Sex, Drugs, and Mineral Regulation

Posted: Dec 15, 2019

For years, Mineral Management Service (“MMS”) has been busy cozying up to the Oil and Gas Industry. In 2008, the Inspector General of the Interior Department released a report detailing serious ethics violations at MMS. It reported that certain employees in the Denver and Washington offices used, and even bought, cocaine on the job, took presents from Industry representatives (some totaling upwards of $9000 over four years), including tickets to football and baseball games, PGA tour events, and Colorado ski trips. More troubling is that these employees also rigged contracts, engaged in illegal moonlighting, leaked confidential information about one company to others, and allowed very favorable amendments to oil and gas bids after they had been submitted.

And yet, the most disturbing thing about this is not the drug use, the conflicts of interests, the gift giving, or the flagrant contract rigging, but the fact that some of these employees were transferred to other MMS offices and were not fired for their misconduct. Is it any surprise that inappropriate and unethical behavior at MMS continued?

The effects of this cozy relationship were on display when, last month, the Deepwater Horizon rig exploded in the Gulf of Mexico. This rig was under MMS's direct regulatory supervision. MMS's “regulation,” however, permitted the Deepwater Horizon rig to drill without the necessary environmental permits or oversight. Its “regulation” also permitted the rig to operate without safety documentation. In fact, MMS's past and current “regulation” has weakened safety on off-shore rigs so much that companies themselves now decide which safety requirements they'd like to follow. MMS regulation seems to consist of bending over backwards for Industry, while ignoring public safety and environmental health.

We, the public, have allowed this to happen. There was no outcry when MMS officials were reassigned after the party was busted in 2008. There was no outcry when MMS approved three lease sales, 103 seismic blasting projects, and 346 drilling plans in 2009 without proper environmental review. Apart from a few lawsuits filed to force MMS to comply with Federal Law, MMS’s laughable attempts at regulation have largely flown under the radar. That is until the Deepwater Horizon rig exploded.

In response to the Deepwater Horizon rig explosion, Department of the Interior Secretary, Ken Salazar, has announced a restructuring of MMS. No word yet on whether the employees responsible for either these oversights or for creating this culture of misconduct will continue to work for the new MMS. However, if they do remain with MMS, reorganization will be a failure.

To truly fulfill its regulatory mission, MMS must undergo a fundamental shift in its attitude towards Industry. MMS must stop being Industry’s bedfellow, and be its partner. It must craft effective regulations that ensure energy security while also preserving environmental and public health. Regulations that allow for favorable oil and gas contracts unfairly transfer wealth from the public to Industry in the form of lower tax revenue. Lax safety regulations can lead to on the job injuries or worse, catastrophic explosions and unnecessary deaths, as in the case of the Deepwater Horizon rig.

The behavior of MMS officials is in direct conflict with their mission. It is unethical and destroys the public’s trust and confidence in government. It is time for MMS to shape up, and it is time for us to demand a better, fairer, and truly ethical regulatory scheme. I applaud Secretary Salazar's reorganization plan, now it's up to us to ensure its success.

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