MMS “cozy” with industry? Hardly

June 2, 2010

JDH 2— John Hofmeister is founder and CEO of Citizens for Affordable Energy, former president of Shell Oil Company and author of Why We Hate the Oil Companies: Straight Talk from an Energy Insider. Any views expressed here are his own. —

How bad, really, was the Minerals Management Service (MMS)?

The quick answer is no one will ever know.

Despite all the accusations of a “cozy” relationship with industry, the recent termination of President Obama’s appointee who served less than a year, as well as the re-organization by the Interior Department suggest that any sleaze has been swept aside by political calculations in the rush to assert that the administration is on top of things in Washington.

I must admit I was surprised to hear of this cozy relationship, since my experience with the MMS was exactly the opposite.

During my term as Shell’s president, my company experienced the frustration and huge costs of being turned down repeatedly by MMS for licenses to drill in the Beaufort Sea off the coast of Alaska because the professional regulators were not satisfied with the environmental plans that had been submitted to support test drilling operations.

They said conditions in the Arctic warranted extra review and consideration.

No amount of argument, debate or revision satisfied them over the next few years; rather, it got more difficult every year, with tougher conditions placed on the prospective drilling efforts.

Even in the face of climbing gas prices, as well as urgent warnings from Congress and the administration in 2006 and 2007 about energy dependence, the permit writers would not budge.

As disappointing as it was to waste literally tens of millions of dollars preparing to work off the North Slope, pending the permit, I had to admire their tenaciousness.

After the point was moot due to the return of winter ice, I decided to visit with the regulators to see what I could learn.

Around a Washington table, which I was assured had never hosted a company president before, I heard straight talk from the MMS staff about what they required and how Shell fell short. It was a valuable lesson, not forgotten.

What’s unfortunately overlooked in the midst of the current scandal and reorganization is the work of hundreds of staff and managers who served their country day in and day out as professional regulators of a critical American industry – and the importance of their task in the face of looming energy crisis.

In recent years the United States has been struggling to increase its domestic production of natural resources to combat our insidious dependence on foreign imports from nations that don’t like us.

MMS staff have been encouraged and motivated to do their jobs, to regulate and inspect industry according to long established policies and protocols, and help relieve our national energy insecurity.

Energy bills in 2005, 2006, 2007 and 2008 promoted and encouraged more energy production in our country. Congressional hearing after Congressional hearing lamented our dependence on imports.

Imagine you work for an organization to which you have dedicated your professional best for years.  You read the papers, listen to your bosses and have a role to play in permitting your nation to produce more energy while regulating how it is produced. You’re showing signs of success.

Domestic production has increased over the past two years.

Then, in the midst of a dire recession, as energy demand sinks, a well blows out in the Gulf of Mexico.

Suddenly, your new bosses of just over a year, the cabinet secretary and the president of the nation, who you don’t know at all, condemn your work and that of your colleagues in front of the entire nation, calling your integrity, ethics and service into question, based on allegations and facts that had nothing to do with you.

Were there instances of irresponsibility, misplaced trust, individual failings, and immature judgments over drugs, sex and other temptations?

The Inspector General of the Interior Department in 2007 says there were. I have no reason to doubt the report.

How extensive and penetrating were such behaviors? We’ll never know.

Is this the first, or last, government agency to employ individuals not worthy of their station? Certainly not.

Is this the only large organization that houses individuals who get too close to their peers, cross the line, get caught and dealt with? Hardly.

Every organization I know, from universities to corporations to major nonprofits, have had employees who did not meet their responsibilities. Do their leaders trash the whole company, university, organization or an entire department on such basis? Not if they understand how leaders lead.

I’m naturally appalled at companies that cajole federal regulators to lighten up if conditions are not met.

On the other hand, I’m just as appalled if political leadership takes advantage of past wrongdoings of a few to make themselves look powerful to the public at the expense of their powerless and hardworking staff.


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methinks the emperor has new clothes!

Posted by cawasji | Report as abusive

Did Shell Oil do any business in the Niger Delta?

Posted by irradiatedmeat | Report as abusive

I hope the sex was worth it. Really, because everybody else got screwed and it wasn’t in a loving way.

Posted by HBC | Report as abusive

Another puff piece written to make us all feel good….
When will we ever learn?

Posted by edgyinchina | Report as abusive

John should be the BP president. Maybe the leak would be plugged by now. We just launched a competitor to Facebook at

Posted by STORBURNcom11 | Report as abusive

John Hofmeister – If you never sat around a Washington table with the MMS to discuss issues then that might also explain the issue of lack of regulatory oversight.

The complaint is that you never had to sit around any table with the MMS to discuss issues because the oil industry itself ticked all the boxes – some of which had already been pencilled in by the MMS for “completion”.

There’s a difference between a close working relationship and a cosy relationship.

BP has now called in the former assistant to the famous oil man Dick Cheney to help with their PR. It’s called “keeping things in the family.”

Posted by | Report as abusive

Now, hold on just a moment here, everybody. I’m no fan of oil companies or their leaders, but this fellow nevertheless makes a valuable point, one that we should all consider: to trash all members of the MMS as irresponsible, corrupt, and incompetent is not right. Anybody who has ever worked in a corporate or organizational setting – even people who have worked on group projects in school or college – know that out of any collection of people, you will inevitably have members who aren’t up to grade. There will be people who “cozy up” to the other side or just are too bloody lazy to do the job correctly. But are those people representative of the group? Not necessarily. Sure, there are entire groups out there who are more corrupt than correct, but those are not the statistical norm. So, while the leadership of an organization may be incompetent or certain unfortunately-placed members be corrupt, the vast majority of the rank and file are honest, hardworking people doing what they think is right.

Am I excusing BP for this mess, Shell for its spills, or Exxon for repainting Alaska? No, of course not. These companies committed major environmental crimes and must be held accountable. That BP is losing millions of dollars a day in cleanup and litigation costs is just; they should probably be losing more and, I’m certain, will when the court cases start rolling in earnest. Big oil has been much too cozy with certain persons in governmental positions. When any self-interested organization starts handing out major “campaign contributions,” attention should be given to the true intentions. No, oil companies need serious oversight. After all is said and done, they are in the business of handling hazardous materials. Maybe not as serious as nuclear waste, but when it’s spilled, it’s a significant problem.

I’d really like all of you to sit down for a moment and think before you start casting stones. Do you really believe, in your heart, that the various clerks, file workers, and general office workers of Lehman or Goldman were in on the whole scheme? Do you truly think that the workers at Enron knew what was going on? Of course not. Yet we vilify them along with the architects of the disasters. So, while we can certainly lay some blame with the MMS, can we truly blame ALL of the employees? We shouldn’t. For, while there were undoubtedly failures in the system and persons not doing all they should, it is entirely unfair and unjust to smear the blame across the whole of the organization. Painting with too broad a brush just leaves an inexcusable mess.

Posted by KeepThinking | Report as abusive

This is not about “group projects in school or college”. This is not about “the statistical norm”. This is not about “various clerks, file workers, and general office workers”, nor “ALL of the employees”, nor “failures in the system”. This is about a criminal enterprise about which we should all “KeepThinking”, including Hofmeister and his astroturf “Citizens” organisation.

Posted by moebadderman | Report as abusive