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Alaska's offshore drilling agency seeks new leader amid controversy

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BOEMRE photo
Drillship in the Beaufort Sea.
The beleaguered federal agency that oversees offshore oil and gas development in Alaska has launched a nationwide search for a new regional director, setting the stage for potentially significant change that could play a big role in Alaska's economic future.

The Bureau of Ocean Energy Management, Regulation and Enforcement -- formerly part of what used to be known as the Minerals Management Service -- often finds itself in the middle of a political and legal tug-of-war as oil companies and state officials push for more opportunities to explore for oil and gas in the Arctic, development that creates jobs and revenue for both the state and the industry.

But conservation groups, sometimes joined by Native leaders, have been unflinching in their scrutiny of the agency's policies and practices. In recent years, these groups have filed numerous lawsuits aimed at blocking offshore lease sales and permit applications in an effort to protect the environment and preserve Native culture.

Alaska regional director John Goll retired last month after 28 years with the agency, the last 13 as its director. Goll, one of only three regional directors in the country, led the Alaska office through both Republican and Democratic administrations. His departure comes just as the agency faces the most intense public spotlight of its existence.

Last year, a devastating oil well blowout in the Gulf of Mexico killed 11 people and spewed an estimated 205 million of gallons of crude into the waters and beaches of the Gulf Coast. The Minerals Management Service was seen as a major culprit for its lax oversight of the oil industry and, in a couple of highly publicized examples, for unethical cozy relationships between MMS officials and oil company executives.

The Obama administration responded with a complete overhaul, breaking MMS into several parts and giving them all new names. The offshore leasing and regulatory arm got tagged as the new Bureau of Ocean Energy Management, Regulation and Enforcement, or BOEMRE, an acronym soon deemed "Bummer" by all sides.

The administration also vowed to tighten its oversight of offshore oil and gas operations, a promise that has also generated criticism from opposing factions: Development interests say it slows down the permitting process, while environmental groups say it fails to be tough enough.

On Tuesday, the National Oil Spill Commission put in place by President Obama to review the Deepwater Horizon disaster in the Gulf, added even more urgency to the need to strengthen BOEMRE. A long-awaited report by the blue-ribbon panel criticized the agency and said it needed to be adequately funded and staffed with capable and trained personnel.

Even as the federal reform effort attempts to take hold, it's already been a tough year for Goll and "Bummer's" Alaska region.

In May, about a month into the Gulf spill, the Alaska regional office held a staff-building event and someone brought a cake decorated with: "Drill Baby Drill." The story made national news, and outraged anti-drilling factions who called for Goll to be fired. Agency insiders say he knew nothing about the cake until it appeared, but he accepted responsibility and took the political fall anyway.

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BOEMRE photo
Ice Breaker and Drillship in the Beaufort Sea.
In March, the Alaska office also took a hit from an audit by the General Accounting Office that found serious problems in how it analyzed permits applications and arrived at other conclusions. The GAO criticized the agency for a lack of guidelines for making decisions, and cited complaints by agency scientists that their recommendations were overridden without foundation. This pattern of mismanagement led in part to nine major lawsuits against the Alaska office in recent years, the audit found. In addition, high turnover -- including nearly complete turnover of a 14-member staff in a five-year period -- also was cited by the GAO as a serious concern.

"In addition to litigation, MMS has also been vulnerable to allegations by stakeholders and former MMS scientists of suppression or alteration of their work on environmental issues," the audit said, adding that some scientists accused top mangers in the office of removing their analysis in order to more easily justify allowing projects to move ahead.

That accusation further outraged environmental groups who have long seen the agency as a friend of a industry and reinvigorated their efforts to protect the Arctic through legal strategies.

Environmental groups have succeeded in stalling development with successful lawsuits challenging lease sales in the Chukchi Sea and other offshore operations. The groups have been pursuing Endangered Species Act Protection for birds and other wildlife and scored a major victory when the government declared more than 187,000 square miles of Arctic coast as critical habitat for polar bears.

Shell Offshore Inc. has invested billions of dollars in its Alaska offshore program and has been seeking BOEMRE approval to drill in both the Chukchi and Beaufort Seas. Last week, Native and conservation organizations succeeded in getting air quality permits already given to Shell for the areas invalidated.

Given the stakes, what sort of manager should they seek?

For now, James Kendall -- BOEMRE's environmental chief -- is acting regional director while the job is being advertised nationally. It comes with a paycheck of as much as $179,700 plus "locality" and cost-of-living adjustments that could add another 25 percent, according to a job posting.


BOEMRE officials declined to talk about their vision for a new director for this story, saying they didn't want to prejudice the job search process. A request for an interview with new BOEMRE national director Michael Bromwich was specifically turned down.

But others who have plenty at stake when it comes to BOEMRE and its decisions suggested a change in leadership at the regional office could have a significant effect on offshore drilling programs and might even serve to fend off the seemingly endless string of lawsuits that cost taxpayers, nonprofit groups and oil companies a lot of money and stymie jobs and the economy.

Kevin Banks, director of the state Division of Oil and Gas, worked for the MMS for about eight years in the 1980s. He sees the regional director position as one of opportunity and says a new director could go a long way toward changing the culture, the character and the public face of the beleaguered agency. A new leader could simply make more of an effort to reach out to other agencies, the public interest groups and even the Arctic village communities that feel the most impact from BOEMRE decisions, whether economic, environmental or cultural.

But that won't be easy.

The director is required to carry out policies set in Washington, D.C. Within the MMS and other federal agencies, Banks says, his experience suggests that "people pay attention to what their bosses want."

"If a federal manager here started taking some real pro-Alaska positions, they would get in trouble," he said.

But the agency also does a lot of great scientific work that takes a back seat to the politics and disputes over process, he said.

A new director who was much more of a stickler about following the permitting rules -- which are carefully detailed in a variety of laws ranging from the National Environmental Policy Act to the Alaska Native land claims act -- would help the agency successfully defend or even deter filling of so many lawsuits, Banks said.

Conservation groups have won major victories simply by showing that the agency didn't do what it was supposed to do, he said.

For their part, environmental groups said an agency that follows the rules -- and the science -- would be fine with them. They believe that if the agency were doing its job, it would agree that oil development has significant impacts on the Arctic environment and that permits should either be denied or strong mitigation efforts put in place. Now, BOEMRE is more likely to give a project a finding of "no significant impact."

"This is a really important position given the magnitude of the decisions facing BOEMRE now," said Michael LeVine,  Pacific senior counsel for Oceana in Juneau. "Having the right person with the right commitment to science and preparedness is vital to the future of clean oceans."

He pointed to the complaints by agency scientists that they were simply ignored.

"We do hope that director Bromwich is taking this agency in a different direction," LeVine said. "There's an opportunity to bring someone different to the table who will bring to Alaska the commitment to science."

The presidential commission also specifically called for more science and research into issues that might affect Arctic offshore operations.

Rick Steiner, a biologist and environmental activist who has spent decades working on oil spill response issues and Arctic environmental concerns, said he's encouraged that BOEMRE is advertising outside the agency and not just automatically promoting from within.

He described Goll as a "nice guy who means well" but who doesn't really stand up to industry. "I think he could have been a lot tougher."

Watchdog groups: Few indications that ‘BUMMER' has begun to change

But there are signs the Obama administration may not be so quick to implement its promises of reform, according to local and national watchdog groups.

Eight months after the Deepwater Horizon blowout in the Gulf, Steiner said, there are few if any signs that the agency is changing. As an example, he pointed to the administration's decision to first impose a moratorium on offshore drilling in the Lower 48, then rescind it based on new rules. But the new rules were then invalidated by the courts because there had been no public notice or comment, a frequent complaint about how the old agency had done business.

"It's total confusion down there," Steiner said. "I haven't seen the new improved MMS yet. As far as changes on the ground or on the water, it's difficult to see at this point."

Jeff Ruch, executive director of the Public Employees for Environmental Responsibility [ http://www.peer.org/ ], keeps track of federal workers, and, a few years ago became deeply involved in the Alaska MMS office when scientists leaked internal e-mails that showed their supervisors were skewing the science in order to justify approving permits.

Like being ‘scalded with hot oil'

His group made the e-mails public, and the information became the foundation for some lawsuits against MMS. They also led to the GAO investigation that was released in March.

Ruch said he also doesn't see much change in BOEMRE in part because some recommendations made by the GAO last spring -- and subsequently agreed to by agency leaders -- have still not been carried out.

"In Alaska you have this GAO report that comes out and you don't change a single policy or supervisor or reporting relationship?" he said.

John Callahan, a spokesman for the Alaska office of BOEMRE, said Goll did issue a directive this fall that the agency believes addresses some of GAO's concerns, including how information is shared with agency scientists and how their work is reviewed. A new handbook that would give guidance on the environmental review process still hasn't been finished, he said.

Ruch sees BOEMRE's problems as stemming from a collision between the politics of the new administration and promises made during the presidential campaign for more openness and accountability.

"I think there is a big unresolved tension in the Obama administration between promising transparency and controlling the message," Ruch said. "They like the idea of transparency, but if you sound a discordant note and that puts people off message, it's like being scalded with hot oil."

Still, major economic interests should be given fair consideration, supporters of offshore development say, and they, too, want a new director who has expertise and an eye toward the promises of the offshore.

Jim Burling, director of litigation for Pacific Legal Foundation -- which generally represents property rights and development interests -- said he hopes the Obama administration doesn't acquiesce to friends in the environmental community with this appointment. He suggested Congress could make more of an impact on the agency and it's legal problems by revising environmental laws to make it tougher to challenge the government's decisions.

"People in Alaska have to eat and this country has to stop importing oil from other countries," he said.

Contact Patti Epler at patti(at)alaskadispatch.com.