AP: Salazar urges splitting energy agency

WASHINGTON — The Obama administration is proposing to split up an Interior Department agency that oversees offshore drilling, as part of its response to the Gulf Coast oil spill, The Associated Press has learned.

An administration official who asked not to be identified because the plan is not yet public said Interior Secretary Ken Salazar will call for splitting the Minerals Management Service in two. One agency would be charged with inspecting oil rigs, investigating oil companies and enforcing safety regulations, while the other would oversee leases for drilling and collection of billions of dollars in royalties.

Currently, the Minerals Management Service, an arm of the Interior Department, is responsible for collecting more than $10 billion a year from oil and gas drilling and with enforcing laws and regulations that apply to drilling operations.

Some critics have said the two roles are in conflict and are one reason the agency has long been accused of being too cozy with the oil and natural gas industry.

An administration official said Salazar has the authority to split up the agency, but is likely to propose other changes Tuesday that would require congressional approval.

An internal investigation in 2008 described a "culture of substance abuse and promiscuity" by workers at the minerals agency. The investigation by Interior's inspector general found workers at the MMS royalty collection office in Denver partied, had sex with and used drugs with energy company representatives. Workers also accepted gifts, ski trips and golf outings, the report by Inspector General Earl E. Devaney said.

Devaney decried "a culture of ethical failure" and an agency rife with conflicts of interest.

More than half a dozen workers out of around 50 at the Denver office were disciplined — and several were fired — because of the scandal.

Salazar, who promised aggressive reform when he took over the Interior Department early last year, believes the tragedy aboard the Deepwater Horizon oil rig — and the resulting massive oil spill — has made reform even more urgent, the administration official said.

The Interior Department will move to establish an independent energy inspection agency within the Minerals Management Service "so that the American people know that they have a strong and independent organization holding energy companies accountable and in compliance with the law of the land," the official said.