[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
     FOREIGN VESSEL OPERATIONS IN THE U.S. EXCLUSIVE ECONOMIC ZONE 

=======================================================================

                               (111-122)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             June 17, 2010

                               __________


                       Printed for the use of the
             Committee on Transportation and Infrastructure

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice Chair                           DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
Columbia                             VERNON J. EHLERS, Michigan
JERROLD NADLER, New York             FRANK A. LoBIONDO, New Jersey
CORRINE BROWN, Florida               JERRY MORAN, Kansas
BOB FILNER, California               GARY G. MILLER, California
EDDIE BERNICE JOHNSON, Texas         HENRY E. BROWN, Jr., South 
GENE TAYLOR, Mississippi             Carolina
ELIJAH E. CUMMINGS, Maryland         TIMOTHY V. JOHNSON, Illinois
LEONARD L. BOSWELL, Iowa             TODD RUSSELL PLATTS, Pennsylvania
TIM HOLDEN, Pennsylvania             SAM GRAVES, Missouri
BRIAN BAIRD, Washington              BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington              JOHN BOOZMAN, Arkansas
MICHAEL E. CAPUANO, Massachusetts    SHELLEY MOORE CAPITO, West 
TIMOTHY H. BISHOP, New York          Virginia
MICHAEL H. MICHAUD, Maine            JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri              MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          JEAN SCHMIDT, Ohio
TIMOTHY J. WALZ, Minnesota           CANDICE S. MILLER, Michigan
HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma
MICHAEL A. ARCURI, New York          VERN BUCHANAN, Florida
HARRY E. MITCHELL, Arizona           BRETT GUTHRIE, Kentucky
CHRISTOPHER P. CARNEY, Pennsylvania  ANH ``JOSEPH'' CAO, Louisiana
JOHN J. HALL, New York               AARON SCHOCK, Illinois
STEVE KAGEN, Wisconsin               PETE OLSON, Texas
STEVE COHEN, Tennessee               TOM GRAVES, Georgia
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
BETSY MARKEY, Colorado
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
JOHN GARAMENDI, California
HANK JOHNSON, Georgia

                                  (ii)

  


        SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

                 ELIJAH E. CUMMINGS, Maryland, Chairman

CORRINE BROWN, Florida               FRANK A. LoBIONDO, New Jersey
RICK LARSEN, Washington              DON YOUNG, Alaska
GENE TAYLOR, Mississippi             HOWARD COBLE, North Carolina
BRIAN BAIRD, Washington              VERNON J. EHLERS, Michigan
TIMOTHY H. BISHOP, New York          TODD RUSSELL PLATTS, Pennsylvania
STEVE KAGEN, Wisconsin               PETE OLSON, Texas
MICHAEL E. McMAHON, New York, Vice 
Chair
LAURA A. RICHARDSON, California
JAMES L. OBERSTAR, Minnesota
  (Ex Officio)

                                 (iii)
























                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Cook, Rear Admiral Kevin, Director of Prevention Policy, United 
  States Coast Guard.............................................     5
Matsuda, David T., Acting Maritime Administrator, Maritime 
  Administration.................................................     5
Weakley, Jim, President, Maritime Cabotage Task Force............    50
Weaver, Warren, Manager of Regulatory Compliance, Transocean.....    50
Wells, Ken, President, Offshore Marine Service Association.......    50

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Oberstar, Hon. James L., of Minnesota............................    61
Richardson, Hon. Laura, of California............................    63

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Cook, Rear Admiral Kevin.........................................    67
Matsuda, David T.................................................    73
Weakley, Jim.....................................................    81
Weaver, Warren...................................................    85
Wells, Ken.......................................................   190

                       SUBMISSIONS FOR THE RECORD

Cook, Rear Admiral Kevin, Director of Prevention Policy, United 
  States Coast Guard:............................................
      Reponse to request for information from Hon. Cummings, a 
        Representative in Congress from the State of Maryland:...
          Regarding the Offshore Installation Manager............    10
          Regarding the Master of Deepwater Horizon and the 
            Offshore Installation Manager........................    11
      Response to request for information from Hon. Mica, a 
        Representative in Congress from the State of Florida.....    29
      Response to request for information from Hon. Yong, a 
        Representative in Congress from the State of Alaska:.....
          Regarding Mobile Offshore Drilling Units...............    16
          Reradring drydocking requirements of Mobile Offshore 
            Drilling Units.......................................    22
Weaver, Warren, Manager of Regulatory Compliance, Transocean, 
  response to request for infromation from Hon. Taylor, a 
  Representative in Congress from the Sate of Mississippi........    90

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

     FOREIGN VESSEL OPERATIONS IN THE U.S. EXCLUSIVE ECONOMIC ZONE

                              ----------                              


                        Thursday, June 17, 2010

                  House of Representatives,
          Subcommittee on Coast Guard and Maritime 
                                    Transportation,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 2:22 p.m., in 
Room 2167, Rayburn House Office Building, Hon. Elijah E. 
Cummings [Chairman of the Subcommittee] presiding.
    Mr. Cummings. The Subcommittee will come to order.
    We convene today to examine the extent of the commercial 
activities conducted in the U.S. Exclusive Economic Zone, EEZ, 
and particularly in the Gulf of Mexico, by foreign-flagged 
vessels.
    Given that this is our subject, the first thing we 
obviously want to know is how many foreign-flagged vessels are 
operating in the EEZ. Unfortunately, while the Coast Guard has 
knowledge of the number of foreign-flagged, mobile, offshore 
drilling units operating in the gulf because such vessels must 
undergo a Coast Guard inspection before they can operate in our 
waters, the Coast Guard cannot tell us exactly how many foreign 
vessels are operating today on our Outer Continental Shelf. We 
lack this knowledge because most foreign vessels are not 
required to report their arrival on our OCS, despite the 
enactment by Congress in 2006 of a provision in the SAFE Port 
Act directing the Coast Guard to finalize within 180 days a 
rulemaking requiring notice of arrival on the OCS. Like far too 
many rulemakings required from the Coast Guard, 4 years later, 
this one is still not done, a situation, ladies and gentlemen, 
which is simply, simply and tragically unacceptable.
    That said, even though we don't know how many foreign 
vessels are operating on the Outer Continental Shelf, we know 
that they are there, and, therefore, we also want to understand 
today the various laws and regulations that govern their 
operations. Foreign-flagged vessels, including MODUs, are 
subject to the laws of their flag states and to applicable U.S. 
laws and regulations. We will examine today how these various 
regulations overlay one another, and whether they truly create 
a safety regime for foreign-flagged vessels, including MODUs, 
which is equal to the safety requirements U.S. flag vessels 
must meet.
    We will look in particular at the Deepwater Horizon, a MODU 
that, of course, was drilling a well in the United States 
seabed, but that was registered in the Marshall Islands by a 
firm that had relocated from the United States to the Cayman 
Islands and then on to Switzerland, primarily, we can assume, 
to avoid the payment of United States taxes.
    Before the Deepwater Horizon was registered in the Marshall 
Islands, it was registered in Panama. We want to understand 
from Transocean why it moved the Deepwater Horizon's 
registration, and we want to understand the operating 
regulations that applied specifically to this MODU.
    Additionally, the Outer Continental Shelf Lands Act, also 
known as OCSLA, requires that most vessels, rigs, platforms or 
other vehicles or structures working on the OCS be manned or 
crewed by citizens or permanent residents of the United States.
    There are statutorily authorized circumstances under which 
vessels, rigs, platforms and vehicles operating on the OCS can 
be exempted from this requirement. For example, if a vessel, 
rig or platform is more than 50 percent owned by citizens of a 
foreign nation, or if an insufficient number of Americans are 
available to perform required work, vessels on the OCS can be 
exempted from employing Americans.
    Information provided to the Subcommittee by the Coast Guard 
indicates that since January of 2008, the Coast Guard has 
granted 52 employment exemptions to vessels and rigs working on 
the OCS, covering nearly 6,700 employees. We will examine the 
types of positions covered by such exemptions, and the firms 
receiving these exemptions and the reasons for the exemptions.
    Frankly, given our extensive economic crisis and 
unemployment rate that is still at 9.7 percent, I find it hard 
to believe that there were no Americans available to perform 
these 6,700 jobs, particularly in the Gulf Coast. And we want 
to understand in particular how and why exemptions based 
specifically on claims of insufficient American labor are 
granted.
    As Members of the United States Congress and the 
Subcommittee on the Coast Guard and Maritime Transportation, it 
is our duty to strengthen the U.S. flag and the U.S. maritime 
industry wherever possible. I look forward to working with my 
colleagues to seize the opportunities that exist in the Gulf of 
Mexico to do just that.
    Eleven families continue to grieve the loss of their loved 
ones, and that grief will remain with these families forever. 
What are now estimated to be potentially millions of gallons of 
oil continue to flow every day from the Macondo well site 
following the Deepwater Horizon tragedy. Against this 
background, it is imperative that we take a critical look at 
the legal and operational regimes governing the production of 
resources on the OCS to identify and close what I suspect are 
wide holes in some aspects of our regulatory oversight.
    We can never again assume, as we too often have in the 
past, that the worst-case scenario is not a possibility, or 
that just because something hasn't gone wrong in the past, it 
won't in the future. As chairman of this Subcommittee, I am 
committed to ensuring that a tragedy like the Deepwater Horizon 
never happens again. The first step towards achieving that goal 
is ensuring that our regulatory requirements become and remain 
equal to the technologies we are employing to explore for and 
produce natural resources. Eleven men died, and the Gulf Coast 
is now literally drowning in oil because that has not been the 
case.
    Ladies and gentlemen, I have said it many, many times. This 
is our watch. We are on the Earth at this moment. It is our 
duty to safeguard our environment. It is the Coast Guard's duty 
to guard the coast. And I think we can do better.
    With that, I recognize our distinguished Ranking Member 
Congressman LoBiondo.
    Mr. LoBiondo. Thank you very much, Mr. Chairman. And 
welcome to our panelists.
    Under international and domestic law, the Federal 
Government exercises wide authority over the activities vessels 
can carry out in the U.S. waters. Under this patchwork of laws 
and conventions, we have reserved certain maritime activities 
exclusively for the U.S. fleet, while others, including 
international cargo movement, large cruise ships operating in 
U.S. ports, are dominated by foreign-flagged vessels. In all 
cases, the Coast Guard is responsible for ensuring the 
compliance of these vessels with U.S. safety, security and 
environmental laws, regardless of the vessels' nationality. 
However, some in the maritime community have expressed concerns 
about the service's vigilance in carrying out this mission, 
especially on the Outer Continental Shelf.
    Maritime trade is a critical component to our Nation's 
economy, but in recent decades, the number of vessels operating 
under U.S. flag has plummeted. Many vessel owners have chosen 
to reregister under foreign flags of convenience because it 
often results in reduced operational costs and smaller tax 
burdens as compared to vessels registered in the United States. 
The Subcommittee had scheduled a hearing to examine the status 
of U.S. overseas fleet, but we had to postpone it. I hope, Mr. 
Chairman, we will be able to reschedule this hearing so we can 
examine conditions that are acting as disincentives to 
registering under U.S. Flag.
    As I said, the Coast Guard enforces safety, security and 
environmental laws on all vessels operating in U.S. waters; 
however, I am concerned the service has not fulfilled their 
statutory mandate to extend the 96-hour advance notice of 
arrival requirements to vessels traveling to points on the 
Outer Continental Shelf. As a result, we have an incomplete 
view of what vessels are operating in U.S. waters and what 
activities they are carrying out. In this day and age, this is 
simply unacceptable, and I urge the Coast Guard to finalize 
this rulemaking as soon as possible.
    The United States has sovereignty over all living and 
nonliving resources found within its Exclusive Economic Zone, 
and we have exercised this authority to exclude foreign 
interests from accessing U.S. fisheries. Some in the maritime 
community have called for similar Americanization of other 
activities in U.S. waters, including the operation of offshore 
oil- and gas-drilling rigs.
    While I support a strong U.S. merchant fleet and believe 
there may be some merit to this proposal, I believe the 
Subcommittee should undergo a thorough review of the impact 
that this may have on commerce, the maritime industry, as well 
as the ability of the Coast Guard to absorb yet another mission 
at the same time the administration is proposing to recklessly 
slash the service's operating budget.
    I am disappointed that no one from the Customs and Border 
Protection is here to provide testimony on the Federal 
Government's interpretation of the Jones Act. And while the 
Coast Guard is responsible for enforcing the Jones Act, Customs 
and Border Patrol is responsible for determining what qualifies 
as coastwide trade. Therefore, it would have been helpful to 
have a witness from Customs and Border Patrol here today to 
answer questions about the administration's interpretation of 
the Jones Act.
    Lastly, while this side of the aisle still has yet to see a 
legislative proposal to address the oil spill, I look forward 
to working with the chairman and to develop commonsense 
amendments that will provide results.
    I want to thank the witnesses for being here again today. 
And, Mr. Chairman, thank you again for holding this hearing.
    Mr. Cummings. Mr. Taylor.
    Mr. Taylor. Mr. Chairman, I will be very brief. I think the 
privilege of pulling minerals off an American sea bottom ought 
to be reserved for an American-owned, American-built, American-
crewed vessel. I think we would have a heck of an easier time 
enforcing the law, seeing that our fellow citizens, if they 
make a mistake, pay up, and, above all, seeing that the 
revenues are distributed as they should be. When those taxes 
are paid, they ought to be paid to the American Treasury, not 
to that of the Marshall Islands.
    With that, I yield back.
    Mr. Cummings. Thank you very much, Mr. Taylor.
    Let me just say to the Committee, I had two discussions 
today, one with Secretary Napolitano, and one with Mr. Price of 
Appropriations, and our efforts to--Mr. Price has assured me 
that they are working very hard with the administration to 
restore the cuts that we are so concerned about and getting 
additional funds so that the Coast Guard can effectively 
address the issues in the Gulf Coast. And I just wanted to--I 
know all the Members of the Committee were concerned about 
that, and I just wanted to make you all aware of that.
    Mr. Young.
    Mr. Young. Thank you, Mr. Chairman. I am sorry I am late. I 
was interested in just the comments you said about funding the 
Coast Guard. We have neglected the Coast Guard all these years 
as far as getting the money to this agency. I have been here 
many, many years, and we keep plying and asking them to do 
missions without properly funding. We don't have the Coast 
Guard, I mean, the ice-breaking capability. We have charged 
them with oil spill responsibility. We have tried to do what we 
should have done, but we didn't do it the way we could have 
done, and that is to have the adequate amount of money for you 
to do the job.
    I will ask some questions later on concerning flagged 
vessels. This is a deep concern to me about vessels operating 
in the gulf and other areas that should not be operating 
because they're not American flagged. And I will bring those 
questions up later.
    But this is an agency I think needs strong support from 
this Congress, and shame on us if we don't do it.
    I yield back the balance.
    Mr. Cummings. Thank you very much.
    Our first panelists will be Rear Admiral Kevin Cook, 
Director of Prevention Policy, United States Coast Guard; and 
the Honorable David T. Matsuda, Acting Director, Maritime 
Administration.
    Gentlemen, thank you very much for being with us.
    Rear Admiral Cook, we will hear from you now for 5 minutes.
    I am sorry. Just a moment. I apologize. I didn't see Mr. 
Coble.
    Mr. Coble, did you have an opening statement?
    Mr. Coble. No, Mr. Chairman.
    Mr. Cummings. Thank you very much.
    All right. Rear Admiral.

 TESTIMONY OF REAR ADMIRAL KEVIN COOK, DIRECTOR OF PREVENTION 
POLICY, UNITED STATES COAST GUARD; AND DAVID T. MATSUDA, ACTING 
         MARITIME ADMINISRATOR, MARITIME ADMINISTRATION

    Admiral Cook. Good afternoon, Mr. Chairman, Ranking Member 
LoBiondo, and distinguished Members of the Subcommittee.
    Mr. Chairman, I would like to have my written statement 
entered into the record.
    Mr. Cummings. Without objection, so ordered.
    Admiral Cook. I am pleased to be here with the Acting 
Maritime Administrator to discuss foreign-flagged vessel 
operations on the United States Outer Continental Shelf.
    Before I get to the specific subject of today's hearing, I 
would like to echo the condolences expressed previously by my 
fellow Coast Guard members who recently testified. As you know, 
the Coast Guard involvement with Deepwater Horizon started at 
its earliest hours with the search and rescue. My heartfelt 
sympathies go out to the members of the 11 families who so 
tragically lost their loved ones in the explosion on board the 
Deepwater Horizon.
    Additionally, I wish to express my admiration for the crew 
of the Damon B. Bankston, the U.S.-flagged offshore supply 
vessel operated by Tidewater Marine, who stayed in close 
proximity to a very dangerous situation to save so many lives.
    As the Coast Guard's Director of Prevention Policy, one of 
my primary responsibilities is to oversee the inspection 
program for vessels, offshore facilities, and Mobile Offshore 
Drilling Units, or MODUs, in the requirements to comply with 
applicable U.S. and international safety and security laws, 
regulations and policies. To ensure the safety and security of 
units operating on our Outer Continental Shelf, the Coast Guard 
coordinates with various Federal agencies, such as the Maritime 
Administration, the Customs and Border Protection, Minerals 
Management Service and other organizations like the American 
Bureau of Shipping.
    The bulk of the Coast Guard's compliance oversight is 
carried out through annual safety and security inspections 
conducted on all U.S. and foreign-flagged fixed and floating 
production platforms, mobile offshore drilling units and other 
vessels, as applicable.
    Foreign-flagged vessels are permitted to operate on the 
Outer Continental Shelf and are inspected to standards 
equivalent to U.S. Vessels. The primary difference between U.S. 
Coast Guard inspections of U.S.-flagged vessels versus foreign-
flagged vessels, including MODUs, is that for U.S.-flagged 
vessels, the Coast Guard is responsible for carrying out the 
inspections, tests and surveys in order to issue the statutory 
certificates. For foreign vessels the flag state or recognized 
organization, such as the Classification Society, working on 
behalf of that flag state is responsible for carrying out the 
inspections, tests and surveys.
    The Coast Guard examination carried out on foreign-flagged 
vessels is of sufficient breadth and depth to verify proper 
crew training, competence and competencies; that is, a 
satisfactory safety management is in place, and overall the 
foreign-flagged vessel's equipment and material condition are 
maintained and operated in compliance with applicable 
international and flag state standards, as well as domestic 
regulations, thereby ensuring an equivalent level of safety as 
compared to U.S. vessels.
    The scope of the Coast Guard port state control 
examinations carried out on foreign-flagged vessels exceeds 
current international guidelines for port state control. These 
type of examinations include inspection and equipment tests and 
emergency drill requirements beyond those ordered by other 
countries. When a Coast Guard examination reveals questionable 
equipment, systems or crew competency issues, the Coast Guard 
expands the port state control exam as necessary to determine 
whether a deficiency exists or not. That scope of the expanded 
examination is not limited, and the Coast Guard may require 
additional tests, inspections or crew drills to the extent 
deemed necessary. When deficiencies are found, the Coast Guard 
mandates corrective action, depending on the severity, and may 
detain a vessel, restrict operations until that deficiency is 
completed.
    Currently there are thousands of vessels engaged in the 
Deepwater Horizon spill response. Some of the vessels are 
foreign. Of particular note, the foreign drill ship Discoverer 
Enterprise, a Marshall Islands-flagged vessel, has been the 
primary drill ship recovering the liquid flowing from the 
damaged well since the installation of the top hat. A U.S.-
flagged MODU, Q4000 is now assisting to incinerate oil beyond 
the Discover Enterprise's capacity to recover that oil. The 
Liberian-flagged Toisa Pisces and Great Britain-flagged Loch 
Rannoch are currently making preparations to assist in the 
ongoing recovery operations. These two vessels have been 
employed because of the unique characteristics they maintain, 
specifically dynamic positioning systems, which will enable 
them to remain on station to conduct response operations, yet 
be rapidly able to cease operations and move safely in the 
event of a hurricane.
    The Coast Guard remains committed to maritime safety and 
security on the Outer Continental Shelf through continuing 
inspections of U.S.-flagged vessels and those foreign-flagged 
vessels subject to our port state control requirements.
    Thank you again for the opportunity to testify today. And I 
will be happy to answer any questions you have.
    Mr. Cummings. Thank you very much.
    Acting Maritime Director Matsuda.
    Mr. Matsuda. Good afternoon, Mr. Chairman, Ranking Member 
LoBiondo, and distiniguished Members of the Subcommittee. Thank 
you for the invitation to testify today.
    President Obama said the BP oil spill in the Gulf Coast is 
the worst environmental disaster in our Nation's history. From 
the start of this crisis, the Maritime Administration has 
supported the ongoing relief effort and monitored the impact on 
the maritime industry. We activated our internal command center 
and provided personnel to assist at the United States Coast 
Guard's National Incident Command Center. We also participate 
in the Interagency Solutions Working Group and the various 
maritime transportation system recovery units in the Gulf 
Coast.
    Fortunately, as you can see on the graphic here, this spill 
has not significantly impacted the Nation's maritime 
transportation system. Most of the traffic you see going to the 
Port of New Orleans has simply gone around the spill area. 
Commerce and trade continue, but operators are keeping a 
watchful eye to avoid the fouled gulf waters.
    Before I continue, I would like to take a moment to also 
express my condolences to the families of the 11 Deepwater 
Horizon crew members who did not survive the explosion. We 
mourn their loss and, like our sister agencies, we are working 
diligently to make sure this type of incident never occurs 
again.
    The MARAD family was also affected by the tragedy that 
overwhelmed the Deepwater Horizon. Two graduates of the United 
States Merchant Marine Academy in Kings Point, New York, Darin 
Rupinksi and James Mansfield, were on board. Both are heroes. 
Their stories are detailed in my full written testimony, which 
I will submit for the record with your permission, sir.
    I want to emphasize the Administration is committed to 
making certain that every asset possible is available to 
address this catastrophe. As Admiral Cook mentioned, among the 
first vessels to respond to the distress call of the Deepwater 
Horizon was the Damon Bankston, a vessel that was built in the 
United States, is registered in the United States, and is 
crewed by United States mercahnt mariners.
    Since the sinking of the Deepwater Horizon, many more U.S.-
flagged vessels have responded to the crisis. As of last week, 
77 percent of the vessels providing oil spill source control in 
the gulf are U.S.-flagged. For example, take the U.S.-flagged 
Joe Griffin, operated by Edison Chouest Offshore of Galliano, 
Louisiana. The ship carried the extremely large cofferdam 
containment structure that was lowered in the early attempt to 
cover the leak last month.
    During the current situation in the Gulf of Mexico, U.S.-
flagged vessels have been used in every situation where U.S. 
vessels and crew are available.
    While there are foreign-flagged vessels operating in the 
gulf, none appear to be operating in violation of the Jones 
Act. As you know, the Jones Act requires that cargo being 
transported between U.S. ports must move aboard vessels that 
are U.S.-flagged, U.S.-built, U.S.-owned, and largely crewed by 
U.S. merchant mariners. However, we are aware that in some 
situations, especially in energy exploration activities, only a 
few companies in the world operate the kind of vessels that 
might be needed. When this happens, it is, of course, prudent 
for the vessel operators to apply for a Jones Act waiver.
    The Jones Act can be waived by the Secretary of Homeland 
Security, through U.S. Customs and Border Protection. In order 
to verify that no U.S. vessels are available for a certain job, 
U.S. Customs and Border Protection relies on our agency to 
first survey the U.S. industry. Recently a company tried to 
hire specialized foreign-built barges to assist in the U.S. 
oil-spill response. But when the company requested a waiver of 
the Jones Act, the Maritime Administration performed a quick 
survey and located many comparable U.S.-flagged vessels that 
were available. This information was relayed back to U.S. 
Customs and Border Protection.
    The law also allows the Coast Guard's Federal on-scene 
coordinator to make an exception to the Jones Act in the 
aftermath of an oil-spill like we are dealing with here. This 
exception process is designed to allow immediate attention and 
processing of requests for oil-spill response vessels. Again, 
once an exception request is received, the Maritime 
Administration immediately surveys the industry for U.S. 
mariner and vessel availability.
    In closing, I would like to commend, once again, the work 
of our Nation's unassuming merchant mariners. The U.S. Merchant 
Marine has capably served as the Naval and military auxiliary 
service in the time of war, and the Jones Act has helped ensure 
that we have a Merchant Marine capable of responding to 
national emergencies in our coastal waters.
    Thank you, Mr. Chairman. I am happy to respond to any 
questions you and Members of the Subcommittee may have.
    Mr. Cummings. Thank you both very much.
    Admiral Cook, under U.S. law or regulation, when a 
dynamically positioned MODU, such as the Deepwater Horizon, is 
drilling a well with the riser pipe down and in contact with 
the sea floor, is it classified as a point in the United States 
for purposes of the Jones Act? And are there any instances in 
which a dynamically positioned MODU could be drilling a well 
with the riser pipe down and in contact with the sea floor when 
it would not be a point in the United States for purposes of 
the Jones Act?
    Admiral Cook. Well, Mr. Chairman, I know Mr. Matsuda made 
the point that CBP administers that, but it is--to my 
knowledge, there would not be a time when we have contact with 
the bottom, permanent contact like that with the riser, where 
you wouldn't be considered a point or place in the U.S.
    Mr. Cummings. So then--so your answer is no?
    Admiral Cook. The answer is yes, that when you are fixed to 
the bottom, that you would be considered a point or place in 
the U.S.
    Mr. Cummings. Then is a dynamically positioned MODU 
drilling a well with a riser pipe down and in contact with the 
sea floor underway, or is it not underway at a time it is 
conducting such a drilling operation?
    Admiral Cook. When you----
    Mr. Cummings. Let me say it again, because I am asking you 
this for a reason. I want to make sure we are clear. We need 
some clarity from the Coast Guard on certain--and this is 
consistent with some Jones Act issues, and we want to make sure 
what the Coast Guard's interpretation is.
    Is a dynamically positioned MODU drilling a well with a 
riser pipe down, and in contact with the sea floor, underway, 
or is it not underway at the time it is conducting such a 
drilling operation?
    Admiral Cook. It is considered not underway, and, in fact, 
the lighting and requirements are like a fixed facility.
    Mr. Cummings. And what was the last part of what you just 
said?
    Admiral Cook. The lights that they show for navigation are 
as if they were a fixed facility.
    Mr. Cummings. So then if--the vessel must necessarily then 
be under the command of a licensed captain; is that correct? In 
other words, when would it be required to have a licensed 
captain in charge?
    Admiral Cook. In U.S. regulations?
    Mr. Cummings. Yeah.
    Admiral Cook. It would have a captain, and typically the 
captain would be required to have the OIM, Officer Offshore 
Installation Manager, endorsement, and so that they would also 
be the one in charge of drilling.
    Mr. Cummings. So, let me make sure I understand this. An 
offshore installation manager was in charge of the Deepwater 
Horizon at the time of the accident on April 20; is that right? 
Do you know?
    Admiral Cook. Yes.
    Mr. Cummings. Somebody was?
    Admiral Cook. The offshore installation manager.
    Mr. Cummings. Do you know who that was?
    Admiral Cook. I don't know by name.
    Mr. Cummings. But you will get that to me; will you not?
    Admiral Cook. Yes, sir.
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    Mr. Cummings. And did that individual have a master's 
license with the OIM endorsement, or were the master function 
and the offshore installation manager function performed by two 
separate people on the Deepwater Horizon at the time it was 
drilling at the well site?
    Admiral Cook. It was performed by two separate people.
    Mr. Cummings. And you will give me both of those names?
    Admiral Cook. Yes, sir.
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    Mr. Cummings. Very well. I am going to ask you one more, 
and then I want to let the other members of the panel ask you 
some things.
    Now, just to be specific, although the Coast Guard 
regulations are silent with regard to MODUs that are on station 
and drilling while utilizing a dynamic positioning system, 46 
CFR 15.520(d) specifies that, and I quote, a self-propelled 
MODU other than a drill ship must be under the command of an 
individual who holds a license as master endorsed as OIM, end 
of quote.
    And 46 CFR 15.420(e) specifies that, and I quote, a drill 
ship must be under the command of an individual who holds a 
license as master. And when a drill ship is on location, the 
individual in command must hold a license as a master endorsed 
as OIM, end of quote.
    In contrast, 46 CFR 15.20(f) specifies, and I quote, that a 
non-self-propelled MODU must be under the command of an 
individual who holds a license or endorsement as OIM, end of 
quote.
    Are these specific requirements regarding the master 
positions for MODUs, drill ships and non-self-propelled MODUs 
the same under the Marshall Islands regulations?
    Admiral Cook. Mr. Chairman, the Deepwater Horizon was 
accepted under international certificates under the IMO MODU 
Code, okay? There are provisions where Marshall Islands MODUs 
could be accepted based on an equivalent regulation. So there 
are actually three schemes. One is a U.S. regulation, one is a 
country which comes forward and proves that their regulations 
are equivalent, and three, which is purely the international 
certification through the IMO MODU Code Safety of Life At Sea 
Conventions. And so Marshall Islands prescribes their manning 
in concert with the Safety of Life At Sea Convention, and then 
they have additional guidance that requires extra watch folks.
    So is it exactly equivalent? It is not word for word 
equivalent.
    Mr. Cummings. It is not what?
    Admiral Cook. It is not word for word equivalent, but it 
achieves the same purpose.
    Mr. Cummings. So it either is the same or not the same. I 
am just trying to figure out what the significance of Marshall 
Islands is as compared to the U.S.
    Well, let me ask you this. Based on what we know about the 
manning requirements for a self-propelled MODU under U.S. flag 
and under the Marshall Islands flag, do the requirements of 
these two flag states require manning levels that provide an 
equivalent level of safety?
    Admiral Cook. Yes, they do.
    Mr. Cummings. And does anything you have learned about 
manning or any other aspect of the Marshall Islands regulatory 
structure lead the Coast Guard to be reassessing whether the 
Marshall Islands regulations provide an analogous level of 
safety to those required of U.S. vessels and MODUs?
    Admiral Cook. The analagous--or the certification that they 
were equal is still being recognized. And we are also in the 
background working on an update to subchapter N that will 
incorporate the things like dynamic positioning, which you have 
mentioned were silent on, and at that time we will go ahead and 
do a line-by-line comparison to make sure that we are not 
missing anything.
    But the regulations are believed to be equivalent. And we 
have also been very active with the International Maritime 
Organization in furthering the international codes, which in 
this case apply to MODUs, but in other cases apply to chemical 
tankers or liquefied gas carriers.
    So our goal is to always make whatever regulatory regime 
ends up impacting the U.S., we want that to be equivalent so 
that we all have the same level of safety.
    Mr. Cummings. Well, just one other thing. How can--it just 
doesn't sound like it is the same, well, because I thought a 
master was to be in control at the time of the accident under 
U.S. law. And when this accident happened a master was not in 
control; is that right?
    Admiral Cook. While they were drilling, right. The OIM was 
in charge. When they went to the emergency phase, the master 
then was in charge.
    Mr. Cummings. But that is not the same, though, is it?
    Admiral Cook. That is not the same person.
    Mr. Cummings. Well, it is not the same requirement as is 
done in the U.S.
    Admiral Cook. In the U.S. we have a master that has the OIM 
endorsement, so it is the same person.
    Mr. Cummings. All right. I will come back to you because I 
think there--it sounds like there is a difference, although 
you--maybe we are not speaking the same language here.
    Mr. LoBiondo.
    Mr. LoBiondo. Thank you, Mr. Chairman. I would like to 
yield my time to Mr. Young of Alaska.
    Mr. Young. Thank you, Mr. LoBiondo.
    Admiral, how many drill ships are U.S.-flagged working in 
the gulf?
    Admiral Cook. Sir, right now there are nine working in the 
gulf. We have 37 that maintain active certification that could 
be drilling elsewhere or with the industry term "staffed," 
ready to be employed.
    Mr. Young. Now, are those equal to the New Horizon, or are 
they the shallow-water ones that are drill rigs?
    Admiral Cook. Those are mobile offshore drilling units.
    Mr. Young. But when you say offshore, there is a difference 
between 1 mile down than the ones that drill at 250 feet, 300 
feet, 500 feet. Are these rigs flagged rigs that are self-
mobile, that are capable of drilling offshore in the deep 
waters?
    Admiral Cook. Yes.
    Mr. Young. They all can do that?
    Admiral Cook. Some of them are. They move, and then they 
are jacked up.
    Mr. Young. Well, none of the jacked rigs can work offshore 
at 1 mile deep, and you and I know that; is that right?
    Admiral Cook. Right.
    Mr. Young. What I am looking for is how many--because the 
chairman alluded to the Marshall Islands flagging, and there 
are numerous reasons why it was made in Korea, flagged in the 
Marshall Islands, supposed to meet all the requirements. How 
many American modes, if you call them whatever you want to, 
operate in that deep water that are American-flagged?
    Admiral Cook. Mr. Young, I will have to get back to you on 
the record.
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    Admiral Cook. But I will tell you that the Q4000, which is 
a U.S.-flagged MODU, is on scene and is now right next to the 
Discoverer Enterprise, which is the ship recovering the oil. 
The Q4000 has a burner skid on it, and that is burning off 
excess oil that the Discoverer Enterprise can't use. So that is 
an example of a U.S.-flagged MODU.
    Mr. Young. My interest--it is not your problem. You have to 
certify and everything else just how many rigs we have, because 
most of the rigs now that are on moratorium will have to leave 
those waters because they are not American-flagged. They will 
go to Brazil or China or Cuba or somewhere else to drill. And I 
am interested in a Jones Act drill that can drill deep water in 
the future and not some foreign-flagged type operation.
    The other issue I was going to ask you about, Admiral, I 
have a deep concern because all this period of time we have a 
lot of American Jones Acts vessels down there that are sitting 
idle. And the supply ships that are not Jones Act vessels come 
to shore and take supplies and supply the rig, and that is 
against the Jones Act. And the Coast Guard, so far, has not 
enforced that regulation. Are you aware of what I am talking 
about?
    Admiral Cook. Yes. Any time we are aware, we do work with 
CBP to try and follow up on that.
    Mr. Young. But I will inform you, and I have talked to some 
of the people in the Coast Guard, I have been bringing this to 
your attention for many years that this has been a 
circumvention of the Coast Guard Jones Act enforcement, because 
what they do is they supply supposedly stuff to the rig, 
they're not Jones Act vessels, to a rig that could be a Jones 
Act rig. But then they will go to shore and pick up products 
and food and supplies for the rig, and that puts my Jones Act 
vessels out of work.
    And I am hoping that you understand, and you ought to know 
this, too, if you don't, because this is wrong. I mean, it is 
just absolutely creeping up over the years where the Jones Act 
is not being enforced. And I am a big Jones Act person, always 
have been, because I believe in an American fleet. So I think 
you have been neglectful in that arena. You heard me say I 
support the Coast Guard, but I don't want them to keep chipping 
away and keeping our Jones Act fleet from not operating, which, 
very frankly, the work is not there.
    I have 58 seconds left. Again, on the spill, I am not 
excited about a foreign vessel, although saying we have it 
available, we are not paying for it, the oil company is paying 
for it. But I would suggest if you allow one in under a waiver, 
that when we get a domestic vessel that is on site, comes into 
the site, that you eliminate the foreign vessel, that they 
should not continue to operate. Do you understand what I am 
saying?
    Admiral Cook. I understand. So that the waiver would be for 
a period of time until a U.S. flag could fill that role.
    Mr. Young. And in that waiver making it specific that I am 
from Holland, or I am from Nigeria, and I go in and that ship 
is working there, and I get a ship out of Newport or out of 
Galveston that comes in. That foreign vessel, that is when it 
ceases operating so we can get the American vessel in 
operation. You can do that?
    Admiral Cook. I can bring that message back, sir.
    Mr. Young. I would suggest you do that. I think that would 
be a good idea for the Coast Guard. Put it in the waiver.
    Thank you, Mr. Chairman.
    Thank you, Mr. LoBiondo.
    Mr. Cummings. Thank you very much.
    Ms. Richardson.
    Ms. Richardson. Thank you, Mr. Chairman.
    First of all, thank you, both of you, for coming here.
    And, Mr. Matsuda, it is always good to see you again in 
your support throughout all of our districts.
    My questions are going to be primarily focused on the Jones 
Act, which seems to be of much discussion of everyone these 
days. In your opinion, do you believe that the Jones Act was 
originated to deal in normal situations, you know, interstate 
commerce moving back and forth cargo? Do you believe the rules 
were really intended for in times of disaster, as we are at 
this point?
    Admiral Cook. I think that when you look at the actual 
waiver provision, that it is a national defense waiver that has 
to be obtained to the Jones Act provisions, so I would say that 
it may not have been envisioned for a spill response scenario, 
but certainly something which endangers our national security, 
which environmental disasters, I think, can be brought into 
that category.
    Ms. Richardson. And how long does it typically take to do a 
waiver? Is it something--you know, a vessel turns in their 
requests. How many days is it? How many hours is it? Weeks? 
Months?
    Mr. Matsuda. I can speak to that. The Maritime 
Administration's portion of surveying the industry currently, 
in our agreement with the U.S. Customs and Border Protection, 
can take as long as 48 hours. Usually, it is much faster. I can 
tell you that the one waiver request we received so far for 
this spill we got back within the same day.
    Ms. Richardson. And how many waiver requests have been 
submitted? Just the one since the spill occurred?
    Mr. Matsuda. Well, they would be submitted directly to 
Customs. And now the National Incident Commander has requested 
that all requests for waivers be filtered or started directly 
through them. But we have so far only seen one request. And 
frankly, we did a survey and found that there were many U.S.-
flagged vessels available for that purpose.
    Ms. Richardson. Okay. But when you look at the news, and 
you see the situation of what is going on there, and I plan on 
being there on Monday, it seems to me--I understood that the 
reason why the waiver was not met was because there were other 
available ships, vessels. Well, then, where are they, and why 
aren't they there?
    Mr. Matsuda. If I understand your question, the actual 
requirement for a response vessel is going to be given by the 
National Incident Commander. They work with BP to determine 
what vessels are needed and what kind of vessels. If they come 
with a foreign-flagged ship, they will need--well, if they need 
a Jones Act waiver because it is a foreign-flagged ship, and 
they are going to be operating either within coastwise trade or 
within three miles of the coast, then they will need a waiver. 
But otherwise----
    Ms. Richardson. Let me be more specific to you. My question 
is you have told us and what we have read in the material says 
that with the waiver that was submitted, the reason why it was 
not granted was because there were other American vessels, 
which clearly we all--and I agree with my colleagues, we all 
would prefer that we are supporting American-made vessels and 
crew and so on. But my question is if they turned in the 
waiver, if it was denied because there were other vessels, then 
are the other vessels performing the work?
    Mr. Matsuda. It would depend on the kind of vessel. If 
there is a need for that specific vessel then, like I said, it 
would be run through the waiver process to see if there is 
first a U.S.-flagged vessel. If there is no need for the 
vessel, then it is going to be idle.
    Ms. Richardson. Well, okay. We just had a briefing, the 
Senate and the House, with Admiral Allen, and I have got to 
tell you from what I have seen so far, and I haven't been there 
in person, but I will be there on Monday, it seems like to me 
it is needed. I mean, I see pictures of oil everywhere, you 
know, animals that are soaked in it. I mean, it doesn't seem, 
in my opinion--now, I haven't physically seen how many vessels 
are out there, but it seems to me that there is a need.
    So I guess what I would like to ask on behalf of this 
Committee is, one, if you could get us the number; and if you 
could do the same time frame of less than 48 hours, how many 
waivers have been requested; have they been denied; if they 
have been denied, have other vessels been put out there; and to 
really determine is that all that we need.
    Now, the Admiral said that there are a lot of vessels, but 
different vessels have different capabilities. And so someone 
may say, hey, I want to come out and help, but they may not 
necessarily have that capability. But it just seems from 
looking at it that there are other skimmer boats and other 
things that could be done.
    Mr. Matsuda. Ma'am, I will take your request. Certainly I 
think Customs and Border Protection will probably be the best 
place to get the waiver information, or from the National 
Incident Commander. But, I am happy to pass along that request 
as well.
    Ms. Richardson. Okay. Thank you.
    Mr. Cummings. Mr. LoBiondo.
    Mr. LoBiondo. Thank you, Mr. Chairman. I would now like to 
yield to Mr. Coble.
    Mr. Coble. Thank you, Mr. Chairman.
    I thank the gentleman from New Jersey.
    Admiral, several news reports have suggested that the 
administration has rejected offers of foreign-flagged skimmers 
that could be used as part of the response. Has the 
administration, in fact, turned away offers of skimming vessels 
or equipment?
    Admiral Cook. Mr. Coble, no offers of qualified skimmers 
have been turned away.
    Mr. Coble. Say it again.
    Admiral Cook. No offers of qualified assistance have been 
turned away.
    Mr. Coble. Okay. Let me go a step further, speaking about 
skimmers. Has the administration reached out to the domestic 
fleet to bring in all skimming assets that might be available?
    Admiral Cook. There has been a continuing effort, and it 
has been most recently ramped up again this week, where we have 
also gone out to the U.S. Navy, who has provided skimmers since 
the very beginning, but has some additional ones at 
installations around the country, and we are going to the 
commercial oil spill response organizations, which are part of 
the response network that is in place in every port throughout 
the country.
    Mr. Coble. How many skimmers, Admiral, are actively 
skimming on a daily basis? And if you don't know, you could get 
that to us?
    Admiral Cook. I brought the information sheet in case we 
had any questions regarding this. The total number of skimmers 
is 447.
    Mr. Coble. Four hundred forty-seven?
    Admiral Cook. Yes.
    Mr. Coble. Admiral, does the Jones Act create an impediment 
to the employment of foreign-flagged skimming vessels?
    Admiral Cook. It is a factor, but I would not call it an 
impediment, because foreign-flagged skimmers can be--they are 
treated as oil spill response vessels. And if they are operated 
outside of 3 miles, they are not impacted by the Jones Act.
    Mr. Coble. Well, let me ask another question regarding 3 
miles. Do skimmers operating beyond the 3-mile limit require a 
coastwise endorsement? I am thinking no, but I don't know that.
    Admiral Cook. They do not because they are not going from 
place to place. They are just on the waterway, whatever 
waterway that is. In this case, you know, the Gulf of Mexico.
    Mr. Coble. And finally, does the Jones Act create an 
impediment to the employment of foreign-flagged skimming 
vessels?
    Admiral Cook. Not an impediment outside of 3 miles. But if 
you come within 3 miles, then the Federal on-sea coordinator 
would have to determine that those skimming vessels were needed 
and there was not a U.S. skimming capability that could be 
used. And the State Department would have to verify that should 
a reciprocal development occur where U.S.-flagged skimmers 
could be used in that foreign country, that that reciprocal 
arrangement exists. So it is an impediment inside of 3 miles.
    Mr. Coble. I thank you, sir.
    Mr. Matsuda, did you want to add anything to that?
    Mr. Matsuda. No. I would agree. We are familiar with the 
procedures used, and we can tell you that from our perspective 
they work very well, very quickly, and it helps maintain a 
policy of preserving a U.S. Merchant Marine.
    Mr. Coble. Admiral, thank you both.
    Don, do you want to ask anything?
    I will yield the balance of my time to the gentleman from 
Alaska.
    Mr. Young. There is a provision in the law concerning 
movement of valueless material that has to be a Jones Act 
vessel; is that correct? And what they skim--and one of the 
reasons we are having so many problems, we have got 447 
skimmers out there. This is very difficult oil to skim. You see 
the vision on the shore because it coagulates as it gets close 
to shore. If we could do it right next to the shore, we would 
be a lot better off. But is the valueless provision in law 
applied to what is skimmed, because there are so many barrels 
of water versus actual barrels of oil--is there any value to 
it?
    Admiral Cook. Mr. Young, I really don't have the background 
to comment on a legal basis of whether it is valueless.
    Mr. Young. Mr. Chairman, get that back to us, because--I am 
after American-flagged ships is what I want. And I don't like 
foreign-flagged ships in my waters or our waters. So remember 
that phrase. Under the dredging concept they had to be Jones 
Act vessels; if they were collecting, and it was valueless 
material, we made them Jones Act vessels.
    Now, if they are collecting this oil, and although it has 
water in it, is this considered valuable or nonvaluable? If it 
is nonvaluable, then they still should be--they shouldn't be 
allowed to collect it. It should be American-built ships. So 
get that back to me.
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    Mr. Coble. Mr. Chairman, I will reclaim and yield back.
    Mr. Cummings. Thank you.
    Just one real quick question, Mr. Taylor, just one very 
quickly. When I was in the Gulf Coast about a week ago, 
Admiral, I saw a lot of the local folks. They would take a 
boat. They would have two boats, and they would have the boom 
attached to each boat, and they would create, like, a 
horseshoe, and they were corralling the oil to be burned. Does 
the Jones Act come--I mean, let us say they are within the 3 
miles situation. Does the Jones Act apply there at all?
    You are familiar with what I am talking about, right? And 
there was a lot of that kind of activity and a lot of-- and 
they were saying that a lot of the local fishermen really were 
trying to get to do some of that kind of work. And I was just 
wondering, how does that apply, just following up to Mr. 
Young's questions. Just curious. Would you have that 
information?
    Admiral Cook. Mr. Chairman, we would have go to CBP.
    Mr. Cummings. But you know what I am talking about, right?
    Admiral Cook. Absolutely, in situ burning. And if we viewed 
it from a helicopter, it would look like a horseshoe, so that 
the activity would be going on, and it would be--the work would 
be generated by the two vessels. But I don't know whether that 
would be considered for Jones Act.
    Mr. Cummings. All right. Thank you very much.
    Mr. Taylor.
    Mr. Taylor. Thank you, Mr. Chairman.
    To Mr. Coble's point, I would guess if the roles were 
reversed, and this spill was off of North Carolina rather than 
Mississippi, Alabama and Florida, and a significant number of 
the gentleman's fishermen were out of work as a result of that 
spill, I would guess that those fishermen would take great 
offense that a vessel from overseas was brought in to do the 
work that they were capable of doing.
    Now, I don't have a problem if there is a need for greater 
skimming capacity, but that points to the fact that apparently 
when we passed the Oil Pollution Act of 1990--and I think the 
gentleman was on the Merchant Marine Committee then, I know Mr. 
Young was--we obviously didn't do a good enough job of putting 
aside the money for American-flagged vessels to do this if we 
have to go overseas to fill this need.
    But my point is, Admiral, the vessel was inspected in the 
Marshall Islands. It was built in Korea. I am just curious, how 
long did it take the Marshall Islands Coast Guard to show up 
and provide help for that vessel when it caught on fire? And 
how long did it take for the Korean Coast Guard to show up when 
this rig caught on fire?
    Admiral Cook. Well, Mr. Taylor, I mean, you certainly know 
it was the U.S. Coast Guard that was there.
    Mr. Taylor. Now, wait a minute. It is Marshall Islands-
flagged, built in South Korea. The taxes go to Switzerland, so 
I guess the Swiss Coast Guard showed up to help when this 
vessel caught on fire, right, and to rescue those people out of 
the water? Was it the Swiss Coast Guard out there coordinating 
all this, flying overhead, organizing the skimmers?
    Admiral Cook. It was just the U.S. Coast Guard, sir.
    Mr. Taylor. Just the U.S. Coast Guard. So the country that 
didn't get to build the rig, the country that did not inspect 
the rig, right? The country that does not get the taxes from 
the rig, is--in the event of a default by BP gets all the bill, 
all of the grief, didn't get to build it, didn't inspect it.
    Let's go to another point. I understand the kids from the 
Merchant Marine Academy just took their Coast Guard licensing 
test last week, and it is 4 days, a very tough test. I think 70 
percent of the kids passed, which meant 30 percent of the kids, 
after 4 years of studying, did not pass at least the first go-
round.
    I am just curious, if that 30 percent that didn't pass 
showed up with a note from the Marshall Islands that said they 
had passed their third mates exam, would you sign off on it? 
Would you give them a third mates license based on the fact 
that they got a note from the Marshall Islands that said they 
passed the third mates exam?
    Admiral Cook. Congressman Taylor, we invest as heavily as 
we can in the development of international standards, and if 
someone on a Marshall Islands-flagged ship presented a Marshall 
Islands-flagged third mate license, we would accept it.
    Mr. Taylor. I am just curious. Given the amount of 
corruption around the world, what guarantee do you have that 
that license in the Marshall Islands or Panama or any of these 
other countries where a great many vessels are registered--what 
guarantee do you have that they actually performed those safety 
inspections before United States Coast Guard signed off on 
them?
    Admiral Cook. Well, our goal is to go on board and do a 
verification so that we check certain things so that we can 
develop a sense of whether the vessel is being maintained in 
concert with international requirements.
    Mr. Taylor. But what is your degree of certainty that the 
necessary fire prevention took place on that vessel, or did you 
rely solely on the signature of someone you have never met on 
an inspection that you did not witness that may or may not have 
taken place that resulted in the lives----
    And, again, I am not blaming you, Admiral. I am not blaming 
the United States Coast Guard. I am questioning a policy where 
the United States Coast Guard signs off on an inspection you 
did not witness, of someone you never met, who may not even 
exist in the first place, that probably could have been bought 
for a bribe in a third-world country.
    What degree of comfort would you have in having your child 
or someone you cared about serving on that vessel?
    Admiral Cook. Well, sir, I think the Deepwater Horizon is 
certainly a terrible incident. But when you look at the safety 
records across the board, I think that there is some reason to 
have confidence that the Coast Guard's Port Safe Control 
Program is sound. Whether there can be exceptions--
    Mr. Taylor. Did they do as good a job on that inspection as 
your people would have done?
    Admiral Cook. I think they are enforcing equivalent level 
of standards; and the American Bureau of Shipping, in fact, was 
the classification society that was actually performing the 
inspections on behalf of the Marshall Islands.
    Mr. Taylor. Did they do as good a job as your people would 
have done?
    Mr. Cummings. You may answer the question. The gentleman's 
time has expired. Please answer the question.
    Admiral Cook. To the extent that we can verify the 
compliance, it was as good a job. We weren't there, like you 
said. So we don't have actual knowledge.
    Mr. Cummings. Just for clarification's sake, are the 
inspections that the Coast Guard conducts before issuing a 
certificate of compliance to a foreign-flagged MODU and an 
inspection that the Coast Guard conducts before issuing a 
certificate of inspection to a U.S.-flagged MODU, are they 
identical?
    Admiral Cook. They are not identical.
    Mr. Cummings. How are they different?
    Admiral Cook. They are different in that, if it were a U.S. 
flag, we follow the U.S. regulations and apply those regulation 
by regulation. To the extent that we have been able, and we 
have been very successful in getting those types of standards 
replicated through international instruments, the foreign-
flagged certificate demonstrates that they are built and 
maintained through an international standard, and then the 
Coast Guard verifies that we do in fact believe that they are 
being maintained to that.
    We put the crews through drills, firefighting and lifeboat 
drills. We run through all of the records. We do spot checks on 
engineering things. We check their steering systems, physically 
move them. We double-check the bridge equipment.
    So those are the kind of things that are done as a 
verification. And then, as I said in my opening comments, if 
there is a reason to suspect that something is not being 
maintained, then all bets are off and we can dig as deep as we 
want across the board. But it is a verification examination.
    Mr. LoBiondo. Mr. Chairman, I ask unanimous consent that 
Mr. Mica be allowed to sit on the Committee.
    Mr. Cummings. Without objection.
    Mr. LoBiondo. And I yield my time to Mr. Mica.
    Mr. Mica. Thank you.
    I appreciate you convening this hearing on an important 
topic.
    I think most of us here would like to see that every ship 
that operates in the economic zone have an American flag, 
American staff, and American built. From a practical 
standpoint, though, according to the report given to us by the 
majority staff, 37 flagged U.S. vessels and 57 foreign-flagged 
offshore vessel units engaged--these are offshore drilling 
units--engaged in activity in the Outer Continental Shelf.
    I guess the Coast Guard also reported there are 38 U.S.-
flagged and one foreign-flagged floating facility, platform, 
engaged. I guess a floating platform is also considered a 
vessel; is that correct.
    Admiral Cook. Correct. I think it is commonly known as a 
floating production and storage.
    Mr. Mica. But do you conduct the inspections also of those 
platforms?
    Admiral Cook. Yes, we do.
    Mr. Mica. It doesn't sound like that is a big problem, 
because it sounds like we would have one out and one foreign. 
But the majority of the offshore drilling units are in fact 
foreign-flagged vessels. Is this staff report correct?
    Admiral Cook. Those are the statistics I have as well.
    Mr. Mica. I have seen a couple of reports of how many are 
deepwater and how many are in shallower water. Do you have any 
idea how many are operating of the 57 foreign vessels?
    Admiral Cook. Thirty of the 57 are on MMS leases right now.
    Mr. Mica. Thirty of the 57? Okay. Well, and are they all 
production? Because the Horizon was not a production. It was 
exploration. Do you know?
    Admiral Cook. I don't have that breakdown, Mr. Mica.
    Mr. Mica. It is nice to want to have them all American 
flagged, and I would support that if we could.
    I am just wondering what kind of disruption--and I don't 
think you are prepared to answer that question. I don't know if 
our Acting Administrator--do you have any idea what it would do 
if we imposed a mandate that they all be U.S. flagged, 
particularly with these mobile offshore drilling units?
    Mr. Matsuda. Well, I can tell you that it certainly spurs 
the U.S. shipbuilding industry and not just for those units 
themselves but also the supply vessels.
    Mr. Mica. If we were to do that, we probably couldn't do it 
overnight. You don't build the ship overnight. And we can't get 
rid of these foreign drilling units overnight. So I am just 
trying to--what we have got to do is find a practical way if we 
are going to do this.
    And then does the Coast Guard--I guess it wouldn't require 
any more or less capability. You still have the same number of 
vessels--would that be right, Admiral--and you are conducting 
the same type of inspections.
    Admiral Cook. Well, if they became all U.S. flagged?
    Mr. Mica. Your operational inspection is no different for a 
foreign vessel as opposed to a domestic U.S.-flagged vessel 
under the Jones Act?
    Admiral Cook. They achieve an equivalent result, but the 
U.S. flag is more time-intensive.
    Mr. Mica. You are spending more time looking at the U.S. 
than you are at the foreign?
    Admiral Cook. We have to verify more things with the U.S.-
flagged.
    Mr. Mica. You would know initially about the U.S. flagged 
more because you were there--you set the standards for 
construction. You were there along the way. But maybe we have a 
problem here that if we don't have enough inspection of the 
foreign-flagged vessels----
    I mean, well, first of all, one of the concerns is that we 
have missed the mark somewhere with the Horizon. And I don't 
know that to be the case. It is just assumed because we have 
had this disaster. And I would support all U.S. flagged. I have 
no problem with that.
    I can't do that overnight without some disruption. I don't 
know how many are production. We estimate maybe half are 
production, or maybe more, but you can't take them out of 
service and not have a replacement. So we will have to build 
some.
    In the meantime, I still have a body of vessels that are 
foreign-flagged, and I am being told that there may be a 
different level of inspection for them, or maybe I am just 
assuming it from what you said, than there is for a U.S. 
flagged vessel. I know we got a different process to get there 
with a U.S., but I wouldn't imagine any lesser standard of 
inspection by the Coast Guard for a foreign versus a domestic 
Jones Act flagged rig or drilling unit.
    Admiral Cook. Congressman, part of the issue is that the 
flagged state are most typically a classification society like 
the American Bureau of Shipping, acting on behalf of a flagged 
state, goes on board a regular series of inspections and does a 
lot of the trips of equipment and overfeeds and verifies 
different electrical issues so that those tests are done before 
we arrive.
    Mr. Mica. But the Horizon itself, was there a different 
level of inspection for the Horizon, a foreign-flagged vessel 
versus another flagged equivalent? You are saying there would 
be a greater inspection and attention to detail to the 
American-flagged than there would to the foreign.
    Admiral Cook. I would say the Coast Guard spends more time 
on the U.S.-flagged because other inspection regimes assist in 
the foreign flag.
    Mr. Mica. The other part of this would be the problem we 
had was not with the vessel so much in the Horizon case but it 
was the actual drilling. You don't oversee the drilling. That 
would be the MMS; is that correct?
    Admiral Cook. That is correct.
    Mr. Mica. Okay. So they were asleep at the switch.
    But we don't know--well, we know why it sank. At least 
anecdotally we know that the Horizon sank because of the 
explosion, fire, et cetera, weakened structure like any vessel 
would, but we don't know in fact that it was any less maritime 
or marine capable or there was some defection in it in your 
inspection of the vehicle that somebody missed, do we.
    Admiral Cook. No. We assume that it wasn't.
    Mr. Mica. It appears, too, from the preliminary 
investigation that the gas exploded, caught the rig--the 
floating platform, which you inspect, burnt, went down. But the 
ultimate problem was in the drilling. MMS inspections, or 
whoever did the drilling, did not comply with adequate means to 
stop that from occurring; is that correct?
    Admiral Cook. We don't have the complete answer, 
Congressman, but there are a joint investigation between the 
Coast Guard and MMS ongoing.
    Mr. Mica. Saturday, I got--it was marked urgent. It was an 
e-mail. It was from a United States-flagged major company. I 
won't give their name here. But from one of their top 
executives.
    He says that we want to help. Like other Americans--well, 
we have both assets and expertise to do so. We've been present 
at the incident command site since the early days following the 
disaster. We have offered more than a dozen American vessels, 
Jones Act qualified in parenthesis. They are currently in the 
Gulf to help in the cleanup, including especially configured 
emergency response platforms as summarized in the document.
    Let me paraphrase it. It just says they have been waiting 
to hear from DHS, they have been waiting to hear from Coast 
Guard, they have been waiting to hear from Customs or Border is 
also involved in this. They have not heard from anybody. They 
said they have dozens of vessels, and there are basically 
scores of American-flagged vessels that have not been called 
into service. Do you know anything about this or why they 
wouldn't be used?
    Admiral Cook. If I could make two comments, Congressman.
    First, there are 2,930 vessels of opportunity, boats that 
have been hired by BP that aren't otherwise typically involved 
in any operations that would be anything like BP would conduct. 
And those are involved in setting boom, helping with skimming, 
those kinds of thing.
    Mr. Mica. Is BP employing foreign vessels?
    Admiral Cook. What I would like to say, though, 
Congressman, if I could after the hearing get that information 
from you, I will take it back and see if I can't break it free.
    Mr. Mica. Mr. Chairman, I will submit a copy of the letter 
I sent earlier in the week; and I was astounded to get this 
over the weekend that we have American-flagged vessels, cleanup 
vessels waiting there. So I did send a letter. I got a copy 
here to Secretary Napolitano and asked her to look into it.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Cummings. Thank you very much.
    Mr. Oberstar. I'm sorry. Chairman Oberstar.
    Mr. Oberstar. Thank you very much for holding the hearing 
and the work that you have invested in following this issue and 
in preparing for this hearing and for your superb management of 
the Coast Guard Subcommittee.
    I want to make a few sort of framework statements, 
observations.
    The flagged states are responsible for ensuring vessels 
under their flag are in compliance of the law of the flagged 
state and of the international laws of the International 
Maritime Organization. So they are responsible to ensure that 
recognized organizations carry out inspections and comply with 
the law.
    Some of those flagged states set relatively low standards. 
I made this first observation in the first hearing we had 3 
weeks ago. That is why vessel owners such as BP register their 
vessels in those third flag states. Lower standards, lower 
costs to operate, lower pay for their personnel on board the 
vessels, in this case, the mobile offshore drilling unit, and a 
more relaxed and less rigorous enforcement of safety laws 
aboard that vessel.
    We have been very concerned ever since the outset of this 
tragedy about reports that this vessel may not have been 
properly maintained, that it wasn't properly overseen, that 
there was disagreement between BP and Transocean, BP, a British 
company, Transocean, a Swiss company, registered in that great 
maritime Republic of the Marshall Islands with so much maritime 
expertise.
    We lost a lot of lives fighting over the Marshall Islands 
in World War II. That doesn't make them a maritime nation.
    These reports led us to these concerns which led us to this 
hearing that Mr. Cummings is conducting.
    Recently, I observed a representative of the Marshall 
Islands Maritime Administration testify at the Joint 
Investigation Board that they have approximately 2,200 vessels 
under their flag, 2,200 vessels. The United States at the end 
of World War II was the world's greatest maritime Nation. We 
had 5,500 American-flagged vessels. We had 25 million 
deadweight tons of shipping. Today, we have 94 ships under U.S. 
flags that engage in foreign commerce.
    And our Outer Continental Shelf is subject to operational 
drilling by vessels flagged under the Republic of the Marshall 
Islands? How can they manage the responsibilities under 
international law effectively with a registry maintained out 
here in Reston, Virginia? Who verifies that the organizations 
in the Marshall Islands, the ones that they recognize to do the 
work, are doing it properly?
    And what we want to learn through--want to explore through 
this hearing is the role of the Coast Guard in inspecting 
foreign-flagged vessels.
    So the U.S. Outer Continental Shelf, exclusive economic 
zone, foreign-flagged vessel operating with a drill rig owned 
by another foreign-flagged company and yet the environmental 
and economic losses are borne by Americans.
    The Coast Guard has reported in response to our questions 
that 60 percent of the mobile offshore drilling units are 
foreign-flagged operating in our exclusive operating zone.
    My view after this tragedy is that we need to Americanize 
the vessels operating in the U.S. economic zone, and I noted 
with some delight Mr. Mica's support for such an initiative, 
and we have actually talked about this at our most recent 
hearing a week ago.
    But the question is, what capability does the Coast Guard 
have now to do all those inspections and what capability does 
the Minerals Management Service have, trained personnel, to 
understand the operations as our FAA does of aviation matters, 
commercial aviation? They set the standards. They certify the 
repair stations. They certify the maintenance personnel. Does 
the Coast Guard have a certified capability of personnel to 
take over such responsibility, and how long will it take to 
develop the expertise within the Coast Guard to do so?
    Admiral Cook. If I understand your question correctly, 
would the Coast Guard have the expertise to take over the 
functions that are currently performed by the Minerals 
Management Service?
    Mr. Oberstar. Yes.
    Admiral Cook. Obviously, we would have to invest in people 
and training in order to accomplish that new field for us. I 
know the question has generally been out there about if we made 
everything U.S.-flagged we would assume that the business 
opportunities would drive things to essentially the same level 
of number of vessels.
    Right now, it would be a challenge to identify exactly what 
that additional workload would be, but that is something we 
would have to study in detail. We would have to look at the 
different programs that the Coast Guard has. Some are straight 
inspection. We also have ones where we use classification 
societies even on U.S.-flagged to assist us. It is called an 
alternative compliance program.
    And then we would also be looking at the capacity in the 
shipyards, because we would be very much involved in shipyard-
type inspections, even in the dry dockings that occur after the 
ships are built.
    So I think a wide range of things.
    Mr. Oberstar. I think the Coast Guard is the best in the 
world at this, at this responsibility, of overseeing, setting 
the standards, inspecting, ensuring that qualifications are met 
and vessels are seaworthy; and yet you really don't have--this 
whole arena of deepwater drilling has developed only in the 
last decade. And all of the attention of previous oil spill 
liability legislation--and I have been engaged in it since the 
Torrey Canyon and the Amoco Cadiz in the 1970s--has been 
directed at vessels, tankers. Now we have a vessel that is not 
a tanker. It is a drilling unit, and it is a vessel. It can 
move on the water surface from place to place.
    But operating at a 5,000-foot depth is not something that 
the Coast Guard is particularly trained and skilled to deal 
with. It wasn't in your job description, frankly, although it 
was in the Minerals Management Service, and they handled it 
poorly, and they didn't develop skills and expertise. In fact, 
in May of 2008, in documents we uncovered at the Minerals 
Management Service, they issued an exemption from a "blowout 
scenario requirement" for Outer Continental Shelf actions in 
the Gulf in their notice to lessee, meaning British Petroleum. 
So their exploration plan did not include an analysis or a 
response plan for a blowout of the wellhead.
    They also filed a further statement saying it was "unlikely 
that an accidental surface or subsurface oil spill would occur 
from the proposed activities." The Minerals Management Service 
took them at their word. Said that is fine. We trust you. You 
are big guys, multimillion dollar corporation. You don't have 
to file a response plan.
    Mr. Chairman, you have the Coast Guard Authorization Bill 
approaching conference. Our staff are meeting with the Senate 
staff working out the differences in the two versions. We have 
a very strong marine safety section in the House-passed bill. 
It has been a bipartisan agreement. Mr. LoBiondo was part of 
these discussions, Mr. Mica; and you, Mr. Chairman, you led the 
way on this.
    This would be an opportunity for us to include in 
concurrence with the Senate new authority for the Coast Guard 
to develop the capability to do this kind of inspection and 
develop the expertise and recruit the personnel and we would 
have to provide the authority for additional funding for that 
additional personnel to do these things. You would be able to 
handle that kind of work, wouldn't you, Admiral?
    Admiral Cook. However, it would turn out, we would trust in 
your judgment in that. But I think we would make sure it was a 
seamless marriage between the drilling activities and the 
vessel activities so that we don't create an opportunity for a 
safety or an environmental issue.
    Mr. Oberstar. Correct. And you certify or approve the 
certificate of operation of the vessel master, don't you, the 
Coast Guard?
    Admiral Cook. Yes, we do.
    Mr. Oberstar. But there is no such certification for the 
drill master on board that vessel and that person, that vessel 
master that you have certified. There is no similar 
certification for that drill master, is there?
    Admiral Cook. There are requirements, training 
requirements.
    Mr. Oberstar. No stamp of approval as we do with A&P 
mechanics for aviation or as you do in the maritime sector. And 
I think raising that standard is vitally important for the 
future safety in these drilling operations, especially when 
there is no capability to send a human to that depth which is 
below the depth of which our nuclear submarines can dive to fix 
things when they go wrong. We have seen we have remotely 
operated vehicles that are limited in their ability to fix a 
failure.
    Admiral Cook. Yes, sir.
    Mr. Oberstar. Last point, coming back to the question Mr. 
Mica raised.
    There are 2,900-some vessels--when I was at the command 
center in Robert, Louisiana, the Coast Guard and the Minerals 
Management Service and all of the other associated agents plus 
BP said they were hiring vessels as quickly as they could to do 
the cleanup and the skimming, but they needed the 
certification, needed to be sure they had the training and the 
proper equipment on board their vessels to do the work that 
they were paying them to do.
    Now, is there a problem of certifying vessels that are 
available for hire to do the skimming and cleanup work in the 
Gulf? Are vessels presenting themselves for Coast Guard 
approval?
    Admiral Cook. They are, and we are using vessel examiners 
from our Coast Guard auxiliary to assist us. They are trained 
examiners for fishing vessels and other vessels, which aren't 
quite as complex as tankers and such. So they are assisting us 
in that, and I think we are meeting all of the needs.
    Mr. Oberstar. So you are processing these as fast as you 
can but making sure that they are capable of doing the work 
that they would be contracted to undertake. And BP is paying 
them?
    Admiral Cook. We are ensuring that they have the right 
safety equipment, life jackets, fire extinguishers, those kinds 
of things. And if there is specialized training that needs to 
be done, that is being done by BP.
    Mr. Cummings. Just very quickly on a follow-up to Chairman 
Oberstar's question. How many Coast Guard personnel are 
currently fully qualified to inspect MODUs?
    Admiral Cook. We have 69 personnel that have the MODU 
qualifications.
    Mr. Cummings. And where are they? Where are they stationed? 
Do you know? In the Gulf?
    Admiral Cook. The majority of them are in the Gulf. Some of 
them may be in rotational assignments.
    Mr. Cummings. Now, Mr. LoBiondo.
    Mr. LoBiondo. Admiral Cook, is 69 enough?
    Admiral Cook. If I could just digress a little bit and 
build on something Chairman Oberstar was talking about.
    As you know, we have been trying to build our marine safety 
competency and had gotten lower than we really thought was 
acceptable, and I believe our marine safety improvement program 
is on a good trajectory. One of the things that we have added 
is a center of expertise for the offshore industry. It was just 
stood up this year. So it is still in its infant stage.
    One of the very first things that we did--and this is well 
before Deep Horizon--is sign out what we call a joint task 
analysis, which is a top-to-bottom review of the training that 
goes into all the mobile offshore drilling inspectors. And that 
is currently under way. We have added additional training 
capacity at our training center in Yorktown because we would 
like to have more inspectors even for the current workload.
    Mr. LoBiondo. Bottom line is you don't have enough to do 
what you need to do right now?
    Admiral Cook. Right. We are doing some improvisation to 
make it all work.
    Mr. LoBiondo. Something you said earlier in your testimony 
about help that has been offered--and correct me if I am 
misrepresenting what you said. But no offer of assistance has 
been turned away; is that what you said?
    Admiral Cook. The term that I said was no "qualified" 
offer.
    Mr. LoBiondo. No qualified offer.
    What I am having a hard time understanding is this is not 
jiving with public reports, printed reports. And somehow this 
is not adding up in my mind. I mean, we are hearing that there 
are more either American-flagged vessels or more state-of-the-
art technology vessels, that offers have been made and we have 
basically said we are okay. We don't need you. Something isn't 
meshing here. Because I don't know--nobody said we are okay, 
but somehow the response was they weren't needed. And if you 
look at what is going on, even from a nonprofessional eye, that 
just doesn't jive.
    Admiral Cook. I could submit for the record the examples of 
what has been accepted from international.
    But one of the issues is that, of course, that the spill 
has continued and it has evolved, and I have used the term it 
is a siege. So there could have been decisions made at 
different points along the way where a specific resource didn't 
appear to be needed and, if it is needed now, it will be 
reevaluated and asked for.
    But I could give you an example with just skimmers. I think 
all of us--if you haven't been associated with pollution 
response equipment, you hear skimmers, you are thinking of 
probably a boat with a skimming capacity and maybe a belt that 
brings oil up from the surface. Well, skimmers are also the 
small cylindrical things that are floated in the water inside 
of a boom and they suck just through a hose. There is no boat 
associated with it at all.
    So when we hear the word "skimmer," sometimes it conjures 
up an image of a boat that would maybe be capable of carrying 
three or four people, where in other cases it is simply a 
device that would simply be in the water. So that type of thing 
sometimes could be misrepresented.
    I don't want to confuse anyone. There is a true sense of 
urgency on getting all of the right equipment down to the Gulf. 
We want to preserve as much of the Gulf Coast as we can from 
further impact on this environmental disaster. So every effort 
is being made to capitalize on offered equipment.
    Mr. Matsuda. If I could add as well. We are aware of a 
number of offers by the U.S. industry and others who have 
vessels available that are not skimmers but could be converted 
to skimmers within a certain time period. I know that many of 
these have come across as offers as skimmers, but in actuality, 
they need a little work. But, again, the requirement has to 
come from the National Incident Command Center.
    Mr. LoBiondo. I know. But the frustrating part for us is 
when we hear from what we believe are credible sources, in my 
case from the maritime sector, the U.S. maritime sector, that 
there is more capacity available to help with this disaster 
that is not being utilized, and it is hard to connect the dots 
in our minds with the magnitude of the disaster that we are 
facing, why we would not be utilizing all available assets to 
help remedy what is going on.
    And I understand your answers.
    And, Mr. Chairman, I hope you would convey to the Customs 
and Border Patrol, I don't know what the right word is, how 
outrageous it is for them not to be here. It is an insult to 
this Committee. It is an insult to you. And these gentlemen are 
being put on the rack to answer questions the Custom and Border 
Patrol has responsibility for. And I don't know what we can do 
to get them in here, but I just I think it is totally 
unacceptable.
    But I thank you, and I yield back for now.
    Mr. Cummings. Thank you very much, and I will jump on that.
    Congresswoman Brown.
    Ms. Brown. Thank you, Mr. Chairman, for us going to the 
Gulf Coast, because I learned quite a bit.
    I just finished meeting with the Florida National Guard, 
and we are in an emergency mode. We need skimmers. My 
understanding is Louisiana has 300 and we have 30. And the 
National Guard and the Governor's office has been trying to 
locate them. And there are small boats I guess. But we need the 
big ones. And I understand they are available in other 
countries, including Mexico and Norway.
    What is the process for the State to utilize these vessels 
from other countries? And I have some pictures of some of them. 
They are big. We are talking about protecting Florida coasts.
    Admiral Cook. Well, Ms. Brown, earlier, I cited my 
information sheet that I brought here that we carry around with 
us every day to make sure that we know what the right number of 
items are that are responding to this.
    So, in Florida, it shows that there are 110 skimmers. And 
again they can be various sizes, and I understand what you are 
saying. You want big skimmers ready to go.
    Some internationally accepted skimmers, Norway recently----
    Mr. Brown. You said it is 110 skimmers. Are you saying they 
are working? Because the Coast Guard just indicated to me we 
have 30, meaning the Coast Guard. But we don't have enough, 
whatever we are seeing.
    Admiral Cook. I can't say whether they are all being 
employed right now. But I know there are 110 allocated to the 
State of Florida.
    Ms. Brown. You were beginning to read something.
    Admiral Cook. I was just trying to sort through this--and 
forgive me, because it is not all about skimmers.
    But these are international offers, examples of offers that 
have been accepted. Mexico's offered two skimmers. Norway's 
offered 8 skimming systems.
    And then earlier I had commented that, although the Navy 
supervisor of salvage has been an on-scene partner with us from 
the beginning providing skimming, we have also reached out to 
the Navy or some of their installations or bases around the 
country to see if they could free up some additional skimming. 
And there is a full court press now with the oil spill response 
organizations who have equipment in other ports other than the 
Gulf Coast, and I am trying to make arrangements to free up 
some of them contractually so that they are not bound to the 
area that they are in and they could be applied to the Gulf.
    So we hear you, and I hope we can get it.
    Ms. Brown. The problem that I have is the time frame. 
Because this has gone on for--they tell us on television how 
many days--but the question is what is the process in order for 
the State to take advantage of these skimmers from other 
countries, the big ones?
    Admiral Cook. The best way to do that is work through our 
incident command posts so you work all the way up to the 
unified command which is in Louisiana, but you do have an 
incident command post stood up over in Key West. It was just 
recently moved from St. Petersburg. And we also have one in 
Mobile, if you are talking about the Panhandle.
    There is a considerable concentration of people and 
equipment, but the main thing is that they are linked into the 
command and control structure all the way up to the incident 
commander. Make your needs known through them, and that is the 
fastest way to get it.
    Ms. Brown. Can you give me that information in writing who 
are the contacts so I can make sure that my State is not given 
the runaround? This is something that we need. This is an 
emergency.
    Admiral Cook. We will follow up with you, ma'am, yes.
    Mr. Cummings. I am sitting here and listening very 
carefully, and I am trying to make sure that--as you know, 
whenever I talk about the Coast Guard, I talk about two things, 
a culture of excellence as opposed to mediocrity and being 
effective and efficient.
    And I tell you when I listen to your dialogue here with 
Congresswoman Brown and you said we are trying to make 
arrangements, I gotta tell you, it gave me a not-good feeling. 
Because what is happening, and I am trying to make sure that we 
fully sense--first of all, I support the Coast Guard a million 
percent. But I want to make sure that we fully sense the 
urgency of this moment.
    We have a window of opportunity to save our beaches, save 
some of our birds and fish and wildlife, and I am just 
wondering whether there is that sense of urgency. And I think 
this is what Ms. Brown is talking about, Congresswoman Brown, 
that sense of urgency that it doesn't--sometimes it doesn't 
seem like folks are moving with that idea that they have got to 
act not today but yesterday, 55 days ago.
    So I am just wondering, you know. When you say something 
like we are trying to make arrangements, I hate to say it but 
that is not good enough.
    We are a can-do Nation. And when you have a situation where 
somebody--and I have gone to the ceremonies where members of 
the Coast Guard have done heroic things, and they acted like 
that because they knew that if they didn't act at that moment 
that that moment would never come again and somebody's life 
might be lost.
    In this instance, we have people's livelihoods being lost, 
their opportunities to keep their businesses open. I mean, it 
is just so much.
    And I just--I guess you know I am not trying to beat up on 
you, but you are the Coast Guard now. You are sitting in front 
of me, and you have got certain responsibilities I know. And I 
mean and if I were you, if I were you, I would be saying to 
Congresswoman Brown not, you know, you go up to the command and 
you go up here, you go up there. You say, look, I am going to 
take that back. I am going to deal with that. I am going to 
jump on that today. Understanding that you are not going to 
necessarily be able to accomplish everything she wants, but 
that is how we do it in the Coast Guard.
    And so I am just wondering whether that sense of urgency is 
there. I think that when we hear the frustration of the 
American people--and that frustration comes from that. Is there 
that sense of urgency. Do we feel it? Do we understand it? Do 
we understand it? It is like we gotta act right now. Not 
tomorrow.
    Because when you say arrangements--arrangements means that 
you have got to negotiate something. So that may be 30 or 40 
days from now. By then, I don't know what the situation might 
be in Florida.
    I am not just talking with regard to Congresswoman Brown. I 
am talking about to these governors and to these the 
congresspeople and the people that are looking for the Coast 
Guard to act. Because they come to me. They come to me and they 
say, Cummings--I am talking about Members of Congress--what is 
going on with the Coast Guard? And I keep saying, they are 
giving it their best. They are doing everything they are 
supposed to do. And then when I hear you talk about 
arrangements, it is kind of frustrating, to say the least.
    You may comment.
    Admiral Cook. Thank you, Chairman; and thank you for your 
continual support of the Coast Guard.
    And I apologize if I came across in a bureaucratic sense, 
because that sense of urgency is very real in the Coast Guard. 
I have had several meetings with our new commandant, and there 
is no one who feels that it is more urgent for the Coast Guard 
than he. We are moving patrol boats down to help organize more 
of these vessels of opportunity. We are helping with skimming 
and moving boom. We are moving aircraft down to make sure we 
are first on scene to spot oil as it is coming near the beach 
so that skimmers can be directed to that oil before it impacts 
the beach. So I think we have the message.
    And, you know, I came here with a mindset of addressing the 
Deepwater Horizon, the Outer Continental Shelf activity. So 
maybe in that sense I was in a mode that was transmitting some 
of the regulatory aspects and those things. But please don't 
misguide that for a lack of passion and a lack of commitment. 
And it is urgent for the Coast Guard, and we are up to the 
task.
    Mr. Cummings. And, number two, effectiveness and 
efficiency, two of my colleagues from my State, Senator Cardin 
and Senator Mikulski, were down in the Gulf Coast last week, 
last Monday; and one of the things that they were so disturbed 
about--and I recall seeing some of this when Congresswoman 
Brown and I were down there 2 weeks ago, 2-1/2 weeks ago--they 
said that they saw a lot of a boom that had not been tended. I 
mean, as a matter of fact, it had been left out there. Nobody 
came to take care of it.
    They were very, very upset about that and they were so 
upset that they apparently got a hold of some higher-ups and 
said, well, where is the coordination----
    Let me tell you why I ask you that, and then we will go to 
Ms. Richardson.
    I say to my staff, when I see one problem, that means there 
are probably a lot more that I didn't see. And so I am just 
wondering--you know, I am again going back to effectiveness and 
efficiency. Are we looking at things like that? Is that just 
putting stuff out saying, okay, there it is. It is out there. 
Or are we tending to that boom and other things there?
    Ms. Brown. Mr. Chairman, just 30 seconds.
    My understanding is that the booms are okay, you know, but 
the skimmers is like catching almost 40 percent of the oil. So 
it is very effective, and that is why we want them. Better than 
the booms. Booms give us mental comfort, but it is not as good 
as the skimmers because you have people attending to it or 
maybe not. But they seem to think it is better.
    Admiral Cook. If I could follow up to both comments.
    Mr. Chairman, part of the rationale for getting more boats, 
more helicopters, and additional people--and some of those 
people may not be Coast Guard, they may be National Guard who 
are activated in addition to the ones that are currently 
activated--is to get the presence so we discover all of the 
problems before they are not reconcilable.
    So to answer your question, if you see a problem, there are 
probably more problems. I would agree with you. But we want to 
be the ones who discover it, direct it, and keep the coastline 
safe.
    And then, as far as Congresswoman Brown's comment, that is 
correct. The more we can identify the oil while it is still on 
the water and intercept it there, the more we can ensure the 
environmental integrity of the shoreline.
    Mr. Cummings. I am going to go to Mr. Mica and then to you, 
Ms. Richardson.
    Mr. Mica. Well, again, I think the Coast Guard has done a 
great job. The Coast Guard, at least I found in my line of 
questioning, sir, you said you do inspect vessels both foreign, 
American-flagged. A little bit concerned that it doesn't appear 
that we have enough attention to the foreign-flagged vessels. I 
am not sure that was the case, but that was the indication that 
I got.
    Sounds also like you are strained on your resources. At 
least it appeared from the question Mr. LoBiondo had asked that 
you were able to do your job but it was using all of the 
resources available; is that sort of correct?
    Admiral Cook. Yes, sir. You know, we have limited ability 
to sustain a surge.
    Mr. Mica. And one comment you made said that you were down 
in some of your capability, but you were trying to ramp that 
up.
    I am not familiar with all of the different ranks in the 
Coast Guard, but do you have any like a second lieutenant 
magician? You know, like that level but a magician in the Coast 
Guard.
    Admiral Cook. No magicians.
    Mr. Mica. I didn't think so, because it would probably take 
one to comply with what has been going on, what has been 
proposed for you to do.
    Now, first of all, you had nothing--you did your job. It 
appeared that the vessel was not the problem. It was the 
drilling.
    So what this hearing is doing is really trying to set the 
stage to solve a problem which we don't have which is to, 
again, Jones Act the entire American zone. I have no problem 
with that. I am pro-American. I want the ships flagged in the 
U.S., built in the U.S., but that is being added on to the oil 
spill.
    The problem with the oil spill was the failure of the 
inspections, MMS. The problem with the oil spill was BP not 
being monitored in its work or giving a permit without putting 
the criteria in that required it to do its things.
    What stuns me--and I ask you the question if you have any 
magicians in the United States Coast Guard is because, first of 
all, if we increased--we right now have 25--this is the 
Democrat staff's--25 deepwater well active rigs in the Gulf. 
The Obama administration approved 33 since they took office. 
Wouldn't it take quite a few more assets to monitor some of 
those assets? Now that would take a magician to do that when 
you submit in February a budget that cuts your personnel by 
1,100 ships, helicopters, aircraft.
    So, again, in announcing not only that they had done this, 
this is what they had approved, but I have got the New York 
Times March 31 headline that said they were approving even more 
drilling in the Gulf. That was their policy. The President came 
out with it before the spill. So it would take a new position 
called second lieutenant magician in the United States Coast 
Guard proposing this is policy, giving you the assets to do the 
job, dramatically increasing your workload, and then cutting 
your resources to do it.
    So do you see, sir, why I suggest you need that grade of 
magician.
    Admiral Cook. I do, sir.
    Mr. Mica. Well, it is not a very good point, but I wanted 
to make it.
    You guys are doing a good job with what we have given you. 
We appreciate it. You are getting drug into another issue which 
is part of a bigger debate. And I will get back with you on the 
American-flagged vessels that are available. I know you don't 
have total say over who comes on board, but we have some of 
those skimmers and others that could be used, and we want to 
get them engaged as soon as possible.
    Thank you.
    Mr. Cummings. Let me be very clear. Nobody is asking for 
anybody to be a magician. Under no circumstances. And there is 
nobody, nobody in this Congress that stands up for the Coast 
Guard more than this chairman.
    But, at the same time, again, every organization as we saw 
in with Deepwater--not Deepwater Horizon but Deepwater--we have 
to pursue excellence in everything we do. Period. And it is not 
about a magician. It is about making sure that we take the 
resources that we do have and use them effectively and 
efficiently.
    And before our chairman came in, I had announced that I 
spoke to Secretary Napolitano and I spoke to Chairman Price, 
Subcommittee of appropriations that deals with the Coast Guard. 
They assured me that they are going to make sure that the 
funding is restored that was taken out of the budget, and that 
they are going to get some additional money to take care of the 
needs that they will now have in trying to address this issue.
    And that was, by the way, a bipartisan effort on all of our 
part. Because it wasn't a question of assessing blame. It was 
being about the business of making sure that the Coast Guard 
had every single thing it needed to accomplish what it had to 
do.
    So. With that, Ms. Richardson.
    Ms. Richardson. Thank you, Mr. Chairman. I may not be as 
nice and polite as you just said that.
    Listening here today reminds me of when President Bush said 
to FEMA Administrative Brown, you are doing a good job. I am 
actually here to say the more I listen the more disappointed 
and concerned I am becoming.
    According to my notes, you guys had an exercise, a spill of 
national significance, exercise conducted on March 24 and 25 of 
2010. That was just about 3 months ago. You mean to tell me 
that you can't answer the questions to us of how many skimmers 
exist when you supposedly had a national exercise that I would 
think would have included knowing this information? I mean, 
this is basic MBA kind of work.
    So this is my request that you would give to this 
Committee: How many skimmers do we have? How many are assigned? 
How many have been offered, when, and where? How many have been 
received and accepted, and how many are available and where? 
That means includes the Coast Guard, private, National Guard, 
foreign.
    I mean, you have got to know what you have to do something, 
and I don't understand why you don't have that database to know 
where your resources are that you can utilize.
    Do you want to respond.
    Admiral Cook. Well, Congresswoman, we have a State-by-State 
breakdown as far as location of the skimmers.
    Ms. Richardson. So answer the question. How many do you 
have in total? How many are you using?
    Admiral Cook. The total is 447. And that is for the four 
States.
    Ms. Richardson. The four States. You have--in the entire 
United States we have 447 skimmers.
    Admiral Cook. We have 447 available in the Gulf for this.
    Ms. Richardson. No. My question is, how many skimmers do we 
have in the United States? How many?
    Admiral Cook. I don't have that answer.
    Ms. Richardson. Okay, do you see my problem and your 
problem? You have got to know how many you have. It is not just 
the four States. Hell, you can take them from California. Take 
them from wherever. We need them. Why are we just looking at 
the four States? This has been 56 days. They had plenty of time 
to get wherever they needed to be.
    So my request, again, is how many skimmers do we have, how 
many are we using, how many have been offered, where are they 
from, how many have been in fact received of what has been 
offered, how many are available and where? And that is not 
restricted to the four States. That is to the Coast Guard, the 
National Guard, private, foreign. Who has it? So that if we can 
use it, we should use it.
    And I just want to say, sir, with all due respect, Rear 
Admiral, you have chosen a profession to serve, and I am 
grateful for that, not just today because we had the spill, for 
probably your career has been 20-plus years and we are 
thankful. But this kind of thing is what we work towards. And 
in my opinion of being on both Transportation and Homeland 
Security, it is inexcusable not to know what you have, 
especially 55 days into it. And we need that, because if we 
have got to help you, if we have got to say repeal--you know, 
there should be no hindrance of Jones Act, whatever it is you 
need us to do, we want to do it. But we can only do it if we 
know what resources are available.
    I have a minute and 15 seconds.
    Based upon that exercise, why weren't we prepared for this? 
Because that is why we spend the money to do these exercises.
    Admiral Cook. Ms. Richardson, we did the spill of national 
significance exercise. And when you are dealing with the spill 
from a vessel, no matter how large it is, it is a known 
quantity, even if you lose the entire contents of that vessel.
    In this case, we have a well that continues to put out more 
oil and, as you see, it either changed in character or our 
ability to assess the oil has changed. But we realize it is a 
significant amount of oil each and every day. So that the 
finite limit associated with a ship which really the Oil 
Pollution Act of 1990, I think was really focused on that, is 
now being contorted by a well that continues to produce oil 
every single day. So it is a magnitude issue.
    Ms. Richardson. So I would only suggest that you knew the 
Deepwater Horizon was there before this happened 60 days ago, 
right?
    Admiral Cook. We did.
    Ms. Richardson. So it might have been helpful if we were 
going to do a national level exercise we would do an exercise 
that could meet at its highest point of what could potentially 
be a problem. Because, as I said, the more I learn about this, 
the more I don't understand how no one thought that this would 
happen. To me, it seems a very reasonable expectation.
    But, as I close, Rear Admiral, I just want to say thank you 
for your service. For all of those who are working with you, we 
thank you. We just need to get this done. And I don't have the 
confidence and a lot of the American people do not have the 
confidence that all of the things that need to be done are 
being done. And we cannot rely upon BP or anyone else. We have 
got to use our resources to get this done. And it has got to 
have been done yesterday and not "we are still trying to 
negotiate or free up." We need it now, and if there is anything 
I can do to help you do that, you don't hesitate to let me 
know.
    Admiral Cook. Yes, ma'am. I understand.
    Sir, if I can just quickly--and this isn't in any way to be 
argumentative. In 2002, the spill of national significance 
event was on the Gulf Coast; and, ironically, Admiral Allen as 
the Atlantic area commander was the commander at that time as 
well. So we do try and choose venues that we think are 
reasonable, and I would have to say, that in this case, we did 
not imagine this much oil.
    Mr. Cummings. Let me ask you this quick one question. Did 
we do like an all call? Did the Coast Guard do like an all-call 
for skimmers? In other words, have we done anything like that, 
saying to the world we need skimmers or do you feel like there 
is already enough down there in the Gulf Coast? I mean--I know 
this is a very unusual situation, and I was just curious.
    Admiral Cook. Prior to this week, the calls have been more 
targeted, looking for specific skimmers and trying to meet the 
needs.
    But we realize that we need more. So, going on--and, in 
fact, I have been at work each of the last two nights until 10 
o'clock on that particular issue of skimmers. And we are doing 
an all-call, all-calls out to the Navy.
    Mr. Cummings. And so that I can understand that--and thank 
you, Mr. LoBiondo. We are going to come to you. But I think 
this is so very important.
    So, when you say an all-call, exactly what does that mean? 
I mean, does it go out to the maritime community? Is there some 
blast e-mail that goes out? I mean, how does that--if you know.
    Admiral Cook. We started with direction from Admiral Papp 
to go out to all of our captains of the port and work with--
and, you know, I don't want to throw in a bunch of terms that 
end up making this seem----
    Mr. Cummings. No, you don't have to do that. Just keep it 
real simple.
    Admiral Cook. They have committees that are standing in 
each port that are made up of various stakeholders, including 
the States, locals, and federals. And they have a contingency 
plan for oil spill response. There are oil spill response 
organizations, OSROs, which are qualified by the Coast Guard, 
and those entities have equipment.
    There are response plans required for every facility, like 
an oil terminal, or a ship coming in. They contract with those 
OSROs to make sure that equipment can be available if they have 
a spill in that port in that time frame.
    So there is equipment throughout the country. It is tied up 
in requirements, commercial requirements----
    Mr. Cummings. Yeah, I understand. I'm talking about--but I 
would assume the all-call would be for people who might be 
available.
    Because I have to tell you--and I have said this in many 
speeches--of all the positions that I have held in Congress for 
my 15 years, I can tell you that the maritime community is 
probably the most--and dealing with maritime issues, when it 
comes to issues of keeping the water clean and things of that 
nature, one of the most cohesive communities I have ever seen.
    And I know there are a lot of people, not just in the 
maritime community, but others who want to make this work. As a 
matter of fact, I had a meeting with Mr. West down there in 
Port Fourchon, and one of the things that he said is that they 
are determined--and he deals in, of course, supplying to the 
rigs and things of that nature, and he works with the oil 
industry. But he said that one of his major concerns was to 
make sure--and their concerns was to make sure that they did 
everything in their power to help address this issue.
    And so, there are a lot of people that are out there. I 
just want to make sure that we are calling on them.
    And then I assume that BP would end up with the expense for 
this. Is that right? Since they are responsible for the cleanup 
under the Oil Pollution Act. Is that right?
    Admiral Cook. Right, because these would be skimmers that 
the Federal on-scene coordinator says we need.
    Mr. Cummings. Uh-huh. We might have to take the money out 
of the fund, but then BP would have to pay us back. Is that 
right?
    Admiral Cook. We have no reason to think BP wouldn't 
support contracting them now.
    Mr. Cummings. Fine, fine. Thank you very much.
    Mr. LoBiondo?
    Mr. LoBiondo. Admiral Cook, in the SAFE Port Act of 2006, 
Congress required the Coast Guard to update regulations to 
extend requirements that vessels submit a notice not less than 
96 hours before arriving at a point on the Outer Continental 
Shelf. To date, no final rule has been issued.
    Can you tell us why the service has failed to comply with 
this law for nearly 4 years and when you will complete the 
rulemaking?
    Admiral Cook. Congressman, there was some thought that that 
rule should be wrapped in with some other ongoing rulemaking, 
and it has been decided that it should be alone. Notice for 
proposed rulemaking was published and closed out in November of 
2009. And the final rule is done and being administered through 
the system right now.
    Mr. LoBiondo. So, in terms of timing, what do you believe 
that might be?
    Admiral Cook. It is actively being considered within the 
review process as a completed, final rule.
    Mr. LoBiondo. Or is it fair to say it might be stuck in the 
Secretary's office?
    Admiral Cook. You know, it is in our administrative 
process----
    Mr. LoBiondo. Stuck somewhere.
    Admiral Cook. I mean, sir, there are ones where I could 
say, you know, something was delayed and it seemed like it was 
stuck. This one is on its way, very much on its way.
    Mr. LoBiondo. Mr. Chairman, I don't know if it is 
appropriate, but maybe through your status as Chair of the 
Subcommittee, you might be able to urge someone to get back to 
the Committee with a timetable or, in fact, the final product. 
I think enough time has passed and it is something we need.
    Mr. Cummings. If the gentleman would yield, we will have a 
letter to the appropriate people tomorrow, inquiring as to 
where the rule is and the urgency of getting that rule out. I 
was kind of surprised that the rear admiral didn't know exactly 
where it is.
    Mr. LoBiondo. Yeah, I mean, if it is stuck somewhere, we 
need to know where it is stuck, and we need to then----
    Mr. Cummings. Get it unstuck.
    Mr. LoBiondo. --work to get it unstuck. But if we don't 
know where it is stuck, though--okay. Thank you.
    Mr. Cummings. Rear Admiral, did you want to say anything 
else about that?
    Admiral Cook. I believe it is ready to be released, sir. 
So----
    Mr. Cummings. You said ready to be released?
    Admiral Cook. I believe that it is.
    Mr. Cummings. Rear Admiral, do me a favor----
    Admiral Cook. You know in your experience, sir, it is 
difficult----
    Mr. Cummings. I know, I know. I understand that.
    Admiral Cook. --to get the final----
    Mr. Cummings. I understand that. But at least--I understand 
that all of that is not in your control. I got that. But I want 
to be--I mean, something that pertains to what you do, I would 
hope that would you get us that information as fast as you can. 
In other words, exactly where it is.
    Admiral Cook. Okay. Yes, sir.
    Mr. Cummings. Go ahead. You want to tell me something?
    Admiral Cook. It is a----
    Mr. Cummings. You keep saying--it sounds like it is almost 
out the door. I just want to know what door.
    Admiral Cook. Well, I think the administrative review 
process between the agency and the Department is a seamless 
corridor there. So----
    Mr. Cummings. We will talk afterwards and we will figure it 
out, and we will get the appropriate letter to the appropriate 
people and hopefully get the appropriate response in a short 
period of time.
    Mr. Taylor?
    Mr. Taylor. Thank you, Mr. Chairman.
    Admiral, I want to go back to the line of questioning about 
the equivalency of had that vessel been an American-flagged 
vessel and the appropriate level of Coast Guard inspection and 
had that been a foreign-flagged vessel. So walk me through 
this.
    If that had been an American-flagged vessel, how often, by 
law, would it have had to have been dry-docked for a full Coast 
Guard inspection, which I am guessing would include the actual 
use of all the firefighting equipment, review of the pumps, 
review of literally from top to bottom of that vessel? How 
often does that happen for a U.S.-flagged vessel?
    Admiral Cook. Well, we go out every year for the 
firefighting. And then what we do is also, during the course of 
the year, we lay out the compartments so that, during the 
different visits over the course of a year, we crawl the entire 
inside of the----
    Mr. Taylor. And refresh my memory. How often does that 
vessel have to go into dry-dock for a full hull inspection?
    Admiral Cook. I will have to get back to you on the record 
for that, sir.
    Mr. Taylor. It is my understanding it is every 2 years. 
Okay? So what I am having a little----
    Admiral Cook. Typically, it is twice in 5 years.
    Mr. Taylor. Twice in 5 years. So I am having a little 
trouble with--going back to your saving it was an equivalent 
level of safety, when I read that the Deepwater Horizon had not 
had a dry-dock inspection since 2006 and wasn't due until 2011, 
that sounds like a 5-year center, rather than two on a 5-year 
center. Was I reading that correct?
    Admiral Cook. Yes, you are.
    Mr. Taylor. Now, again, not being smart, but steel is 
steel, rust is rust, corrosion is corrosion. What I can't 
figure is that somehow that foreign-flagged vessel was less 
likely to suffer corrosion and structural failure on the span 
of 5 years than an American vessel is on 2 years.
    Again, I know folks in the industry. I know that your 
people go into that rating because they really do want to do a 
good job. They want to crawl through that vessel, they want to 
find something wrong, because they don't want that vessel to be 
unsafe. And they are doing it, apparently, every 2-1/2 years.
    So how can you call a 2-1/2-year inspection cycle 
equivalent to a 5-year inspection cycle when we both know that 
somehow the laws of corrosion aren't suspended for a foreign-
flagged vessel?
    Admiral Cook. In either case, in a foreign- or a U.S.-
flagged ship, we also allow things like underwater inspection 
in lieu of dry-docking, where the entire outside is videotaped 
and reviewed so that we can look for any anomalies.
    So, in terms of a dry-docking, you know, there are things 
that are done to allow the dry-docking period to be 5 years. 
You can take a look at the 2-1/2-year mark. And those type of 
accommodations can be extended to both foreign- or a U.S.-
flagged.
    Mr. Taylor. Are U.S. standards too strict?
    Admiral Cook. No. In every case, what we are aiming for is 
to either bring international standards to U.S. standards or, 
if for some reason the international standards are better, then 
we would adjust our own.
    But I think, to answer your question, the U.S.-flagged 
standards are not too strict.
    Mr. Taylor. Then, if U.S. standards are not too strict, are 
the foreign standards that you were signing off on too loose? 
Because they are not equivalent.
    You are not going to convince me that a 2-1/2-year standard 
is the same as a 5-year standard in anybody's book. You are not 
going to convince me that the people from the Marshall Islands 
doing that inspection are inspecting that vessel as rigorously 
as your people, particularly when the Marshall Islands is a 
heck of a long way from the Gulf of Mexico.
    So let's go back to your statement. Are they really 
equivalent? Because I don't believe that they are, but I will 
give you an opportunity to convince me otherwise.
    Admiral Cook. Well, sir, just succinctly, the point of our 
inspections are to be able to ensure the U.S.-flaggeds are 
safe. And then we also go onboard foreign. And we leverage the 
different inspections that are going on on behalf of the flag 
state or by the flag state itself, and we verify that the level 
of safety is acceptable for service to the U.S.
    Mr. Taylor. Well, Admiral, should we outsource the 
inspecting of drilling rigs? Should we outsource it to the 
Marshall Islands, if they are that good?
    Admiral Cook. No, sir, I don't think we should.
    Mr. Taylor. But you have effectively done that when you 
sign off on their inspection. You have outsourced it.
    Admiral Cook. I would say we outsourced it if we didn't do 
a very rigorous verification and ensure that the level of 
safety that Marshall Islands has signed off to is being 
maintained on that vessel.
    And we also invest a lot of time, energy, talent, working 
through the International Maritime Organization, to put every 
piece of backbone we can into the international agreements 
before they are finalized and deployed worldwide.
    So we are very true to the goal of trying to ensure an 
equivalent level of safety.
    Mr. Taylor. But, again, you correct me if I am wrong. You 
all are relying on a certificate, signed either by someone from 
the Marshall Islands or their designee, that the requirements 
that you normally enforce were enforced. You have, in effect, 
outsourced your responsibility.
    Now, it may be a bad law that we need to change. But is it 
not true that you outsourced your responsibilities?
    Admiral Cook. Congressman, I don't want to be 
argumentative, but I just can't agree that we have outsourced 
our responsibilities, because----
    Mr. Taylor. So you did that inspection, not the Marshall 
Islands?
    Admiral Cook. We validated that the vessel was up to 
acceptable standards through taking their certificates and then 
verifying it through our inspection.
    Mr. Taylor. You took their word. You took their word. Yes 
or no?
    Admiral Cook. Trust but verify, sir. We took their word and 
did a verification.
    Mr. Taylor. Thank you, Mr. Chairman.
    Mr. Cummings. Let me ask you this. Does the Marshall 
Islands do inspections, to your knowledge?
    Admiral Cook. They use recognized organizations like ABS.
    Mr. Cummings. So they don't do any inspections, right, to 
your knowledge?
    Admiral Cook. No, they are not doing inspections to issue 
their own certificates. Right.
    Mr. Cummings. And so, in light of what has happened here, 
do you--I mean, have there been any discussions with regard to 
what you might--now, following up on Mr. Taylor's questions, in 
light of what has happened here, where we have the most 
catastrophic environmental incident that has happened to our 
country and continues to happen, have there been discussions as 
to what you all might do with regard to making sure that these 
standards are being met?
    I mean, have you all said, "You know what? We are not even 
going to discuss it, because we know that everything is 
excellent with the Marshall Islands"? I mean, have there been 
any questions that have arisen as to how our United States 
Coast Guard will deal with Marshall Island-flagged ships with 
regard to inspections and the adequacy thereof and the reliance 
on their word and how we verify? Has there been any of that, or 
have you all just said, "You know what? We got it, it is 
already done, it is fine, everything is okay"?
    Admiral Cook. Mr. Chairman, we continuously review the 
performance of flag states across the board on not just MODUs 
but, you know, the other types of vessels that we allow in on 
our port state control programs.
    And Marshall Islands, I don't have the exact statistic in 
front of me, but they are a very reasonable performer. We have 
certain flag states that are, kind of, repeat offenders, and 
they become targeted for additional inspections.
    Mr. Cummings. Right.
    Admiral Cook. And it is a risk-based regime, so we are 
continually assessing each flag state for their performance.
    Mr. Cummings. And so, if we can trust the foreign-flagged 
states, why do we do the CVE inspections for cruiseships? Why 
is that?
    Admiral Cook. We have so many U.S. passengers that are 
going onboard the foreign ships that we felt like we wanted to 
have more of a presence onboard those foreign ships.
    Mr. Cummings. And in light of this catastrophe and the fact 
that so much harm is being brought to our country, I mean--and 
I understand, that makes sense, to look at the cruiseships. 
This doesn't say to you, well, maybe--say to the Coast Guard, 
maybe we need to do a little bit more here? I am just curious.
    Admiral Cook. Well, we have those kinds of discussions, 
sir. We are interested in, certainly, the outcome of the 
investigation, as well. We don't know whether there is going to 
be implications to the maritime inspection regime or if it will 
all be about the drilling. So I think it is premature to go to 
a CVE type of arrangement for MODUs.
    Mr. Cummings. Mr. LoBiondo?
    Mr. LoBiondo. No more questions.
    Mr. Cummings. Then let me just finish with two or three 
more things.
    You said a little bit earlier--I had asked you about how 
many of our Coast Guard folks were qualified to inspect the 
MODUs, and I think you said 69. Was that the number?
    Admiral Cook. If I said 69, I meant 89.
    Mr. Cummings. How many?
    Admiral Cook. Eighty-nine.
    Mr. Cummings. Okay, 89. How many of those people--these are 
the ones that are qualified, is that right? They have been 
trained?
    Admiral Cook. Yes. They have an inspection qualification 
for mobile offshore drilling units.
    Mr. Cummings. Okay. And how many of those are actually in 
those positions right now? I understand you have them 
qualified, but I want to know how many are actually doing that 
right now.
    Admiral Cook. I don't have that exact number. I can get 
back to you on the record, sir. Some of those people, you know, 
are rotated into oversight assignments where they are not 
actually doing inspections.
    Mr. Cummings. This is very important, because Mr. LoBiondo 
had asked you--and I know he really meant it, and he is 
absolutely right. He was asking about what more do we need.
    And, see, when you tell me that it is 89 that are 
qualified, I know and we all know that the Coast Guard is 
overtaxed and we have folks who have to do all kinds of jobs. 
And so, when you say 89, 89 could mean 30 that are actually 
doing the job. It could mean 50. But if we don't know and if 
you don't know, there is a problem. And so, could you get us 
that information as fast as you can?
    And, number two--and I don't see how you can answer this 
question without the information that I just asked you in the 
last question--is there a need for Congress to make it possible 
for you to have more people trained to be able to inspect these 
MODUs?
    Admiral Cook. Well, Mr. Chairman, you know, we appreciate 
any support that is provided. We are, on our own, through some 
of the billets that were provided in earlier years, I think 
mostly a lot through your leadership and Chairman Oberstar, we 
have addressed some of the shortcomings in the marine safety 
program. And, like I said to Mr. LoBiondo, we have applied some 
of those to a center of expertise that would be a point of 
synergy to further develop the program.
    But it is premature to say exactly how many inspectors we 
might need, but we are doing that job task analysis, which we 
think will be very insightful, will enable us to know what the 
additional training load needs to be to get us the right amount 
of inspectors.
    Mr. Cummings. This is my last question: Admiral Cook, the 
OCSLA required that, within 6 months after September 18, 1978, 
the Secretary of the Department in which the Coast Guard is 
operating shall issue regulations which require that any 
vessel, rig, platform, or other vehicle or structure which is 
used at any time after the 1-year period beginning on the 
effective date of such regulations for activities pursuant to 
this subchapter be manned or crewed by citizens of the United 
States or aliens lawfully admitted to the United States for 
permanent residence.
    However, there are circumstances under which vessels, rigs, 
platforms, and vehicles operating on the OCS can be exempted 
from the requirement that they employ only Americans. For 
example, if a vessel, rig, or platform is more than 50 percent 
owned by a citizen of a foreign nation or if an insufficient 
number of Americans are available to perform required work, 
vessels on the OCS can be exempted from the requirement that 
they employ only Americans.
    Information provided to the Subcommittee by the Coast Guard 
indicates that, since January 2008, the Coast Guard has granted 
52 exemptions, covering nearly 7,000 employees.
    Were most of these exemptions based on a lack of sufficient 
number of Americans to perform the required work? And how does 
the Coast Guard assess whether there is not a sufficient number 
of Americans to perform a specific type of work?
    Admiral Cook. Okay. The process involves submission to the 
Coast Guard----
    Mr. Cummings. Wait, let's go back. Why don't we deal with 
the first question first. Were most of these exemptions based 
on a lack of sufficient number of Americans to perform the 
required work?
    Admiral Cook. Yes.
    Mr. Cummings. Okay. Now go ahead.
    Admiral Cook. Okay. And some of those are only good for 1 
year. So it is 7,000 in number; it may not be 7,000 in 
positions.
    But the way it is done is the company submits the 
information to the Coast Guard, and they have evidence of 
having advertised for the job or whatever outreach they have 
done. That information is packaged up, sent to the Department 
of Labor. The Department of Labor validates it. And if they 
agree, they send us back what is called an advisory 
determination. And then that gives us the permission to issue a 
letter authorizing that company to hire someone that is not a 
U.S. mariner.
    Mr. Cummings. And what are the firms that receive the 
majority of the employment exemptions? And what are the types 
of positions that are most commonly exempted?
    Admiral Cook. The most common exemption is for the galley 
or catering folks.
    Mr. Cummings. What kind?
    Admiral Cook. The catering--the food service people.
    Mr. Cummings. Food service?
    Admiral Cook. Yes, sir.
    Mr. Cummings. Wait a minute. You mean people to serve food 
and prepare it?
    Admiral Cook. Right.
    Mr. Cummings. Do you know why that is, why we can't find 
people to serve food and prepare food? Because I have a lot of 
them in my district. I mean, I am sure they pay a reasonable 
amount of money. I am just curious.
    Admiral Cook. We don't know for sure. We speculate that 
somehow they can make an equivalent living without having to go 
to sea, and they choose not to put in for those jobs.
    Mr. Cummings. Even if they are unemployed. Does your 
assumption still comes with that? I am just curious.
    Admiral Cook. Well, I can't answer that, sir. The sea life 
is arduous for some people. But there may be another barrier.
    Mr. Cummings. Okay. How many of the vessels operating on 
the Outer Continental Shelf are exempt from employing Americans 
because they are more than 50 percent owned by citizens of a 
foreign country?
    Admiral Cook. Could you state your question again, sir?
    Mr. Cummings. Sure. How many of the vessels operating on 
the Outer Continental Shelf are exempt from employing Americans 
because they are more than 50 percent owned by the citizens of 
a foreign country? Would you have that information?
    Admiral Cook. No. What I have is the number of exemptions 
requested.
    Mr. Cummings. Okay. You can get that for me. We will get 
you a note, a letter, with additional questions, all right?
    And just one last question: What are the firms that receive 
the majority of employment exemptions?
    Admiral Cook. I will have to get that back on the record 
for you.
    Mr. Cummings. Do you know whether they are the same firms 
coming back over and over again?
    Admiral Cook. Yes, because many of the positions are the 
same year after year.
    Mr. Cummings. All right.
    Let me just say this as we close out this panel--did you 
have something else, Mr. LoBiondo?
    Let me just say this. I want to make it very clear that I 
have the--I saw what the Coast Guard was doing down in the gulf 
coast. And I think they are doing a great job.
    But let me say this. I think it is important that that job 
be done as effectively and efficiently as possible. And I 
really mean that. I think effectiveness and efficiency is 
number one--and urgency, and urgency.
    And I just hope that--I pray to God that we can get this 
thing, this oil--stop this oil from coming up out of the bottom 
of the ocean and that we can help people get back to their 
regular way of life, because there is a lot of pain being 
suffered right now.
    And, again, we want to thank the Coast Guard for all that 
you do. And we also thank you, Acting Maritime Administrator 
Matsuda. Thank you.
    We will now hear from the next panel: Warren Weaver, 
manager of regulatory compliance, Transocean; Mr. Ken Wells, 
president, Offshore Marine Service Association; and Mr. Jim 
Weakley, president of Maritime Cabotage Task Force.
    I thank the gentlemen for waiting so long. We really 
appreciate it.
    Mr. Weaver, we will hear from you first.

 TESTIMONY OF WARREN WEAVER, MANAGER OF REGULATORY COMPLIANCE, 
   TRANSOCEAN; KEN WELLS, PRESIDENT, OFFSHORE MARINE SERVICE 
  ASSOCIATION; JIM WEAKLEY, PRESIDENT, MARITIME CABOTAGE TASK 
                             FORCE

    Mr. Weaver. Chairman Cummings, Ranking Member LoBiondo, and 
other Members of the Committee, I want to thank you for the 
opportunity to speak with you today.
    My name is Warren Weaver. I am the manager of regulatory 
compliance for Transocean, Limited. Transocean is a leading 
offshore drilling contractor with more than 18,000 employees 
worldwide and more than 4,500 employees in the United States.
    I have been with the company for more than 35 years, 
including more than 13 years in rig-based assignments. I am a 
former OIM unrestricted able-bodied seaman and lifeboatman and 
have a number of certifications relating to offshore rig 
operations and management. As manager of regulatory compliance, 
my focus is in assisting rig management with regulatory 
questions concerning class, flag, and international maritime 
organization and licensing.
    The safety of our employees and crew members and compliance 
with regulations is of utmost importance. And the loss of lives 
on the Deepwater Horizon on April 20th is devastating to 
Transocean.
    As requested by the Subcommittee, I am here today to 
address certain maritime aspects of Transocean's operations, 
including the flagging of our rigs.
    Transocean operates 139 drilling rigs in 29 countries 
around the world. Less than 10 percent of Transocean's fleet is 
located in the Gulf of Mexico. There are approximately 37,000 
vessels in the world, and less than 1 percent of those vessels 
are U.S.-flagged, or roughly 220 vessels. Approximately half of 
the global vessel fleet fly under the flags of Panama, Liberia, 
and Marshall Islands.
    Transocean's mobile offshore drilling units, or MODUs, are 
constructed, classed, and certified for worldwide service. As 
rigs complete work under existing contracts, the MODUs will 
move into other locations somewhere else in the world. 
Transocean's operations of its MODUs strictly follow the laws 
and regulations in each of those 29 countries in which it 
operates, including the United States, and international 
standards, regulations, and codes applicable under IMO.
    Nearly all of Transocean's MODUs are flagged outside the 
United States. The reasons for this are strictly logistical. 
Foreign-flagged MODUs that operate in U.S. waters meet or 
exceed all functional standards for U.S.-flagged MODUs. There 
is no material difference in terms of functionality or safety. 
The Deepwater Horizon rig complied with U.S. and international 
regulations.
    A number of inspections are performed on foreign-flagged 
vessels and were specifically performed on the Deepwater 
Horizon. The inspection certifications fall into three 
categories: U.S. Coast Guard, flag administration, and class 
society.
    Additionally, the U.S. Coast Guard has a program called 
QUALSHIP 21, which recognizes and endorses the most rigorous 
and proactive foreign-flagged nations. The Marshall Islands, 
where the Deepwater Horizon was flagged, is one of those 
QUALSHIP 21 nations.
    The offshore exploration and production industry is global. 
To maintain maximum flexibility to move these MODUs to various 
locations around the world as the industry requires, foreign 
flagging is preferred.
    Foreign flagging of MODUs has nothing to do with relaxed 
manning or safety standards. As the company has advised other 
congressional committees, foreign flagging does not convey any 
tax benefits. Foreign flagging does not reduce or diminish the 
required inspections and surveys.
    Transocean remains deeply committed to the safety of our 
people. Transocean's operations meet all industry and legal 
standards, and we will continue to do so as the industry 
continues to evolve as a result of this tragedy.
    I thank you for the opportunity to speak with you today. I 
have submitted my full testimony to the Committee, and I look 
forward to answering any questions you may have. Thank you, 
sir.
    Mr. Cummings. Thank you.
    Mr. Ken Wells?
    Mr. Wells. Good afternoon, Mr. Chairman, Members of the 
Committee. My name is Ken Wells. I am president of the Offshore 
Marine Service Association. OMSA is the national trade 
association for the U.S.-flagged vessels that carry the 
supplies and personnel out to offshore energy projects, 
including the offshore supply vessel whose crew saved 115 
survivors of the Deepwater Horizon disaster.
    More than 60 years ago, our industry was born when 
fishermen and shrimpers began using their small boats to supply 
the needs of the first offshore projects. Today, their sons and 
grandsons run some of the most sophisticated offshore vessels 
in the world. In the future, we look forward to meeting the 
needs of the new alternate energy sources, like wind and 
hydropower.
    In the interest of clarity, we do not operate drilling 
vessels. That is a very different type of vessel involving very 
different types of operations. And, for that reason, my 
comments refer to not MODUs but, rather, the other foreign-
flagged vessels that work offshore.
    OMSA-member vessels are part of the Jones Act fleet, 
meaning U.S.-flagged vessels with coastwise endorsements. By 
law, our vessels are owned by Americans, crewed by Americans, 
and built in American shipyards. Flying the American flag means 
we are inspected and boarded with regularity by the U.S. Coast 
Guard. We must comply with safety, security, labor, 
environmental, and tax laws.
    We fly the American flag proudly. But please understand it 
can be expensive to operate a U.S.-flagged vessel and compete 
with foreign vessels that do not have to meet the same 
standards as our vessels.
    That is why we have the Jones Act. It provides the capital 
security that has allowed our member companies to build more 
than 260 new offshore vessels in American shipyards over the 
last 3 years. It has allowed our members to create 100,000 
American jobs ashore and at sea.
    But we see the Jones Act being eroded. And despite the 
urgings of Congress, we don't see the Department of Homeland 
Security doing very much about it.
    Today, we know there are 85 foreign vessels working in our 
offshore energy sector on a regular basis. An additional 60 
foreign vessels were in the gulf and have departed over the 
last few months. We know that because, 2 years ago, we hired a 
full-time investigator to track those vessels.
    We took that step because we realized that Customs and 
Border Protection and the Coast Guard lacked the fundamental 
tools to adequately track foreign vessels. Four years ago, the 
SAFE Port Act directed the Coast Guard to require foreign 
vessels to report their locations and purpose when they work in 
our offshore waters. But DHS has still not finalized those 
regulations.
    So what have we found? Many security and safety concerns 
that I have touched on in my written testimony. We have also 
found what we believe to be a number of Jones Act violations. 
We found CBP's field units to be generally responsive and 
willing to investigate. But those cases, including two that are 
now more than a year old, appear to have disappeared once they 
reached headquarters, and DHS has been unresponsive on their 
status.
    Another area of concern is whether these foreign boats are 
paying U.S. taxes. The IRS answered last year when it issued an 
industry directive which states, and I quote, "Our analysis 
indicates that a significant number of foreign vessels 
permitted to work in the OCS do not comply with U.S. filing 
requirements." We understand the IRS is now preparing a second 
directive that questions whether foreign vessels are paying 
withholding taxes on their foreign workers, as well.
    The last area I would like to discuss concerns DHS's 
apparent reluctance to properly interpret the Jones Act. For 
many years, we have been troubled that CBP has incorrectly 
interpreted the Jones Act as allowing foreign vessels to 
transport large items of cargo offshore for installation.
    This came to a head in late 2008 when BP made a request to 
use a foreign-flagged vessel to transport a blowout preventer 
and a valve structure known as a Christmas tree to an offshore 
location. In its request, BP described that cargo with the 
arcane term, "equipment of the vessel." They claimed that was 
not covered by the Jones Act. CBP agreed at first. But after we 
pointed out that that was not part of a vessel's equipment, 
like a life raft or an anchor, but rather a seven-ton piece of 
oil field equipment which would be installed on the wellhead 
for the life of the well, CBP took another look and told BP it 
could not use a foreign vessel to transport it.
    Better yet, CBP followed up with a proposal to address 
several of its conflicting interpretations in a way that 
restored the clear meaning of the law. You will recall that 
Members of this Committee supported CBP's action and urged CBP 
to finalize that proposal.
    But then a funny thing happened. Opponents of the Jones Act 
urged DHS to withdraw the proposal, and DHS did. CBP withdrew 
the proposal in mid-September, saying it would be reissued in 
the near future. But instead, 6 months later, DHS stuck the 
proposal into an advanced notice of proposed rulemaking, almost 
guaranteeing it would drag on for years.
    It now appears stuck in limbo. The future development of 
our industry hangs in the balance, and DHS has been completely 
unresponsive. It has left us frustrated and concerned about our 
government's willingness to uphold our fundamental laws or 
maintain American jobs.
    In the interest of time, I will stop there and thank you 
for allowing us to submit the statement. And I will be pleased 
to answer questions. Thank you.
    Mr. Cummings. Thank you very much.
    Mr. Jim Weakley?
    Mr. Weakley. My name is James Weakley. I am president of 
the Lake Carriers' Association and a former Coast Guard 
inspector. Today, however, I am also testifying on behalf of 
the Maritime Cabotage Task Force, a broad-based U.S. maritime 
coalition assembled to promote American cabotage laws.
    Our American-owned, American-built, and American-crewed 
vessels operate under strict and extensive U.S. Coast Guard 
standards governing construction, maintenance, crewing, and 
operations. These regulations are the world's most effective 
and demanding. Our fleet is in the hands of hardworking 
American men and women who have a personal stake in our 
national security, economy, and environment.
    International safety and environmental protection standards 
are issued under several conventions by the International 
Maritime Organization, a branch of the United Nations. 
Government responsibility for oversight and enforcement is 
vested in the registering nation, which is the nation whose 
flag the vessel flies, called its flag administration. Many 
flag administrations take their responsibility seriously. 
However, oversight and enforcement varies dramatically.
    A flag administration used by vessel operators to avoid 
government regulations, taxes, and other costs is often 
referred to as a "flag of convenience." Many of the foreign-
flagged vessels competing with American sailors in the 
international trades are loosely regulated, often unsafe, and 
frequently crewed by poorly trained personnel. Some are even 
"ships of shame," paying extremely low wages, few benefits, 
demanding inhumane schedules, under inhumane conditions.
    The U.S. Coast Guard conducts port state control 
inspections on targeted foreign-flagged vessels to reduce the 
presence of substandard ships in U.S. waters. Higher-risk 
vessels are more likely to be inspected in or near a U.S. port 
to determine whether they pose a hazard to the port or the 
environment. The Coast Guard can deny, detain, or expel from 
U.S. waters a substandard vessel to ensure the safety, 
security, and environmental protection.
    While there is a robust American-flagged presence in the 
Gulf of Mexico, foreign mobile offshore drilling units and 
support vessels routinely perform industrial tasks on the Outer 
Continental Shelf. Flags of convenience commonly used by these 
foreign vessels include the Marshall Islands, which registered 
the Deepwater Horizon, Panama, Liberia, the Bahamas, Singapore, 
and Malta.
    As of last month, the Coast Guard's port state control 
program's list of flag administrations with a detention ratio 
higher than the industry average included Panama, Malta, and 
more.
    Additionally, many of the previously named countries are 
relatively small, never visited by vessels they register, and 
lack national inspection infrastructure to ensure the vessels 
flying their flag meet international standards.
    Also, the nature of the resource development work in the 
Gulf of Mexico and its proximity to other countries allows some 
of the foreign-flagged vessels engaged in this work to avoid 
calling on U.S. ports, which complicates our port state control 
inspection and its effectiveness.
    Are American-flagged vessels generally safer than flag-of-
convenience ships? For the many reasons I have explained, the 
answer is yes.
    Additionally, American vessels provide important economic 
benefit to our Nation. According to a recent study by 
PricewaterhouseCoopers for the Transportation Institute, the 
U.S. domestic maritime industry generates $100.3 billion in 
gross economic output, $45.9 billion in value added, $29.1 
billion in wages, and $11.4 billion in Federal, State, and 
local taxes. A significant portion of this economic activity 
takes place in the coastal waters of the Gulf of Mexico.
    We hope that this Committee will consider these factors as 
it considers its response to the Deepwater Horizon spill. Thank 
you.
    Mr. Taylor. [Presiding.] The Chair recognizes Mr. LoBiondo.
    Mr. LoBiondo. Thank you, Mr. Taylor.
    Mr. Weaver, I believe--correct me if I am wrong--in your 
testimony, that you say that the Deepwater Horizon was 
registered in the Marshall Islands for purely logistical 
reasons?
    Mr. Weaver. Chairman LoBiondo, yes, our foreign-flagged 
units are registered in foreign flags so they--excuse me. They 
are registered with foreign flags so we can move them readily 
around the world.
    As you know, other places of the world incorporate similar 
labor laws as the United States. We use U.S. citizens in the 
United States. We have to use foreign nationals when we are 
working in foreign national countries.
    Mr. LoBiondo. Well, it is just a little curious to me that, 
if it is purely logistical reasons, Marshall Islands or Western 
Pacific, something like 2,000 miles away from the gulf and 
nowhere near any offshore oil-drilling operations.
    Do your vessels ever operate in the Marshall Islands or 
near the Marshall Islands?
    Mr. Weaver. No, the Marshall Islands registry--
International Registries, Incorporated, has offices in Reston, 
Virginia. Most of their staff is run by former U.S. Coast Guard 
employees.
    Mr. LoBiondo. I understand that, but I am getting back to 
this "logistical" word that has me a hung up a little bit.
    Mr. Weaver. Well, for a U.S.-flagged unit working overseas, 
we use--for a U.S.-flagged MODU, we have to have--the master 
has to be a U.S. citizen onboard the unit.
    Mr. LoBiondo. Okay. And you continue to assert that this 
has nothing to do with tax or regulatory situations or costs?
    Mr. Weaver. No, it has nothing to do with taxes. And other 
committees have been told this from other areas.
    Mr. LoBiondo. Mr. Weaver, in your opinion, what would the 
impact of prohibiting foreign-flagged vessels from 
participating in offshore exploration, production, and 
transportation activities be?
    Mr. Weaver. I could speak with--I mean, as far as the MODUs 
go. I don't know about the transportation.
    Mr. LoBiondo. As far as the MODUs go.
    Mr. Weaver. But the MODUs, the large percentage of the 
offshore MODU fleet is foreign-flagged. So if you were--if 
those were excluded, is that the proper question?
    Mr. LoBiondo. Well, if we prohibited foreign-flagged 
vessels from participating in offshore oil exploration, then 
you are saying we wouldn't be able to do it.
    Mr. Weaver. I don't think you could ramp up the needs that 
you would have right away. I am not a professional in the 
industry to speak on that. But there could be other options, if 
they so desired. There are cases where you could dual-flag 
units.
    Mr. LoBiondo. Mr. Wells or Mr. Weakley, I know that you 
said you don't operate the mobile offshore drilling units, but 
do you want to venture a stab at answering that question? If we 
were to prohibit foreign-flagged vessels, what would that 
impact be?
    Mr. Weakley. Well, sir, if I would use the analogy from the 
fisheries industry, the Magnuson-Stevens Fishery Conservation 
Act actually reclaimed that resource from the foreign fishing 
fleets off our coasts. And they did that, in a way, by 
initially restricting the flag of the vessels. Today, we see a 
robust U.S.-flagged, U.S.-built fishing fleet.
    I think the model is set. I think it can be done. I think 
Americans should benefit from the resources in the American 
Exclusive Economic Zone. We can build these ships. We can crew 
these ships. It is our oil. Taxes ought to be paid based on the 
profits to the United States Government, and the wages should 
be preserved for American citizens.
    Mr. LoBiondo. Mr. Weakley and/or Mr. Wells, under the Jones 
Act, only a U.S.-flagged vessel with a coastwise endorsement 
may provide any part of the transportation and merchandise by 
water between points in the United States.
    What is your view if the Federal Government is enforcing 
the Jones Act as it were written and intended by Congress?
    Mr. Wells. Thank you, sir.
    That would be precisely what we would be looking for. Our 
goal is to put Americans to work on the water, to put Americans 
to work in our shipyards. And our view is that the law is very 
clear. The law on its face should be very clear. And we think 
that it should be enforced, as you have said, the way Congress 
intended.
    Mr. LoBiondo. But it is your opinion, in your capacity, 
that the Federal Government is not enforcing it. Am I 
interpreting that correctly?
    Mr. Wells. They are not enforcing it effectively. They are 
not acting on cases that are brought before them. And they are 
not acting on interpretive matters that are pending.
    Mr. LoBiondo. Just one last one, Mr. Chairman.
    Along these same lines, are there enough Jones Act-
qualified vessels to meet the demands of the OCS? And what do 
you say can be done to increase the number of qualified vessels 
to meet the growing demand?
    Mr. Weakley. I would say that they are. And if there is an 
increase in demand, we will certainly build them. And once they 
are built, we will crew them. The best way to do that is to 
retake our Exclusive Economic Zone from the foreign ships out 
there taking our oil.
    Mr. LoBiondo. Okay. Thank you Mr. Chairman.
    Mr. Taylor. Mr. Weaver, I want to follow up with you in my 
line of questioning to the Coast Guard. Going back to what the 
admiral had to say, two dry-dock inspections over the span of 5 
years versus one every 5 years, do you think that is 
equivalent?
    Mr. Weaver. The requirement is two dry-dockings in 5 years, 
none to exceed 3 years.
    Mr. Taylor. Same for the Marshall Islands?
    Mr. Weaver. Same for the Marshall Islands, an IMO 
regulation. It is in the IMO MODU code. And that is the 
requirement.
    Mr. Taylor. When was the last dry-docking of the Deepwater 
Horizon?
    Mr. Weaver. I would have to get back with you on that. I am 
sure we have the information, but I don't have it with me right 
now.
    Mr. Taylor. So you are absolutely certain it was within 2 
years of the accident?
    Mr. Weaver. Excuse me?
    Mr. Taylor. You are absolutely certain it was no more than 
2 years from the date of the accident?
    Mr. Weaver. It is twice in 5 years and not to exceed 3.
    Mr. Taylor. But you don't know the exact date.
    Mr. Weaver. I don't know the exact date.
    Mr. Taylor. Do you know where it occurred?
    Mr. Weaver. Excuse me?
    Mr. Taylor. Do you know where it occurred, the dry-docking?
    Mr. Weaver. Where it would do it?
    Mr. Taylor. The most recent dry-docking of the Deepwater 
Horizon, where did that take place?
    Mr. Weaver. Offshore.
    Mr. Taylor. In which country, sir?
    Mr. Weaver. United States.
    Mr. Taylor. Okay. Do you know which shipyard?
    Mr. Weaver. No, we don't go to shipyard. We use underwater 
in lieu of dry-docking for these vessels because we can't fit 
in any dry docks.
    The divers do the external hull inspections. Other 
components are examined no differently than a dry-dock. That is 
how the mobile offshore drilling units, the semi-subs are used. 
They use underwater in lieu of dry-docking, which is a dry-
docking equivalency. And those are done twice in 5 years and 
once every--I mean, not to exceed 3. Excuse me.
    Mr. Taylor. Do you remember the name of the firm that you 
hired for that purpose?
    Mr. Weaver. American Bureau of Shipping carries out our 
dry-docking in accordance with their rules and regulations and 
the IMO rules and regulations.
    Mr. Taylor. Okay.
    The chairman has asked me to provide you with a couple of 
questions. And so, in his absence, I am going to read these.
    The Deepwater Horizon was an MODU that was dynamically 
positioned; is that correct?
    Mr. Weaver. Correct.
    Mr. Taylor. Okay. Was it classified under the law of the 
Marshall Islands as an MODU or as an MODU DPV?
    Mr. Weaver. It is under schedule MODU which is a DP mobile 
offshore drilling unit.
    DPV is for mobile offshore units and drill ships.
    Mr. Taylor. So which manning requirements apply for it? The 
DPV?
    Mr. Weaver. No, the schedule A.
    Mr. Taylor. A certificate of inspection provided by the 
Coast Guard for United States MODU with dynamic positioning 
indicates that when a MODU is on location with fully 
operational dynamic positioning, the crew complement must 
include a master with an OIM endorsement, a mate with BS/BCO 
endorsement, two able-bodied seamen, one ordinary seaman, one 
chief engineer, one assistant engineer MODU certified, and two 
oilers.
    What were the specific Marshall Islands manning 
requirements for the Deepwater Horizon when it was on location 
drilling with full operational dynamic positioning?
    Mr. Weaver. The schedule A on location requires an OIM 
barge supervisor, two BCOs, I think two ABs, and one ordinary 
seaman. And then it requires a maintenance supervisor.
    I would have to actually look at the schedule to get into 
the exact details.
    Mr. Taylor. So what about the chief engineer?
    Mr. Weaver. A chief engineer is only required--it also can 
be substituted for moves of more than 72 hours by a licensed 
maintenance supervisor.
    Mr. Taylor. Is that under U.S. law or Marshall Islands?
    Mr. Weaver. These licenses we hold are U.S. Coast Guard 
licenses endorsed by the Marshall Islands. These are U.S. 
mariners that were on the Deepwater Horizon.
    Mr. Taylor. How about an assistant engineer?
    Mr. Weaver. Who was on board?
    Mr. Taylor. On board at the time of the accident.
    Mr. Morris. We can get you the information on who was on 
board.
    Mr. Taylor. Was there an assistant engineer on board at the 
time of the accident?
    Mr. Weaver. I don't know.
    Mr. Taylor. How many oilers were on board at the time of 
the accident?
    Mr. Morris. I don't know that, sir.
    Mr. Taylor. Would you provide that for the record?
    Mr. Weaver. Yes.
    Mr. Taylor. I am going to ask you the same question.
    You are a vessel exploiting the mineral resources of the 
United States of America. That vessel was made where?
    Mr. Weaver. It was built in Korea.
    Mr. Taylor. And it was licensed where?
    Mr. Weaver. You mean what flag does it fly on? Initially, 
it was flagged with Panama; and now it is flagged with Marshall 
Islands.
    Mr. Taylor. And its corporate headquarters for the 
organization is where?
    Mr. Weaver. In Switzerland.
    Mr. Taylor. So the combined resources aiding in the cleanup 
and recovery of the people who jumped overboard, recovery of 
those who lost their lives, tell me what has been the total 
response of the Korean government so far.
    Mr. Weaver. I have no idea.
    Mr. Taylor. They got to build the ship. They obviously made 
some money on it.
    Mr. Weaver. The Korean shipyard built the ship, sir.
    Mr. Taylor. How about the Marshall Islands? What has been 
their participation so far?
    Mr. Weaver. Their participation I believe has been in 
investigations, and that is as far as I know.
    Mr. Taylor. Are they out there cleaning up the oil?
    Mr. Weaver. No, sir. Not that I know of.
    Mr. Taylor. How about the Swiss where you pay your 
corporate taxes. Their participation has been what so far?
    Mr. Weaver. I do not know, sir.
    Mr. Taylor. Would it be safe to say that the combined total 
of all of them is not one vessel out there, not one person out 
there participating in the cleanup?
    Mr. Weaver. I know we----
    Mr. Taylor. I have been out there several times. I haven't 
seen anyone from any of those countries out there.
    Mr. Weaver. We have three other vessels out there to take 
care of the spill.
    Mr. Taylor. Again, this is from the chairman, did officials 
in the Marshall Islands ever visit the Deepwater Horizon when 
stationed in the Gulf of Mexico?
    Mr. Weaver. The Marshall Islands goes through an annual 
inspection--yearly.
    Mr. Taylor. Let us clarify. I am going to ask the question 
again. Did officials from the Marshall Islands ever visit that 
vessel in the Gulf of Mexico?
    Mr. Weaver. The registry assigns individuals to carry out 
the inspections. Certified marine inspectors are sometimes a 
classification society such as ABS, American Bureau of 
Shipping.
    Mr. Taylor. No one from the Marshall Islands visited those 
vessels; is that correct?
    Mr. Weaver. I don't have the information specifically if 
Marshall Island people have been on the Deepwater Horizon.
    Mr. Taylor. So, again, it was delegated out to the American 
Bureau of Shipping; is that correct?
    Mr. Weaver. As far as my knowledge would go, I don't know 
if their individuals have ever carried out the inspections 
other than ABS or one of their licensed--I don't know their 
license----
    Mr. Taylor. To your knowledge--again, this is the 
chairman's question--has Transocean sought from the Marshall 
Islands any exemption to any Marshall Islands safety 
regulations?
    Mr. Weaver. No, sir.
    Mr. Taylor. Mr. Wells, I am curious. I don't think to 
this--even 60 or 50 days into this we have any idea of the 
economic damage it has done to seafood, tourism. We know about 
the loss of 11 lives. We know of a lot of lives devastated by 
this. I am just curious, how much money do you think Transocean 
saved when they bought that rig in Korea?
    Mr. Wells. I don't know the answer to that, sir.
    Mr. Taylor. Do you want to give me a rough idea on that?
    Mr. Wells. Not on my life, sir. I have no idea, sir.
    Mr. Taylor. Mr. Weaver, when they bought the Deepwater 
Horizon, did Transocean try to manufacture with an American 
manufacturer?
    Mr. Weaver. I don't know, sir.
    Mr. Taylor. Could you get back to me on that? I would be 
curious how much money they saved when they went over to Korea 
instead of an American shipyard.
    How much money in taxes do you think Transocean saves by 
registering that vessel in the Marshall Islands and having 
their corporate headquarters in Switzerland instead of the 
United States.
    Mr. Weaver. If I could go back to my opening statement.
    Mr. Taylor. Yes, sir.
    I understand, Mr. Weaver, you are an international company, 
but you happen to have been pulling mineral wealth out of the 
seabeds of the U.S. territorial waters.
    Mr. Weaver. We don't take ownership of the minerals.
    Mr. Taylor. But you were sure working in the U.S. 
territorial waters.
    Mr. Weaver. Right.
    Mr. Taylor. Mr. Weaver, are you familiar with an inverted 
corporation?
    Mr. Weaver. Excuse me?
    Mr. Taylor. Are you familiar with the term "inverted 
corporation"?
    Mr. Weaver. No, sir.
    Mr. Taylor. It is a term where companies, often in the 
offshore oil business, will see to it that whatever profits 
would have been made by something like the Deepwater Horizon 
are more than gobbled up by the note paid to the parent 
corporation on a mortgage on, say, that drilling rig. And since 
the United States of America, since most countries do not 
charge taxes on foreign investments, money made overseas, it is 
a very clever way of not only paying taxes in the country where 
you are pulling out the minerals, then you don't pay taxes in 
the host country as well.
    I am just curious. Is Transocean what they would call an 
inverted corporation so that, in effect, they don't pay taxes 
anywhere?
    Mr. Weaver. I can't answer that question, sir. But in my 
opening statement I said, as the company has advised other 
congressional committees, foreign flagging does not convey any 
tax benefits.
    Mr. Taylor. But an inverted U corporation does, sir.
    Mr. Weaver. I don't know.
    Mr. Taylor. Again, from the chairman, I understand that you 
currently have 14 rigs operating in U.S. waters. Have you 
completed recently required tests on all of the blowout 
preventers you have on those rigs, and what were the results of 
those tests?
    Mr. Weaver. I don't have that information, sir.
    Mr. Taylor. Okay. What would be a reasonable amount of time 
to expect that information from your corporation?
    Mr. Weaver. We will have to ask the appropriate people to 
provide that information.
    Mr. Taylor. How about if we ask for 2 weeks or less and you 
get back to us.
    Mr. Weaver. We will get back to you with something.
    Mr. Taylor. How many drilling rigs does Transocean own, and 
where are they currently flagged?
    Mr. Weaver. Transocean currently owns 139 drilling rigs. 
Ten percent of the rigs are located in the Gulf of Mexico, and 
we are located in 29 different countries around the world. We 
are currently flagged with Liberia, Marshall Islands, Panama, 
Vanuatu, one swamp barge with Indonesia, one Australian unit, 
one U.S.-flagged drill ship. And I am sure I am missing a few 
coming from my memory.
    Mr. Taylor. Okay. The chairman would like to know, were the 
fire drills on the Deepwater Horizon performed every Sunday?
    Mr. Weaver. I don't know. They were supposed to be 
performed weekly. We can find out.
    Mr. Taylor. Would you please?
    Because the question was--his concerns were if they were 
done on a regular, announced schedule, that you might have 
varying levels of competency at the time of the drill, varying 
levels of concern and, obviously, varying levels of quality 
performed with the drill.
    Mr. Weaver. Yes, sir.
    Mr. Taylor. Well, gentlemen, thank you for being with us.
    In this absence of the chairman's return, this hearing is 
adjourned.
    [Whereupon, at 5:23 p.m., the Subcommittee was adjourned.]

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