Special Reports

Federal agency’s duties to be split

WASHINGTON — Interior Secretary Ken Salazar announced Tuesday that the Minerals Management Service, the troubled federal agency that oversees all aspects of offshore leasing, will be split in two in the wake of the Gulf of Mexico oil rig explosion.

The split addresses one of the main criticisms of the agency in the days following an oil explosion that killed 11 workers and continues to spew oil from the sea floor into the Gulf of Mexico: that the agency is too cozy with the industry it regulates.

Splitting its functions will address that conflict. Currently the Minerals Management Service is responsible for regulating offshore drilling, but also for leasing tracts on the outer continental shelf and collecting royalties on the oil and gas they produce.

An Interior Department official said the move won’t require congressional approval, although such a proposal had been advanced on Capitol Hill and was expected to be discussed Tuesday as two Senate committees begin oversight hearings.

The Union of Concerned Scientists expressed its support to dividing the Minerals Management Service, saying the breakup was “long overdue.”

Said Francesca Grifo, director of the UCS Scientific Integrity Program: “Putting one agency in charge of enforcing safety regulations and collecting billions of dollars in oil and gas royalties was asking for trouble. Separating these functions would benefit all parties involved — the Department of Interior, the American public, and the oil companies that must rebuild public trust.”

Top executives from three companies involved in the Deepwater Horizon oil rig disaster faced a barrage of questions Tuesday on Capitol Hill. Angry senators are eager to make it clear they intend to hold someone responsible for a blowout that killed 11 workers and continues to spew 210,000 gallons of oil each day into the Gulf of Mexico.

But it’s also clear the three companies will have another source of finger-pointing — one another.

In testimony released Monday before the first of Tuesday’s two Senate hearings, the executives, from BP America, which owned the well, Transocean Ltd., which owned the rig, and Halliburton, a contractor on the rig, blame the other companies for the as-yet-undetermined cause of the explosion.

Meanwhile, in New Orleans, a two-day public hearing into the events surrounding the April 20 explosion got under way Tuesday morning. The investigation is being conducted jointly by the MMS and the U.S. Coast Guard.

In a related development, Florida Gov. Charlie Crist said Tuesday that a special legislative session will be called in the next couple of weeks to focus on a proposed constitutional amendment to ban offshore oil exploration, as well as new tax incentives to encourage utilities to promote renewable energy sources.

In Washington, Lamar McKay of BP, in prepared testimony to the Senate Energy and Natural Resources Committee, said the company wants to answer two questions at the root of the disaster: What caused the explosion and fire, and why did the blowout preventer fail? He makes it clear Transocean owned the blowout preventer.

“The systems are intended to fail-closed and be fail-safe. Sadly and for reasons we do not yet understand, in this case, they were not,” McKay was to testify. “Transocean’s blowout preventer failed to operate.”

That directly counters Transocean CEO Steven Newman’s statement. “Over the past several days, some have suggested that the blowout preventers used on this project were the cause of the accident,” Newman was expected to testify. “That simply makes no sense.”

Their investigative team has looked at numerous possible causes, Newman will say, but the company’s blowout preventers “were clearly not the root cause of the explosion.” The well had been sealed with casing and cement, and within a few days, the blowout preventers would have been removed, anyway. At that point, the cementing and casing were responsible for controlling any pressure, he says in his testimony.

Although Newman does not single out Halliburton for blame, he does make it clear that Halliburton was the cementing subcontractor — and as such “is responsible for encasing the well in cement, or putting a temporary cement plug in the top of the well, and for ensuring the integrity of the cement.”

Tim Probert of Halliburton has a different take, and points back to BP in his prepared testimony. The well owner is ultimately responsible, said Probert, who is the president of the company’s global business lines and its chief health, safety and environmental officer.

In Kenner, La., the captain of a boat that was beside the Deepwater Horizon when it blew up said he was surprised when a geyser of mineral “mud,” a standard lubricant for drilling operations, shot up through the rig’s derrick.

“I saw mud falling on the back of my boat, sort of a black rain,” said Alwin Landry, standing watch on the support vessel Damon B. Bankston. Testifying in a federal inquiry Tuesday into the rig’s sinking, Landry said he immediately radioed the rig. Suddenly, a green flash on the main deck aft of the derrick caught his eye, then the concussion of the initial blast.

Obama has temporarily halted all new offshore drilling until the Interior Department submits a safety report due May 28.

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