Interior secretary names 2 to oversee plan to split up agency that oversees offshore drilling

Salazar names 2 to oversee agency restructuring

WASHINGTON — Interior Secretary Ken Salazar said Thursday he has named two high-level officials to oversee a restructuring of an agency that oversees offshore drilling.

Salazar previously said he wants to split the Minerals Management Service in two. One agency would be charged with inspecting oil rigs, investigating oil companies and enforcing safety regulations, while the other would oversee leases for drilling and collection of billions of dollars in royalties.

Also Thursday, all six West Coast senators proposed a permanent ban on drilling off the Pacific coast. The move by the Democratic lawmakers from California, Oregon and Washington state was largely symbolic because there is no federal drilling on the West Coast and no plans to open the coast to drilling. California Gov. Arnold Schwarzenegger, a Republican, withdrew his support for new offshore drilling in state waters shortly after the Gulf Coast incident.

The Senate, meanwhile, defeated a move by three drilling opponents to raise liability limits for oil spills from $75 million to $10 billion. Democratic Sens. Frank Lautenberg and Robert Menendez of New Jersey and Bill Nelson of Florida said they would try again after their proposal was blocked by Sen. Lisa Murkowski, R-Alaska, a drilling supporter.

Sen. Patty Murray, D-Wash., said she was disappointed that Senate Republicans “once again put Big Oil profits” over taxpayer interests. “This is a simple issue of fairness: If an oil company causes a spill, they should have to pay to clean it up,” Murray said.

The Obama administration has said it would like to see the liability limit increased, but has not set a specific figure.

Salazar’s plan to split the agency that oversees offshore oil drilling would separate the agency’s two core responsibilities, which critics say are diametrically opposed — making money off the industry, while also cracking down on it in ways that may affect the industry’s bottom line.

Rhea Suh, assistant Interior Secretary for policy, management and budget, and Chris Henderson, a senior adviser to Salazar, will oversee the MMS restructuring.

Salazar has said the plan — part of the Obama administration’s response to the massive Gulf Coast oil spill — will ensure there is no conflict, “real or perceived,” regarding the agency’s functions.

Sen. Dianne Feinstein, D-Calif., chairwoman of the Senate Appropriations Interior subcommittee, said Thursday she will convene a hearing on the restructuring plan.

“I’ve come to realize that the Minerals Management Service is a relatively weak agency that lacks appropriate enforcement authority and has an intrinsic conflict of interest in that it collects revenue from an industry it is tasked with regulating,” Feinstein said.

The Minerals Management Service, an arm of the Interior Department, oversees the nation’s natural gas, oil and other mineral resources. The 1,700-employee agency collects and distributes more than $13 billion per year in revenues from federal leases for offshore and onshore drilling. It also enforces laws and regulations that apply to drilling operations.

Some critics have said the two roles conflict and one reason the agency has long been accused of being too cozy with the oil and natural gas industry. There is growing bipartisan sentiment in Congress in favor of toughening oversight of agency. At a minimum, lawmakers want to ensure that the agency’s director is a Senate-confirmed position.

The Senate hearing will be an opportunity to determine whether the proposed reorganization is likely to result in greater environmental and safety oversight of offshore drilling — and whether it can help prevent ethical misconduct by agency employees, Feinstein said.

“The spill in the Gulf only serves to demonstrate that oil drilling in critical places off of our coastlines carries with it real risk,” she said. “It seems to me that we need to have some very clear standards and limits in place before drilling resumes and any new rigs are able to be placed offshore. Congress and the administration have a responsibility to ensure these spills never again happen.”

Salazar is scheduled to appear Tuesday before the Senate Energy and Natural Resources Committee, the first time he has appeared before Congress since the April 20 explosion and subsequent spill, which has dumped an estimated 4 million gallons of oil into the Gulf of Mexico.