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Page last updated at 19:31 GMT, Tuesday, 11 May 2010 20:31 UK

US oil industry watchdog to be broken up

One of the New Harbor Islands is protected by two oil booms against the oil slick
Experts fear the oil could cause an ecological disaster

The US is to break up a federal oil industry watchdog - amid conflict of interest fears - following the Gulf of Mexico oil spill disaster.

Interior Secretary Ken Salazar unveiled the plans to split up the Minerals Management Service, which both inspects rigs and collects oil royalties.

Oil executives have been passing blame, as they were grilled at a Senate hearing into the spill, amid protests.

President Barack Obama says he is "frustrated" the leak is not plugged.

British firm BP will make a second attempt this week to seal the oil well.

An attempt to drop a huge box on to the leak failed at the weekend and BP will now try to cap it with a smaller box.

MARDELL'S AMERICA
Mark Mardell
There's been plenty of technical detail in Washington as three companies try to explain what went wrong... In simple language it's a blame game
Mark Mardell
BBC North America editor

The energy giant is also expected to try to plug the well using rubbish like tyres and golf balls.

Oil executives were met by angry protesters as they attended a congressional hearing into the disaster on Tuesday.

Senate energy committee chairman Jeff Bingaman said at the outset it was important to remember the 11 lives lost in the disaster.

He added: "The sobering reality is that despite the losses and damage that have already been suffered, we do not yet know what the full impact of this disaster will be."

Blame game

The Deepwater Horizon rig that blew up in the Gulf of Mexico on 20 April was owned and operated by drilling firm Transocean, but leased by BP.

The head of BP America told the Senate hearing he had reason to believe a critical safety device called a blowout protector had been modified, reports news agency Reuters.

Lamar McKay also noted the 450-tonne device was owned by Transocean.

I hear one message - don't blame me
Sen John Barrasso
Senate Energy Committee

But Transocean's boss said there was no reason to believe its blowout protector had been at fault, as he pointed the finger at BP.

"Offshore oil and gas production projects begin and end with the operator, in this case BP," said chief executive Steven Newman.

He also pinned blame on the failure of a cement oil-well casing, built by BP contractor Halliburton.

But Halliburton executive Tim Probert argued his firm had followed all requirements set out by BP and industry practices.

Senator John Barrasso said: "I hear one message - don't blame me. Shifting the blame game doesn't get us very far."

A separate hearing into the oil disaster was being held on Tuesday by the Senate environment committee.

Sex and drugs

Meanwhile, Interior Secretary Salazar announced plans to split up the Minerals Management Service (MMS), which critics say is riddled with conflicts of interest.

ATTEMPTS TO CONTROL SLICK
An oil-soaked bird struggles against the side of a ship in Gulf of Mexico
Booms have been partly successful although rough seas have washed oil over them
Some controlled burning of oil has taken place, but it causes serious air pollution
About 325,000 gallons of dispersant have been used, although scientists warn it may kill marine life
A relief well is being drilled but could take many weeks
A huge steel funnel suffered a build-up of ice-like crystals and had to be put aside

Critics say the agency's two core responsibilities are diametrically opposed - making money off the industry by collecting royalties, while also cracking down on it in ways that may affect the industry's bottom line.

Announcing the proposed split of the MMS, Mr Salazar said it was important to ensure "a strong and independent organisation holding energy companies accountable".

A 2008 interior department investigation found some MMS employees took drugs and had sex with energy company representatives.

Some staff had also accepted gifts and free holidays, amid "a culture of ethical failure", according to the investigation.

The interior secretary has also been conducting a 30-day review of offshore drilling, at the request of President Barack Obama.

BP and US officials have been desperately trying to seal the damaged oil well, which is gushing 5,000 barrels (210,000 gallons) a day into the sea.

The broken pipe is almost a mile (1.6km) below the ocean's surface, with little visibility for remote-controlled vehicles.

A sheen from the slick is surrounding island nature reserves off Louisiana, and tar balls have reached the Alabama coast.



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