Salazar rolls out plan for offshore safety agency, seeks more Congressional help

Interior Secretary Ken Salazar announced on Tuesday that he is creating a new independent agency within his department to oversee offshore oil-and-gas safety and environmental protections.

The agency will be carved out of Interior’s Minerals Management Service (MMS), which currently regulates offshore drilling and collects billions of dollars in leasing and royalty revenues.

“We will assure the American people that we have a strong and independent organization holding energy companies accountable and in compliance with the laws of the land,” Salazar said at a news conference.

The announcement, which came as two Senate panels opened hearings into the ongoing Gulf of Mexico oil spill, follows questions about the adequacy of federal oversight in that disaster. A House panel will convene a third hearing on the disaster on Wednesday.

Interior said the new agency — whose creation does not need congressional approval — would include what had been MMS’s inspection, investigation and enforcement operations. They will be separate from leasing, revenue collections and permitting.

Salazar noted the billions of dollars MMS collects each year in energy production royalties and said it is important to separate that from the safety and environmental function, “so there is no conflict, real or perceived.”

MMS has long been criticized by watchdog groups and Interior’s own inspector general for being too close to the industry and ill-equipped to ensure royalties are paid in full.

In addition to announcing the new agency, Salazar said the administration is preparing to send Congress a legislative package of measures in response to the spill that would include an additional $29 million for offshore activities.

Interior said the sum includes about $20 million for more inspections of offshore platforms and enforcement of safety rules, and $7 million for “more comprehensive evaluations of policies, procedures and actions that may be needed” in light of the April 20 explosion of the Deepwater Horizon rig that led to the spill.

Also, the package the White House is submitting to Congress would change a 30-day statutory deadline for MMS to act on oil-and-gas company exploration plans. Salazar wants to allow 90 days, which could be extended further to complete environmental and safety reviews, Interior said.

While the new independent safety agency does not require Capitol Hill’s blessing, Salazar said he wants to work with Congress. He touted his support for an MMS “organic act,” noting the agency was created via secretarial order in the 1980s.

The White House is also asking lawmakers to increase the $75 million liability cap on economic damages.

White House press secretary Robert Gibbs said Tuesday: “In addition, to deal more generally with the harms created by oil spills, the president has requested that we send legislation to Congress to toughen and update the law surrounding caps on damages.”

One congressional proposal under consideration would increase the ceiling to $10 billion, but some now say even that might not be high enough. 

This story was updated at 7:13 p.m.