Watchdog employees face jobs bar in US oil industry

Published: June 25 2010 03:00 | Last updated: June 25 2010 03:00

Sweeping changes to the US oil industry watchdog, outlined yesterday, could see its top employees being banned from working for oil companies for life and drilling operators paying a fee to fund more inspections.

Even as it takes on a new name and head, the agency, previously known as the Minerals Management Service, now the Bureau of Ocean Energy Management, Regulation and Enforcement, came in for renewed scrutiny yesterday during a hearing of the Senate's energy and natural resources committee, which oversees it.

"If we do this right, it is my hope that we can see tangible results on all fronts, and a shift away from the cascade of failures that led to the Deepwater Horizon accident and towards work of the highest quality," said Jeff Bingaman, Democratic chairman of the committee.

The bill would levy an as yet unspecified fee on the industry so that the agency could hire more and better-qualified inspectors to oversee rig operations.

Ken Salazar, secretary of the interior, whose department includes the watchdog, told the committee that the agency needed to hire an additional 330 inspectors to be able to meet the increased need to inspect drilling rigs and to conduct environmental reviews of drilling plans.

Mr Salazar said the number of inspectors working in the agency - at 62 - was "extraordinarily and woefully inadequate".

The bill would increase the requirements for operators to cover the damages they may cause and raise the levels of civil and criminal fines payable.

It will also make every offshore operator provide risk assessments and detailed plans for responding to loss of well control and clean-up operations.

Lease sales will be limited to operators who have fully met safety, environmental and due diligence responsibilities on current operations, and which have paid all damages caused in any prior accidents.

*The federal judge who overturned the Obama administration's ban on deepwater drilling yesterday dealt another blow to the White House, rejecting its application to put a hold on his decision.

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