As a former Minerals Management Service official defended the agency before Congress, Secretary of the Interior Ken Salazar announced a series of reforms today—most notably, a proposal to break up MMS, the agency that oversees offshore drilling.

The announcement was the first sign of major restructuring at the agency after BP’s disastrous oil spill, which continues to spread in the Gulf of Mexico. The MMS, an agency within the Interior Department, will be split in two, separating its safety inspection and enforcement responsibilities from its responsibility to oversee leasing, approve permits and collect royalties from oil and gas companies.

As we’ve pointed out in several blog posts, the MMS hasn’t had the best track record in either of these departments.

In 2008, MMS’s royalty department was embroiled in a scandal involving sex, drugs and other inappropriate ties with the industry it regulates. The regulatory side of the agency expressed concerns about safety equipment on several occasions, but never issued stronger regulations, instead allowing the industry to self-police while collecting insignificant penalties from companies with violations. Even after the Deepwater Horizon incident in the Gulf, the part of MMS that oversees leasing exempted 27 offshore drilling plans in the Gulf from having to undergo detailed environmental analysis, including another plan by BP.

Splitting the agency has the potential to help, but it doesn’t go far enough to address the agency’s main conflict of interest, said Mandy Smithberger, an investigator at the Project on Government Oversight, a nonprofit watchdog group.

“The conflict of mission at MMS is bigger than that issue,” Smithberger told me. The conflict also looms between the leasing and royalties sides, which “seems not to be addressed at all” by the proposed restructuring. To the extent that a desire to collect royalties influenced how stringent inspections were, the new separation will help, she said. But a desire to collect more royalties could also influence the decision to move along lease sales in order to boost production.

Smithberger and others, including MMS-critic Rep. Darrell Issa, R-Calif., have called the move a good “first step.” But not everyone seems to think the changes are necessary. In a defense of MMS’s regulatory personnel, former MMS official Elmer Danenberger told a Congressional panel that “these people won’t take a doughnut from the industry.”

“I can tell you without hesitation that everyone in that regulatory program is fully committed to safety and pollution prevention,” he said, expressing disappointment in the media coverage of the agency.

Salazar has the authority to divide MMS, according to Bloomberg. But several of the other reforms he announced today—including the allocation of an additional $29 million for inspections—would require Congressional approval.

We’ve called MMS for comment on the new changes, but have not received a response.

Utah State Representative Chris Herrod has gotten a lot of attention since his bill to explore seizing federal land through eminent domain became law last month.

Colleagues in other Western legislatures have called seeking tips on replicating his success in their states. And the law was a topic of discussion this week when U.S. Interior Secretary Ken Salazar paid a visit to Salt Lake City.

A majority of the land in Utah, as in many Western states, is owned by the federal government. Herrod’s measure treats the federal government like any other property owner in the state. It allows Washington to keep the rights and title to the land but not ultimate jurisdiction over it. That jurisdiction rests with Utah, and it means that federal land holdings may be subject to state eminent domain authority.

To Herrod, the law is an expression of long-simmering anger. Last year, he watched as the new Obama administration canceled 77 leases to oil and gas companies that had been approved by President George W. Bush. Then he saw a leaked administration memo that purported to list 14 sites as possible new national monuments, two of them in Utah.

Outrage over federal land policies is nothing new in Western states, where local officials have long sought to develop public land and collect tax revenue from it. Now, with Democrats in charge in Washington and conservative activists energized in their opposition towards the Obama administration’s health care, energy and budget policies, some in the West are trying to counter what they see as federal heavy-handedness in land-use matters. Herrod, a Republican, has spoken at Tea Party rallies trying to tap into that anger, although he is wary of calling his bill a “Tea Party bill.”

“It’s a natural outflow of the frustration,” he says. “We kind of feel like we’re serfs. We have this land and we have to beg Washington to see if we can use it.”

So far, there are few signs that the West is gearing up for a full-scale renewal of the Sagebrush Rebellion, the 1970s movement that challenged Washington’s control of public lands. While numerous bills have cropped up in Western legislatures attempting to wrest control of land from the federal government, few have been as radical as Herrod’s and few have received anywhere near the same attention. By contrast, when President Bill Clinton designated the Grand Staircase-Escalante National Monument on 1.9 million acres of public land in southern Utah, he touched off a fury in Western states that had many comparing it to the earlier uprising.

“I can’t see really anything in the Obama administration that would be cause to start another Sagebrush Rebellion,” says John Freemuth, a political scientist at Boise State University.

For instance, Interior Secretary Salazar is a Colorado rancher who last year decided to keep wolves off the endangered species list, furthering a Bush-era policy that angered environmentalists but pleased Western ranchers. The administration has spurned calls to list the sage grouse as an endangered species, a move that would close off vast swaths of land to development. Instead, Salazar has indicated he is willing to let states work through their own procedures for protecting the birds, which scientists from the U.S. Fish and Wildlife Service say need to be protected.

George Nickas, executive director of the environment group Wilderness Watch, is not worried. The Utah bill is little more than “political theater,” he says. “Every so often some of these folks in these states kind of rebel. They like to pick on the federal government and say ‘We resist any federal government control on these lands.’ My guess is it’s wrapped up in the anti-Obama, anti-federal government, anti-Washington, D.C., rhetoric that seems to be so hot right now.”

Herrod says his bill was intended to do more than send a message. He wants to use money generated from developing public lands to fund Utah schools. And he believes that if and when the law is subjected to a federal court test, it could win a 5-to-4 decision in the U.S. Supreme Court. Even some of Herrod’s supporters are skeptical of that view. “I’d say go for it but I think that’s a bit of a stretch,” says Lynn Luker, a lawyer and Republican state representative in Idaho.

Luker sits on the State Affairs Committee in the Idaho House, which last month approved a measure to explore suing the federal government to get control of parcels of federal land in Idaho. Members of the committee say that claiming the land could open it up for logging, which, Luker says, would reduce the risk of forest fires while also providing electricity from burning dead timber.

Other Western states are looking for ways to take on the federal government. Wyoming lawmakers approved a resolution that claimed sovereignty from Washington under the 10th Amendment. An almost identical resolution was debated but defeated in Nevada last year. Montana lawmakers voted on — and turned down — a bill to assert the state’s right to manage its own wolf population.

It’s still unclear whether Utah’s sweeping eminent domain legislation is a sign of things to come. “We’ve got this sort of opening shot from the Utah Legislature, and I think it remains to be seen whether any other Western state will adopt or pursue similar sorts of policies,” says Robert Keiter, a law professor and public lands expert at the University of Utah.

Utah’s anti-Washington sentiment did not stop state officials from warmly receiving Salazar this week as he tried to smooth over differences. But lawmakers and Governor Gary Herbert grilled the interior secretary on Utah’s effort to open old roads in federally protected areas and on the new eminent domain law.

Salazar said he got the message.

This story was reported by Stateline staff writer David Harrison.

Interior Secretary Ken Salazar has changed the procedures the Bureau of Land Management must follow before leasing federal land for oil and gas drilling, sending a message that the Department of the Interior aims to reverse some energy policies of the Bush administration.

“The previous Administration’s ‘anywhere, anyhow’ policy on oil and gas development ran afoul of communities, carved up the landscape, and fueled costly conflicts that created uncertainty for investors and industry,” Salazar said in a news release. The BLM, which is part of the Department of the Interior, regulates oil and gas on the 256 million acres of federal land it manages.

The reformed policy, which Salazar announced earlier today, will require more detailed reviews before leases are issued, will allow for more public involvement in developing master leasing and development plans, and will shift the focus of new drilling toward areas already being developed. The reforms also create an Energy Reform Team to identify and implement the reforms.

In the past, BLM has used categorical exclusions to approve leases, allowing leases to be rubber-stamped based on existing environmental analysis rather than relying on new reviews. Based on today’s announcement, BLM will no longer be allowed to use those exclusions in cases of “extraordinary circumstances” — meaning drilling that could impact protected species, historic or cultural resources, or human health and safety.

“Restoring balance to an agency that was out of whack for years is a good move,” said Amy Mall, a senior policy analyst with the Natural Resources Defense Council. “It means [the BLM is] not just going to lease a parcel because the industry wants it.”

She added that while the announcement is a positive one, it remains to be seen whether the reforms will be adequately implemented.

Announcement of a “comprehensive review” of oil and gas leasing on federal lands has aroused curiosity among many in Wyoming. U.S. Interior Secretary Ken Salazar said a month ago that the onshore energy development program will be getting a top-to-bottom examination. Since then, oil and gas trade groups have called the move unfair, and conservation and sporting groups say they’re hoping for a better balance between wildlife protection and energy development.

Wyoming Range outfitter Gary Amerine says he expects the value of land beyond its energy potential — whether that be oil and gas, or wind and solar — will be factored back into land use decisions.

“Balance is the key to this whole process. We can’t just develop, develop, develop and not look at the impacts to other resources.”

Ann Morgan is a former U.S. Bureau of Land Management (BLM) state director who is now vice-president of The Wilderness Society Public Lands Campaign. She says the practice in recent years of relying on the oil and gas industry to recommend which areas should be developed, shows how the leasing program has lost sight of its responsibility to manage land for multiple values.

“The BLM, who are the stewards of these resources for the American people, not the oil and gas industry, should decide when, where and how the oil and gas resource should be developed.”

Oil and gas trade groups have blamed Secretary Salazar for the recent slowdown in production and layoffs, although local economists have pointed out that demand for those resources has dropped because of the recession.

Listen to the Wyoming News Service podcast by Deborah Smith.

It doesn’t rise to the level of the sex and drugs peccadillo or oil shale lease fire sale but Interior staffers stepped in ethical cow pie again.

An Oct. report by the Dept. of Interior Inspector General found in the waning days of the Bush Administration that two high level National Landscape Conservation System (NLCS) managers breached ethical protocols with environmental advocacy groups the National Wildlife Federation and the Wilderness Society, including discussing proprietary budget information, requesting changes to federal legislation under consideration and providing editing assistance on non-governmental brochures.

NLCS, a division of the embattled Bureau of Land Management, is charged with conserving and protecting 27 million acres of nationally significant public lands, largely in the West.

Its Division Chief Jeff Jarvis copped to a fellow co-worker that his actions were “felony stupidity.”

That’s putting it mildly.

But Jarvis is largely off the hook. NLCS Director Elana Daly, who was also investigated, has since left the department.

The Dept. of Justice weighed in on the investigation and concluded that there were no criminal sanctions for the lobbying violation. Any administrative action is at the discretion of the BLM director.

The investigation was spurred by 2008 complaints by Rep. Rob Bishop (R-Utah) and now former Rep. Bill Sali (R-Idaho), who lost his re-election bid. Both Bishop and Sali have been noisy foes of Interior and the agency’s attempts to strengthen oil and gas industry regulations on public lands. Bishop chairs the Western Caucus, a conservative congressional group that champions property rights and unfettered energy development.

High Country News narrates the latest installment of rogue Interior staffers gone wild:

But the enviro-agency dalliances highlighted by the investigation look downright G-rated compared to the Interior Department’s cavorting with industry. Last year, the Inspector General found that staffers of Interior’s Mineral Management Service were literally in bed with executives from the oil companies they were supposed to be auditing. That is, when their bosses weren’t demanding oral sex from them, or sniffing meth off their toaster ovens. Soap operatics aside, though, that investigation highlighted just how dysfunctional the program overseen by these party animals really was. Royalty in Kind — wherein royalties on oil and gas plucked from public land are paid in oil and gas — was first implemented because it could net more money for the feds than traditional royalties. But the Inspector General found that it was more vulnerable to faulty oversight than the conventional system of collecting cash royalties.

In response, now-Interior Secretary Ken Salazar performed one of his most significant acts yet: On Sept. 16, he began phasing out the Royalty In Kind program.

Salazar didn’t stop there. On Oct. 20, he ordered an investigation into “a set of favorable conditions and low royalty rates” offered to energy companies holding oil shale leases just days before the end of the Bush administration. That announcement came just about a month after news broke that the Justice Department was investigating whether former Interior Secretary Gale Norton’s department gave preferential treatment to Royal Dutch Shell. In 2006, Interior awarded oil shale leases to a subsidiary of the company. Just two months later, Norton resigned from her position at Interior and soon after took a position in Shell’s oil shale department.

High Country News also notes, with irony, that Interior Sec. Ken Salazar announced Sept. 21 a little-noticed management order to shore up the department’s ethics program.