what was then MMS collected $22 billion in royalties, rentals, and bonus bids during 2008.

"The industry is well aware that finding additional revenue may be difficult given current budget constraints. However, reallocating federal resources or directing a small percentage of future OCS lease sale revenue for use by BOEMRE may provide two additional options to fund staffing, training, and permit processing."

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