Oil and Politics | Where’s the Reform?

Oil and Politics—Minerals extraction is a dirty business, evident in the oil slick riding the currents of the Gulf of Mexico. Minerals-extraction political appointments are often as befouled as the process. The previous occupant of the Oval Office had left a disaster waiting to happen.

Consider. Nine days before George W. Bush and Dick Cheney took the oath of office in January 2001, coal lobbyist Steve Griles invited oil, gas, and coal executives to a meeting at the American Petroleum Institute’s Washington, D.C., offices. Griles had worked in the Reagan Interior Department, where he was quietly advancing oil and gas drilling off the California coast. At the Petroleum Institute gathering, Griles told industry executives to draw up their wish lists.

Griles was later appointed to the number two spot at Interior. The top position went to Gale A. Norton, a “drill, baby, drill” proponent long before the Republican Party decided that that simple mantra was a complete energy policy. When Norton left Interior, she went to work for Shell Oil. When Griles left Interior, he went to prison.

Bush’s first Minerals Management Service (MMS) director was Johnnie Burton, who had published an oil-and-gas newsletter and served in the Wyoming State House. A French Algerian, she was also a literary translator, perhaps the only literary translator ever to direct the MMS. She was unable to right a disastrous royalties-revenue collection system inherited from the Clinton administration and never recovered from a sex-and-drug scandal in which MMS field staff got their freak on with oil and gas company employees.

Randall Luthi, a Wyoming rancher and lawyer and former speaker of the Wyoming House, and an authority on federal minerals royalties, replaced Burton in 2008. Luthi arrived in time to close the deal on a federal oil-and-gas lease of Alaska’s Chuckchi Sea, despite serious concerns about the impossibility of managing an oil spill in a remote, frozen ocean that is a rich habitat for salmon, seal, and walrus. Luthi dismissed warnings from environmentalists and fishermen that oil spills in the Chuckchi Sea could never be managed.

Obama looked to a different talent pool. He appointed Colorado Senator Ken Salazar as Secretary of Interior. Liz Birnbaum, an environmental lawyer, was staff director for the Committee on House Administration when she was appointed in July 2009 to direct the MMS. Before going to work on the Hill, Birnbaum had served as vice president for government affairs and general counsel for American Rivers, a conservation organization, and as an associate solicitor in the Clinton Interior Department. As a law student, she edited the Harvard Environmental Law Review.

Where’s the Reform?—Better appointments have not translated into reform at a regulatory agency serving the interests of the industry. Early on, Salazar had promised that Birnbaum would clean up the agency, with its history of fraud and inefficiency (and sex and drugs). His concern now seems misdirected, as it was focused on the revenue-collection side rather than the environmental safety side of the MMS.

Birnbaum has been unusually silent since BP’s drilling platform collapsed into the Gulf in April. She surfaced in mid-May to demand that Shell Oil provide additional information on safety measures before drilling begins in the Chuckchi Sea, a slight change in policy that was an obvious reaction to the Deepwater Horizon disaster.

Regarding safety and permitting, no institutional reforms are evident. A May 14 story in the New York Times described a pattern of suppressing critical reports, ignoring permit requirements regarding wildlife habitat, and threatening staff scientists who impede the permit process—which continues a year and five months into the Obama administration.

The Times reported that the MMS ignored laws that require companies to obtain permits from the National Oceanic and Atmospheric Administration if endangered species or marine mammals are put at risk by exploration or drilling. Since January 2009, the MMS has approved “at least three huge lease sales, 103 seismic blasting projects, and 346 drilling plans” in the Gulf of Mexico without the required permits.

Although Interior Secretary Salazar said the permit process would be delayed after the collapse of the Deepwater Horizon drilling platform, five permits to drill in the Gulf were granted between May 3 and May 7. The following week, the Ninth Circuit Court of Appeals rejected an appeal by environmental and Native American groups to stop oil drilling in the Chuckchi Sea, scheduled to begin this summer unless the Obama administration intervenes.