Bush MMS Director: 'When I Was There It Seemed to Work Well'
From the Wonk Room.
Johnnie Burton, former MMS director
As for allegations of lax enforcement at the Minerals Management Service, grossly inadequate spill response plans and other regulatory shortfalls, Burton said that as MMS director she was unaware of those problems. “I can’t answer all these questions at this point because when I was there it seemed to work well,” Burton said.
The agency worked so “well” that investigators found evidence of “cronyism and cover-ups of management blunders; capitulation to oil companies in disputes about payments; plunging morale among auditors; and unreliable data-gathering that often makes it impossible to determine how much money companies actually owe.”
Burton was in charge during the development of the offshore drilling plan that expanded drilling to the site of the Deepwater Horizon disaster. Her Outer Continental Shelf Oil and Gas Leasing Program 2007-2012 included 2008’s Lease Sale 206, in which BP purchased Mississippi Canyon Block 252 (MC252) for $34 million. MC252, also known as the Macondo Prospect, has been flooding the Gulf of Mexico with oil for months now. Burton’s plan dismissed the environmental threat of that sale, primarily because no huge disasters had taken place since the Ixtoc I blowout in 1979, as these excerpts show:The analysis above shows that with regard to potential oil spill impacts, areas that contain wetlands and marshes such as the Central GOM are particularly sensitive. However, lessees have been producing oil and gas from the Central Gulf and other areas for over 50 years with a remarkable record of environmental safety. For more than 30 years, there have been no significant oil spills from platforms anywhere on the OCS. [p. 92]No Environmental Justice impacts from accidental oil spills are expected because of the movement of oil and gas activities further away from coastal areas and, also, the demographic pattern of more affluent groups living in coastal areas. [p. 60]
The Central Gulf coastal area ranks second in marine primary productivity only to the Mid-Atlantic. The marine primary productivity of the Central Gulf does not appear to have been appreciably diminished by offshore exploration and production activities. The same is true of other areas of the OCS with existing operations and production. Thus, the size, location, and timing of lease sales in the PFP are consistent with the marine primary productivity of the areas in which lease sales will be held. [p. 95]
Overall, impacts on national parks, national wildlife refuges, national estuarine research reserves, and national estuary program sites due to routine operations are expected to be limited under the proposed action because these areas are restricted from development. Impacts from oil spills are unlikely because it is anticipated that 75 percent of the hydrocarbons developed, as a result of the 2007-2012 leasing program in the GOM area are expected to occur in deep water (>330 m) usually located far from the shoreline. [p. 57]
Any single large spill would likely affect only a small proportion of a given fish population within the GOM, and it is unlikely that fish resources would be permanently affected. [p. 57]
In areas with a large proportion of impact-sensitive industry, such as tourism, the potential incremental impacts of oil spills would likely result in a one-time seasonal decline in business activity. [p. 59]
Impacts of accidental releases to water quality would depend on the size of the spill, type of material or product spilled, and environmental factors at the time of the spill. However, there would be no long-term, widespread impairment of marine water quality. [p. 60]
I remember enough to tell you, for the five years I was there, we never relaxed any rules – never changed any rules to make them any less safe.
In fact, Burton’s MMS followed the Bush agenda of “increasing domestic oil and gas production, offering more incentives to drillers in the Gulf of Mexico and pushing to open the Arctic National Wildlife Refuge and other wilderness areas to drilling.” The “department trimmed spending on enforcement and cut back on auditors, and sped up approvals for drilling applications.” Auditing revenues plummeted by 86 percent from its 2000 peak even though oil prices soared, as Burton slashed auditing, fired effective auditors who challenged oil companies for bilking the American public and she resisted efforts to recoup money.
Thunder Horse platform, July 2005These are amazing times in the Gulf of Mexico. We are entering the second decade of sustained expansion of domestic oil and gas development in the deep water area of the Gulf.
The praise heaped on BP and the safety of offshore drilling from Secretary of the Interior Gale Norton, Burton’s boss, at the Thunder Horse celebration are painful in retrospect:
It is little noticed, and even less appreciated, but offshore production platforms have a remarkable safety record. Only about 1 percent of the oil in U.S. domestic waters comes from accidental spills, according to the most recent Oil in the Sea report from the National Academy of Sciences. . . .My second message today is about the importance of energy to the American economy, and the need for America to have its own domestic sources of energy. I recognize that this message is somewhat ironic, since today we are recognizing the accomplishment of a company well known as British Petroleum. Clearly part of what we celebrate today is the strong alliance that extends across the Atlantic Ocean. We recognize once again that two nations have grown from a common root, split apart, and matured. We feel assured that a business venture involving both nations is as secure as one done within our national borders.
Five months later, in July 2005, Hurricane Dennis nearly sank the Thunder Horse platform at Mississippi Canyon Block 778. After the dangerously listing platform was repaired, it was returned to production, where it continues to pump oil for BP and Exxon to this day, only a few dozen miles from the Deepwater Horizon wreck.
Department of Interior’s oil, gas and mineral revenue programs
At the hearing, Chairman Feinstein will call for passage of legislation she has sponsored to close a loophole that has allowed oil and gas companies to pay no royalty payments for drilling on the Outer Continental Shelf for leases negotiated in 1998 and 1999. This measure to close the loophole was stripped from the FY2008 Interior Appropriations bill.
Under this provision, the companies who have not renegotiated their existing contracts will have a choice.
- They can keep their existing leases royalty-free if they so choose, but be barred from bidding on new contracts, or
- They can agree to renegotiate these leases in good faith and be able to participate in the bidding for new leases.
- C. Stephen Allred, Assistant Secretary for Lands and Minerals Management, Department of the Interior
- Randall Luthi, Director, Minerals Management Service
Luthi Before Interior Appropriations Tomorrow
Randall Luthi, the controversial chief of the Department of Interior’s Minerals Management Service, will be testifying at a Senate Appropriations subcommittee tomorrow morning. His decision to hold the Chukchi Sea drilling lease sale two weeks ago, the first offshore sale in over a decade, while the Fish & Wildlife Service continues to delay its ruling on the endangerment of polar bears, has garnered protests from government scientists, environmental groups and Congressional Democrats.
Sen. Feinstein, the chair of the subcommittee, released the following statement:At the hearing, Chairman Feinstein will call for passage of legislation she has sponsored to close a loophole that has allowed oil and gas companies to pay no royalty payments for drilling on the Outer Continental Shelf for leases negotiated in 1998 and 1999. This measure to close the loophole was stripped from the FY2008 Interior Appropriations bill.
Feinstein has been pushing for this legislation at least since 2006, since the loophole in 1998 and 1999 leases issued under the Deep Water Royalty Relief Act of 1995 was discussed in Congressional hearings.
Chukchi Lease Sale Goes Forward; Still No Polar Bear Decision from FWS
Despite opposition from environmental organizations and Democrats in Congress, the Minerals Management Service is proceeding with its scheduled sale of offshore drilling leases in the Chukchi Sea at 9 AM Alaska time (1 PM EST). FWS chief Dale Hall failed to make the February 6 deadline despite his testimony to the Senate Environment and Public Works Committee last week that he was “pushing to get there.”
A Los Angeles Times op-ed penned last weekend by MMS director Randall Luthi, The Bear Necessities, defends the lease sale, claiming that “under the Marine Mammals Protection Act, the bear currently receives regulatory protections even stricter than those available under the Endangered Species Act.” This statement ignores the critical habitat provisions of the ESA which could prevent such actions as the lease sale.
Last week MMS officials sent a cease-and-desist order to Public Employees for Environmental Responsibility, who earlier published “a series of internal e-mails from current and former Interior scientists raising troubling questions about how badly environmental assessments of Arctic offshore oil development were skewed.”
The Alaska Wilderness League plans to live-blog the sale.
Update The sale has been completed, the 488 blocks selling for a total of over $2.6 billion.
Estimated reserves include 77 trillion cubic feet of conventionally recoverable natural gas (worth about $635 billion at $8/MMBtU) and 15 billion barrels of oil ($1.5 trillion at $100/barrel).
The winning bidders:- Shell (Netherlands, $2.1 billion)
- ConocoPhilips (US, $506 million)
- Repsol (Spain, $14.4 million)
- Eni (Italy, $8.9 million)
- StatoilHydro (Norway, $14.4 million – most Statoil & Eni bids were joint bids)
As StatoilHydro noted in its press release, “The area is considered a frontier area with no production or infrastructure as of today.”
Polar Bear Fate Heats Up
Senate Hearing
In today’s Senate Environment and Public Works Committee hearing on the Fish and Wildlife Service’s now-illegal delay in ruling whether polar bears are an endangered species, Sen. Boxer (D-Calif.) sharply rebuked the FWS director Dale Hall. She noted that the Alaska field office sent a recommended decision to Hall on December 14th of last year. Hall refused to discuss the recommendation, saying it would be “inappropriate” to discuss internal deliberations.
Hall gave as his only reason for the delay past the January 8 deadline the need to present a “high-quality” decision that responds in full to the voluminous public comments received. He stated that there was no significant scientific uncertainty in the endangerment posed by global warming to polar bears, the only reason for delay the Endangered Species Act permits. Under repeated questioning from Sens. Boxer and Lautenberg (D-N.J.), Hall said he wanted to present a decision, if possible, by February 6th.
Hall noted that in many ways the Marine Mammals Protection Act provides stronger protection than the Endangered Species Act for polar bears even if a finding of endangerment were made – a claim criticized by Andrew Wetzler of NRDC, who noted that the MMPA does nothing to protect critical habitat, the matter which would affect the planned sale of drilling rights in the Chukchi Sea.
MMS Speaks
On that front, Ben Gemen reports for E&E News that Minerals Managment Service director Randall Luthi said any delay of the scheduled February 6 sale of Chukchi Sea leases would prevent any oil-and-gas exploration in 2008. However, he also stated that the agency position is that:there is no need for a delay, regardless of what FWS decides. He said that even in the absence of a listing, energy development is accompanied by several layers of environmental review and safeguards, including collaboration with FWS and the National Marine Fisheries Service.
Kerry Moves to Block
Meanwhile, Sen. Kerry (D-Mass.) introduced legislation yesterday that would block lease sales in the Arctic until Endangered Species Act decisions are made on the polar bear and its critical habitat, mirroring Rep. Markey’s (D-Mass.) proposed legislation in the House.
Internal Emails Show MMS Staff Outcry
Finally, Public Employees for Environmental Responsibility has released over the past week communications from MMS scientists pleading with the political appointees to delay the lease sale (contrary to Luthi’s January 17th testimony) and DOI directives forbidding MMS scientists to consider the possible threat of invasive species from opening the seas to drilling.
The threats and protections for the polar bear
Witnesses
Panel I- FWS Director Dale Hall
- Andrew Wetzler, Natural Resources Defense Council
- Margaret Williams, World Wildlife Fund
- Brendan Kelly, University of Alaska
- Richard Glenn, Alaskan Arctic resident and sea ice geologist
- J. Scott Armstrong, University of Pennsylvania Wharton School
Barrasso Once protection for the polar bear is finalized, agencies will be required by law to avoid jeopardizing the species. And the only way to do so is to reduce emissions.
10:22 Lieberman These species have inherent value. If I may go on a moment I was raised in a tradition, it says in the Bible that Adam and Eve have a responsibility to both work and protect the Garden and all that’s in it. We heard in a hearing nearly a year ago quite a remarkable accumulation of testimony. Mr. Hall identified a warming climate and the melting of sea ice as the primary reason polar bears are threatened as a species. 2/3 of the world’s polar bear population could be lost by the middle of the century. That could be a conservative projection. Some are troubled by the coincidence between the delay and the drilling leases.
10:28 Craig I’m just beginning to acquaint myself with this issue. I understand the climate change movement, the emotion involved in all of that, it’s difficult to predict the future. I’ve watched as various organizations have used the ESA as a wedge or a sledgehammer to shape human activities. I’m here to listen. I hope we don’t rush to judgment. History will only say, was it us, or was it Mother Nature? That is still an open question.
10:32 Mr. Hall We reopened and extended the comment period to allow the public to respond to the new USGS research. We expect to present a final decision to Sec. Kempthorne in the very near future. It is important to recognize that the polar bear is protected under several acts and treaties.
10:36 Boxer Did your staff present a recommendation to you?
Hall Yes. I’m working to the proper modes to explain all the questions. It’s not just making the decision, it’s the Congress and public being able to understand. This delay is my responsibility.
Boxer I wouldn’t want that responsibility to be on my shoulders. Look at Mr. Johnson. He hasn’t given one ounce of paperwork to justify his decision. So there’s a precedent. According to Bruce Woods the completed decision from the Alaska field office was sent to HQ December 14th. What was the recommendation?
Hall It would inappropriate for me to discuss internal deliberations.
Boxer You do understand there is a lease sale?
Hall Yes.
Boxer Am I correct that you have not filed a notice for a delay due to significant scientific uncertainty?
Hall I delayed to get all the information together. The quality of the answer is important. We owe those public comments to be responded to.
Hall The vast majority of the public comments supported the science that would support a listing.
We did not believe that there was ample scientific disagreement to warrant using that clause of the Act.
Boxer Have you been in communication with anyone at the White House about the decision?
Hall No, ma’am. I notified the Secretary and the Secretary notified the President.
Boxer I hope you would reconsider this.
Hall I do not take this lightly. But I am committed to getting a high quality decision out there. I don’t want to overpush our staff.
Boxer Can you do it before February 6?
Hall That was our projected date. We’re pushing to get there.
Boxer If you need some staff assistants, we would help you. It would mean a lot to me.
Hall Our staff has worked very hard.
10:52 Lautenberg Did you say February 6 is not possible?
Hall No, we’re trying to make that goal.
Lautenberg Why don’t you make the recommendation that no driling should take place?
Hall It’s a lease sale exercise. Under that exercise our staff in Alaska did work with MMS.
Lautenberg You’re a person of some significant respect in the environmental community. You understand what you’re doing will make a difference how we approach the leases. We need your help to protect the situation.
Barrasso questioning.
11:00 Hall I don’t believe it’s possible for us to meet the legal standard to reach take for emissions done somewhere else on the globe. Right now the greenhouse gas discussions are from all sources. To be able to track something from the action to the effect we have to have the science that makes the bridge. We can’t get there today. When you reach into CAFE standards and industry and our homes we don’t know how to make that responsible for the loss of polar bears. That is the requirement under the law.
11:02 Lieberman You’re a life FWS person. Did you view the USGS survey as credible?
Hall We do. The conclusion was that 2/3 of the habitat they need would be gone.
Lieberman If polar bears are declared endangered, how would that affect the Chukchi lease sale?
Hall There would be a Section 7 consultation. If the lease sales went forward, then the next steps would be industry proposals and then we would consult under the laws.
Section 7 consultation says that no agency take action that may jeopardize the continued existence of a species.
Lieberman The MMS admits between 750-1000 oil spills are likely due to this lease sale. I believe the greatest threat is ice loss. But this is also a source of danger. Would you agree?
Hall Yes, I do.
11:07 Craig This is one senator who’s not going to tell you to rush the science. Take your time. Get the science right. I don’t want you to rush it to stop a lease sale. Some senators want to use this as a blocking tactic. There’s a process.
11:10 Klobuchar I must say I’m concerned. The first petition was made in February 2005.
Hall The standards for ESA and Marine Mammal Protection Act are very close. If it were listed under the ESA one of the first things we’d want to do is synchronize the ESA and MMPA actions.
I firmly believe we should consider the Arctic as an ecosystem. There will be winners and losers.
Warner I believe the polar bear should be listed as endangered.
11:52 Wetzler There is nothing in the MMPA that requires that critical habitat be protected as there is in the ESA.