What now for what used to be the US Minerals Management Service? Even before the Macondo blowout put its credibility in question, the agency was under siege. Questions about the MMS—now the tripartite Bureau of Ocean Energy Management, Regulation, and Enforcement—didn't start with the Gulf of Mexico tragedy. They can be said to have begun with a trumped-up controversy over price caps on royalty relief in deepwater leases issued in 1996-2000.
That controversy turned MMS into a political bull's-eye. It began with disclosure in 2006 that deepwater leases issued in 1998 and 1999 didn't provide for the reinstatement of royalty when oil and gas prices rose above certain limits. The omissions, apparently resulting from miscommunication among MMS officials, became a scandal. Inevitably, oil companies fully compliant with law and lease terms were treated as scoundrels.
'Bad actors'
Many lawmakers even wanted to withhold new acreage from firms reasonably opposed to the insertion of price thresholds into existing leases. When officials made clear they wanted instead to renegotiate with oil firms, Rep. Ed Markey (D-Mass.) griped, "This is simply trying to continue to work with bad actors." To some politicians, the integrity of contracts yields to any chance to berate oil companies and the other party's officials.
Since then, courts have determined that Interior lacked authority to write price thresholds into deepwater leases issued during 1996-2000. So the threshold-free leases that brought discredit to MMS turned out to have been the legal ones.
While the legal question worked its way through the judiciary, though, Markey and his colleagues were blistering MMS officials in hearings and the press. Then an inspector general's investigation found instances in which MMS functionaries accepted gifts from and had unethical relationships with oil company workers. "The conduct of a few has cast a shadow on an entire bureau," the 2008 IG report said in a noble but futile reach for perspective. For political sharks, MMS was raw meat. Its credibility and inescapable links to the oil industry were targets of opportunity.
To be sure, MMS was hardly blameless. For reasons including but not limited to the Macondo accident, repairs are essential. In June 17 testimony before the House Natural Resource Committee's Subcommittee on Energy and Mineral Resources, Frank Rusco of the Government Accountability Office listed a range of problems his agency has found at MMS and its onshore counterpart, the Bureau of Land Management. Large among them is difficulty hiring, training, and retaining technical workers.
One data set from Rusco's written testimony deserves close analysis. It covers turnover rates for inspectors at Offshore Energy and Minerals Management (OEMM), the MMS unit responsible for overseeing oil and gas activities. Adequacy of that oversight has come under doubt since the Macondo event.
The data cover 2004-08, during which the number of inspectors at OEMM's four district offices varied between 42 and 44. The turnover rate—the number of inspectors leaving position divided by the total number of inspectors in position—was 6.8% in 2004 and 4.3% in 2005. In 2006 the rate rose to 9.1%. In 2007 it rose again to 11.6% before jumping to 19% in 2008.
Coincidence?
Employees leave jobs for many reasons, of course. Maybe it's just a coincidence that turnover jumped while MMS bosses and the agency itself were being smeared in Congress and the media. But pressure on bosses becomes pressure on workers and affects performance. In 2006-08, MMS cannot have been a pleasant place in which to work. Conditions cannot have improved when Ken Salazar took charge of Interior describing MMS at every opportunity as a wholesale mess created by the previous administration.
Yes, MMS has problems and needs reform. But a viciously polarized political climate has distorted those problems in the past. If it continues to do so, if the three offices of the reconstituted bureau continue to be treated as levers of political opportunism rather than tools of safe work and honest finance, solutions will be illusory. They even might be dangerous.
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