Can a Failed Agency be Trusted to Oversee Oil Industry?

Saturday, September 12, 2009

Secretary of the Interior Ken Salazar wants to revamp the nation’s oil-and-gas royalty system to encourage more efficient drilling for fossil fuels on federal lands. The idea makes sense, but the problem lies in its execution—or rather, who will be executing it. The Minerals Management Service is responsible for overseeing the collection of royalties from oil companies that extract petroleum and natural gas from federal tracts—a job that the agency bungled in the past, thanks to a mistake during the Clinton administration and a Bush administration that was overly friendly to the oil and gas industry, costing the federal government large sums of money. 

In September 2008, a report by the Department of the Interior’s inspector general accused the agency of being infected with “a culture of ethical failure.” Another IG report referred to “a culture of substance abuse and promiscuity” in which agency officials “frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.”
“Unfortunately, the Minerals Management Service (MMS) has consistently struggled to properly oversee these leases,” wrote Mandy Smithberger of the Project on Government Oversight. Smithberger points out the last time MMS tried to implement a variable royalty rate, dealing with drilling rights in the Gulf of Mexico, the government lost out on $53 billion that wasn’t collected from oil companies.
-Noel Brinkerhoff, David Wallechinsky
Sex, Drug Use and Graft Cited in Interior Department (by Charlei Savage, New York Times)
Out of Sight, Under Fire Over Leases (by Edmund L. Andres, New York Times)
Minerals Management Service (AllGov-Controversies)


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