Interior Department Completes Reorganization of the Former MMS

WASHINGTON—On Oct. 1, 2011, the Department of the Interior (DOI) will formally establish two new, independent bureaus – the Bureau of Safety and Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM) – to carry out the offshore energy management and safety and environmental oversight missions currently under the jurisdiction of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). The establishment of BOEM and BSEE will mark the completion of an effort to reorganize the former Minerals Management Service (MMS).

This important milestone comes as part of a series of fundamental changes made by the Obama administration to reform the government's regulation of offshore energy development and the agency responsible for it – while ensuring that responsible oil and gas drilling and production continues on the U.S. Outer Continental Shelf – under the leadership of Secretary of the Interior Ken Salazar and BOEMRE Director Michael R. Bromwich.

“We have worked tirelessly to strengthen safety and oversight of offshore energy development, and to ensure that the lessons learned from the Deepwater Horizon guide safe and responsible development,” Secretary Salazar said. “By restructuring our management and enforcement structure, we have clarified our agencies' roles and responsibilities and strengthened our oversight capabilities. Led by Michael Bromwich and Tommy Beaudreau, BOEM and BSEE will carry out our oversight missions with greater efficiency and effectiveness, helping to expand safe and responsible offshore energy development and supporting job-creation and investment in coastal communities.”

The Deepwater Horizon blowout and resulting oil spill shed light on weaknesses in the federal offshore energy regulatory system, including the overly broad mandate and inherently conflicted missions of MMS which was charged with resource management, safety and environmental protection, and revenue collection.

On May 19, 2010, Secretary Salazar signed a Secretarial Order that directed the division of MMS into three separate organizations, BSEE, BOEM and the Office of Natural Resources Revenue (ONRR), each with separate and clearly defined missions. MMS was renamed BOEMRE in mid-June 2010. ONRR became a separate office under the Assistant Secretary for Policy, Management and Budget on Oct. 1, 2010.

BSEE will be led by Director Bromwich, who has served as the BOEMRE director since its creation in June 2010 and has agreed to serve as the BSEE director until an ongoing national search for a permanent director has been completed. BSEE will be responsible for safety and environmental oversight of offshore oil and gas operations, including permitting and inspections, of offshore oil and gas operations. Its functions include the development and enforcement of safety and environmental regulations, permitting offshore exploration, development and production, inspections, offshore regulatory programs, oil spill response and newly formed training and environmental compliance programs.

“Over the past year, we have made fundamental changes to the offshore regulatory system to significantly enhance operational safety and environmental protection,” said Director Bromwich. “We will continue to take the necessary steps to ensure the regulatory system keeps pace with advancing technology, and we will be aggressive in ensuring safety and environmental compliance.”

BOEM will be led by Director Beaudreau and will be responsible for managing environmentally and economically responsible development of the nation's offshore resources. Its functions will include offshore leasing, resource evaluation, review and administration of oil and gas exploration and development plans, renewable energy development, National Environmental Policy Act (NEPA) analysis and environmental studies.

“We are committed to balanced decision-making regarding the development of our domestic offshore conventional and renewable energy resources, including ensuring that appropriate consideration of the environment is given in every case,” said Director Beaudreau. “We will continue moving forward with development of a new five-year offshore energy program, oil and gas lease sales in the Gulf of Mexico, environmental analyses and studies, and offshore wind energy development in the Atlantic Ocean.”

Efforts to re-organize the agency have occurred in parallel with the development and implementation of the most aggressive and comprehensive reforms to offshore oil and gas regulation and oversight in U.S. history. BOEMRE has issued new, rigorous regulations that bolstered offshore drilling safety, and ratcheted up efforts to evaluate and mitigate environmental risks, including:

• The Drilling Safety Rule created tough new standards for well design, casing and cementing – and well control procedures and equipment, including blowout preventers. This rule requires operators to have a professional engineer certify the adequacy of the proposed drilling program. In addition, the new Drilling Safety rule requires an engineer to certify that the blowout preventer to be used in a drilling operation meets new standards for testing, maintenance and performance.
• The Workplace Safety Rule requires, for the first time, that offshore operators maintain comprehensive safety and environmental programs. This includes performance-based standards for offshore drilling and production operations, including equipment, safety practices, environmental safeguards, and management oversight of operations and contractors. Companies will now have to develop and maintain a Safety and Environmental Management System (SEMS) – a comprehensive safety and environmental management program designed to reduce human and organizational errors that have been found to be the contributing or root cause of work-related accidents and offshore oil spills. BOEMRE has recently proposed a set of enhancements to the Workplace Safety Rule that will add greater protection by supplementing operators' SEMS programs with employee training, engaging personnel in safety management, and strengthening auditing procedures by requiring them to be completed by independent third parties.

These changes are in addition to new requirements regarding the development of well-specific blowout and worst-case discharge scenarios and ensuring that operators demonstrate that they have access to, and can deploy, subsea containment resources that would be sufficient to promptly respond to a deepwater blowout or other loss of well control.

For a full list of reforms, view the reforms fact sheet: http://www.doi.gov/news/pressreleases/loader.cfm?csModule=security/getfile&pageid=260330