Shuffling Chairs on the Oil Rig

In response to BP’s (BP) ongoing oil disaster in the Gulf of Mexico, Interior Secretrary Ken Salazar announced plans today to split the dreaded and loathesome Minerals Management Service into two separate agencies — one to supervise offshore drilling rigs and one to collect the billions of dollars in royalties on the oil and gas pumped in public waters.

It’s fine that the Obama administration wants to carry out radical surgery on an agency that is notorious for incompetence, cronyism, scandals, cover-ups and supine subservience to the oil industry. Who wouldn’t want to carve the place up?

The problem is that MMS — and Interior itself — has a long history of criminal incompetence at BOTH supervising deep-water drilling and collecting the money. Splitting its core incompetencies into two separate agencies won’t necessarily solve that problem.

The Project on Government Oversight, which uncovered massive scandals on royalty collections back in the 1990s and has stayed on the case every since, warns today that the proposed split won’t in itself resolve the inherent conflicts of interest at MMS.

“It’s important to note that the place where there’s been the most potential for financial corruption–royalty management–will not be separated from the leasing function.”

POGO asks whether the new regulatory agency will have the authority to enforce its findings — something that hasn’t been the case with the Defense Contracting Audit Agency? Will it have its own legal counsel, or will it have to rely on Interior’s legal counsel, which has stymied enforcement countless times in the past.

We shall see. The Obama adminstration actually seems to believe in government, which the Bush administration did not. But turning Interior into a true steward of the nation’s oil and gas resources will require more than redrawing boxes on an organizational chart.

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About Edmund L. Andrews 37 Articles

Edmund L. Andrews spent two decades as a business and economics correspondent for The New York Times. During that time, he covered many of the nation ’s most transforming events, from the Internet and biotech revolutions to the emergence of capitalism in central Europe and Russia and the Federal Reserve under Alan Greenspan and Ben S. Bernanke. In 2009 he published BUSTED: Life Inside the Great Mortgage Meltdown (WW Norton), his own harrowingly personal account of the epic financial crisis. He has frequently appeared on major television and radio news programs, from the NewsHour with Jim Lehrer and Today to 20/20, All Things Considered, Lou Dobbs on CNN, the Colbert Show, BBC Worldwide, MSNBC and CNBC.

Ed began his affiliation with The Times in 1988 when he covered patents, telecommunications, and technology. In 1992, he joined the Washington bureau of The Times as a domestic correspondent and reported extensively on the business and politics surrounding the convergence of cable television, the Internet and broadband digital networks. In 1996, Ed became The Times’ European economics correspondent and its Frankfurt bureau chief. He returned to Washington in 2002 and became the bureau’s lead economics correspondent and The Times’ main eyes and ears on the Federal Reserve.

Prior to joining The Times, Ed worked as a magazine writer specializing in business and economics. Before that, he was an assignment editor for Cable News Network in Washington and an education and city government reporter at The Sentinel-Record in Hot Springs, Ark.

Ed graduated magna cum laude from Colgate University in 1978 with high honors in international relations. In 1981, he received a master’s degree in journalism from Northwestern University. He is married to Patricia Barreiro and has four children – Ryan, Matthew, Daniel and Emily.

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