Salazar, Bromwich pledge real, but careful, changes at BOE

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, June 25 -- Changes at what used to be the US Minerals Management Service will be more than cosmetic, the agency’s new director and US Interior Sec. Ken Salazar told the US Senate Energy and Natural Resources Committee on June 24. But reforms, while aggressive, also won’t be rash, they added.

Emphasizing that he has only been director of what is now the US Bureau of Ocean Energy Management, Regulation, and Enforcement (BOE) since June 21, Michael R. Bromwich said he nevertheless expects to proceed on three fronts initially. He said he plans to examine the agency’s proposed reorganization, increase its ability to police itself (including conducting internal audits), and increase its capacity to respond quickly to allegations.

“Just because there have been problems with this agency doesn’t mean I’m going to order collective beheadings,” Bromwich told the committee. “There are many employees within BOE who are working hard with a high sense of ethics.”

He and Salazar testified as the committee considered S. 3516, a bill cosponsored by chairman Jeff Bingaman (D-NM) and ranking minority member Lisa Murkowski (R-Alas.), which would reform US Outer Continental Shelf management and leasing policies; authorize periodic reviews of minimum bond amounts, royalty rates, and fiscal systems; and enact employee training and other additional requirements for deepwater wells.

The bill also would increase sanctions on poor operators, including higher civil and criminal penalties, and impose an inspection fee on industry participants to pay more the hiring and training of more inspectors. It also would provide funding for high-priority research, including well control and spill response, and an independent science advisory board outside the agency to provide oversight.

Resources, principles
“Congress should create organizational resources and a set of principles and requirements that will have safety, environmental protection, and innovation at its core,” Bingaman said in his opening statement. “We should require that both industry and agency employees have the expertise, experience, and commitment to quality that is necessary to handle the complex issues involved. If we do this right, it is my hope that we can see tangible results on all fronts and a shift away from the cascade of failures that led to the Deepwater Horizon accident and toward work of the highest quality.”

Salazar said, “This legislation should have come long ago. An agency with this level of responsibility deserves a higher standing.” But two other members of the committee and one nonmember, Scott Brown (R-Mass.), offered their own bills addressing other issues in more detail which the committee also plans to consider at an expected markup in another week.

Similar legislation emerged on the other side of the Capitol as US House Natural Resources Committee Chairman Nick J. Rahall (D-W.Va.) announced on June 24 that he is reintroducing his bill to reform DOI’s federal offshore resources management agency with additional provisions in response to the gulf well blowout and spill. He said the committee and its subcommittees have held five hearings on the matter, and plans to hold a hearing on his revised bill on June 30.

“Just as the disaster at the Massey Upper Big Branch Mine in West Virginia does not signal the end of coal mining in the United States, the Deepwater Horizon incident does not signal the end of oil and gas drilling off America's coasts,” said Rahall. “The committee's investigation has, however, made it abundantly clear that the incident is a game changer in the way we manage America's offshore energy resources.”

Within the Senate committee, meanwhile, members said they would demand other reforms. Robert Menendez (D-NJ) said that so-called revolving door provisions for agency directors are weak. Ronald L. Wyden (D-Ore.) agreed. “You’re off to a good start with your changes in the agency’s structure, but I think we need to change the ground rules,” he told Salazar. “I want to see strict limits on employees going to work for organizations they used to regulate.”

Salazar replied, “We need a revolving door ban, probably for 2 years. It may need to be a lifetime ban, depending on an employee’s level at the agency.” Changes at BOE and other DOI agencies will be genuine, he said, adding, “I have no interest in cosmetic changes. The people I have brought in will help me get this done.”

Contact Nick Snow at nicks@pennwell.com.