FRONT PAGE CONTRIBUTOR
‘Conflict of Interest’ at BOEMRE? Hooey!
This press release is the biggest load of hooey I’ve seen for a while. The Department of the Interior wants to create two new agencies to remedy what they term “conflicting missions” within a single agency. Hooey.
WASHINGTON, D.C. – Secretary of the Interior Ken Salazar and Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich today announced the structures and responsibilities of two new, independent agencies that will carry out the offshore energy management and enforcement functions once assigned to the former Minerals Management Service (MMS). …
The former MMS was saddled with the conflicting missions of promoting resource development, enforcing safety regulations, and maximizing revenues from offshore operations,” said Director Bromwich. “Those conflicts, combined with a chronic lack of resources, prevented the agency from fully meeting the challenges of overseeing industry operating in U.S. waters. The reorganization is designed to remove those conflicts by clarifying and separating missions across the three agencies and providing each of the new agencies with clear missions and new resources necessary to fulfill those missions.” [emphasis added]
Two new bureaucracies, eh? This plan is a prescription for disaster for the Gulf of Mexico. It should serve as a wake-up call for any thinking person who thinks America’s energy security is an important issue. Or, for that matter, for anyone who doesn’t relish the thought of $8.00/gallon gasoline.
“Conflicting missions?” Baloney. Like “walking” and “chewing gum” at the same time are conflicting missions.
Please indulge an allegory.
Outside the dusty Oklahoma town of West Pigknuckle there are two farmers: we’ll call them Farmer Salazar and Farmer Maley. Neither is independently wealthy, but over the years each has managed to accumulate 3 sections of prime, rolling ranchland.
Three hundred million years ago, geologic good fortune visited the Greater West Pigknuckle Metroplex, which now sits square in the middle of the oil- and gas-rich Anadarko Basin.
Having been approached by oil and gas leasing agents, the doctors each decide to lease their land. Oil companies will have the right to drill, subject to lease stipulations. In return for granting a lease, each farmer will receive 20% of the oil and gas sales, with no further investment.
The farmers assess their priorities:
- Preserve the value of the land for their children and for their posterity.
- Maximize income while conserving the resource.
Farmer Maley contemplates his options and decides to hire a manager to help him lease to an oil company that is going to help him reach his goals: drill safely, only in approved areas, with respect for the environment. When and if the company makes a well(s), the manager will verify that the royalty payments are proper and timely.
Seeing this, Farmer Salazar says “You’re a silly, silly man, Maley. You’ve given your manager conflicting missions, because in his zeal to maximize royalty income, he won’t care whether the oil company is responsible!”
So Salazar hires two managers. To the first he says: “Your only responsibility is ensuring that my land stays pristine. If they spill any oil or cause any damage, then it’s off with your head!” To the second: “If those oil companies cheat me, then it’s off with your head!”
Fast forward five years.
Maley has 10 wells on his property, and two rigs are busy drilling new wells. As a result of the mineral income, the manager has been able to hire an accountant to help him with the books, freeing the manager to focus on operations. It hasn’t always been easy; the oil company made a mess of their first location, but when Maley’s manager made it clear that the cost of failure was cancellation of their lease, the oil company quickly got their act together.
Salazar has yet to get his first well drilled. The environmental manager he hired was no dummy; he was smart enough to figure out that there’s only one way give the environment 100% protection, and that’s to do nothing at all. In a way, the accounting manager has done his job, too, since with zero income, Mr. Salazar can’t say he’s been “cheated”.
As I hope I’ve illustrated, these “conflicting missions” are a complete red herring. As a landowner of huge dimensions, the Feds have the power to dictate the terms of development. By setting up an independent agency with responsibility only for environmental issues, Interior is virtually guaranteeing that the permitting process will become slowed to a glacial pace, if there is any movement at all.
I can only conclude that that’s exactly what Mr. Obama and Mr. Salazar want.
Cross-posted at VladEnBlog.