2 New Agencies to Split Offshore Drilling Duties

Thursday, 20 Jan 2011 08:14 AM


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WASHINGTON (Reuters) - Two new government agencies that will be operating by October will divide the responsibilities of leasing America's offshore energy reserves and enforcing safety rules for drilling, U.S. Interior Secretary Ken Salazar said on Wednesday.

The leasing agency will award tracts in federal waters to energy companies to explore for oil or natural gas, while the second agency will enforce safety and environmental regulations on those leased areas.

"We are moving ahead quickly and responsibly to establish the strong, independent oversight of offshore oil and gas drilling that is needed to ensure that companies are operating safely and in compliance with the law," Salazar told reporters.

The agencies, along with a third one already established to collect royalties from production on federal leases, will replace the Interior Department's scandal-plagued Minerals Management Service, which had carried out all three responsibilities.

Salazar also said he was creating a permanent committee of scientific, engineering and technical experts to advise on improving offshore drilling safety and responding to oil spills.

The changes are part of the reforms resulting from the BP oil spill and reflect recommendations from the special presidential commission that looked into the accident.

Green groups welcomed Salazar's plan to separate offshore leasing from safety inspections of drilling rigs.

"For far too long, the drive to maximize leasing and drilling have trumped the efforts of safety regulators, inspections and enforcement," said Mike Gravitz with Environment America.

However, the oil industry and its congressional backers are worried the Obama administration is adding more government bureaucracy that will slow the process of issuing offshore drilling permits.

"As the agency moves toward its new structure, its leaders must ask themselves whether it is adequately carrying out its mandated mission to oversee the development of America's offshore energy resources," said Jim Noe, who heads a group representing shallow water drillers.

"With the average price of gasoline steadily rising and an Iranian-controlled OPEC advocating for higher prices, families already struggling to makes ends meet cannot afford to have American energy development slowed down by new layers of bureaucratic red tape," Representative Doc Hastings, the new Republican chairman of the House Natural Resources Committee, said in a statement.

Salazar said developing the oil and natural gas resources in the Gulf of Mexico were vital to the U.S. economy.

But he declined to speculate on when the department would issue its first deepwater oil exploration permit since the temporary offshore drilling ban imposed after the BP oil spill was lifted in October.

© 2014 Thomson/Reuters. All rights reserved.

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