Oil industry groups are nervous about U.S. Interior Department proposals to wipe out the Minerals Management Service.
Interior Sec. Bruce Babbitt is said to be considering delegating MMS's royalty collection duties to producing states, moving them to the Bureau of Land Management, or perhaps something else,
Babbitt's decision could come this week as part of President Clinton's expected announcement on streamlining government. Babbitt has scheduled an unusual closed-circuit television address to Interior employees for Mar. 27.
Babbitt last week elevated Cynthia Quarterman, acting MMS director, to permanent director, which industry took as a sign that MMS would not be dismantled entirely.
OIL'S OPPOSITION
Oil groups, dismayed that Interior would consider dismantling MMS, have protested to Babbitt and legislators. Congress could block any reorganization.
The National Ocean Industries Association wrote Babbitt, "MMS has a strong core of career employees who hold great institutional knowledge about the (offshore leasing) program and the industry that has built up around it.
"While we sometimes find ourselves in disagreement with MMS, even to the point of litigation, MMS has always proceeded in a professional, competent manner.
"We are concerned that a radical change in management of the (offshore leasing) program could be extremely disruptive and could adversely affect the future flow of energy to meet the needs of our nation."
The International Association of Drilling Contractors said, "To disperse MMS functions throughout the department or to encourage devolution to the coastal states would not improve efficiency or achieve significant cost savings. What it might surely do is further discourage investment in the U.S. offshore."
The Rocky Mountain Oil & Gas Association said in 1992 Interior studied transferring MMS's onshore royalty collection functions to the states and decided that economies of scale dictated continuation of the federal program.
The association said, "Decentralization of the federal royalty management program would place additional, unnecessary, and unjustified burdens on the industry.
"Lessees will be required to report to multiple states, whereupon they will be subject to varying interpretation of regulations, different reporting standards, and inconsistent audit approaches."
Rmoga said at a Jan. 19 Interior meeting on possible organizational changes at MMS, producing states' delegates unanimously opposed the concept of assuming MMS duties.
THE LINOWES REPORT
It's ironic that Interior would consider killing MMS as a solution to any kind of problem.
MMS was created in 1982 at the recommendation of a special panel investigating the haphazard collection of federal royalties.
The Linowes Commission concluded Interior needed a centralized, computerized agency to accurately determine oil and gas production from federal leases and collect royalties.
If it's not too late, someone should send Babbitt a copy of the Linowes report.
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