Salazar Receives Implementation Plan for Restructuring the Department's Offshore Energy Missions

WASHINGTON, D.C. – Secretary of the Interior Ken Salazar today received an implementation plan for restructuring the department's offshore energy management responsibilities, detailing a transition that could begin as early as October 1 and be completed in 2011. Salazar is reviewing the plan and has forwarded it to congressional leaders for their review and comment.

“Restructuring our management of energy resources on the Outer Continental Shelf is a substantial and systemic endeavor,” Secretary Salazar said. “The reform and reorganization is based on the premise that the missions formerly carried out by the Minerals Management Service must be clearly defined and distinct from each other. In short, we must eliminate real and perceived conflicts within the organization.”

The Secretary noted that the implementation plan provides a balance between the need to move quickly and the necessary analysis and planning required to effectively achieve an organizational change of this scope and complexity. “The process must be planned both to achieve important structural goals and to engage employees and managers in an important and precedent-setting governmental transition,” he said. “Internal and external communications will be critical throughout this process of change.”

Salazar requested the implementation plan when he ordered the restructuring of the Minerals Management Service on May 19, 2010, separating the agency's resource management, safety and environmental oversight, enforcement and revenue-collection responsibilities and reassigning those functions to three newly established Interior agencies: the Bureau of Ocean Energy Management, Bureau of Safety and Environmental Enforcement, and Office of Natural Resources Revenue.

“These three new entities will replace the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM). In June, Salazar renamed the Minerals Management Service to be BOEM.” BOEM is headed by Michael R. Bromwich, a former Justice Department Inspector General who is leading reforms and overseeing the restructuring that will strengthen oversight and policing of offshore oil and gas development.

The implementation plan was drafted by Assistant Secretary for Policy Management and Budget Rhea Suh, Assistant Secretary for Land and Minerals Management Wilma Lewis and Senior Advisor Chris Henderson. BOEM Director Bromwich reviewed the plan and provided comments. The plan recommends that the Office of Natural Resources Revenue be transitioned under an accelerated timetable with the objective of transferring the largely intact Minerals Revenue Management function to the Assistant Secretary for Policy, Management and Budget on October 1, 2010. Further analysis and optimization of the operation will follow the transition.

The task of establishing the new Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement is more complex, requiring a careful and deliberate process to clearly define how roles and responsibilities will be divided, how ongoing interactions will be managed, what administrative resources each entity will need, and where and when new personnel will be added. The plan calls for six months of employee engagement and communication, detailed analysis, and planning to accomplish this, with a phased implementation beginning in January 2011 and continuing for about twelve months.

The plan notes that reorganization is not the sole means of addressing the problems in federal offshore energy management, but it is an essential element of a broader program that includes major new safety requirements, investigation of the BP Oil Spill, legislative and regulatory reform, and programs to enhance enforcement and inspection activity.

Among its objectives, the restructuring must engage employees in the process of change; undertake detailed process mapping and redesign; address facilities needs; fully evaluate budgetary impacts and needs; evaluate existing employee skills; recruit new talent; and establish information technology (IT) plans. Timing and planning will be affected by ongoing Deepwater Horizon spill response efforts, as well as the organizational attention required to identify and implement new safety regulations.

The plan describes the missions and roles of the new organizations as follows:

The Office of Natural Resources Revenue will ensure the full and fair return to the American people of royalties and other monies owed for the utilization of public resources in the production of conventional and renewable energy and mineral resources both onshore and in the Outer Continental Shelf. The new office will report to a Deputy Assistant Secretary for Natural Resources Revenue Management and Oversight within the Office of the Assistant Secretary for Policy, Management and Budget. The office will be responsible for collecting and disbursing funds which have recently averaged $13 billion per year. Collections come from the Bureau of Land Management, the Bureau of Indian Affairs, and BOEM energy programs -- from the development of oil and gas resources, renewable sources (including geothermal), coal, lead, limestone, phosphates, potash, and sand-gravel.

The Bureau of Ocean Energy Management will foster environmentally responsible and appropriate development of the Outer Continental Shelf for both conventional and renewable energy and mineral resources in a manner that is efficient and effective, and that ensures the American people receive fair market value for the rights conveyed. The bureau will function as the resource manager for conventional and renewable energy and mineral resources on the Outer Continental Shelf. It will be the primary contact for the public, including coastal states, interested in offshore energy development issues. The bureau will be headed by a Director under the supervision of the Assistant Secretary for Land and Minerals Management.

The Bureau of Safety and Environmental Enforcement will promote and enforce safety in offshore energy exploration and production operations and assure that potential negative environmental and other impacts on marine ecosystems and coastal communities are appropriately considered and mitigated. The bureau will be headed by a Director under the supervision of the Assistant Secretary for Land and Minerals Management. Applying independent regulation, oversight, and enforcement powers, the bureau will develop and enforce policy, rules, and regulations related to safe and environmentally sound development of Outer Continental Shelf energy resources. Its program will include necessary engineering and safety reviews, inspecting operations for compliance, approving spill response plans, and reviewing NEPA activities. The new bureau will be headed by a Director under the supervision of the Assistant Secretary for Land and Minerals Management.

In addition to these new entities, Bromwich is establishing an Investigations and Review Unit within the Bureau of Ocean Energy Management, Regulation, and Enforcement to: 1) promptly and credibly respond to allegations or evidence of misconduct and unethical behavior by bureau employees as well as by industry; 2) oversee and coordinate the bureau's internal auditing, regulatory oversight and enforcement systems and programs; and 3) assure the bureau's ability to respond swiftly to emerging issues and crises, including significant incidents such as spills and accidents. As appropriate, the review unit's functions and capabilities will continue in the new organizations.

The implementation plan is available online at http://www.doi.gov/deepwaterhorizon/loader.cfm?csModule=security/getfile&PageID=38543