TOP DRAWER ARTICLE

What's the MMS?
by
HL Carpenter

By now you've most likely heard about the resignation of the head of the Minerals Management Service (MMS) due to the Deepwater Horizon oil spill in the Gulf of Mexico. But you may be wondering when this federal agency came into existence.

That happened in 1982, when Congress determined the accounting system used by the Department of Interior to track royalties and other payments for oil and gas produced from lease sites on federal and Indian lands was archaic and inadequate. Congress passed the Federal Gas Royalty and Management Act of 1982 to establish a more efficient federal royalty management system.

Enter MMS, created and charged with collecting, accounting for, and disbursing the revenues from federal oil and gas lease sites. According to May 2010 testimony and a press release issued by US Interior Secretary Ken Salazar, MMS has collected more than $210 billion since 1982 and distributed the money to states, Indian tribes, counties, and the federal treasury. The agency has collected an average of more than $13 billion annually for the past five years.

Now the agency that changed the way the Department of Interior accounted for royalties is itself being changed. In addition to new ethics standards and other administrative changes, MMS is currently being reorganized into three new entities: The Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement, and the Office of Natural Resources Revenue.

Originally published June 2010.

Last update: January 8, 2011