The Obama administration proposed splitting the primary regulator of oil companies into two entities, amid mounting criticism of federal oversight of drilling in the wake of the BP oil spill. Currently, the Materials Management Service, a unit of the Interior Department, regulates oil drilling and collects royalties from oil and gas companies that drill on federal property.
The dual roles pose a potential conflict, since the same agency responsible for drilling safety has an interest in maximizing oil revenue. Under the administration’s proposal, Interior would create one, 300-person unit to perform safety inspections, while a separate unit would collect royalties. Congress must approve the change.
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