Detailed Information on the
Minerals Management Service - Outer Continental Shelf Minerals Regulation and Compliance Assessment

Program Code 10003715
Program Title Minerals Management Service - Outer Continental Shelf Minerals Regulation and Compliance
Department Name Department of the Interior
Agency/Bureau Name Minerals Management Service
Program Type(s) Regulatory-based Program
Assessment Year 2005
Assessment Rating Effective
Assessment Section Scores
Section Score
Program Purpose & Design 100%
Strategic Planning 89%
Program Management 100%
Program Results/Accountability 78%
Program Funding Level
(in millions)
FY2007 $92
FY2008 $104
FY2009 $102

Ongoing Program Improvement Plans

Year Began Improvement Plan Status Comments

Expand program evaluation through regular independent reviews.

Action taken, but not completed MMS continues to engage in external evaluations when resources allow and sufficient benefits to the organization can be defined. MMS is one of 4 federal agencies funding and participating in a national study of the U.S. oceans workforce conducted by the Marine Advanced Technology Education Center. This study is evaluating the current state of the workforce and will characterize the educational/ training programs needed to prepare this workforce for future requirements.

Publish Safety and Environmental Management System (SEMS) regulations.

Action taken, but not completed The Safety and Environmental Management System Regulations have been drafted and are expected to enter DOI surnaming in late June 2008. Final publication is anticipated in the Fall of 2008.

Completed Program Improvement Plans

Year Began Improvement Plan Status Comments

Focus regulatory efforts on operators that have a history of problems and violations.

Completed A monthly MOC report lists problem facilities; managers use that report to conduct targeted inspections. Escalating actions are taken if problems persist including annual or more frequent Operator performance reviews and required performance improvement plans. Should an operator not improve their performance over a specified period, the MMS may move to disqualify an operator from a facility, MMS District, or the entire OCS.

Explore regulatory options to improve safety and environmental management systems.

Completed In April 2006, MMS published a final rule revising incident reporting requirements.MMS now receives information on all serious incidents & a significant number of minor incidents.A May 2006 ANPR requested comments on requiring operators to incorporate safety & enviro. mgmt. procedures in operations. Since the 2005 hurricane season, new initiatives address safety & survivability of OCS facilities during major storms. MODU station keeping & structural integrity are of particularly high priority.

Program Performance Measures

Term Type  
Long-term Outcome

Measure: Achieve an oil spill rate for offshore development of no more than X barrels spilled per million barrels produced

Explanation:This measure accounts for petroleum spills of one barrel or greater as a result of MMS-regulated activities. While the true target is always "0", industry has spilled less than 0.001% of oil produced over the past twenty years. Ambitious targets seek to reduce this further. (1) Production numbers are updated as MMS audits and reviews companies OCS properties to verify federal OCS production and royalty payments. The result for this measure will continue to be revised in future years as "trapped" oil is recovered, previous unknown spills are found and OCS production is verified. (2) May change, largest Hurricane Ivan spill volume of 1,720 bbl may change if/when operator decommissions pipeline Spring 2007. (3) May change as additional information becomes available. Includes oil spilled as a direct result of Hurricanes Katrina and Rita. The spill rate EXCLUDING hurricanes is 0.2. (4) Estimated value; FY 2006 results are expected Spring 2007.

Year Target Actual
2002 < 10 0.2
2003 < 10 4.2
2004 < 10 8.2
2005 < 10 24.7
2006 < 5 3.0
2007 < 5 2.2
2008 < 5
2009 < 5
Long-term Efficiency

Measure: Reserves recovered per dollar of funding for the Conservation Management component of the program

Explanation:This measure captures the increase in barrels of oil (and equivalent volumes of natural gas) produced for every dollar in funding for MMS conservation management activities. MMS often requires industry to take certain actions to optimize recovery of oil and gas resources. The target is the baseline from data collected in 2002 through 2004. It reflects recovery of 56.9 MMBOE at a funding level of $10.9 million over the 3-year period. Future targets are under development as MMS assesses additional information. BOE can vary significantly year to year depending on industry submitted Conservation Information Documents (CID). Deepwater CID's normally include larger reservoirs and result in greater BOE conserved than shelf CIDs.

Year Target Actual
2005 5.2 BOE 3.49
2006 5.2 BOE 20.38
2007 5.2 BOE 62.7
2008 5.2 BOE
2009 5.2 BOE
Long-term Outcome

Measure: Number of fatalities among workers in DOI-permitted activities

Explanation:The program strives for no fatalities, but a rolling 5-year average has been used for performance analysis. Beginning in 2005, the program will remove the highest annual figure before calculating the average to ensure that an "outlier" event with multiple fatalities does not skew future expected values. This ensures an ambitious target. *While no single cause for the increase in fatalities and serious injuries in FY 2006 from FY 2005 can be identified, the unusual offshore activity level during FY 2006 is most likely a significant contributing factor. During FY 2006, the offshore industry in the Gulf of Mexico has been engaged in recovering from the record damage caused by hurricanes Katrina and Rita in August and September 2005. The number of repair operations and man-hours operating on the OCS has been well above that of recent years, dramatically affecting the availability of equipment and qualified people to conduct the recovery and repair operations.

Year Target Actual
2002 N/A 7
2003 7 11
2004 7 3
2005 6 6
2006 6 9
2007 6 3
2008 6
2009 6
Annual Outcome

Measure: Maintain an Annual Composite Operator Performance Index of X or less

Explanation:The OPI is calculated based on the number and severity of 1) violations cited and 2)accidents reported. In computing the index, compliance data are related to the number of safety and pollution prevention components inspected during the year, and accident data are related to the total number of such components installed in MMS-regulated facilities.

Year Target Actual
2002 0.20 0.14
2003 0.20 0.21
2004 0.20 0.16
2005 0.20 0.11
2006 0.20 0.20
2007 0.20 0.15
2008 0.20
2009 0.20
Annual Output

Measure: Total Number of Compliance Inspections Completed

Explanation:MMS has increased the number of inspections by nearly 60% from 1999 to 2004 and anticipates sustaining this new level of activity to assure compliance and to support continued achievement of safety and environmental protection outcome goals.

Year Target Actual
2002 17,000 22,547
2003 17,000 23,218
2004 21,000 24,938
2005 25,000 23,115
2006 23,000 19,961
2007 22,300 20,567
2008 20,000
2009 20,000
Annual Outcome

Measure: Achieve an Annual Composite Accident Severity Ratio of X or less

Explanation:The ASR is calculated based on the number and severity of OCS accidents reported. In computing the index, accident data are related to the total number of safety and pollution prevention components installed in MMS-regulated facilities. The ASR is a component of the OPI, and is reported separately so that gross changes in the OPI can be readily attributed either to changing levels of enforcement activity, or changes in accident (fatalities, injuries, spills, property damage) outcomes.

Year Target Actual
2002 .08 .04
2003 .08 .08
2004 .08 .08
2005 .08 .03
2006 .08 .10
2007 .07 .075
2008 <.10
2009 <.10
Long-term Outcome

Measure: Number of serious injuries among workers in DOI permitted activities

Explanation:OCS Incident Reports are analyzed to determine whether reported injuries occurred during the conduct of activities regulated by MMS and meet criteria for designation as "serious". The program strives for no injuries, but a rolling 5-year average has been used for performance analysis. Beginning in 2005, the program will remove the highest annual figure before calculating the average to ensure that an "outlier" event with multiple injuries does not skew future expected values. This ensures an ambitious target. *While no single cause for the increase in fatalities and serious injuries in FY 2006 from FY 2005 can be identified, the unusual offshore activity level during FY 2006 is most likely a significant contributing factor. During FY 2006, the offshore industry in the Gulf of Mexico has been engaged in recovering from the record damage caused by hurricanes Katrina and Rita in August and September 2005. The number of repair operations and man-hours operating on the OCS has been well above that of recent years, dramatically affecting the availability of equipment and qualified people to conduct the recovery and repair operations.

Year Target Actual
2002 25 21
2003 25 23
2004 25 29
2005 25 23
2006 23 29
2007 23 32
2008 27
2009 TBD

Questions/Answers (Detailed Assessment)

Section 1 - Program Purpose & Design
Number Question Answer Score

Is the program purpose clear?

Explanation: Through the OCS Regulatory and Compliance program, the MMS regulates industry to ensure that mineral operations on the Outer Continental Shelf are conducted in a safe and clean manner, and without unreasonable impact on other uses of the ocean. The program promotes conservation management by working to maximize ultimate recovery of mineral resources from federal leases offshore, subject to environmental considerations.

Evidence: OCS Lands Act, section; Federal Oil and Gas Royalty Management Relief Act (FOGRMA); Secretarial Orders 3071, as amended, and 3087; and DOI Manual 118-1; FOGRMA, Section 101, Duties of the Secretary, subsection (b)

YES 20%

Does the program address a specific and existing problem, interest, or need?

Explanation: The program addresses the responsible development of OCS mineral resources. It establishes and enforces requirements through regulations, lease terms, and plan/permit conditions. The program oversees all aspects of offshore mineral operations from exploration to decommissioning. Absent the OCS Regulatory and Compliance program, there is no coherent framework to deliver OCS mineral resources to the American public.

Evidence: There have been no large (>1,000 barrels) platform spills on the OCS since the MMS was established in 1982; however, inspection results and civil penalties demonstrate that there continues to be a need for enforcement activities to assure compliance with the provisions of the law and supporting regulations. Statistics on Incidents of Non-Compliance, Civil Penalties; Operator Performance Index; Accident Investigation Reports

YES 20%

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: The OCS Lands Act states that only the Secretary of the Interior is responsible for the development of the mineral resources on the OCS. Though there may appear to be overlap between this program and others, MMS developed Memorandums of Understanding with the Coast Guard, the Department of Transportation and relevant States to define responsibilties. In addition, the Oil Pollution Act assigns MMS resonsibility for oil spill prevention and response planning.

Evidence: OCS Lands Act, Section 4; Oil Pollution Act, Section 1016; MMS-USCG MOU; MMS-DOT MOU

YES 20%

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The MMS compliance program has been found to be a balanced regulatory program, effective in providing access to mineral resources while minimizing impacts upon the environment and assuring that the public receives fair value for the resources.

Evidence: A proposal in 1995 to "devolve" MMS responsibilities to State regulators was met with resistance from the Congress, industry associations, and individual companies. [HR 1813 Congressional Hearing Report] During fiscal years 1999 through 2003, MMS was challenged on only one of its 1,997 decisions approving oil and gas exploration and one of its 1,631 decisions approving offshore oil and gas development and production. There were no challenges to the 2,850 drilling permits issued. [GAO Report 05-124, "Oil and Gas Development"] Of the thousands of exploration and development plans approved by the program, states have concurred with the consistency of such plans with their state coastal management program in virtually all of the cases. [Commission on Ocean Policy, "An Ocean Blueprint for the 21st Century"]

YES 20%

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The program assesses developing technology, monitors lessee/operator activities, and analyzes the results of compliance inspections and incident investigations to identify the best available and safest technologies, systems, and practices that assure continued safe and clean operations on the OCS. The program acts through regulatory and non-regulatory means to minimize risks to the public and the environment and to avoid uncompensated resource loss.

Evidence: The program found a growing number of injuries and fatalities associated with crane use. MMS revised standards and regulations after conferences and workshops with industry. The program continues to work with industry and has elevated the issues to an international regulators forum to seek out any additional experience and solutions. The program recognized the particular sensitivity of a live coral area (Flower Garden Banks) and established an environmental monitoring program to ensure protection of that living resource. The program has received an environmental award from CEQ. CEQ-NEPA25 report, p.34.

YES 20%
Section 1 - Program Purpose & Design Score 100%
Section 2 - Strategic Planning
Number Question Answer Score

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: Long-term measures reflect the outcomes of the program monitoring of lessee and operator activity to prevent waste, damage to the environment, and ensure safe development and production.??

Evidence: Proposed PART Measures 2004 Deep Gas Rule and associated Economic Analyses

YES 11%

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The Program has a limited number of specific quantifiable targets with clear baselines for long-term measures. The targets improve upon the baseline and are ambitious.

Evidence: In addition to the measures selected for this PART review, the program monitors a number of milestones in its Strategic Initiatives and Action Plans, which are tied to DOI strategic goals and include specific due dates for key initiatives. Proposed PART Measures; OMM Strategic Initiatives and Action Plans 2005-2009

YES 11%

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: The program closely monitors its activities and industry's performance in the program's core areas of Safety and Environmental Protection (OPI & Inspections) , Conservation and Fair Value (Resources recovered & incentives cost-effectiveness), and Responsible Lease Management with discrete and quantifiable annual performance measures.

Evidence: In addition to the measures selected for this PART review, the bureau regularly reports a suite of GPRA performance measures to ensure the program is meeting its objectives and satisfying its mandate to facilitate orderly development of OCS mineral resources in a responsible manner. Proposed PART Measures; FY 2004 GPRA Results

YES 11%

Does the program have baselines and ambitious targets for its annual measures?

Explanation: Specific targets have been identified for each of the program's annual measures, including a short-term measures. The program has sufficient data to establish both baselines and appropriate targets.

Evidence: Proposed PART Measures GPRA measures

YES 11%

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: The MMS has a strong commitment to the effective regulation of OCS minerals development activities. State and Tribal governments, other Federal regulators, industry, and the public are regularly consulted and involved through Memorandums of Understanding

Evidence: MMS and the U.S. Coast Guard signed a revised MOU which details how the two agencies will continue to foster communication and cooperation; optimize the use of government resources; develop common, compatible regulations and policies; encourage adoption of similar codes and standards; and assist offshore operators in understanding applicable regulations. MMS, the U.S. Army Corps of Engineers, and BP Exploration Alaska signed a MOU in 2004 to shorten the development time frame from 5 years to 2 ?? years for permit evaluation and NEPA compliance processes for the Liberty Development Project.

YES 11%

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The program has not undergone one comprehensive review, and could benefit from a regular scheduled independent review. Independent evaluations of varying scope have been conducted as needed by outside parties. The program contracts for studies of portions of the program as policies and priorities evolve. The results of these studies are used to validate or modify program approaches. The program also conducts internal Alternative Management Control Reviews (AMCRs). These internal evaluations are conducted by a team from a different program office from the one being reviewed.

Evidence: Several Technology Assessment & Research studies are cited: Risk Assessment of Shut-In or Temporarily Abandoned Wells assessing effectiveness of applicable provisions of the regulations; October 2002. -Deepwater Kicks and BOPE Performance, appropriateness and effects of waivers issued under applicable regulations, 7/24/2001. -Evaluation of the Suitability of Industry Standards as MMS Requirements, 2/25/2002. -Worldwide Assessment of Leak Detection Capabilities for Single & Multiphase Pipelines, 8/6/2003 -Assessment of Safety, Risks and Costs Associated with Subsea Pipeline Disposals, 9/16/2004. In 2004, the U.S. Commission on Ocean Policy completed a comprehensive assessment of national ocean policy, addressing issues ranging from ocean governance to the stewardship of marine resources. [Commission on Ocean Policy, "An Ocean Blueprint for the 21st Century"] Recent GAO reports: - Oil and Gas Development (05-214) - Natural Gas Flaring and Venting (04-809) GAO Report GAO-04-543R found in reviewing the Deep Gas Royalty Reduction final rule that "The final rule provides temporary incentives in the form of royalty suspension volumes for producing gas from certain deep wells (at least 15,000 feet below sea level). The rule also provides a royalty suspension supplement for drilling certain unsuccessful deep wells. The rule also provides price thresholds that may result in discontinuation of the royalty relief." Addendum A: Conducting Alternative Management Control Reviews; DOI Management Control and Audit Follow-up Handbook prescribes the content and structure of AMCRs to followed by DOI bureaus.

NO 0%

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The program's budget request links budget dollars and staffing levels to DOI mission goals and the related performance measures and Activity-Based Costing (ABC) end outputs. The program accounts for all related costs and shows that the funding requested will help the program meet its goals.

Evidence: Since 1985, the program has realigned resources to support performance goals and mission priorities. Long-term trends reflect steadily increased investment in the Gulf of Mexico region, offset by the closure of the Atlantic office and reductions at Program Headquarters and other regions. MMS Budget Justifications

YES 11%

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: The program's key managers, known as the Offshore Steering Committee, lay out the program's strategic direction in Strategic Initiatives and Action Plans. These key initiatives are aligned with the DOI Strategic Plan. Specific actions are assigned to individual managers, and milestones are monitored on a regular basis. As initiatives are accomplished, they are replaced on the plan with new initiatives, reflecting emerging challenges and opportunities. In addition, the program had begun examining the effectiveness of royalty incentives which will guide future incentive decisions.

Evidence: DOI Strategic Plan; OMM Strategic Initiatives and Action Plans; OMM 2004 Closeout Report

YES 11%

Are all regulations issued by the program/agency necessary to meet the stated goals of the program, and do all regulations clearly indicate how the rules contribute to achievement of the goals?

Explanation: The program crafts regulations to address concerns identified through data collected from the regulated industry, inspections, and accident investigations. The program promulgates only those regulations that are designed to move the industry toward achievement of program goals.

Evidence: Report of the National Energy Policy Development Group

YES 11%
Section 2 - Strategic Planning Score 89%
Section 3 - Program Management
Number Question Answer Score

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: The program collects performance data through reports submitted by the regulated community, direct inspection of operations in progress, and incident investigation. The MMS, the Coast Guard, and industry developed safety and environmental measures for a voluntary program (about two-thirds of OCS facilities participated).

Evidence: In 1991, the program developed a safety and environmental management system for OCS oil and gas operations. The industry responded by developing several voluntary industry standards. In addition, the program has held workshops and conferences to provide additional tools such as audit protocols. The program is developing an Advance Notice of Proposed Rulemaking to explore making selected elements of such an approach mandatory. Operator Performance Index (OPI) analysis.

YES 9%

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Contracting officers assure the quality and timeliness of contracted work, and monitor expenditures. Additionally, MMS developed a process to integrate risk assessment and to track internal and external program evaluation information. Performance plans for all OMM managers and most employees include standards that are linked to the program's GPRA and PART measures or the Strategic Initiatives and Action Plans. Contracting officer technical representatives (COTRs) within the program assure the quality and timeliness of all contracted work, and monitor expenditures accordingly.

Evidence: The contractor at the Ohmsett test tank is responsible for maintaining the facility and scheduling testing of oil spill clean up and recovery equipment and related personnel training. The contractor has achieved 84% utilization rate, 9% above the shared goal. Managers' performance plans (contracts) and subordinates showing cascading of GPRA measures and accountability for performance results to program personnel. COTR Desk Reference Manual; Example of Employee Accountability: Oil Spill Rate cascaded from Associate Director to Regional Manager to Petroleum Engineer.

YES 9%

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: Financial and operating plans are created annually, and the program conducts quarterly budget reviews to identify unfunded needs, spending lapses, and unusual spending patterns. The program establishes formal agreements with program partners, including reporting requirements to ensure that work performed contributes to the bureau's performance goals. Cost centers are established to track program budget allocations, and specifically identify funding associated with Congressional earmarks and intent.

Evidence: FY 2004 End-of-Year Obligation Summary

YES 9%

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The OCS Connect project is a multi-year re-engineering and IT improvement project spanning FY 2002 to FY 2007 that has been approved by OMB and provides for specific cost savings, cost avoidance, and programmatic and public user efficiencies. From FY 2002 to FY 2004, the Offshore program evaluated 46 Full Time Equivalents (FTE) and converted six to contract while estimating cost avoidance of approximately $493,000 annually by retaining the balance in-house.?? From 2005-2008, the Offshore program plans to evaluate an additional 174 FTE.??The program also had an efficiency measure which examines the additional resources recovered per dollar of funding.

Evidence: Competitive sourcing report. OCS Connect Exhibit 300, Section I.C. Performance Goals and Measures

YES 9%

Does the program collaborate and coordinate effectively with related programs?

Explanation: The program collaborates with related international offshore oil and gas regulatory bodies to address common areas of regulatory interest, such as safety and environmental performance measures. At the Federal level, the program works extensively with the U.S. Coast Guard, Environmental Protection Agency, Corps of Engineers, and other Federal agencies under a series of MOUs, MOAs, and other operating agreements. The program also works collaboratively with various State, Tribal, regional and local authorities.

Evidence: 2005 International Regulators Conference agenda & draft performance measures; OCS Policy Committee reports; API Assessment of the Value of Voluntary Standards; MMS Standards Committee membership list; MOUs with DOT and Coast Guard

YES 9%

Does the program use strong financial management practices?

Explanation: The MMS has procedures in place for financial management, quality assurance, contractor oversight, and management control.

Evidence: For FY 2003, an independent auditor determined the MMS to be free of material internal control weaknesses with procedures in place to ensure that charges are legitimate and payments, accurate. Weaknesses cited in the bureau's FY 2004 financial report are unrelated to the OCS Regulatory and Compliance program. FY 2003 Independent Auditors Report; MMS FY 2004 Annual Financial Report

YES 9%

Has the program taken meaningful steps to address its management deficiencies?

Explanation: In 2004, the OMM established a Chief and two Program Analyst positions to address performance management and program evaluation. This group manages both external (such as GAO and IG audits) and internal reviews (such as Alternative Management Control Reviews), as well as, program performance measures, including GPRA and PART, and the OMM strategic initiatives. Both analysts are involved in Activity Based Cost/Management and budget/performance integration matters. This team relies upon subject-matter expertise throughout the bureau, but provides a focal point for the Offshore Program's Associate Director on all issues pertaining to DOI's Management Excellence goals.

Evidence: Position Descriptions; 2004 AMCR reports: Inspections, Digital Well; 2005 AMCR team charters: Accident Investigations; Oil Spill Financial Responsibility

YES 9%

Did the program seek and take into account the views of all affected parties (e.g., consumers; large and small businesses; State, local and tribal governments; beneficiaries; and the general public) when developing significant regulations?

Explanation: The program always publishes each rulemaking in the Federal Register and solicits comments from the public, including all affected parties. The MMS also holds public information sessions (workshops) to facilitate the development of a regulation that is reasonable and is expected to achieve the desired results. The program bases much of the operating regulations upon existing or collaboratively developed standards.

Evidence: The program published a Notice of Proposed Rulemaking on July 8, 2003 to propose joint MMS and U.S. Coast Guard accident/incident reporting. On July 31, the program extended the comment closing date from October 6, 2003 to December 5, 2003. The program held a public meeting jointly with the USCG on September 3, 2003 to provide for public discussion and comment. As a result the entire rule is being restructured and rewritten. Federal Register Notices; Technology and Assessment Rating (TAR) study on effectiveness of use of industry standards.

YES 9%

Did the program prepare adequate regulatory impact analyses if required by Executive Order 12866, regulatory flexibility analyses if required by the Regulatory Flexibility Act and SBREFA, and cost-benefit analyses if required under the Unfunded Mandates Reform Act; and did those analyses comply with OMB guidelines?

Explanation: The program established a Regulations and Standards Branch in 2004 to coordinate rulemaking processes and ensure fulfillment of applicable statutory, OMB, and Departmental requirements. This includes the systematic development of appropriate underlying analyses to support the need for the action, other approaches considered, and a cost-benefit analysis appropriate to the proposed action.

Evidence: Deep Gas Provisions (January 26, 2004). OMB determined that this rule was significant according to the criteria in Executive Order 12866. The MMS prepared an economic analysis for this regulatory action, including a detailed discussion on the impacts to small businesses as required by the Regulatory Flexibility Act. The preferred alternative adopted in this rule could have substantial positive economic effect, with only a slightly adverse effect on other units of government. Drilling Operations (February 20, 2003). OMB designated this to be a significant rule because the rule raised novel legal or policy issues. The rule required that blind shear rams become a mandatory component in surface blowout preventer stacks, used to drill oil and gas wells on the OCS. A cost-benefit analysis was performed to assess the financial implications of the requirement.

YES 9%

Does the program systematically review its current regulations to ensure consistency among all regulations in accomplishing program goals?

Explanation: In 1988, the OMM restructured the entire 30 CFR 250 operating regulations suite into Subparts focusing on specific programmatic areas. The OMM regulations are reviewed by Subpart, such that a given programmatic element is reviewed in its entirety, helping to ensure consistency. MMS establishes review priorities according to issues facing the OCS program and the offshore industry. This sets the regulatory review in the framework of examining the effectiveness and efficiency of program operations and industry performance.

Evidence: Recent revisions to the Subparts include: Subpart A - Published final rule on 12/28/1999; Subpart D - Published final rule on 2/20/2003; Subpart I - Published final rule on 4/21/2003; Subpart L - Published final rule on 5/12/1998; Subpart M - Published final rule on 2/5/1997; Subpart N - Published final rule on 8/8/1997; Subpart O - Published final rule on 8/14/2000; Subpart Q - Published final rule on 5/17/2002. Not a single comment was received when the bureau issued a Federal Register notice for a comprehensive review of existing regulations on 12/26/2000.

YES 9%

Are the regulations designed to achieve program goals, to the extent practicable, by maximizing the net benefits of its regulatory activity?

Explanation: The agency has worked extensively with the regulated community and others in the public to maximize the net benefits of its regulatory activity. This includes actions prior to formulation of a regulation and subsequent actions taken in the implementation of the regulation. The program explicitly allows for use of an alternate process or equipment at 30 CFR 250.141 after receiving approval, and for departures from the operating regulations at 30 CFR 250.142.

Evidence: One example is the 1997 revision to Subpart O. The final rule streamlined the existing industry training program and allowed for alternative approaches that operators could use to demonstrate that their workforce was appropriately and adequately trained. Further, the operating regulations at 30 CFR 250.141 provide for satisfying the regulations through alternative means that can be demonstrated to provide an equal or greater level of safety.

YES 9%
Section 3 - Program Management Score 100%
Section 4 - Program Results/Accountability
Number Question Answer Score

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: The MMS oversees production of about 20% of the natural gas and 30% of oil produced domestically, while continuing to assure safety and environmental protection. The long-term measures reflect target reductions in offshore fatalities and oil spills.

Evidence: Proposed PART meausures Budget Justifications


Does the program (including program partners) achieve its annual performance goals?

Explanation: The program fulfills its mandate to inspect offshore facilities and operations, while also increasing the number of inspections by 10% per year over the period 1999-2004. The program has adopted a new measure to keep track of the number of compliance inspections completed. Previously, MMS met their goals for the number of inspections per component. The Operator Performance Index demonstrates that most companies maintain safe and clean operations, with the composite index meeting the target for seven of the nine years that the measure has been tracked.

Evidence: Each production facility and drilling operation on the OCS is inspected at least once a year, and the Annual Number of Inspections Conducted is an output measure for the program that reflects the level of resource commitment that MMS provides to identify regulatory violations. The Operator Performance Index reflects the ability of the operators to effectively address control measures and prevent safety-related incidents and adverse impacts upon the environment.


Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: To date, cost comparison studies show that OMM will avoid over $2.4 million in costs over a five-year period by retaining work in-house versus contracting for services.?? In addition, OMM has achieved actual savings by realigning its workforce through more efficient organizations, enabling MMS to move FTE to more mission critical functions and partially absorb unfunded increases in fixed costs.

Evidence: The MMS certifies well-control schools to ensure training covers pollution control equipment and procedures. Over time, various industry groups developed a framework for the private sector to assume training with no loss in the level of safety and environmental protection assurance. The OMM published revised regulations to transfer the function. The program determined that only about 5 percent of the reservoirs under development were rate sensitive and needed screening. The MMS developed screening criteria and no longer requires annual reports on 95 percent of reservoirs, significantly reducing the burden on industry as well as OMM workload. The MMS has piloted an electronic reporting system for lessees and operators to submit offshore well data. which improves the quality, timeliness, and compliance of the information exchange. MMS analyses show the system could reduce processing time for the 20,000 applications by up to 50 percent.


Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: OCS Connect Benchmarking/Best Practices reports, prepared by an independent contractor, illustrate that the programs core processes are well-managed when compared with best practices across industry and government organizations. Blueprint reports outline additional improvements to be implemented as the re-engineering and systems integration project progresses. Though there are no cross-country reports comparing regulatory programs, compared to other nations the United States experiences less major incidents due to the MMS program. In addition, Both the World Bank and the GAO have acknowledged that the U.S. record on flaring of natural gas is far superior to that of other countries.

Evidence: Process clusters for which OCS Connect benchmarking studies have been completed thus far: Manage and Administer the Leasing Program (including Responsible Lease Management functions) Protect Environmental Resources (including Environmental Protection functions) Manage Geological/Geophysical Interpretations(including many Conservation and Fair Value functions) Management of Plans and Management of Permits are currently in progress. World Bank Global Gas Flaring Reduction Report

YES 17%

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Both the World Bank and the GAO have acknowledged that the U.S. record on flaring of natural gas is far superior to that of other countries, while the National Academies of Science have found that only one percent of oil discharges in North American waters is related to the extraction of petroleum and the United Nations Environment Programme concluded that the nature and extent of environmental impacts from offshore oil exploration and production activities generally account for a very small proportion of marine pollution. This is in large part, due to the program. In addition, the Council on Environmental Quality highlighted the MMS Flower Garden Banks Long-Term Monitoring effort in reviewing NEPA implementation and Adaptive Environmental Management.

Evidence: World Bank Global Gas Flaring Reduction NAS Oil in the Sea UNEP Agenda 21 CEQ The National Environmental Policy Act: A Study of Its Effectiveness After Twenty-five Years

YES 17%

Were programmatic goals (and benefits) achieved at the least incremental societal cost and did the program maximize net benefits?

Explanation: The net benefits of the program include thousands of jobs (with reduced fatalities), oil and gas (with very low spill rate and environmental degredation), and billions of dollars in revenue. The program continuously reviews regulations and compliance rates to determine if regulations are reasonable and effective and works with stakeholders to update regulations when they are found to be poorly structured, unclear, unnecessarily restrictive, or poorly implemented.

Evidence: Two specific examples are provided: Electronic Pressure Transmitters and Level Sensors (2002). Joint MMS and industry analysis of maintenance data indicated that reducing the frequency of testing for certain devices would not compromise safety and would continue to provide a degree of protection equal to prior regulatory requirements. The MMS revised its regulations to incorporate a new industry standard and reduce regulatory burden. Multi-Phase Metering (2004). An operator contacted MMS about two shut-in wells. To restore production, the operator proposed to route the wells to a low-pressure system. The existing production in this system qualified for royalty relief, thus requiring separate measurement of differing royalty-rate regimes prior to commingling. The MMS allowed the operator to use a multi-phase meter, technology new to the Gulf of Mexico Region, to continuously measure the production from these wells. The ensuing allocation scheme allowed both wells to be restored to production and resulted in 75,000 barrels and 500 MMCF of incremental recovery.

Section 4 - Program Results/Accountability Score 78%

Last updated: 09062008.2005SPR