US Drilling Regulators Work to Remove Conflicts Of Interest

WASHINGTON (Dow Jones Newswires), Jan. 20, 2011

The U.S. offshore drilling regulator is putting the finishing touches on a major reorganization it announced last year, aimed at addressing conflicts of interest that came to light following the Deepwater Horizon oil spill.

Separately, the Interior Department is forming a team of technical experts to provide advice on drilling and spill response, covering everything from "valves, instrumentation and gamma ray readings," Interior Secretary Ken Salazar said Wednesday.

This advisory panel, the Offshore Energy Safety Advisory Committee, will be led by the former director of the Sandia National Laboratory, Tom Hunter, who played a central role in the government response to Deepwater Horizon, Salazar said.

The changes within the Interior Department and its Bureau of Ocean Energy Management, Regulation and Enforcement follows the release of a lengthy report by a presidential commission studying Deepwater Horizon that highlighted gaps within the government agencies that oversee oil and gas drilling.

The reorganization within the bureau is aimed at separating the different functions of offshore drilling regulators--namely, revenue collection, leasing decisions and safety enforcement.

Prior to Deepwater Horizon, these functions were performed by one government agency, the formerly named Minerals Management Service, which suffered from a "conflicting set of missions," bureau Director Michael Bromwich said.

Salazar announced in May that he would create three new agencies to perform the different functions. The department carved out the revenue collection operations in October, forming the Office of Natural Resources Revenue.

On Wednesday, the department announced the creation of the two other agencies--Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement--to oversee the other operations.

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