In May 2013,  BSEE management determined that other regulatory changes were  higher priorities. In recognition of continued risks to the effectiveness of its oversight of  offshore oil and gas development, BSEE initiated an organizational  restructuring in October 2013 that encompasses its investigations,  environmental compliance, and enforcement capabilities. BSEE’s Investigative Policies and Procedures Have Not Changed Since the Deepwater Horizon Incident, and the Bureau Does Not Have the Capability to Analyze Incident Data

BSEE has not completed a policy identifying investigative responsibilities  under the October 2013 restructuring or updated its existing policies or  procedures for investigating incidents that occur on the OCS since the  Deepwater Horizon incident. Developing policies and procedures are  among the goals of BSEE’s restructuring, according to restructuring  planning documents, and consistent with federal standards for internal  control. The use of outdated investigative policies and procedures is a long- standing deficiency in the bureau’s investigative capabilities. For  example, following the Deepwater Horizon incident, Interior’s IG and OCS  Safety Oversight Board reports identified flaws in Interior’s investigation  guidance documents—specifically, that the guidance documents did not  include detailed requirements for planning investigations, gathering and  documenting evidence, and ensuring quality control. Without  updating its existing, pre-Deepwater Horizon investigative policies and  procedures, BSEE continues to face risks to the effectiveness of its  investigative capabilities. BSEE’s Ongoing Restructuring Risks Weakening Its Environmental Compliance Capabilities

BSEE’s ongoing restructuring of its environmental compliance program  reverses actions taken to address post-Deepwater Horizon concerns,  weakening its oversight of operator compliance with environmental  standards. The  predecessor division was established as a national program in 2011 in  response to the findings of the post-Deepwater Horizon incident  investigations. Specifically, in September 2010, the OCS Safety Oversight  Board reported that the focus of BOEMRE—BSEE’s predecessor  bureau—on oil and gas development might have been at the expense of  protecting the environment. Based on the recommendations of this report  and the OCS Safety Oversight Board, BSEE established an  Environmental Enforcement Division with region-based environmental  staff reporting directly to the headquarters-based division chief instead of  regional management, as had been done prior to the establishment of the  Environmental Enforcement Division, to ensure that the environmental  component of BSEE operated under a separate reporting structure from  the regional BSEE offshore operations. BSEE Has Made Limited Progress Developing and Updating Its Environmental Compliance Policy and Procedures

BSEE has not completed an environmental compliance policy or  developed procedures for environmental compliance—which are among  the goals of BSEE’s restructuring effort, according to restructuring  planning documents, and consistent with federal standards for internal  control. BSEE’s Ongoing Restructuring Has Made Limited Progress Addressing Long-Standing Deficiencies in Its Enforcement Capabilities

BSEE’s restructuring of its enforcement capabilities has made limited  progress addressing long-standing deficiencies in its effectiveness. BSEE Has Not Developed Procedures, Including Criteria for Using Its Enforcement Tools

BSEE has not completed an enforcement policy or developed procedures  consistent with federal standards for internal control—including criteria for  enforcement actions against operators that violate safety and  environmental regulations—which are among the goals of BSEE’s  restructuring effort, for all its enforcement tools, according to restructuring  planning documents. The absence of enforcement criteria is a long-standing deficiency in the  bureau’s enforcement capabilities. For example, in 2010, IG and OCS  Safety Oversight Board investigations following the Deepwater Horizon  incident recommended that BSEE—then BOEMRE—assess its  enforcement tools and how to employ them to deter safety and  environmental violations. These documents also state that the  current lack of criteria results in inconsistent enforcement actions and  creates uncertainty for operators regarding BSEE’s oversight approach  and expectations. Without  completing policies and procedures for these capabilities, BSEE  continues to face risks to their effectiveness. However, BSEE reverted to a region-based reporting structure without  conducting and documenting a risk analysis, including actions to mitigate  any risk and, thus, it is not clear that BSEE will have reasonable  assurance that environmental issues are receiving the appropriate weight  and consideration as called for by the OCS Safety Oversight Board  report. Appendix I: Objectives, Scope, and Methodology

To examine the extent to which the Department of the Interior’s Bureau of  Safety and Environmental Enforcement’s (BSEE) ongoing restructuring  has enhanced its capabilities for (1) investigations, (2) environmental  compliance, and (3) enforcement, we reviewed laws, regulations, policies,  and guidance related to BSEE’s authority regarding these capabilities, as  well as its activities in implementing them since the bureau’s inception in  2011.
Why GAO Did This Study

On April 20, 2010, the Deepwater Horizon drilling rig exploded in the Gulf of Mexico resulting in 11 deaths, serious injuries, and the largest marine oil spill in U.S. history. In response, in May 2010, Interior reorganized offshore oil and gas management activities—energy development, revenue collection, and regulatory oversight—into separate bureaus. In October 2011, Interior created BSEE to manage regulatory oversight. Since then, BSEE has undertaken reform efforts but has not fully addressed deficiencies in its investigative, environmental compliance, and enforcement capabilities identified by investigations after the Deepwater Horizon incident. In October 2013, BSEE initiated an organizational restructuring to address continuing oversight deficiencies. GAO was asked to review BSEE's efforts to enhance its oversight capabilities.
This report examines the extent to which BSEE's ongoing restructuring has enhanced its capabilities for (1) investigations, (2) environmental compliance, and (3) enforcement. GAO reviewed laws, regulations, and policies, related to BSEE's restructuring and oversight activities. GAO also interviewed BSEE officials and industry representatives.

What GAO Found

The Department of the Interior's (Interior) Bureau of Safety and Environmental Enforcement's (BSEE) ongoing restructuring has made limited progress in enhancing the bureau's investigative capabilities. BSEE continues to rely on pre- Deepwater Horizon incident policies and procedures. Specifically, BSEE has not completed a policy outlining investigative responsibilities or updated procedures for investigating incidents—among the goals of BSEE's restructuring, according to restructuring planning documents, and consistent with federal standards for internal control. The use of outdated investigative policies and procedures is a long-standing deficiency. Post- Deepwater Horizon incident investigations found that Interior's policies and procedures did not include requirements for planning investigations, gathering and documenting evidence, and ensuring quality control and determined that their continued use posed a risk to the effectiveness of bureau investigations. Without completing and updating its investigative policies and procedures, BSEE continues to face this risk.
BSEE's ongoing restructuring of its environmental compliance program reverses actions taken to address post- Deepwater Horizon incident concerns, and risks weakening the bureau's environmental compliance oversight capabilities. In 2011, in response to two post- Deepwater Horizon incident investigations that found that BSEE's predecessor's focus on oil and gas development might have been at the expense of protecting the environment, BSEE created an environmental oversight division with region-based staff reporting directly to the headquarters-based division chief instead of regional management. This reporting structure was to help ensure that environmental issues received appropriate weight and consideration within the bureau. Under the restructuring, since February 2015, field-based environmental compliance staff again report to their regional director. BSEE's rationale for this action is unclear, as it was not included in the bureau's restructuring planning documentation or analysis as part of restructuring planning. Under federal standards for internal control, management is to assess the risks faced from external and internal sources and decide what actions to take to mitigate them. Without assessing the risk of reversing this reporting structure, it is not clear that BSEE will have reasonable assurance that environmental issues are receiving the appropriate weight and consideration as called for by post- Deepwater Horizon incident investigations.
BSEE's ongoing restructuring has made limited progress in enhancing its enforcement capabilities. In particular, BSEE has not developed procedures with criteria to guide the use of its enforcement tools—such as warnings and fines—which are among the goals of BSEE's restructuring, according to planning documents, and consistent with federal standards for internal control. BSEE restructuring plans state that the current lack of criteria results in inconsistent actions and creates uncertainty for operators regarding BSEE's oversight approach and expectations. The absence of enforcement criteria is a long-standing deficiency. For example, post- Deepwater Horizon incident investigations recommended an assessment of enforcement tools and how to employ them to deter safety and environmental violations. Without developing procedures with defined criteria for taking enforcement actions, BSEE continues to face risks to the effectiveness of its enforcement capabilities.

What GAO Recommends

GAO recommends, among other things, that BSEE (1) complete and update its investigative policies and procedures, (2) conduct and document a risk analysis of the regional-based reporting structure, and (3) develop procedures for enforcement actions. Interior neither agreed nor disagreed with GAO's recommendations.