Date: May 11, 2010

Contact: Kendra Barkoff (202) 208-6416

Salazar Launches Safety and Environmental Protection

Reforms to Toughen Oversight of Offshore Oil and Gas
Operations
WASHINGTON, DC – As part of an ongoing agenda to change the way the Department of the
Interior does business, Secretary of the Interior Ken Salazar today announced a set of reforms
that will provide federal inspectors more tools, more resources, more independence, and greater
authority to enforce laws and regulations that apply to oil and gas companies operating on the
Outer Continental Shelf.

Salazar has also enlisted the National Academy of Engineering to provide a set of fresh eyes on
the issues surrounding the Deepwater Horizon incident and an independent, science-based
understanding of what happened.

“The tragedy aboard the Deepwater Horizon and the massive spill for which BP is responsible
has made the importance and urgency of our reform agenda even clearer,” said Secretary Salazar.
“We have been – and will continue to be – aggressive in our response to BP’s spill, but we must
also aggressively expand the activities, resources, and independence of federal inspectors so they
can ensure that offshore oil and gas operations are following the law, protecting their workers,
and guarding against the type of disaster that happened on the Deepwater Horizon.”

The reforms Secretary Salazar announced today are the first of several potential changes the
Department of the Interior is considering. Secretary Salazar is conducting a 30-day safety
review at the request of President Obama, has assembled an Outer Continental Shelf Safety
Oversight Board to provide recommendations for improved management and oversight of OCS
operations, and the MMS is conducting a Joint Investigation of the incident with the U.S. Coast
Guard.

The four major new actions that Secretary Salazar announced today are:

1. Independence for MMS’s Energy Inspection and Enforcement Mission

Secretary Salazar announced that he intends to restructure the Minerals Management Service
(MMS) in order to establish a separate and independent safety and environmental
 enforcement entity. Salazar said the MMS’s inspection, investigation, and enforcement
operations will be separate and independent from the agency’s leasing, revenue collection,
and permitting functions. Currently, the Minerals Management Service collects energy
revenues on behalf of American taxpayers and enforces laws and regulations that apply to
offshore energy operators.

“The job of ensuring energy companies are following the law and protecting the safety of
their workers and the environment is a big one, and should be independent from other
missions of the agency,” said Salazar. “We will responsibly and thoughtfully move to
establish independence and separation for this critical mission so that the American people
know they have a strong and independent organization holding energy companies
accountable and in compliance with the law of the land.”

2. Additional Resources for Federal Inspectors

The oil spill response legislation that the Obama Administration will submit to Congress will
propose an additional $29 million for inspections, enforcement, studies and other activities.
This includes approximately $20 million for increased inspections of other platforms,
engineering studies, and enforcement of safety regulations for other offshore platforms,
another $7 million for more comprehensive evaluations of policies, procedures and actions
that may be needed in light of the Deepwater Horizon incident, and $2 million for the Fish
and Wildlife Service, U.S. Geological Survey or others to conduct general environmental
studies. MMS’s budget for inspections for Fiscal Year 2010 is $23 million.

3. Independent Investigation by National Academy of Engineering

At the request of the Obama Administration, the National Academy of Engineering will
conduct an independent, technical investigation to determine the root causes of the
Deepwater Horizon disaster so that corrective steps can be taken to address the mechanical
failures underlying the accident.

The National Academy of Engineering (NAE) is a highly-regarded and respected

organization affiliated with the National Academy of Sciences (NAS). Its projects, like those
of the NAS, are implemented by the Academies’ operating arm, the National Research
Council (NRC). Its project teams are composed of members of the NAE and other experts
from academia, industry, and - when appropriate - from government. The team members are
unpaid experts throughout the world with knowledge and expertise in various engineering
disciplines. Similar, independent investigations have been conducted of events like the
space shuttle Challenger accident. NAE and NAS analyses and technical investigations often
lead to results and findings that have had enormous impact on future policy decisions.

The independent NAE analysis and technical investigation will complement -- but not
replace -- the on-going joint investigation that the USCG and MMS are conducting under
their respective governmental investigative authorities.

4. Expanded Authority to Review Exploration Plans

 The Obama Administration, in the oil spill response legislation it is submitting to Congress,
is proposing to eliminate a 30-day congressionally-mandated deadline for the Minerals
Management Service (MMS) to act on exploration plans that oil and gas companies submit.
Changing this 30-day mandatory deadline to a 90-day timeline that can be further extended to
complete environmental and safety reviews, as needed, would provide MMS more time to
conduct additional environmental analysis on an exploration plan.

Additional environmental analysis on the exploration plan would supplement the full-scale
Environmental Impact Statement (EIS) that MMS conducts for the five year plan. It would
also supplement the EIS and other environmental reviews conducted prior to any lease sale.
MMS also undertakes additional environmental reviews for smaller grids of lease blocks
before they are developed.

The changes Salazar announced today are the latest in a series of reforms to MMS that began in
January 2009. Those reforms include: the establishment of new ethics standards; termination of
the controversial royalty-in-kind program; balancing of the agency’s mandate to include offshore
wind and renewable energy production; implementing recommendations of the Inspector General
and independent reviewers; directing an independent Marine Board review of MMS’s inspection
program for offshore facilities; cancelling proposed offshore lease sales in Bristol Bay and the
Arctic Ocean; and establishing a clear, orderly, and science-based process for determining which
areas on the Outer Continental Shelf may be appropriate for oil and gas development.

In addition, Secretary Salazar has undertaken several initiatives in response to BP’s spill,
including:

 Announced that no applications for permits to drill will go forward until the Department
completes a 30-day review of safety processes that President Obama requested;

 Ordered immediate inspections of all deepwater operations in the Gulf of Mexico. The
inspections of deepwater drilling rigs found Incidents of Non-Compliance (INC) on two
rigs. Those violations were corrected and no other violations were found. To view the
inspection report, click here. Inspections of deepwater production platforms is ongoing.

 Issued a safety notice to all operators, reminding them of their responsibilities to follow
MMS regulations and to conduct full and thorough tests of their equipment;

 Established the Outer Continental Shelf Safety Oversight Board within the Department of
the Interior with top officials to strengthen Outer Continental Shelf safety and improve
overall management, regulation, and oversight of OCS operations;

 Launched a joint investigation of the incident with the U.S. Coast Guard to determine
what happened.

For information about the response effort, visit www.deepwaterhorizonresponse.com.

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