It’s impossible to go to any restaurant in Houston without overhearing at least one conversation about the Deepwater Horizon disaster.
This is probably true in other areas of the country, but in Houston most of these people know what they’re talking about. I went to breakfast Saturday morning and overheard some gentlemen at a nearby table discussing the top kill procedure and debating its potential success. (It failed.) Other eavesdropped topics include what went wrong with the blowout preventer and whether there was a cement failure.
On top of this is the recent announcement by Department of the Interior Secretary Ken Salazar that the US Minerals Management Service (MMS) would be divided to keep the regulators away from the royalty collectors. The director of the MMS was fired, and other key officials were expected to step down as a result of this move.
The general press has had a field day with the MMS, an agency which flew way under the radar until recent events put it in the glaring spotlight of media attention. Now the government is being asked to defend an organization that both regulated the oil industry and reaped some of its profits. Was there a conflict of interest?
Let’s return to another lunch conversation, this time with a friend of mine who has been in the geophysical contracting industry for a long time. He only recently began dealing with the MMS, and his company got off to a very bad start when it failed to secure the proper permits before shooting a survey. Officials at the MMS came down hard on the company, requiring them to send out a research vessel to evaluate the environmental impact of the incorrectly permitted survey. Like a teen-ager becoming more cautious after that first speeding ticket, the company learned from the experience and developed better processes and a more proactive safety/environment culture. The company now has a good relationship with MMS. In fact, my friend tells me that, unlike many other government agencies, the MMS has a very service-oriented culture. If a permit is needed in a hurry, shortcuts are not an option, but they will try to help whenever the resources are available.
He even went so far as to say that he’d write letters of recommendation for any of the people he worked with at the agency because he felt they were doing their jobs correctly. They are able to resolve conflicting interests because they understand both sides of the argument – “Drill, Baby, Drill” vs. “Save the Whales” – and make balanced decisions.
“Can you imagine what it will be like when there are two separate agencies handling these issues?” he asked. “There will be a building full of folks trying to maximize government revenues and another building full of folks asking seismic companies to provide Bose noise-canceling headphones for sea slugs.”
When asked to give a presentation to explain operations to MMS officials, my friend offered to take several of them to Fourchon, La., to see a crew in action. The MMS determined that this might be construed as accepting favors from contractors. So 15 of them took a day of vacation and drove to Fourchon in their own cars for the tour. They would not accept lunch, though they did break down and drink some water. They weren’t in it for the hospitality; they were genuinely interested in knowing more about geophysical operations.
I know that operators and service companies have not always been happy with MMS decisions, but the fact is that this is one regulatory agency that actually understands the oil and gas industry. The purpose of the MMS is to make sure that offshore natural resources are exploited in a safe and environmentally sensitive manner. Until Maconda, the Gulf had a fairly pristine record when it came to major spills. To imply that this disaster came about because the MMS was too chummy with the industry is a bit of a stretch, in my opinion.
But what’s done is done. It remains to be seen if the new agency, with its divided duties, will continue to maintain this cordial but productive relationship with the energy industry.
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