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Gulf Disaster
Reuters, August 31, 2010

U.S. govt sets new rules for offshore oil inspectors
By Ayesha Rascoe

The Obama Administration has imposed a new ethics policy on employees overseeing offshore drilling as the government moves to clean up a regulatory regime tarnished by the BP oil spill.

Under the new rules issued to employees on Monday, inspectors for the Bureau of Ocean Energy Management are barred from conducting inspections on any projects employing family members or close friends.

The bureau, formerly known as the Minerals Management Service, has faced intense attacks since the Gulf oil spill, with critics charging the agency was too close to the industry it was supposed to regulate.

Breaking the ties between the regulator and the oil industry may be difficult, however, because some Gulf inspectors have worked for oil companies and live in areas where the oil sector is a prominent part of the community.

There could also be concerns in the industry that the rules might make it difficult to find inspectors in some areas, which could slow the approval process of projects.

Lynn Scarlett, who was deputy Interior Secretary during the prior administration, said the new rules should not significantly limit the pool of inspectors, however.

The policies "clarify the rules that already exist on ethical conduct, particularly with respect to conflict of interest, and that's a good thing," Scarlett said.

The Obama administration, under fire from critics on its handling of the spill, brought in former Justice Department inspector general Michael Bromwich earlier this summer to help change the culture of the offshore drilling agency that is part of the U.S. Interior department.

The administration imposed a six-month ban on deepwater drilling so it could set up a better system of oversight for the offshore projects. But oil companies have attacked the ban for delaying projects and costing the region jobs.

In addition to disqualifying themselves from any inspections that may represent a conflict of interest, bureau workers are now banned from performing any inspections on projects operated by a former employer until two years after leaving the company.

Kieran Suckling, director of the Center for Biological Diversity, called the new ethics rules "window dressing."

"They need to focus on policy and technology reforms rather than spitting out one more set of ethic check boxes for some inspector to fill out," Suckling said.

Even before the BP accident poured millions of barrels of oil into the Gulf, the MMS was hit by numerous scandals involving employees engaging in unethical and sometimes criminal conduct with oil company workers they were supposed to oversee.

The MMS' inspector general released a report in May documenting bad behavior by bureau employees during the prior administration, including accepting sporting event tickets and hunting trips from energy companies.

If employees adhere to the new policies, the bureau should be able to repair the damage done from these scandals, said David Pettit, senior attorney for the Natural Resources Defense Council.

"There's been a problem of legitimacy in the eyes of the public," Pettit said. "If it's followed that should take care of those kind of situations."

(Editing by Marguerita Choy)

© Copyright 2010 Thomson Reuters

Photo © Paul S. Hamilton