The federal agency responsible for regulating oil and gas extraction let oil companies like BP write their own safety regulations, ignored or downplayed the environmental threats from drilling, and issued drilling permits before fully consulting with other regulatory agencies. The Obama administration has launched an overhaul of the agency and has sent to Congress a legislative proposal to address the looming disaster in the Gulf Coast region.
The Minerals Management Service (MMS), the Department of Interior (DOI) agency responsible for regulating energy and mineral resources, has badly mismanaged the oil and gas permitting process. The agency has abdicated its responsibility for ensuring that energy extraction is done safely, according to numerous sources investigating the BP oil spill in the Gulf of Mexico.
The April 20 BP Deepwater Horizon oil rig explosion left 11 workers missing and the subsequent oil spill continues to spew thousands of gallons of oil into the Gulf. Investigations of the explosion are beginning to show that BP and its partners in the Deepwater Horizon project did not implement safe oil drilling practices that are used in other areas of the world. MMS left decisions about drilling practices to the companies rather than issuing strong regulatory requirements that may have prevented the explosion.
On May 12, the Oversight and Investigations Subcommittee of the House Committee on Energy and Commerce held a hearing to begin assessing what committee chair Rep. Henry Waxman (D-CA) called "a calamitous series of equipment and operational failures." The hearing focused on the actions by BP; Transocean Limited, the operator of the oil rig; and Halliburton, an oil services company responsible for a critical seal designed to stop the flow of oil.
The Senate’s Energy and Natural Resources Committee and the Environment and Public Works Committee also held hearings on the spill in which executives associated with the Deepwater Horizon rig testified.
President Obama also named MMS as a culpable party in this disaster. On May 14, for example, after getting another briefing on the federal government’s response to the spill, Obama said, "For too long, for a decade or more, there has been a cozy relationship between the oil companies and the federal agency that permits them to drill. It seems as if permits were too often issued based on little more than assurances of safety from the oil companies. That cannot and will not happen anymore."
In a scathing August 2008 report by the agency’s inspector general, MMS employees were found to have accepted gifts from oil industry representatives, improperly socialized with lobbyists, engaged in unauthorized business activities, and flaunted the agency’s ethical standards. The report summarized MMS’s royalty-in-kind program personnel as lacking professional conduct standards and believing the rules of ethics did not apply to them.