Watching Government MMS plays catch-up

With Patrick Crow
from Washington, D.C.

Minerals Management Service Director Cynthia Quarterman said last week two government shutdowns in 2 months and the threat of deep cuts in MMS funding have sent the U.S. agency and its customers reeling.

She said, "No sooner did MMS announce a series of innovations in 1995 to improve customer and stakeholder services through streamlined reporting and operating requirements, than Congress withheld funding for the agency. MMS was forced to close all but emergency operations.

"Industry was left pleading for authorizations to drill wells or make significant changes in wells, facilities, or pipelines. Royalty payments to states and Indians were delayed."

The International Association of Drilling Contractors estimates the 20 day shutdown in December and January idled 24 offshore rigs for periods ranging from 2 to 7 days at a cost of $20,000-100,000/day. IADC estimated losses to the offshore industry at $7.8 million in the Gulf of Mexico alone during this period.

Payments delayed

A skeleton crew of 12 MMS employees remained on the job to respond to situations involving life threatening situations or environmental problems and to deposit royalty revenues.

Quarterman said, "On Dec. 29, the day royalty disbursements to states and Indian tribes would ordinarily have been due, we were informed that royalty payments should be treated like other payments subject to a permanent appropriation, and additional personnel were brought in to distribute royalty revenues.

"However, payments to states and Indian allottees were delayed. MMS had to pay $67,000 in interest for that delay, through no fault of its own. Fortunately, we had worked far enough into December that we could process those payments without too many problems."

She said after President Clinton signed a continuing resolution Jan. 6 ending the 20 day shutdown, MMS Gulf of Mexico personnel worked through the weekend to issue approvals for 26 wells, of which nine were applications for permits to drill and 17 were for completion, workover, sidetrack, or abandonment.

MMS Gulf of Mexico personnel have processed about 350 of the 650 permit applications filed since mid-December, but 300 are pending. MMS's royalty management program office at Lakewood, Colo., remains more than a week behind in processing reports and payments filed since mid-December.

Backlog to persist

Clinton signed a continuing resolution Jan. 28, funding the Interior Department and other agencies through Mar. 15.

Quarterman said even if the White House and congressional leaders can resolve their budget impasse before then, it will take MMS months to work through its backlog.

She warned another shutdown could delay MMS efforts to issue deepwater royalty relief rules, prepare for Gulf of Mexico and offshore Alaska lease sales scheduled this year, and complete work on the new 5 year leasing program.