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Agency overseeing oil, gas exploration gets shakeup

September 30, 2011 |  2:53 pm

Gulf oil spill 
The Obama administration fulfilled a vow made just after the Gulf of Mexico oil spill to reorganize and revamp the beleaguered agency that oversees the domestic offshore oil and gas exploration and production.

The April 20, 2010, Macondo well blowout killed 11 men and spewed nearly 5 million barrels of oil into the ocean. It also revealed that the Interior Department agency tasked with managing the vast offshore energy sector, the Minerals Management Service, was plagued by conflicts of interest, inadequate resources and weak regulations.

The administration swiftly did away with MMS after the gulf oil disaster to create an interim agency. On Saturday, with the restructuring completed, two new agencies are set to emerge: the Bureau of Ocean Energy Management (BOEM), which would regulate the leasing of offshore blocks for energy development, and the Bureau of Safety and Environmental Enforcement (BSEE), which would be responsible for the permitting and inspections of offshore oil and gas projects.

A year ago, the Interior Department created an independent unit that collects royalties from the oil and gas production. Michael Bromwich, who oversaw the interim agency that followed MMS, will continue as interim director of BSEE until a permanent director is found.

Several candidates for the directorship have turned away the administration’s overtures because of the political fights they knew they would have to endure, Bromwich said at a meeting with the media Friday.

The Interior Department has come under withering political criticism from congressional Republicans and representatives from the Gulf Coast and Alaska for allegedly moving too slowly to grant drilling permits. Recently, Rep. Jeff Landry (R-La.) compared ocean energy employees in the Interior Department’s New Orleans office to the Gestapo because they could not meet with him on an unannounced visit.

Tommy Beaudreau was named as the director of BOEM. An Alaskan whose father worked in the state’s oil industry, Beaudreau was a partner with Bromwich at a Washington law firm before going with him to MMS shortly after the well blowout. Industry officials and environmentalists have said Beaudreau was the architect behind many of the sweeping changes to the old agency.

The agencies are certain to be buffeted by proponents and opponents alike of offshore oil and gas development. Next week, the Republican-led House Natural Resources Committee, an ardent critic of the Obama administration’s offshore policies, is scheduled to hold a hearing on a federal report that investigates the causes of the blowout and rig explosion.

Earlier this week, environmentalists filed a lawsuit to block the Interior Department’s conditional approval of Royal Dutch Shell’s plan to drill in the Beaufort Sea off Alaska.

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-- Neela Banerjee in Washington

File: Boats skim oil and then ignite oil collected on the surface of the water as crews work in July 2010 to clean up the massive oil spill into the Gulf of Mexico. Credit: Carolyn Cole / Los Angeles Times

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