Scandal With Sex and Drugs Causes US Oil Industry Watchdog To Be Broken Up

  Posted by - May 11, 2010 at 10:04 pm - Permalink - Source via Alexander Higgins Blog
Lamar McKay BP Chairman at Congressional hearing amid protests.
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The US is to break up a federal oil industry watchdog – amid conflict of interest fears which include accepting sex and drugs from oil companies – following the Gulf of Mexico oil spill disaster.

Interior Department  Secretary Ken Salazar unveiled the plans to split up the Minerals Management Service, a part of the Interior Department, which both inspects rigs and collects oil royalties.

At today’s Senate Hearing into the Gulf oil spill, Oil executive pointed fingers at each other. They all played the blame game while admitting that no one knew what caused the explosion on the Deepwater Horizon oil rig at the Mississippi Canyon site and offered that investigations to discover the cause of the explosion where under way.

While executives from BP, Transocean and Halliburton, gave their prepared testimonies  at the Senate Hearing protesters on Capitol Hill called out “BP kills” and waved signs denouncing the British energy giant.

While President Barack Obama says he is “frustrated” the leak is not plugged, the media released statements that it the British firm BP will make a second attempt this week to seal the oil well using a much smaller dome. Over the weekend the first attempt to drop a 4 story dome on top of the catastrophic Gulf oil spill failed

BP is also expect to begin working on an industry proven tactic, being referred to as a jump shot, which would attempt to cap the leak by shooting debris into the failed blow out preventer in an attempt to cap off the leak.

Oil executives were met by angry protesters as they attended a congressional hearing into the disaster on Tuesday.

Senate energy committee chairman Jeff Bingaman said at the outset it was important to remember the 11 lives lost in the disaster.

He added: “The sobering reality is that despite the losses and damage that have already been suffered, we do not yet know what the full impact of this disaster will be.”

Blame game

The Deepwater Horizon rig that blew up in the Gulf of Mexico on 20 April was owned and operated by drilling firm Transocean, but leased by BP.

The head of BP America told the Senate hearing he had reason to believe a critical safety device called a blowout protector had been modified, reports news agency Reuters.

Lamar McKay also noted the 450-tonne device was owned by Transocean.  BP’s prepared written testimony for the Senate Hearing can be read here.

But Transocean’s boss said there was no reason to believe its blowout protector had been at fault, as he pointed the finger at BP.

“Offshore oil and gas production projects begin and end with the operator, in this case BP,” said chief executive Steven Newman.

He also pinned blame on the failure of a cement oil-well casing, built by BP contractor Halliburton. Transocean’s prepared written testimony for the Senate Hearing is here.

But Halliburton executive Tim Probert argued his firm had followed all requirements set out by BP and industry practices. Halliburton’s prepared written testimony for the Senate Hearing is here.

Senator John Barrasso said: “I hear one message – don’t blame me. Shifting the blame game doesn’t get us very far.”

A separate hearing into the oil disaster was being held on Tuesday by the Senate environment committee.

Sex and drugs scandal leads to announcement MMS will be split up.

Meanwhile, Interior Secretary Salazar announced plans to split up the Minerals Management Service (MMS), which critics say is riddled with conflicts of interest.

Critics say the agency’s two core responsibilities are diametrically opposed – making money off the industry by collecting royalties, while also cracking down on it in ways that may affect the industry’s bottom line.

Announcing the proposed split of the MMS, Mr Salazar said it was important to ensure “a strong and independent organisation holding energy companies accountable”.

A 2008 interior department investigation found some MMS employees took drugs and had sex with energy company representatives.

Some staff had also accepted gifts and free holidays, amid “a culture of ethical failure”, according to the investigation.

The interior secretary has also been conducting a 30-day review of offshore drilling, at the request of President Barack Obama.

BP and US officials have been desperately trying to seal the damaged oil well, which is gushing 5,000 barrels (210,000 gallons) a day into the sea.

The broken pipe is almost a mile (1.6km) below the ocean’s surface, with little visibility for remote-controlled vehicles.

A sheen from the slick is surrounding island nature reserves off Louisiana, and tar balls have reached the Alabama coast.

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