Wednesday, May 19, 2010

MMS Oil Fines Are A Joke

What to know the difference between the EPA and MMS? Under the EPA, if you spill 25,000 gallons of gas in the soil of Maryland, you will pay $4,000,000 in fines and over $34,000,000 in total other cost. Under the MMS you can spill between 275,000 and 2,000,000 gallons a day and have your fine limited to $35,000 in fines and $75,000,000 in total cost. But as always the devil is in the details.

Interior department rules limit MMS to maximum $35,000 fines per incident. Of course these can be added up but the basic unit of infraction is a joke. We will not even discuss the collusion and corruption which is being exposed in the relationship between MMS and big oil. The odds of actually receiving any type of fine at all are miniscule. As reported in a previous post, in the last 18 years, the agency has levied a bare million dollars a year in fines. This is the amount charged; the amount collected was a fraction of that. All this on an industry drawing billions in profit from public lands. Offshore drilling racks up over 3 major violations a month and has a safety record among the worst industries. BP has paid barely $580,000 in the last decade – it made over $5,600,000,000 in the last 3 months. Equalizing those numbers to a monthly rate BP which had over a 12 major incidents in that time paid barely $4,100 a month while making $1,866,666,666 a month. That is 0.0000002589 percent of profits while committing major violations 10.00 percent of the months.

I realize those numbers are hard to grasp and that is part of the magic MMS and their corporate buddies use to get away with theft and corruption. They overwhelm the public and we have to fall back upon a trust that the regulators are doing their basic jobs. MMS is clearly not doing its job, in fact they appear to be more a public relations and cost control arm of the oil industries than a servant of the American people.

Unfortunately this “cozy” relationship as Obama puts it was not limited to Bush politics. Even the normally responsible EPA has become less and less likely to punish corporations with fines that would actually punish behavior effectively. In 2001 Exxon was fined $4,000,000 for spilling 25,000 gallons of gas in Maryland. A month ago the EPA fined and received $418,000 for a spill of 45,150 gallons of gas in Oklahoma. That is a huge degradation in the punitive impact. For an industry that rounds its financial statements up to the nearest million a $418,000 fine will not even be a footnote on their profit report.

The best way for the Obama administration to let the corporations know he means business is to start by cleaning up his own house. Starting with MMS officials need to be sacked wholesale and criminal investigations begun on them. The fine limits of $35,000 per incident and $75,000,000 total need to be scrapped. Not raised but done away with. In an industry of unlimited profits the risk for flagrant abuse needs to be unlimited.


EPA, $418k fine for Magellan oil

$4 million dollar fine for Exxon

The American Meltdown, MMS fines since 1990

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