* Separating Interior agency to end conflict of interest
* White House to seek $29 million for more inspections
* 30-day limit to issue drill permits would go to 90 days
(adds comments from Interior Secretary, lawmaker)
By Tom Doggett
WASHINGTON, May 11 In response to the BP (BP.L)
oil spill, U.S. Interior Secretary Ken Salazar said on Tuesday
that the federal agency that oversees offshore drilling will be
split to separate the collection of oil royalties from safety
The Minerals Management Service currently carries out both
roles, drawing criticism from some U.S. lawmakers and
environmental groups that it is a conflict of interest for one
agency to be responsible for regulating the safety of offshore
oil production while also being charged with keeping the oil
flowing so the government can collect royalties.
"The job of ensuring energy companies are following the law
and protecting the safety of their workers and the environment
is a big one, and should be independent from other missions of
the agency," Salazar said.
"We will responsibly and thoughtfully move to establish
independence and separation for this critical mission so that
the American people know they have a strong and independent
organization holding energy companies accountable and in
compliance with the law of the land," Salazar said.
The conflict with MMS' dual roles was highlighted with the
explosion of the Deepwater Horizon drilling rig last month that
killed 11 workers and set off what is likely to become the
biggest oil spill in U.S. history.
Senator Jeff Bingaman, the chairman of the Senate Energy
and Natural Resources Committee, said on Tuesday at a hearing
on the accident that regulators were partly at fault.
"Given this disaster in the Gulf, one has to ask whether
leasing and safety policing are like oil and water and simply
do not mix," said Representatives Nick Rahall, chairman of the
House Natural Resources Committee, who sponsored legislation to
reform the MMS.
Salazar said he does not need congressional approval to
split up the responsibilities of the MMS and he can implement
There is no timeline for when this will happen, but a
department spokesman said it would likely take place after the
government's investigation of the rig accident is over.
As part of the MMS overhaul, the White House will ask
Congress for an additional $29 million to pay for more
inspections of offshore platforms and for a thorough review of
procedures. The agency's current inspection budget is $23
Salazar said the administration will also ask Congress to
extend the time limit the MMS has to decide on oil and gas
exploration plans submitted by energy companies to 90 days from
30 days. This would allow more time for the agency to conduct
environmental analysis on an exploration plan.
When Salazar arrived at Interior, the department already
had a questionable history of whether it was able to properly
regulate the oil industry.
The department's inspector general found in 2008 there was
"a culture of substance abuse and promiscuity" among a dozen
department employees who accepted gifts, had sex and used
illegal drugs with workers at oil and gas companies drilling on
(Reporting by Tom Doggett; Editing by Rebekah Kebede)