[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
DISCUSSION DRAFT,
AMENDMENT IN THE NATURE
OF A SUBSTITUTE TO H.R. 3534,
DATED JUNE 22, 2010 (5:25 P.M.)
=======================================================================
LEGISLATIVE HEARING
before the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
Wednesday, June 30, 2010
__________
Serial No. 111-61
__________
Printed for the use of the Committee on Natural Resources
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COMMITTEE ON NATURAL RESOURCES
NICK J. RAHALL, II, West Virginia, Chairman
DOC HASTINGS, Washington, Ranking Republican Member
Dale E. Kildee, Michigan Don Young, Alaska
Eni F.H. Faleomavaega, American Elton Gallegly, California
Samoa John J. Duncan, Jr., Tennessee
Frank Pallone, Jr., New Jersey Jeff Flake, Arizona
Grace F. Napolitano, California Henry E. Brown, Jr., South
Rush D. Holt, New Jersey Carolina
Raul M. Grijalva, Arizona Cathy McMorris Rodgers, Washington
Madeleine Z. Bordallo, Guam Louie Gohmert, Texas
Jim Costa, California Rob Bishop, Utah
Dan Boren, Oklahoma Bill Shuster, Pennsylvania
Gregorio Sablan, Northern Marianas Doug Lamborn, Colorado
Martin T. Heinrich, New Mexico Adrian Smith, Nebraska
Ben Ray Lujan, New Mexico Robert J. Wittman, Virginia
George Miller, California Paul C. Broun, Georgia
Edward J. Markey, Massachusetts John Fleming, Louisiana
Peter A. DeFazio, Oregon Mike Coffman, Colorado
Maurice D. Hinchey, New York Jason Chaffetz, Utah
Donna M. Christensen, Virgin Cynthia M. Lummis, Wyoming
Islands Tom McClintock, California
Diana DeGette, Colorado Bill Cassidy, Louisiana
Ron Kind, Wisconsin
Lois Capps, California
Jay Inslee, Washington
Joe Baca, California
Stephanie Herseth Sandlin, South
Dakota
John P. Sarbanes, Maryland
Carol Shea-Porter, New Hampshire
Niki Tsongas, Massachusetts
Frank Kratovil, Jr., Maryland
Pedro R. Pierluisi, Puerto Rico
James H. Zoia, Chief of Staff
Rick Healy, Chief Counsel
Todd Young, Republican Chief of Staff
Lisa Pittman, Republican Chief Counsel
------
CONTENTS
----------
Page
Hearing held on Wednesday, June 30, 2010......................... 1
Statement of Members:
Hastings, Hon. Doc, a Representative in Congress from the
State of Washington........................................ 3
Rahall, Hon. Nick J., II, a Representative in Congress from
the State of West Virginia................................. 1
Prepared statement of.................................... 2
Statement of Witnesses:
Bromwich, Hon. Michael R., Director, Bureau of Ocean Energy
Management, Regulation, and Enforcement (BOE), U.S.
Department of the Interior................................. 17
Prepared statement of.................................... 18
Response to questions submitted for the record........... 12
Dismukes, David E., Ph.D., Professor, Associate Executive
Director, and Director of Policy Analysis, Center for
Energy Studies, Louisiana State University................. 74
Prepared statement of.................................... 75
Jones, Janis, Vice President of Programs, Ocean Conservancy.. 65
Prepared statement of.................................... 66
Salazar, Hon. Ken, Secretary, U.S. Department of the Interior 5
Prepared statement of.................................... 6
Response to questions submitted for the record........... 12
Additional materials supplied:
Blancett Ranches, Aztec, New Mexico, Letter submitted for the
record..................................................... 97
Broun, The Honorable Paul, Ranking Member, Subcommittee on
Investigations and Oversight, Committee on Science and
Technology,................................................
Letter to The President submitted for the record......... 33
Letter to Secretary of the Interior Ken Salazar submitted
for the record......................................... 35
Costner, Kevin, Founder, CINC, Co-Founder/Partner, Ocean
Therapy Solutions, WestPac Resources, Statement submitted
for the record............................................. 76
Jindal, The Honorable Bobby, Governor, State of Louisiana,
Letter to Secretary of the Interior Ken Salazar submitted
for the record............................................. 43
List of documents retained in the Committee's official files. 98
Meadows, William H., The Wilderness Society, Letter submitted
for the record............................................. 98
National Federation of Regional Associations for Coastal and
Ocean Observing, Letter submitted for the record........... 100
The Nature Conservancy, Statement submitted for the record... 81
Peterson-Cremer, Richard, Legislative Director, Southern Utah
Wilderness Alliance, Letter submitted for the record....... 102
Powder River Basin Resource Council, Letter submitted for the
record..................................................... 103
Schweiger, Larry, President & CEO, National Wildlife
Federation, Letter submitted for the record................ 104
Section-by-Section Analysis of Discussin Draft............... 105
Steuer, Karen, Director, Government Relations, PEW
Environment Group, Letter submitted for the record......... 79
Summary of the Discussion Draft.............................. 114
Sweeney, Pat, Director, Western Organization of Resource
Councils, Letter submitted for the record.................. 116
Theodore Roosevelt Conservation Partnership, including the
American Sports Fishing Association, North American Grouse
Partnership, Pope and Young Club, Quality Deer Management
Association, Trout Unlimited, The Wildlife Society, and
Wild Sheep Foundation,Letter submitted for the record...... 118
LEGISLATIVE HEARING ON THE ``DISCUSSION DRAFT, AMENDMENT IN THE NATURE
OF A SUBSTITUTE TO H.R. 3534, DATED JUNE 22, 2010 (5:25 P.M.)''
----------
Wednesday, June 30, 2010
U.S. House of Representatives
Committee on Natural Resources
Washington, D.C.
----------
The Committee met, pursuant to call, at 10:05 a.m. in Room
1324, Longworth House Office Building, The Honorable Nick J.
Rahall, II, [Chairman of the Committee] presiding.
Present: Representatives Rahall, Napolitano, Holt,
Grijalva, Bordallo, Costa, Boren, Heinrich, Lujan, Miller,
Markey, Christensen, DeGette, Kind, Capps, Inslee, Baca,
Sarbanes, Shea-Porter, Tsongas, Kratovil, Pierluisi, Hastings,
Gallegly, Brown of South Carolina, McMorris Rodgers, Gohmert,
Lamborn, Smith, Wittman, Broun of Georgia, Fleming, Coffman,
Lummis, McClintock, and Cassidy.
STATEMENT OF HON. NICK J. RAHALL, II, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WEST VIRGINIA
The Chairman. The Committee on Natural Resources will come
to order. Just as a way of housekeeping, I am sure all Members
already know it, at approximately 10:30 a.m. we are going to
have four votes on the House Floor so we can plan accordingly.
The Committee is meeting today to conduct a hearing on
Discussion Draft Amendment in the Nature of a Substitute to
H.R. 3534, the CLEAR Act. The CLEAR Act, introduced last year,
was the subject of two days of hearings last September and was
developed as a result of a long series of investigations,
hearings and prior legislative efforts into the pressing need
to reform both the offshore and onshore oil and gas leasing
program.
Since I became Chairman of this Committee in 2007, we have
held 20 hearings, had nine GAO reports done, and passed three
bills out of the House during the last Congress, prior to the
introduction of the CLEAR Act on matters it concerns.
The focus of the introduced version of this legislation is
on royalty reform and enhanced planning processes for energy
development on the Outer Continental Shelf, and an improved
means to make Federal lands available for renewable energy
leasing. The bill also seeks to fully fund the Land and Water
Conservation Fund, and establish a new oceans restoration fund
based on the premise that we take everything from the ocean,
but we put nothing back into it.
Further, it would have eliminated the Minerals Management
Service and replaced it with a new entity. The disaster, which
struck the Gulf of Mexico beginning on April 20th, was indeed a
game changer. As a result of a number of hearings by this
Committee since that date, intensive investigations and review
of documents submitted by all the parties involved in the
Deepwater Horizon incident, the Substitute retains, but builds
upon, the introduced version of H.R. 3534 in three main
respects.
First, it includes a focus on safety, not in a prescriptive
fashion, which I believe may lead to freezing the development
of new technology in its place, but in a more performance-based
approach that mirrors the successful efforts of other
countries, such as Norway and the United Kingdom.
Second, taking a lead from our witness today, the Secretary
of the Interior Ken Salazar, it replaces the former Minerals
Management Service with three entities, separating leasing,
policing, and revenue management, and provides an organic act
for the new Bureau of Energy and Resources Management, Bureau
of Safety and Environmental Enforcement, and Office of Natural
Resources Revenue.
And third, the Substitute would establish a Gulf of Mexico
Restoration Program to provide an explicit statutory basis for
what will be a long-term effort to address the devastating
impacts of the Deepwater Horizon disaster on the environment
and on local communities.
And I would note that none of the funds authorized or made
available under the Substitute may be used to pay for any cost
for which BP is liable. I would like to emphasize that the
heading of the Substitute clearly reads ``Discussion, Draft'',
``Discussion, Draft''. It was made available one week ago and
we will not go to markup until July 14. Therefore, I am
providing ample opportunity for all interested parties to
provide us with their views on this document, and I hope that
will go out to members of the Committee that are not physically
present today via their staffs.
I urge my colleagues who wish to see changes or offer
amendments to the Substitute to contact the Committee as soon
as possible as the markup will occur on the second day after we
return from the July 4th recess, and I would like to be able to
provide the markup vehicle to the Committee as soon as possible
prior to our return.
[The prepared statement of Chairman Rahall follows:]
Statement of The Honorable Nick J. Rahall, II, Chairman,
Committee on Natural Resources
The Committee is meeting today to conduct a hearing on a Discussion
Draft of an Amendment in the Nature of a Substitute to H.R. 3534, the
CLEAR Act.
The CLEAR Act, introduced last year, was the subject of two days of
hearings last September and was developed as a result of a long series
of investigations, hearings and prior legislative efforts into the
pressing need to reform both the offshore and onshore oil and gas
leasing program. Since I became chairman of this committee in 2007, we
have held 20 hearings, had nine GAO reports done, and passed three
bills out of the House during the last Congress prior to the
introduction of the CLEAR Act on matters it concerns.
The focus of the introduced version of this legislation is on
royalty reform, an enhanced planning process for energy development on
the Outer Continental Shelf, and an improved means to make federal
lands available for renewable energy leasing. The bill also seeks to
fully fund the Land and Water Conservation Fund, and establishes a new
oceans restoration fund based on the premise that we take everything
from the ocean, but put nothing back into it. Further, it would have
eliminated the Minerals Management Service and replaced it with a new
entity.
The disaster which struck the Gulf of Mexico beginning on April
20th was a game changer. As a result of a number of hearings by this
committee since that date, intensive investigations and review of
documents submitted by all of the parties involved in the Deepwater
Horizon incident, the Substitute retains, but builds upon, the
introduced version of H.R. 3534 in three main aspects.
First, it includes a focus on safety, not in a prescriptive fashion
which I believe may lead to freezing the development of new technology
in its place, but in a more performance-based approach that mirrors the
successful efforts of other countries, such as Norway and the United
Kingdom.
Second, taking a lead from Secretary Salazar, it replaces the
former Minerals Management Service with three entities separating
leasing, policing and revenue management and provides an organic act
for the new Bureau of Energy and Resource Management, Bureau of Safety
and Environmental Enforcement and Office of Natural Resources Revenue.
And third, the Substitute would establish a Gulf of Mexico
Restoration Program to provide a explicit statutory basis for what will
be a long-term effort to address the devastating impacts of the
Deepwater Horizon Disaster on the environment and local communities.
And I would note that none of the funds authorized or made available
under the Substitute may be used to pay for any cost for which BP is
liable.
I would like to emphasize that the heading of the Substitute
clearly reads ``Discussion Draft.'' It was made available one week ago,
and we will not go to markup until July 14th. I am providing ample
opportunity for all interested parties to provide us with their views
on this document. I urge my colleagues who wish to see changes or offer
amendments to the Substitute to contact the Committee as soon as
possible as the mark-up will occur on the second day after we return
from the July 4th recess, and I would like to be able to provide the
mark-up vehicle to the Committee as soon as possible prior to our
return.
______
The Chairman. I now recognize the Ranking Member Mr.
Hastings of Washington.
STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF WASHINGTON
Mr. Hastings. Thank you, Mr. Chairman.
Mr. Chairman, this hearing today should continue to focus
on the crisis unfolding in the Gulf of Mexico because at this
very moment the well is not capped and oil is still leaking.
Oil is washing onto wetlands and beaches, threatening the
environment and the wildlife, families are out of work,
businesses are struggling to make ends meet, and the Gulf
states are still struggling to get the resources they need to
respond to the spill.
Unfortunately, instead of addressing the immediate crisis
at hand there have been attempts to use this tragedy to impose
a job-killing capital trade national energy tax and push
legislation that is unrelated to the spill, or reforms in
offshore drilling.
Just yesterday President Obama's senior energy and
environmental advisor, Carol Browner, wrote an e-mail message
advocating, and I quote in part, ``The disaster in the Gulf be
used to end our addiction to fossil fuels and pass
comprehensive energy and climate legislation.'' The ongoing
attempt by Democrats to exploit this crisis in order to push a
national energy tax is clearly their best effort not to let a
crisis go to waste, but it will not stop the leak, it will not
provide relief to the people struggling in the Gulf. It will,
however, make the problem worse by increasing energy prices for
all Americans and sending American jobs and companies overseas.
The bill we are discussing today was promoted as addressing
the Deepwater Horizon rig explosion. However, most of its 200
pages have very little to do with this explosion and bill.
There are numerous provisions completely unrelated to offshore
drilling safety, and reform. Reforms are clearly needed to make
American offshore drilling the safest in the world, but
Congress should not get ahead of the facts and in a rush to
write new laws.
Mr. Chairman, if all of us were to ask ourselves if we
believe we have all the facts and information necessary to know
exactly what changes need to be made in offshore drilling, the
only honest answer is no. There is too much we don't know yet.
There are bipartisan document requests that have gone
unanswered by the Administration regarding the government's
oversight of this specific well. This includes the last
inspection report on the blowout preventer. Information has
come to light about human errors that contributed to the
explosion, but we still don't know why the emergency shutoff
failed to work.
The blowout preventer is still a mile from the ocean
surface, and we won't likely have the answers on what went
wrong until it is retrieved and examined. Numerous
investigations are underway, including the Presidential
Commission, which has yet to even hold its first meeting. Why
spend taxpayers' dollars on this commission if Congress has no
intention of reviewing and considering its report and finding.
Congress must know what caused the disaster and then
respond appropriately. This will ensure that Congress is not
just making reforms for headlines and for political purposes,
but making the right reforms to ensure that American drilling
is the safest in the world.
Finally, it is vital that in these tough economic times
that Congress knows what effect proposed new laws will have on
American jobs, our economy, and our dependence on foreign
energy. As we have seen from the Administration's moratorium on
deep well drilling, impulsive decisions can have severe, long-
term economic impacts. Solutions are supposed to help improve
the situation in the Gulf, not make it worse. Congress must
take extra care to ensure that any reforms will not cause
greater economic damage than is already being felt as a result
of this spill.
With that, Mr. Chairman, I will yield back my time.
The Chairman. The Chair will move directly now to hear from
our first panel composed of The Honorable Ken Salazar, the
Secretary, U.S. Department of the Interior, and he is
accompanied by, and I understand the Director will have a
statement to make as well, The Honorable Michael R. Bromwich,
the Director of the Bureau of Ocean Energy Management,
Regulation, and Enforcement, otherwise known as BOE, from the
U.S. Department of the Interior.
Mr. Secretary, we welcome you once again to the Committee,
and as I have done many times publicly, I commend you and your
Department for the tremendous manner in which you have
responded to this disaster. You have put all your resources
available, and I commend you for that response. You may proceed
as you desire.
STATEMENT OF HON. KEN SALAZAR, SECRETARY,
U.S. DEPARTMENT OF THE INTERIOR
Secretary Salazar. Thank you very much, Chairman Rahall,
and Ranking Member Hastings, and distinguished members of this
Committee.
We continue our efforts on this day 71 with what has been a
relentless effort to deal with the problem that we see
unfolding in the Gulf. At the President's direction, we are not
resting, and we will continue to move forward until we have the
solutions, both with respect to the leak containment as well as
continuing the reform efforts that we have been undertaking. I
thought I would do a couple of things at the outset. First,
bring the Committee up to date on what is happening with
respect to the leak containment and the efforts to kill the
well.
First, on the containment measures, in the last 24 hours
about 25,000 barrels of oil were actually collected and
contained and have been captured notwithstanding some high seas
that have been as high as seven feet, and so that interim
containment system is working.
Second, over the next few days the containment capacity
that will be built out that we have been overseeing and working
on will reach a capacity of 40 to 53 thousand barrels a day,
and by mid-July the capacity that will be built out will be 60
to 80 thousand barrels a day.
As a part of the effort of the Federal team, which includes
Secretary Chu and myself, the Navy and others who have been
involved in this effort from the beginning, including our
oversights at Houston, we have ordered these measures to be
taken by BP so that we get the full leak containment and also
that there are redundancies and efforts put into place that
deal with contingencies hurricanes, and our hope is that moving
into mid-July the 60 to 80 thousand barrels of oil will be able
to be contained, most of the pollution currently emanating in
the Gulf of Mexico, and then moving upwards from there with
additional redundancies that are also being planned up to about
90,000 barrels a day if that should ever be needed.
Second, we have always known that ultimately the solution
here is to kill this well, and as of this morning the current
depth is now over 17,000 feet through the relief well. The
relief well has a target of 17,758 feet. So in the next several
weeks they will be getting down to the target depth, and then
hopefully the efforts to kill this well will then move forward.
So that is a quick update on what is happening with respect
to at least the source containment. There are huge efforts
underway to fight the oil on the sea and near shore and onshore
where 7,000 vessels are involved and nearly 40,000 people. The
President, in the early days, through conversations with
Secretary Gates, Secretary Napolitano and I, ordered the
authorization of the Coast Guard. So far the states have called
up around 2,000 members of the Coast Guard to help in the
fight. There are still another 18,000 members that could be
called up if the Governors themselves were to decide that that
is what they want to do.
Let me move over quickly to the subject of this legislation
and the Bureau of Ocean Energy Management, Regulation and
Enforcement. Last year, in September, I believe, I testified in
front of this Committee and Chairman Rahall. At the time, I
indicated to you that you were a pioneer and this Committee was
really pioneering an effort that was long in coming, and I said
that because I recognized then as I recognize today that when
you have an agency that has such a critical responsible set of
missions, the collection on the average of $13 billion a year
on behalf of the American taxpayer, and assuring that the oil
and gas production, which is so important to this country, is
conducted in a safe manner, that organic legislation is in fact
necessary.
So you were there, Mr. Chairman, and many members of this
Committee long before this tragedy was there, and I remember
testifying in support of you moving forward with that organic
legislation. I think the events of the last 71 days have made
it all the more clear that an agency of this importance needs
to have that organic legislation.
I won't go over the fact I have gone over at other times
but we have moved forward in the last 16 months with very
strong efforts on ethics reforms, and hired former U.S.
attorneys and independent prosecutors to essentially oversee
this agency. There have been people who have been terminated,
who no longer have jobs because of the ethics lapses of the
past. That will now continue under Mike Bromwich, who has made
major movement forward with respect to the Outer Continental
Shelf and the plans that had been put out there prior to us
coming on board as Secretary of the Interior. We have opened up
a new chapter to renewable energy and are looking very much
forward to working with all of you as we stand up offshore wind
energy, especially in the Atlantic in the years ahead.
And finally, in the last two budgets we have moved
increasingly to have the kinds of resources that can start
policing these efforts in the OCS. From 2000 to 2008, the
budgets for MMS essentially were flat lined. The budgets of the
President's and the budget that this Congress approved over the
last couple of years have helped us get to the point.
But having said that, there are going to be significant
additional resources that will be needed, Chairman Rahall and
Ranking Member Hastings, and members of the Committee, if we
are to do the job that you all expect the Department of the
Interior to do relative to assuring safety in the OCS in the
development of oil and gas, as well as ensuring that the
environment is protected.
With that, Mr. Chairman, what I would like to do is turn it
over to Mike Bromwich, the Director of the Bureau of Ocean
Energy for his comments.
[The prepared statement of Secretary Salazar follows:]
Statement of The Honorable Ken Salazar, Secretary,
U.S. Department of the Interior
Chairman Rahall, Ranking Member Hastings, and Members of the
Committee, I want to thank you for holding this hearing today as we
continue to address the issues and challenges associated with the
continuing reform of the Department of the Interior's offshore energy
program.
Before we begin, I want to introduce Michael R. Bromwich, the new
Director of the Bureau of Ocean Energy Management, Regulation, and
Enforcement. His impressive background includes time as the Inspector
General of the U.S. Department of Justice, as an Assistant U.S.
Attorney, and since 1999, as an attorney in private practice. His
extensive experience in government and the private sector in improving
the way organizations work make him an ideal choice to lead the
restructuring and reform of the Department's offshore energy program.
For the same reasons I chose Michael Bromwich for this position, I
chose Wilma Lewis who oversees the Department's energy bureaus as the
Assistant Secretary for Land and Minerals Management. A former U.S.
Attorney for the District of Columbia and Inspector General at the
Department, Wilma has played a central leadership role in some of the
most significant reforms during my tenure as Secretary. She has helped
shape reforms ranging from our new approach to offshore oil and gas
leasing and a new emphasis on renewable energy development on the Outer
Continental Shelf, to ethics reform, to the enhancement of leasing
programs and the development of renewable energy programs onshore, to
support for our study of policies designed to ensure fair return to
American taxpayers for the development of public oil and gas resources.
I have also appointed her to chair the Safety Oversight Board in the
aftermath of the Deepwater Horizon oil spill, and to help spearhead the
reorganization of the Minerals Management Service (MMS) toward a new
future.
Offshore Energy Reforms Completed
Although this unprecedented disaster, which resulted in the tragic
loss of life and many injuries, is commanding our time and resources,
it has also strengthened our resolve to continue reforming the Outer
Continental Shelf (OCS) program.
The reforms we have embarked on over the last 17 months, and upon
which we will continue to build, are substantive and systematic, not
cosmetic. The kind of fundamental changes we are making do not come
easily and many of the changes we have already made have raised the ire
of industry. Our efforts at reform have been characterized by some as
impediments and roadblocks to the development of domestic oil and gas
resources. We believe, however, that they are crucial to ensuring that
we carry out our responsibilities effectively, without compromise, and
in a manner that facilitates the balanced, responsible, and sustainable
development of the resources entrusted to us.
I want to review the reforms with you:
First, we focused our efforts on ethics and other concerns that had
been raised in the revenue collection side of the MMS. We began
changing the way the bureau does business and took the following
concrete actions:
upgraded and strengthened ethics standards throughout MMS
and for all political and career employees;
terminated the Royalty-in-Kind program to reduce the
likelihood of fraud or collusion with industry in connection with the
collection of royalties; and
aggressively pursued continued implementation of the
recommendations to improve the royalty collection program that came
from the Department's Inspector General, the Government Accountability
Office, and a committee chaired by former Senators Bob Kerrey and Jake
Garn.
Second, we reformed the offshore oil and gas regulatory program,
which included the following:
initiated in the Fall of 2009 an independent study by an
arm of the National Academy of Engineering to examine how we could
upgrade our inspection and safety program for offshore rigs;
procured substantial increases in the MMS budget for FY
2010 and FY 2011, including a ten percent increase in the number of
inspectors for offshore facilities; and
developed a new approach to on-going oil and gas
activities on the OCS aimed at promoting the responsible,
environmentally sound, and scientifically grounded development of oil
and gas resources on the Outer Continental Shelf.
In that effort, we cancelled the upcoming Beaufort and Chukchi
lease sales in the Arctic, removed Bristol Bay altogether from leasing
both the current 5 year plan as well as the next 5 year plan, and
removed the Pacific Coast and the Northeast entirely from any drilling
under a new 5 year plan. We made clear that we will require full
environmental analysis through an Environmental Impact Statement prior
to any decision to lease in any additional areas, such as the mid and
south Atlantic, and launched a scientific evaluation, led by the
Director of the United States Geological Survey (USGS), to analyze
issues associated with drilling in the Arctic.
Third, we laid the groundwork for expanding the mission of MMS
beyond conventional oil and gas development by devoting significant
attention and infusing new resources into the renewable energy program,
thereby providing for a more balanced energy portfolio that reflects
the President's priorities for clean energy. Toward that end, we:
finalized long-stalled regulations that define a
permitting process for off-shore wind--cutting through jurisdictional
disputes with FERC in the process and ultimately approving the Cape
Wind project;
announced the establishment of a regional renewable
energy office, located in Virginia, which will coordinate and expedite,
as appropriate, the development of wind, solar, and other renewable
energy resources on the Atlantic Outer Continental Shelf; and
entered into an MOU with governors of East Coast states,
which formally established an Atlantic Offshore Wind Energy Consortium
to promote the efficient, orderly, and responsible development of wind
resources on the Outer Continental Shelf through increased Federal-
State cooperation.
Offshore Energy Reforms and Related Activities Underway
Since the Deepwater Horizon explosion and oil spill, the reforms
and associated efforts have continued with urgency, with particular
focus on lessons being learned from the circumstances surrounding the
event. We are aggressively pursuing actions on multiple fronts,
including:
inspecting all deepwater oil and gas drilling operations
in the Gulf of Mexico and issuance of a safety notice to all rig
operators;
implementing the 30-day safety report to the President,
including issuing notices to lessees on new safety requirements, and
developing new rules for safety and environmental protection; defending
the suspension on new deepwater drilling, which is currently the
subject of litigation; and
implementing new requirements that operators submit
information regarding blowout scenarios in their exploration plans--
reversing a long standing exemption that resulted from too much
reliance on industry to self-regulate.
Additional reforms will be influenced by several ongoing
investigations and reviews, including the Deepwater Horizon Joint
Investigation currently underway by the Bureau of Ocean Energy
Management, Regulation and Enforcement, and the United States Coast
Guard. In addition, at my request, a separate investigation is being
undertaken by the National Academy of Engineering to conduct an
independent, science-based analysis of the root causes of the oil
spill. I also requested that the Inspector General's Office undertake
an investigation to determine whether there was a failure of MMS
personnel to adequately enforce standards or inspect the Deepwater
Horizon.
Further, on April 30th I announced the formation of the Outer
Continental Shelf Safety Oversight Board to identify, evaluate, and
implement new safety requirements. The Board, which consists of
Assistant Secretary for Land and Minerals Management Wilma A. Lewis,
who serves as Chair, Assistant Secretary for Policy, Management and
Budget Rhea Suh, and Acting Inspector General Mary Kendall, will
develop recommendations designed to strengthen safety, and improve
overall management, regulation, and oversight of operations on the
Outer Continental Shelf.
Finally, the President established the independent bipartisan
National Commission on the BP Deepwater Horizon Oil Spill and Offshore
Drilling tasked with providing options on how we can prevent and
mitigate the impact of any future spills that result from offshore
drilling. The Commission will be focused on the environmental and
safety precautions we must build into our regulatory framework in order
to ensure an event like this never happens again, taking into account
the other investigations concerning the causes of the spill.
Supplemental Legislation
The Administration will make sure that BP and other responsible
parties are held accountable, that they will pay the costs of the
government in responding to the spill, and compensation for loss or
damages that arise from the spill. We will do everything in our power
to make our affected communities whole. As a part of the response
efforts, we expect to spend a total of $27 million through June 30,
2010 for Interior's response activities.
As part of our reforms, we are also building on the efforts we
undertook in the last seventeen months to strengthen the OCS budget. As
I already mentioned, the President's 2011 budget includes a ten percent
increase in the number of inspectors. Our restructuring of the OCS
program will require additional resources to aggressively pursue the
reforms I outlined earlier, to implement the 30-day report to the
President, and to potentially address the results of ongoing
investigations and the findings of the President's Commission. We are
currently hiring an additional twelve inspectors, six more than we
proposed in the 2011 budget, and we are taking other actions that are
outlined in the 30-day report to the President. Over the course of the
next several years, our restructuring of a more robust OCS regulatory
and enforcement program will dictate the need for engineering,
technical, and other specialized staff.
The President's supplemental request of May 12, 2010, includes $29
million that will fund the near term resources we need for these
activities. As you know, it is critically needed to support our full
and relentless reforms--to bolster inspections of offshore oil and gas
platforms, draft enforcement and safety regulations, and carry out
environmental and engineering studies. The President's request included
a proposal to extend the time allowed by statute for review and
approval of oil and gas exploration plans from 30 to 90 days--this is
also needed and I hope Congress will include it in the final version of
the supplemental.
Reorganization of the Minerals Management Service
On June 15, I appointed Michael R. Bromwich as the Director, of the
Bureau of Ocean Energy Management, Regulation and Enforcement. Michael
will lead us through the reorganization--the foundation for the reforms
we have underway. He will lead the changes in how the agency does
business, implement the reforms that will raise the bar for safe and
environmentally sound offshore oil and gas operations, and help our
Nation transition to a clean energy future.
Michael will join the team that has been working out the details of
the reorganization. In a May 19 Secretarial Order, I tasked Rhea Suh,
the Assistant Secretary for Policy, Management and Budget, Wilma Lewis,
the Assistant Secretary for Land and Minerals Management, and Chris
Henderson, one of my senior advisors, to develop a reorganization plan
in consultation with others within the Administration and with
Congress. The report will provide the plan to restructure the Bureau of
Ocean Energy Management, Regulation and Enforcement in order to
responsibly address sustained development of the Outer Continent
Shelf's conventional and renewable energy resources, including resource
evaluation, planning, and other activities related to leasing;
comprehensive oversight, safety, and environmental protection in all
offshore energy activities; and royalty and revenue management
including the collection and distribution of revenue, auditing and
compliance, and asset management.
The Deepwater Horizon tragedy and the massive spill have made the
importance and urgency of a reorganization of this nature ever more
clear, particularly the creation of a separate and independent safety
and environmental enforcement entity. We will responsibly and
thoughtfully move to establish independence and separation for this
critical mission so that the American people know they have a strong
and independent organization ensuring that energy companies comply with
their safety and environmental protection obligations.
The restructuring will also address any concerns about the
incentives related to revenue collections. The OCS currently provides
nearly 30 percent of the Nation's domestic oil production and almost 11
percent of its domestic natural gas production and is one of the
largest sources of non-tax and non-trust revenue for the Treasury. The
MMS collected an average of more than $13 billion annually for the past
5 years. There will be clear separation between the entities that
collect and manage revenue and those that are responsible for the
management of the OCS exploration and leasing activities.
Sustained Response Efforts in the Gulf
Of utmost importance to us is the oil spill containment and clean
up of the Gulf. I have returned to the Gulf Region numerous times to
help the Administration's effort to protect the coasts, wetlands, and
wildlife threatened by this spill. We have deployed approximately 1,000
employees to the Gulf and they are directing actions to contain the
spill; cleaning up affected coastal and marine areas under our
jurisdiction; and assisting Gulf Coast residents with information
related to the claims process, health and safety information, volunteer
opportunities, and general information on the efforts being carried out
in the region.
Under the direction of National Incident Commander Admiral Thad
Allen and an effort co-led by me and Energy Secretary Steven Chu, we
announced an improved estimate of how much oil is flowing from the
leaking well. That estimate, suggests that the flow rate is at least
35,000 barrels per day, based on the improved quality and quantity of
data that are now available.
The Department's senior staff continues to offer coordination and
guidance to the effort. Deputy Secretary David J. Hayes is devoting his
time to coordinating the many Gulf-related response activities we are
undertaking. Assistant Secretary for Fish, Wildlife and Parks Tom
Strickland has been leading the Department's efforts for onshore and
near shore protection. National Park Service Director Jon Jarvis and
Acting Director of the Fish and Wildlife Service Rowan Gould continue
to supervise incident management personnel and activities that their
bureaus are taking to respond to the spill and clean up oil impacts.
The NPS and FWS have dispatched approximately 590 employees to protect
the eight national parks and 36 wildlife refuges and the numerous
wildlife, birds, and historic structures they are responsible for in
the Gulf of Mexico.
Representatives from the FWS also participated with the U.S. Coast
Guard, the Environmental Protection Agency, National Oceanic and
Atmospheric Administration and state and local governments in a series
of public meetings with local residents to answer questions and offer
information on a variety of topics related to the spill and response
activities.
Finally, there are many, many people in the Department who are
devoting significant time and energy to this event; to the various
investigations and inquiries, both within the Administration and in
Congress, that are being carried out; and to the ongoing reorganization
and reform. I want to acknowledge their work and let them know their
efforts are appreciated and are not going unnoticed.
Over the last couple of months, we have also seen what the
employees in the Bureau of Ocean Energy Management, Regulation and
Enforcement are capable of, their professionalism, their dedication to
the Department, and their enthusiasm for the reforms underway. With
Michael's help we will be able to cast aside the shadow on the many
dedicated employees that has been left by an errant few, and by
previous policies that have prioritized production over ethics, safety,
and environmental protection.
H.R. 3534, the CLEAR Act
Mr. Chairman, last week you unveiled a new version of your
comprehensive energy legislation, H.R. 3534, ``the Consolidated Land,
Energy, and Aquatic Resources Act.'' The Administration is carrying out
a detailed review of this new version of your bill. While the primary
focus of this legislation is the Department's mineral leasing programs,
there are provisions of this bill that affect agencies other than the
Department. It is important that the expertise of other affected
agencies inform this process where appropriate. We will coordinate with
other agencies in the Administration as we move forward with an
evaluation of these important issues. Similarly, we expect that the
findings of the recently-established Presidential Commission, the
National Commission on the BP Deepwater Horizon Oil Spill and Offshore
Drilling, will also help inform decisions on what legislative changes
are needed. However, I would like to offer some general comments on
several provisions that specifically impact the Department.
When I testified before this Committee on the introduced version of
H.R. 3534 last September, I indicated that the Department was in full
agreement with the legislation's goals of ensuring a balanced and
responsible approach to energy development on our public lands and
waters and that dependable oversight and sensible reform of mineral
royalty programs must be achieved. I also indicated that, like you, I
support reforms of the mineral leasing process and programs that will
enable us to manage our onshore and offshore resources more effectively
and responsibly.
We have firmly supported the need for organic legislation for the
functions performed by MMS. We agree that an organization with such
important responsibilities should be governed by a thoughtfully
considered organic act. It is important for organic legislation to
provide the Secretary with the discretion to implement the details of a
reorganization as complicated as this. The report and schedule for
implementation that I will receive on July 9th will provide me with a
detailed roadmap for this reorganization and will greatly inform the
process. The Administration would like to provide the Committee with
more detailed comments regarding the specifics in this legislation,
including the appointment and confirmation of the new bureau and office
heads.
Significant time and effort have been spent by senior staff at the
Department detailing and analyzing reorganization of the functions
carried out by the MMS. Section 101 of H.R. 3534 would include in the
Bureau of Energy Resource Management the onshore energy management
functions currently carried out by the Bureau of Land Management under
its multiple use land management mandate. We will work with your
Committee to further examine these provisions.
There are many other provisions in this bill of which we are
generally supportive and would like to continue discussions with the
Committee. For example, a number of changes in H.R. 3534 highlight the
need for increased safety of operations and consideration of the marine
and coastal environment, including the need for integrated programs for
both environmental research and technological research and development.
A focus on strengthened safety and oversight and the environmental
impacts of offshore oil and gas operations are priorities of the
Administration. We will work closely with other relevant agencies to
ensure we develop a coordinated federal approach to address these
objectives.
H.R. 3534 would extend the deadline for the Department to review
and approve exploration plans; require that lessees obtain a drilling
permit after approval of an exploration plan; and require that, prior
to approval of such a permit, an engineering review of the well system
be completed and reviewed. It also includes new planning requirements
for detailed descriptions of equipment and plans to address potential
well blowouts. The Administration supports authority to provide for
longer review time of exploration plans to allow for stronger reviews
of exploration plans prior to drilling.
Recognizing the importance of this information, on June 18, 2010,
the Department issued a Notice to Lessees (NTL) requiring that new
filings for drilling permits, exploration plans, or development plans
to contain information specifically addressing the possibility of a
blowout and the detailed steps that lessees or operators would take to
prevent blowouts. This reverses a 2003 policy and a 2008 NTL that
exempted many offshore oil and gas operations in the Gulf from
submitting certain information about such a scenario and is consistent
with the requirements contained in these bills.
We are also supportive of the changes in H.R. 3534 intended to
strengthen civil and criminal penalties contained in the OCSLA. These
provisions are generally consistent with the support for increasing
these penalties that we have expressed in recent appearances before
Congress. The Department is also supportive of adding language to the
OCSLA authorizing the imposition of civil judicial penalties for
violations of the Act.
It is also important that the Department have the tools necessary
to efficiently and effectively carry out the duties related to offshore
energy development, including to appropriately staff critical and hard-
to-fill positions in these new entities. We look forward to working
with the Committee and other agencies on the provisions in H.R. 3534
that address this issue. Provisions addressing royalty-related reforms
may also be an important component of this reorganization. While
additional time is needed to analyze the inclusion of a number of
significant provisions, we do support the repeal of the royalty relief
provision contained in section 344 of the Energy Policy Act of 2005 as
this repeal is consistent with the President's fiscal year 2011 budget
request.
The President's June 12, 2009 memorandum creating an Ocean Policy
Task Force envisions a comprehensive, national approach to ocean
planning. The Department is currently involved in a multi-agency
process to develop a new national ocean policy that is intended to look
ahead in the long term to help the United States think comprehensively
about how we make better informed management decisions regarding the
use and conservation of ocean, coastal, and Great Lakes resources. The
Department supports the approach of the President's Task Force.
Finally, the Administration appreciates your focus on ensuring
comprehensive and long-term restoration of the Gulf of Mexico in the
wake of this tragedy. As the President has made clear, a long-term plan
is needed to restore this unique coastal region from the effects of
this tragedy, just the latest blow to befall the people and environment
of this special place. The Administration is already moving forward
with this plan, and the President has asked Secretary of the Navy Ray
Mabus to develop a long-term Gulf Coast Restoration Support Plan that
will include input by states, local communities, tribes, fishermen,
businesses, conservationists, and other Gulf residents.
Conclusion
Much of my time as Secretary of the Interior has been spent working
to promote reform of prior practices in the MMS and to advance the
President's vision of a new energy future that will help us to move
away from spending hundreds of billions of dollars each year on
imported oil. A balanced program of safe and environmentally
responsible offshore energy development is a necessary part of that
future. Our efforts to develop a robust OCS renewable energy program
are a major part of the effort to find that balance and help move our
Nation toward a clean energy future. However, we also recognize that,
for now, conventional oil and gas continues to play a significant role
in our economy. As we evaluate new areas for potential oil and gas
exploration and development on the OCS, we will conduct thorough
environmental analysis and scientific study, gather public input and
comment, and carefully examine the potential safety and spill risk
considerations.
The findings of the Joint Investigation and the independent
National Academy of Engineering will provide us with the facts and help
us understand what happened on the Deepwater Horizon. Those findings,
the work of the Outer Continental Shelf Safety Oversight Board, the OIG
investigation and review, and the findings of the Presidential
Commission will help inform the implementation of the Administration's
comprehensive energy strategy for the OCS.
We are taking responsible action to address the safety of other
offshore oil and gas operations, further tightening our oversight of
industry's practices through a package of reforms, and taking a careful
look at the questions this disaster is raising. We will also work with
you on legislative reforms and the finalization of a reorganization
that will ensure that the OCS program is effectively managed to achieve
these goals.
Lastly, let me assure you this Administration will continue its
relentless response to the Deepwater Horizon tragedy. Our team is
committed to help the people and communities of the Gulf Coast region
persevere through this disaster, to protect our important places and
resources, and to take actions based on the valuable lessons learned
that will help prevent similar spills in the future.
______
Response to questions submitted for the record by the U.S. Department
of the Interior on H.R. 3534, ``CLEAR Act''
Questions submitted by Rep. Kind
1. Secretary Salazar, the bill requires that industry provide
information to regulators on how long it would take to drill a
relief well. I'm concerned this doesn't go far enough. Right
now, the only proven technology that government and industry
know of to stop oil from spewing into the ocean is the drilling
of a relief well. Wouldn't it be advantageous to drill at least
a partial relief well concurrently with the regular drill well?
Response: We are continuing to actively determine the best
strategies to ensure enhanced worker safety and health and
environmental safety standards for offshore operations. We are
undertaking aggressive and comprehensive reforms to offshore oil and
gas regulation and oversight. This includes the reorganization of the
former Minerals Management Service, as well as the implementation of
tougher standards in the drilling and production stages, for equipment,
safety practices, and environmental safeguards. The temporary
suspensions of deepwater drilling, which were lifted on October 12,
2010, allowed the Department time for investigation and implementation
of needed new safety, containment and oil spill response capability
measures. Secretary Salazar based his decision to lift the deepwater
drilling suspensions on information gathered in recent months,
including a report from BOEMRE Director Michael Bromwich on October 1,
that shows significant progress in reforms to drilling and workplace
safety regulations and standards, increased availability of oil spill
response resources since the Macondo well was contained on July 15 and
killed on September 19, and improved blowout containment capabilities.
The continued collection and analysis of key evidence regarding the
potential causes of the Deepwater Horizon explosion will help inform
our ongoing analysis. The Administration strongly supported House
passage of the CLEAR Act, which would provide authority to strengthen
environmental reviews of offshore drilling plans, reform revenue
collection, and implement a more extensive system of inspections of
offshore energy activities.
Regarding the drilling of relief wells, it may seem reasonable to
assume that relief wells reduce risk, and that we could save time
responding to any blowout by requiring operators to drill a relief well
alongside each well drilled in the Gulf of Mexico. However, the risk of
a blowout in the relief well may be the same as the risk of a blowout
in the initial well. This increased risk is a direct result of drilling
twice as many wells into a formation. Each well drilled increases the
risk of a blowout simply because each well presents its own unique
geologic and engineering risks. Relief wells have historically been an
effective method to stop the flow of oil from the bottom of a well
blowout and begin the process of pumping cement to abandon the well.
However, both the risk and costs of drilling relief wells dictate that
they are typically only drilled when necessary to respond to a well
blowout. As demonstrated with the Deepwater Horizon response, there are
other deepwater well containment options that may be faster and equally
effective way in reducing or stopping the flow of oil into the ocean.
BOEMRE is in the process of establishing enforceable mechanisms to
ensure the availability of blowout containment resources. And industry
commitments have been made for new investments in designing and
developing a multi-scenario, multi-component containment system.
2. Secretary Salazar, there are a lot of layers of oversight in this
bill, separate agencies and independent third party certification of
equipment. While I support these reforms, will they even matter in the
event of another blowout? Right now, if there is another blowout and
subsequent leak, we will have to wait over three months for a relief
well to stop the flow of oil, correct? There isn't any technology
developed or being developed that can successfully stop the flow of
oil?
Response: The Bromwich report referenced above evidences the hard
work carried out and progress made since the Deepwater Horizon disaster
in April in addressing drilling safety, blowout containment, and spill
response.
New safety measures, including requirements relating to the
functionality and testing of blowout preventers and the design,
construction and cementing of wells, have been put in place.
Significant developments and improvements have been made in deepwater
well containment technology and equipment; the management and
coordination of containment operations and logistics; and the drilling
of relief wells. BOEMRE is in the process of establishing enforceable
mechanisms to ensure the availability of blowout containment resources.
And industry commitments have been made for new investments in
designing and developing a multi-scenario, multi-component containment
system.
The resources available for other response activity today, should
another spill occur, have increased significantly from critical levels
present shortly after the Deepwater Horizon incident. Most of the
resources such as personnel, vessels, and containment boom used during
the spill are no longer deployed therefore eliminating the urgent
concern about the sufficiency of resources to respond to another
potential oil spill.
3. Secretary Salazar, what does the Department of Interior think would
be the best approach to increasing research and develop
technology that will prevent and stop an oil spill?
Response: The Administration specifically supported the provisions
in H.R. 3534 to remove the arbitrary limit on liability for damages
caused by offshore drilling because it will create incentives for the
oil and gas industry to comply with new health and environmental safety
standards and seek out and implement best practices to do so.
Also in July the Department issued its implementation plan for
restructuring the offshore energy management responsibilities under its
jurisdiction. The plan calls for the creation of the Bureau of Safety
and Environmental Enforcement, tasked with promoting and enforcing
safety in offshore energy exploration and production operations and
assuring that potential negative environmental and other impacts on
marine ecosystems and coastal communities are appropriately considered
and mitigated, and to continue research activities to support evolving
regulatory needs as technologies advance.
Questions submitted by Rep. Lujan
1. Secretary Salazar, the draft legislation under discussion would
require the use of ``best available technology'' for new Outer
Continental Shelf drilling permits, with the Secretary of the
Interior identifying what constitutes ``best available
technology'' every 3 years. How do you foresee this
identification of best available technology working and do you
think it will spur or inhibit innovation in development of new
technologies?
Response: The details of such a process are typically finalized
once specific language has been enacted into law. Nevertheless, under
current offshore regulatory processes, the Department reviews an
operator's exploration or development plans and Applications for
Permits to Drill to verify the use of best available and safest
technology and inspections verify the use of approved equipment and
maintenance of that equipment. Thus the Department has a parallel base
of knowledge and experience and would expect to build on that knowledge
base. However, the results of the several ongoing investigations of the
event will inform the long-term responses.
2. Secretary Salazar, the BLM currently collects rent payments from
solar energy right-of-way authorizations. The agency also collects a
``megawatt capacity fee'' that is based on the total authorized
megawatt capacity for the approved solar energy project. These megawatt
capacity fees charge different fees for different solar technologies
and have a rate structure that may actually penalize technologies that
are more efficient and use less land. I understand that the Bureau is
seeking to collect fair market value for renewable energy production on
public land, however these megawatt capacity fees vary with different
solar technologies and operate on a rate structure that may discourage
renewable energy technology development. As you know, clean, renewable
energy technologies provide taxpayers benefits beyond electricity
generation, and I would like to know how the agency intends to ensure
that renewable energy revenue collection is based on a sound, fair
methodology that promotes efficient generation of clean energy on
public lands?
Response: The BLM is required by the Federal Land Policy and
Management Act to collect an annual rental payment for right-of-way
authorizations on the public lands, and that statute requires that
rents for these authorizations reflect the fair market value for the
use of the public lands. The solar rental schedule, issued by the BLM
in early June, was developed based on review and analysis by the
Department, the BLM, and the U.S. Department of Energy of economic
models comparing the effects various rental rates may have on different
kinds of solar projects. It is explained in detail in the instructional
memorandum found at: http://www.blm.gov/wo/st/en/info/regulations/
Instruction_Memos_and_Bulletins/national_instruction/2010/IM_2010-
141.html. The new rental schedule provides certainty to solar operators
and ensures a fair return to American taxpayers for the use of their
public lands.
Questions submitted by Rep. Tsongas
1. Secretary Salazar, this week I am introducing legislation requiring
oil companies to address a worst-case scenario oil spill, like the one
that we are dealing with in the Gulf of Mexico, as a condition to being
granted rights to explore or drill for oil off our coastline. It would
build on the requirements in the CLEAR Act by requiring additional
safeguards to protect our oceans and coastlines from another
catastrophic spill. Having dealt with a worst-case scenario spill over
the last few months and its tragic and ongoing consequences, what
requirements and safeguards do you think are absolutely necessary to
have in place to effectively respond to a future worst-case scenario
spill? And how do we force regulators to imagine new scenarios that we
possibly have not yet considered?
Response: The Administration strongly supported House passage of
H.R. 3534, which contains many provisions that would give the
Department additional authorities to promote enhanced health and
environmental safety standards for offshore operations, strengthen
environmental reviews of offshore drilling plans, reform revenue
collection, and implement a more extensive system of inspections of
offshore energy activities. The results of the ongoing investigations
into the root cause of the tragedy will provide us with key information
to consider, but the October 1, 2010, report from BOEMRE Director
Bromwich provides a comprehensive look at the progress made on
important requirements and safeguards that the Department believes are
necessary to address drilling safety, blowout containment, and spill
response.
These include new safety measures, including requirements relating
to the functionality and testing of blowout preventers and the design,
construction and cementing of wells that have been put in place since
April 20. In addition, BOEMRE issued a Notice to Lessees with
requirements for the calculation of worst-case discharges and submittal
of information of measures undertaken to prevent a blowout, reduce the
likelihood of a blowout, and conduct effective and early intervention
in the event of a blowout. Significant developments and improvements
have been made in deepwater well containment technology and equipment;
the management and coordination of containment operations and
logistics; and the drilling of relief wells. BOEMRE is in the process
of establishing enforceable mechanisms to ensure the availability of
blowout containment resources. And industry commitments have been made
for new investments in designing and developing a multi-scenario,
multi-component containment system. These measures are essential to
protecting communities, coasts, and wildlife from the risks that
deepwater drilling poses.
2. Secretary Salazar, in a previous hearing before the Energy and
Mineral Resources Subcommittee, Mr. Frank Rusco, Director of Natural
Resources and Environment at GAO, stated that GAO found that there were
system-wide and pervasive problems at the Interior Department in
attracting and retaining expert employees for safety, equipment, and
production inspections, and that it would be absolutely necessary to
address this issue in any reorganization of the MMS. In your opinion,
does the current draft legislation address this issue sufficiently, or
do you have any suggestions for improving the ability for the
Department of the Interior to attract and retain the experts necessary
to oversee offshore oil and gas production?
Response: Over the course of the next several years, the
restructuring of the Department's Outer Continental Shelf programs will
dictate the need for engineering, technical, and other specialized
staff, particularly in the regulatory and enforcement program. This is
an important issue and one the Department and Administration are
already addressing. The President's 2011 budget amendment, released on
September 13, 2010, includes an additional $100 million for BOEM reform
efforts, including funding for more inspectors. The amendment also
proposes raising inspections fees from $10 million to $45 million to
partially offset these added costs. We are in the process of hiring an
additional 12 inspectors and are taking other actions that are outlined
in the 30-day report to the President. Our restructuring of BOEMRE to
achieve a more robust OCS regulatory and enforcement program will
dictate the need for engineering, technical, and other specialized
staff. The President's enacted supplemental request includes $27
million to fund near term resources for these activities. The
Administration strongly supported House passage of H.R. 3534, which
contains provisions intended to advance this effort in the areas of
hiring and training. The Administration looks forward to working with
Congress to improve the bill as it proceeds through the legislative
process.
Questions for Director Bromwich
Questions submitted by Rep. DeGette
1. Director Bromwich, would the Department of the Interior support a
requirement to disclose the chemicals used in hydraulic
fracturing fluids in onshore oil and gas drilling on BLM land?
Response: DOI believes transparency is important in order to
effectively manage oil and gas drilling on Federal lands. The
Department is currently evaluating ways to enhance transparency with
respect to chemicals used for hydraulic fracturing. We are also
identifying opportunities to collaborate with other agencies and key
stakeholders to ensure safe natural gas development on Federal lands
Questions submitted by Rep. Kind
1. Director Bromwich, this bill proposes significant reforms to the
regulatory agencies that oversee the oil and gas industry. Do
you feel these reforms will actually be able to end the culture
of coziness between industry and government regulators?
Response: Setting expectations for agency transparency and
accountability through clear legislative direction is an important
step. In addition to the reforms presented in the bill, there are also
departmental reforms underway. One such reform is the formation of an
Investigations and Review Unit within the Bureau of Ocean Energy
Management, Regulation and Enforcement (BOEMRE) which will look into
allegations of misconduct against the companies we regulate as well as
bureau personnel. In addition, we have recently developed a conflict of
interest/recusal policy designed specifically to address claims that
some regulatory and enforcement decisions were being made based on
relationships rather than the facts. That policy was effective
immediately when issued in August and applies to all offshore
inspectors.
These reforms, both proposed through legislation and the
department, will take time to implement. However, I am extremely
confident in the honest and dedicated employees within the BOEMRE, and
implementing the reforms is a top bureau priority that will help
restore the trust of the American public in our oversight of the oil
and gas industry.
2. Director Bromwich, do you support the creation of a National Oil
and Gas Health and Safety Academy to provide initial and
continued training for regulators?
Response: BOEMRE is in the process of implementing significant
reforms to its training programs which will allow for consistent
initial and continued training in areas including health, safety,
environmental compliance, and operations. The implementation of
specific educational programs for regulators is contingent upon
available funding.
Questions submitted by Rep. Tsongas
1. Director Bromwich, this week, I am introducing legislation
requiring oil companies to address a worst-case scenario oil spill,
like the one that we are dealing with in the Gulf of Mexico, as a
condition to being granted rights to explore or drill for oil off our
coastline. It would build on the requirements in the CLEAR Act by
requiring additional safeguards to protect our oceans and coastlines
from another catastrophic spill. Having dealt with a worst-case
scenario spill over the last few months and its tragic and ongoing
consequences, what requirements and safeguards do you think are
absolutely necessary to have in place to effectively respond to a
future worst-case scenario spill? And how do we force regulators to
imagine new scenarios that we possibly have not yet considered?
Response: The Administration strongly supported House passage of
H.R. 3534, which contains many provisions that would give the
Department additional authorities to promote enhanced health and
environmental safety standards for offshore operations, strengthen
environmental reviews of offshore drilling plans, reform revenue
collection, and implement a more extensive system of inspections of
offshore energy activities. The results of the ongoing investigations
into the root cause of the tragedy will provide us with key information
to consider, but the October 1, 2010, report from BOEMRE Director
Bromwich provides a comprehensive look at the progress made on
important requirements and safeguards that the Department believes are
necessary to address drilling safety, blowout containment, and spill
response.
These include new safety measures, including requirements relating
to the functionality and testing of blowout preventers and the design,
construction and cementing of wells that have been put in place since
April 20. In addition, BOEMRE issued a Notice to Lessees with
requirements for the calculation of worst-case discharges and submittal
of information of measures undertaken to prevent a blowout, reduce the
likelihood of a blowout, and conduct effective and early intervention
in the event of a blowout. Significant developments and improvements
have been made in deepwater well containment technology and equipment;
the management and coordination of containment operations and
logistics; and the drilling of relief wells. BOEMRE is in the process
of establishing enforceable mechanisms to ensure the availability of
blowout containment resources. And industry commitments have been made
for new investments in designing and developing a multi-scenario,
multi-component containment system. These measures are essential to
protecting communities, coasts, and wildlife from the risks that
deepwater drilling poses.
2. Director Bromwich, in a previous hearing before the Energy and
Mineral Resources Subcommittee, Mr. Frank Rusco, Director of
Natural Resources and Environment at GAO, stated that GAO found
that there were system-wide and pervasive problems at the
Interior Department in attracting and retaining expert
employees for safety, equipment, and production inspections,
and that it would be absolutely necessary to address this issue
in any reorganization of the MMS. In your opinion, does the
current draft legislation address this issue sufficiently, or
do you have any suggestions for improving the ability of the
Department of the Interior to attract and retain the experts
necessary to oversee offshore oil and gas production?
Response: Over the course of the next several years, the
restructuring of the Department's Outer Continental Shelf programs will
dictate the need for engineering, technical, and other specialized
staff, particularly in the regulatory and enforcement program. This is
an important issue and one the Department and Administration are
already addressing. The President's 2011 budget amendment, released on
September 13, 2010, includes an additional $100 million for BOEM reform
efforts, including funding for more inspectors. The amendment also
proposes raising inspections fees from $10 million to $45 million to
partially offset these added costs. We are in the process of hiring an
additional 12 inspectors and are taking other actions that are outlined
in the 30-day report to the President. Our restructuring of BOEMRE to
achieve a more robust OCS regulatory and enforcement program will
dictate the need for engineering, technical, and other specialized
staff. The President's enacted supplemental request includes $27
million to fund near term resources for these activities. The
Administration strongly supported House passage of H.R. 3534, which
contains provisions intended to advance this effort in the areas of
hiring and training. The Administration looks forward to working with
Congress to improve the bill as it proceeds through the legislative
process. to oversee offshore oil and gas production?
______
The Chairman. Mr. Director, our condolences--I mean
congratulations to you on your new position, and we look
forward to working with you. You come from impeccable
background, which is quite impressive, and certainly you are
the man for the job.
STATEMENT OF HON. MICHAEL R. BROMWICH, DIRECTOR, BUREAU OF
OCEAN ENERGY MANAGEMENT, REGULATION, AND ENFORCEMENT, U.S.
DEPARTMENT OF THE INTERIOR
Mr. Bromwich. Thank you, Mr. Chairman, Ranking Member
Hastings, and other distinguished members of the Committee.
There is a prepared statement that really goes mostly into
my background that I gather is in the record and so I won't
talk about that. I will be very brief. I want to talk about
three concrete things that have been done in the eight days
that I have now been on the job as the head of the agency.
The first is the renaming of the agency from the former MMS
to the Bureau of Ocean Energy Management, Regulation, and
Enforcement. That was a decision by the Secretary to
demonstrate that there is going to be a change and renewed
focus for the agency, and that the focus is going to be now on
proper and forceful regulation and enforcement in a way that
had not been the case over the prior years. So the name is
symbolic, but it is also real and it reflects a commitment to a
new purpose and a new attitude toward regulation and
enforcement.
The second is the creation of an internal unit within the
Bureau, which we are calling the Investigations and Review
Unit. It was something I proposed to the Secretary on my first
day. It is something he approved on my second day, and it is
something that now exists and we are looking to staff it as
quickly as possible.
The new unit, the IRU, will be staffed with experienced
prosecutors, investigators, scientists, and other personnel
that will allow us to undertake prompt and aggressive
enforcement action both with respect to allegations of
misconduct against people in my agency, but also with respect
to companies and other participants in the industry that we
regulation. I am determined to be aggressive. This unit will
help me be aggressive, and I am determined to be prompt in
bringing appropriate enforcement action.
The third and final point is something that I want to
announce this morning, which is that we are imposing a fine of
$5.2 million on BP America for false, inaccurate, and
misleading reports submitted over a long period of time on
energy production on the Southern Ute tribal lands in
southwestern Colorado. A lot of the work was done by Southern
Ute tribal auditors who initially discovered the problems. The
problems were brought to the attention of BP America. The
problems were not fixed, and as a result we concluded that the
reporting violations were not accidental, but in fact knowing
and willful.
This has been in the works for awhile. It is not something
that I produced in eight days. I think it is a reflection of
the hard and serious work that people in my agency have done
over time, but it does reflect a seriousness of purpose and an
intent to be aggressive in pursuing violations of companies'
obligations in their dealing with royalties and other aspects
of the program sunder my bureau's supervision.
So with that, Mr. Chairman, that concludes my opening
statement, and I am obviously happy to answer any questions
that I can later on.
[The prepared statement of Mr. Bromwich follows:]
Statement of The Honorable Michael R. Bromwich, Director, Bureau of
Ocean Energy Management, Regulation, and Enforcement (BOE), U.S.
Department of the Interior
Thank you, Chairman Rahall, Ranking Member Hastings, and Members of
the Committee for the opportunity to be here today with Secretary
Salazar. I appreciate being included in this hearing and being part of
the discussions about reorganization of the Outer Continental Shelf
program.
Overview
My appointment as the new Director started one week ago Monday, and
therefore I have had only a short amount of time to begin to understand
the Bureau's programs, operations, and challenges. I would like to take
my time to introduce myself and give you an overview of my vision and
goals.
When the President and Secretary Salazar asked me to take this
assignment, I was a partner in the firm of Fried Frank. I headed the
firm's Internal Investigations, Compliance and Monitoring practice
group and concentrated on conducting internal investigations for
private companies and other organizations; providing monitoring and
oversight services in connection with public and private litigation and
government enforcement actions; and representing institutions and
individuals in white-collar criminal and regulatory matters. I also
provided crisis management assistance and counseling.
Even while in private practice I have had significant experience
with turning around troubled government agencies. I served for six
years as the Independent Monitor for the District of Columbia's
Metropolitan Police Department and had just begun performing the same
role for the Virgin Islands Police Department, which involved
overseeing sweeping reforms of those Departments' use of force
programs. I also conducted a comprehensive investigation of the Houston
Police Department's Crime Lab and provided HPD with extensive
recommendations for reforming its Crime Lab, which had a long history
of very serious problems.
In the private sector, I have conducted many major internal
investigations for companies, including in the energy industry;
reviewed the compliance programs and policies of major companies in a
variety of industries, conducted extensive field reviews of such
programs and made recommendations for their improvement; and
represented companies and individuals in state and federal enforcement
proceedings and criminal investigations.
From 1994 to 1999, I was the Inspector General for the Department
of Justice. I conducted special investigations into allegations of
misconduct, defective procedures and incompetence in the Federal Bureau
of Investigation Laboratory; the FBI's conduct and activities regarding
the Aldrich Ames matter; the handling of classified information by the
FBI and the Department of Justice in the campaign finance
investigation; the alleged deception of a Congressional delegation by
high-ranking officials of the Immigration and Naturalization Service;
and the Justice Department's role in the CIA crack cocaine controversy.
From 1987 through 1989, I served as Associate Counsel in the Office
of Independent Counsel for Iran-Contra. In January through May 1989, I
was one of three courtroom lawyers for the government in the case of
United States v. Oliver L. North. I supervised a team of prosecutors
and law enforcement agents that investigated allegations of criminal
misconduct against government officials and private citizens in
connection with provision of aid to the Contras in Nicaragua and
serving as overall coordinator of the Iran-Contra grand jury.
From 1983 to 1987, I served as an Assistant U.S. Attorney in the
U.S. Attorney's Office for the Southern District of New York. During my
tenure, I tried many lengthy and complex cases and argued many
appellate matters before the Second Circuit. I served as Deputy Chief
and Chief of the Office's Narcotics Unit.
From those experiences dealing with many organizations and
institutions, I have accumulated substantial experience in seeing what
works and what does not in organizations. I have had experience leading
government agencies, as well as reviewing the leadership styles in many
agencies. Based on that experience, I am confident that I can lead this
organization and implement the changes that are necessary.
Bureau of Ocean Energy Management, Regulation and Enforcement
As I said, I began my service as the Director, Bureau of Ocean
Energy Management, Regulation and Enforcement on June 21, 2010. So far,
my understanding of the events surrounding the Deepwater Horizon
catastrophe are primarily based on the news coverage, what I have read,
and initial conversations with Department of the Interior personnel.
Therefore, my knowledge of the Bureau, its employees and its programs
is at a very early stage.
I look forward to becoming well-versed in the complex regulatory
regime governing offshore oil and gas exploration and drilling and the
nation's emerging and promising offshore renewable programs. It already
is apparent that the programs that this Bureau manages are
technologically complex and involve a highly specialized workforce. As
an agency, we will be thinking carefully about, and proceeding quickly
with, reforming the way the Bureau does business and oversees energy
exploration and development.
My goal is to develop a set of recommendations for the Secretary
and the President that will improve the way the organization works. I
am committed to eliminating improper incentives and influences,
creating a culture for the OCS program that is devoted to vigorous and
effective regulation and enforcement, and establishing the Bureau as an
agency that is focused on safety and environmental protections. To
provide us with the capacity to meet these commitments, I announced
yesterday the establishment of an investigations and review unit within
the Bureau that can act quickly and will report directly to me.
I understand that the Department has been conducting an extensive
analysis of the organization, its programs, and best practices in other
countries and other agencies. I will take advantage of the work that
has already been done. We expect to release a plan in the coming weeks
that will guide the reorganization. I look forward to talking with you
and getting your input to educate this process.
These are important issues for the President, the Congress and the
Nation. Under Interior's management, the Outer Continental Shelf
currently provides 30 percent of the Nation's domestic oil production
and almost 11 percent of its domestic natural gas production. The
Nation currently relies on the OCS program to continue to make
available the energy resources that we and our economy need. I look
forward to the challenges ahead, and to ensuring that we manage the
development of the Nation's energy resources, while at the same time
enforcing the law and aggressively regulating oil and gas exploration
and drilling to ensure that this activity is conducted in a manner that
is safe for workers and the environment. Thank you.
______
The Chairman. Thank you, Director Bromwich, for that
announcement that you have just made this morning. I commend
you and members of your agency that have so diligently been
pursuing this issue for a number of years now.
Mr. Secretary, I am well aware of your support for
protecting our American landscapes and your support for the
great American outdoors. In your opinion, would the full
funding of the LWCF in this bill help you in those efforts?
Secretary Salazar. Mr. Chairman, the answer is yes.
President Obama has initiated a conversation with America
called the ``America's Great Outdoor Effort''. There have been
listening sessions in places Montana, and Maryland. There will
be some in Colorado and all over this country, and our view has
been that it is time for America to move forward with a new
conservation agenda that meets the needs and challenges of the
twenty-first century.
And as the Chairman is well aware, the Land and Water
Conservation Fund, frankly, has not been funded since its
creation in the 1960s, and so how we move forward with that is
something that I think is important, and we look forward to
working with you and the Members of Congress on that issue.
The Chairman. Thank you. As you are no doubt aware, there
have been many parallels between this disaster in the Gulf of
Mexico and the disaster that struck in my congressional
district just a couple of weeks before the Deepwater Horizon
when we lost 29 brave coal miners in a coal mine tragedy.
There are those that say we should wait for the results of
ongoing investigations before doing anything, before moving
forward even though unsafe conditions are already well
documented and continue to exist after the tragedies have
occurred.
Do you believe that Congress should wait for the results of
the ongoing investigations before trying to move forward on the
type of legislation we are discussing today or is there a need
to move forward now?
Secretary Salazar. There is a need to move forward and to
move forward with urgency, Chairman Rahall, and, frankly, the
sooner that action is taken, the action that we are taking, the
action that we are asking the Congress to help us with, the
faster it is that we are going to be able to get beyond the
tragedy and start standing up again the OCS effort in a way
that can be done in a safe manner and protective of the
environment. So, in my view, waiting is not an option.
The Chairman. And let me ask you a further question about
this pending legislation. When devising safety standards in
legislation, do you think Congress should devise a more
performance-based system or do we need to be more prescriptive?
For instance, would it be a good idea for Congress to specify
in law how many blind-shear rams should be on a blowout
preventer?
Secretary Salazar. Let me say, Chairman Rahall, the
organization which we created, I created through secretarial
order that splits up the organization the way you described it
earlier, was in fact an organization that we developed based on
looking at Norway and looking at the United Kingdom as well.
After tragedies they have had there with respect to OCS
development, they came in and looked at how they were
regulating the oil and gas development in the oceans, and so
that was a manifestation of the organizational effort that we
have created through secretarial order.
The standards that are to be used are something that Mike
Bromwich will be developing and in part it will be the
implementation of the safety recommendations, which the
President directed be delivered to him on May 28, and those
recommendations have been delivered to him.
On the question of what is mandatory versus what is
performance-based, that is something that we will be working on
in the days and weeks ahead. You know, I have a personal view
on some of these issues but I have not yet had an opportunity
to work with Mike on some of these issues, so maybe it would be
a good idea for him to comment on that just briefly.
The Chairman. OK, but you see where I am going. I don't
want to freeze in place today by prescriptive standards that
forbids changes of the current technology is. We all know,
whether it is open-heart surgery procedures or cancer surgery,
you don't want to freeze in place what we have today knowing
advances that are still likely to be made in the future.
Secretary Salazar. Let me respond.
The Chairman. We don't want to freeze in law.
Secretary Salazar. No, I agree with you totally on that,
Chairman Rahall, and I think one of the things that is going to
happen as a result of the Deepwater Horizon, looking at all of
the different issues that occurred here in many days before the
explosion on April 20, is that there will be a lot to be
learned, and in fact today what is happening in the subsea at
5,000 feet is nothing short of the Apollo 12 project and trying
to bring that home.
And so technology that will be developed is something that
is very important, so I do think that there ought to be the
flexibility to the Bureau of Ocean Energy, Enforcement, and
Regulation to the Department of the Interior is to make sure
that we are able to develop those standards in a form that
takes advantage of the lessons learned.
The Chairman. Director Bromwich?
Mr. Bromwich. I agree with that. I think the risk of being
too prescriptive is that the prescription will be quickly
overtaken by new technology. So it may be appropriate to
establish certain baselines that are prescriptive, but I think,
as the Secretary has just said, it is critical to allow enough
flexibility and discretion for the agency to respond
appropriately to developments in technology over time.
The Chairman. My time has expired.
Mr. Hastings. Thank you, Thank you, Mr. Chairman. I am
going to yield my time to Mr. Cassidy, but Mr. Secretary,
before I do, on two other matters unrelated to this hearing,
the PIL payment issue and the monument issue. I will be sending
you a letter today and we would like to have a full and
complete response to those questions, so I just wanted to give
you a head's up, that letter is going out today on an issue
that we have had correspondence on in the past.
But with this I want to yield to my colleague from
Louisiana whose state obviously is impacted, so Mr. Cassidy.
Mr. Cassidy. Thank you, Mr. Hastings.
Mr. Secretary, in the Department of the Interior brief that
was filed in Judge Feldman's court in New Orleans, DOI denies
that there is irreparable economic harm because of this what we
call back home jobs moratorium. Now, given that 20,000 jobs
will be directly--20,000 will be laid off directly, and as many
as 100,000 will be indirectly affected, those are fairly
conservative estimates, is that not irreparable harm?
Secretary Salazar. Congressman Cassidy, I appreciate the
question and the economic issues at stake, and we recognize
that there are economic consequences to the moratorium that we
imposed. We believe that the moratorium was correct when we put
it into place, and we believe it continues to be correct
because the dynamic situation we see unfolding in the Gulf
today----
Mr. Cassidy. Just because I have limited time, is that not
irreparable harm, 20,000 jobs lost directly, maybe 100 more
indirectly, is that not irreparable harm?
Secretary Salazar. I would say the greater irreparable harm
would be if there was another blowout where there is not the
oil response capability to even deal with the current Deepwater
Horizon blowout, and the greater irreparable harm would be if
you have a devastation of the Gulf Coast and its communities in
a way that cannot be recovered, and so our program is----
Mr. Cassidy. Thank you.
Secretary Salazar.--comprehensive moving forward.
Mr. Cassidy. I just have limited time. I don't mean to be
rude, I am very sorry.
So your collection of engineers from the National Academy
of Engineering, they go through this, and they said that a
blanket moratorium is not the answer. It will not measurably
reduce risk further, and it will have a lasting impact on the
nation's economy which may be greater than the oil spill.
Now, here are eight experts gathered by the Department to
make a decision, and they feel as if--the experts, science, not
whatever--that this is not highlighted. I could go through
more. ``A blanket moratorium will have the indirect effect of
harming thousands of workers and further impact state and local
economies suffering from the spill. We would, in effect, be
punishing a large swath of people who were and are acting
responsibly, and are providing a product that the Nation
demands. A blanket moratorium does not address the specific
causes of this tragedy. We do not believe punishing the
innocent is the right thing to do. We encourage the Secretary
of the Interior to overcome emotion with logic, and to define
what he means,'' and they go on.
Now, these were the experts, these were the scientists, so
to speak, of petroleum engineering. What do you know
differently than what they recommend?
Secretary Salazar. First, Congressman Cassidy, their job
was to help us with the safety report to the President, and
they did, and I appreciate their help. I have met with the
subsequent to that report, and will continue to get their input
as well as the input from others on safety measures.
Second, the question of the moratorium was a policy call,
which I made, and there are two fundamental questions that need
to be answered. One, do we have the oil spill response
capability? Number two, can we ensure ourselves that we can
move forward without the possibility of creating this kind of
disaster again? How can we minimize that?
Mr. Cassidy. Now, I want to ask this because, again, in
your report here you state that ``Per the regulations, the
advanced permit to drill requires technically detailed
descriptions of well designed criteria, casing, cementing, and
blowout protector systems.'' This is page 6 of your brief.
These fellows, they are all men so I will call them
fellows, these fellows in their very first page say that, ``We
believe the blowout was caused by complex and highly improbable
chain of human errors, coupled with several equipment failures
and was preventable.''
Now, they are not saying that this is something which is a
black box which we peer into and cannot know an answer. Rather,
they are saying that it is defined, and they produced this
White Paper, which I am sure you are familiar with, which are
safety recommendations that can be implemented now, and indeed
per your brief filed with Judge Feldman you could look at those
plans they have for drilling right now, and decide whether or
not they meet the best practices outlined in this White Paper.
Again, why not do that and preserve these 20,000 jobs?
Secretary Salazar. OK. Let me answer the question in the
broadest sense because I think members of the Committee and,
Mr. Chairman, you and others have a great interest in where we
are on the issue of the moratorium.
We had three choices in front of us, OK. The first is
simply move forward and pretend that nothing had happened, and
that another incident like this could never happen again, and
there were some who were advocates of that, OK?
We had another option, which some were advocates of, and
that is that we bring to and end production in the oceans of
America. OK, so that was a stop button. The President and I
chose to move forward with a pause button because we believe
that we have to learn some lessons to make sure that this does
not happen again.
Now, as we move forward we will adjust accordingly based on
information that we develop, based on our ability to ensure
safety and environmental protection, and so that is part of the
process which we are undergoing at this point in time.
Mr. Cassidy. I yield back. You have been generous, Mr.
Chairman.
The Chairman. The gentleman's time has expired. The Chair
will recognize by the order in which they were here on the
majority side, Mr. Heinrich from New Mexico.
Mr. Heinrich. Thank you, Mr. Chairman, and welcome, Mr.
Secretary. I have a few questions, mostly regarding onshore
reform.
As you know, my home state, unfortunately, we are not
blessed with the ocean-front property as some of my colleagues
on this Committee, so I am going to focus largely on onshore.
What is the Department doing to address some of the
challenges that we have seen in the southern part of your home
state and the northern part of my home state the split estates
issues? Oftentimes where the minerals are Federally held the
surface is privately held, and there are a number of inherent
challenges and conflicts that tend to pop up between those
surface owners and the folks who lease the minerals underneath
those areas.
Secretary Salazar. Congressman Heinrich, on your specific
question on the split estates, I will have Director Bob Abbey
get back to your office on what it is we are doing within BLM
there. I will say this; that with respect to onshore issues and
how they are addressed in this legislation, they are important
issues for us, and we have moved forward on a reform effort
that has included a number of different things, elimination of
royalty-in-kind, which applies both to offshore as well as
onshore, moving forward with the categorical exclusions issues
within BLM and having the right kind of balance, in my view, in
terms of how we protect the environment and conservation
efforts, and at the same time allow development to occur.
My own sense on this legislation, because it does deal with
both BLM and with what was formerly MMS, is that we have a
crisis right now in our hands relating to the Outer Continental
Shelf, but there are some additional reform efforts related to
onshore oil and gas development that I would be very happy to
work with all of you and seeing how we might be able to make
improvements there as well.
Mr. Heinrich. Thank you. You may have answered this when
the Chairman started, but does the Administration have a
position on full funding of the LWCF?
Secretary Salazar. The Administration's position on the
Land and Water Conservation Fund is that they would like to see
full funding of the Land and Water Conservation Fund. So if you
look at the President's budget for this year and moving forward
in the years ahead, it does achieve what was the full funding
level at $900 million.
I would say that this is the time for all of us to really
re-examine what the commitment to conservation really is for
the United States. I think when Stuart Udall, from your home
state, Congressman Heinrich, and others sat down with Robert
Kennedy and others, and thought about the concept of the Land
and Water Conservation Fund their thoughts were that we took
our American resources from our earth and that we should return
something back to the earth with respect to some of the money
needed for conservation.
In my own personal view, and this is just my personal view,
that is a promise unfulfilled because, in fact, billions of
dollars that should have gone into the Land and Water
Conservation Fund have not gone there because they have been
diverted into other areas.
Mr. Heinrich. I appreciate that very much. I think it is an
incredibly important part of this legislation.
I know you issued a secretarial order last year regarding
renewables. What is the status of the Department's response to
that order, and specifically, how are the fast-track projects
moving along?
Secretary Salazar. I am proud to say that that is one of
the reform efforts which Director Abbey and my team have been
working on very hard, and Assistant Secretary Wilma Lewis. We
are looking still forward to getting a December 1 target date
of permitting approximately 5,000 megawatts of power, mostly in
solar and wind and geothermal.
I have been in places like--very remote places in Utah, for
example, where you have wind, solar, and geothermal projects
combined that are actually up and running in Milford, Utah. So
it is a very significant part of our new energy portfolio, and
it is something that the President has prioritized. It is
something we worked with you and the Congress to make it
happen, and I do believe it is going to happen.
Mr. Heinrich. Thank you. I yield back, Mr. Chairman.
The Chairman. The gentleman from Colorado, Mr. Lamborn.
Mr. Lamborn. Thank you, Mr. Chairman.
Mr. Secretary, everyone here I believe and hope agrees that
our priorities need to be to stop the leak, clean up the oil,
address the needs of the Gulf states communities, and hold BP
accountable. Now you have stated in the past that under your
watch the Department will take very seriously the importance of
science and peer-reviewed documents submitted by experts.
According to recent press reports and releases from the
Department after the recent offshore safety report was peer
reviewed, it was then edited by political operatives at either
the Department or the White House to assert against the
recommendations of the expert report signers that a six-month
OCS moratorium was appropriate. The experts then came out and
denounced this manipulation.
Two weeks ago before the Energy and Minerals Subcommittee I
asked the acting Inspector General if she would open an
investigation into how these changes were made, who made these
changes, and why those changes were misrepresented to the
public as the work of the engineering professionals that the
Department had contracted for the report. At the time she
stated that while she wasn't prepared to immediately declare
that they would open an investigation, she could do so in the
future.
In order to ensure that she has the information she needs
to make a comprehensive investigation, are you willing to
cooperate with the Inspector General's investigation into the
political manipulations of this report?
Secretary Salazar. Congressman Lamborn, first, there are no
political manipulations. My letter to the President that I
personally authored is very clear in its statement. It
transmits the 30-day report to the President, and it separates
my recommendation to the President, which is a policy matter
relative to the moratorium. The fact is that the role of the
engineers which I asked the National Academy of Sciences and
the National Academy of Engineering, they were part of a peer-
review process with respect to the safety issues, and I
appreciate the work that they did very much. But at the end of
the day the question of whether or not we move forward with
drilling activity in the Outer Continental Shelf ultimately is
the responsibility and duty under the law of the Secretary of
the Interior. It is not the responsibility of the engineers or
anyone else. And so that was my decision and I take full
responsibility for that decision.
Mr. Lamborn. Do you think it is appropriate to apologize to
the American people for the wrongful interpretation that was
put on the report?
Secretary Salazar. I don't think there is an apology that
is necessary, Congressman Lamborn. The fact of the matter is I
think that what this crisis should tell you, you being a Member
of Congress from my home state, Doug, is that we ought not to
let partisan politics or ideology essentially guide the issue
which we face in America here today. We are in the midst of a
dynamic crisis. It is an epidemic crisis.
Yes, like 9/11, yes, like other crises we have faced, but
this continues. It is not just a one-day thing to hit us. We
are in day 71. We are going to be in it for several more
months, and this is the time for the United States to come
together and say we have a problem and we are going to fix the
problem, and I will tell you, Congressman Lamborn, as Secretary
of the Interior, I am absolutely resolute and confident that
the problem will be fixed, and that this Gulf oil spill will
serve as a catalyst for safer and more environmentally
protective production of oil and gas in the Outer Continental
Shelf; that it will serve as a catalyst, sir, for moving
forward with a Gulf Coast restoration plan of this landscape of
national significance, and that this Gulf spill will also serve
as a catalyst for a new conservation agenda, and to help us
move into the new energy frontier.
So, I think if we as a country use the Gulf oil spill, this
crisis, to really deal with these monumental issues of our time
this crisis will be looked back 20 years from now in a very
positive way by the American people.
Mr. Lamborn. Mr. Secretary, I agree with you on what our
goals and intentions are and need to be, and I agree that
partisanship should not be a part of that. I am troubled that
the experts had to come out and denounce the statement that was
made that they had called for a moratorium when they did no
such thing. In fact, they said that it presents other competing
safety problems by having just a blanket moratorium instead of
a nuanced focus approach. I am just troubled that they had to
come out and denounce that interpretation.
Secretary Salazar. Yes, they have their points of view and
I appreciate and respect their points of view, and I appreciate
the points of view of Members of Congress and other groups who
have communicated with us. I have met with the engineers,
including other engineers who are involved in that report, and
I have had additional conversations with them about their point
of view on how we move forward safely.
You know, many conversations have been held with people
about whether or not there is a part of OCS oil and gas
development that can be moved forward with appropriate
demarcations. May Day demarcations with respect to shallow
water production, and we are moving forward with that. There
may be some other demarcations that are appropriate as well,
but we are going to be thoughtful and we are going to do the
right thing, and I am not going to be pushed into doing
anything prematurely relative to additional development in the
OCS.
Mr. Lamborn. Thank you.
The Chairman. We have time for one more question before
breaking for votes. The gentleman from Oklahoma, Mr. Boren is
next, and I will leave it up to him to decide whether he would
like to not yield his time but give way to the former Chairman
of this Committee, Mr. Miller of California, to ask questions
ahead of him.
Mr. Boren. Mr. Chairman, I was number 27 the last time that
the Secretary was here, but out of deference to my senior
colleague, Mr. Miller, I will yield all of my time to him.
Mr. Gallegly. Mr. Chairman, parliamentary inquiry.
The Chairman. The gentleman from the State of California.
Mr. Gallegly. Mr. Chairman, was that a unanimous consent
question?
[Laughter.]
Mr. Miller. I thank the gentleman. Welcome, Mr. Secretary,
and Director Bromwich to the Committee.
My question really is at what point do--how do we decide
who is going to get to play? Assuming that at some point there
will be a resumption of oil drilling on the Outer Continental
Shelf, that there are leases that have been let and they will
be exploited. What is the criteria for companies to now drill
upon the American Outer Continental Shelf?
Obviously, I have a very serious, longstanding concern with
British Petroleum. In my other committee, in the Education and
Labor Committee, we have chronicled over many years, as has
OSHA, dangerous, lethal behavior by them repeated time and
again in their refineries, on the pipelines and elsewhere under
their jurisdiction, and now we see many of the warnings that we
received over the last decade by independent commissions, from
former Secretary of State James Baker's independent commission
to the pipeline safety, to Booz Allen, talking about cost
cutting, about dangerous decisions that were ignored all the
way to the boardroom time and again.
I guess the question I have is I want to know are they
going to be allowed to go back out onto what is a very
dangerous place as we now see for the environment, a critical
area to explore for oil, are they going to be allowed to go out
there or into the Arctic? I am sure they have the technical
capabilities to do it. That is not what I am concerned about.
What I am concerned about is the ethics of this company and
how they have performed in the past to measure their
performance in the future. I think they should be debarred from
participating in the Outer Continental Shelf for five or seven
years. It will have little or no impact on the supply of fossil
fuels to this country. This is one of the most competitive
places, one of the prizes to drill in the world, and with
possibly some of the greatest returns to them. But at some
point the American people are entitled to a standard. They have
killed their workers before. They have refused to comply. They
have paid some of the largest fines in history. I see that you
just assessed them an additional fine for false, inaccurate,
and misleading reports, which I assume is they misled the
American public what they owed them on those lands, and I just
want to know how the Department is going to handle this or how
you think the Congress should handle this.
Sort of like a poker game, you have to have jacks or better
to open. You ought to bring a safety record. You ought to bring
a conscientious corporate policy to the Outer Continental Shelf
at a minimum. The question is whether or not the continental
shelf will be available or not in the future is a different
decision, but which parties are going to get to play and what
are the standards that are going to be imposed?
Secretary Salazar. Congressman Miller, first let me say
that the standards and enforcement are absolutely necessary for
moving forward with OCS development, and that is something that
I have asked Mike Bromwich to work on with me and with others,
and obviously the 30-day report to the President on safety will
be part of that.
Second, the question of past performance of companies, it
is something that I will work with Mike Bromwich to figure out
what it is that makes the most sense here, and I would ask Mike
perhaps to comment on that particular point, and how you take
into account the past performance of companies relative to
whatever bar you might want to put into place. So Director
Bromwich.
Mr. Bromwich. Yes. There are new standards that have been
created industrywide that have been issued in the last several
weeks, one on safety and one on the environment. So they are
already across the board new requirements and new enhancements.
But you raise a very important question, and that is, with
a record of bad performance, deadly performance, should you
evaluate applications differently. It is something that I am
eight days into the job that I don't have a firm conclusion on
yet, but certainly it should be considered a relevant factor.
It is also going to be a relevant factor as to what kind of
enforcement will be brought with respect to violations in the
future. It is perfectly appropriate, in my view, that if you
have repeat offenders, if you have recidivists that should
increase the enforcement penalties that are imposed.
Mr. Miller. Well, I appreciate you saying that, and I hope
that you will continue that, and it is up to the Congress to
make that clear. But in the coal mining industry, in Mr.
Rahall's district, we have--under MSHA we have patterns of
violations, and we see companies with horrible records that
have been able to evade the law and continue to put miners in
dangerous and deadly situation.
I say this about BP because when I look at how they run
complex refineries, and the lives that they have put in
jeopardy, and the lives that have been taken, this is a complex
workplace, and I am a little concerned that on the questions of
process management standards that you are now starting to put
into effect, or you have out for comment, that those were
created by the American Petroleum Institute and no discussion
with OSHA has taken place prior to very recently about those
standards, and OSHA has 40 years of experience working with
these industries on those issues, and I would hope that those
would not go to final until there is an opportunity to walk
this across that experience on how those processes, they may be
the most important indicator of preventing serious explosive
events taking place in the chemical and oil industry.
Mr. Bromwich. Mr. Miller, on that point, in connection with
the joint investigation that is being conducted by my agency
and by the Coast Guard, the expertise of OSHA is specifically
being sought, so we are aware of the relevance of their work to
the work that we are doing now, and I think that that--I don't
know whether that is a new recognition or not, but it is a
recognition that we now have and plan to pursue in the future.
Mr. Miller. Well, Mr. Rahall and I both sent you a letter
asking you to hold for a moment before those regulations that
were developed by the Petroleum Institute, which may have very
many good suggestions, but that should not be the sole
determinant of what is going forward.
Thank you. I yield my time back to Mr. Boren.
The Chairman. No, Mr. Boren still has his----
[Laughter.]
The Chairman. Mr. Boren still has his full time when we
come back after this series of votes on the Floor.
The Committee is in recess until the votes are over.
[Recess.]
The Chairman. The Committee on Natural Resources will
resume its sitting, and on the Minority side the next gentleman
in order of recognition is Mr. Wittman.
Mr. Wittman. Thank you, Mr. Chairman. I appreciate the
opportunity. Secretary Salazar, thank you so much for your
efforts.
I did want to talk a little bit about the current process
of lease sales. I know that we have halted, or your office has
halted, Virginia's proposed OCS lease, which is going to
further delay, I think, some efforts there as far as looking at
comprehensive energy, and I appreciate the pause. I know we
have to stop and figure out what went wrong in the Gulf and
make sure that we are putting those practices in place as far
as future efforts for offshore energy development.
I do believe strongly, though, that we need an all-of-the-
above energy policy. We need to make sure we are developing all
of our sources of energy, making sure that the marketplace
allows those to be lifted up as to which ones are the most
efficient, and I support oil and gas development as part of
that whole mix. I also support wind development.
I know the Administration had high hopes of developing
offshore wind projects, and I appreciate your efforts to
coordinate the Mid-Atlantic states and study the issue.
However, 17 months into this Administration, MMS has only
signed one commercial wind lease, held no lease sales and there
don't seem to be any schedule, and on top of that the
permitting process looks like it will take years.
I know as we have talked to folks it is an extended process
with a variety of EIS's involved, and I know the agency has
said, well, we are going to take that time because we are not
exactly sure how to go about this, we haven't done these
before. So I am concerned that it is going to take a
significant period of time before any turbines can be built,
and Virginia, as you know, has significant wind resources, has
significant interests there. We have a number of consortiums
that are very interested in offshore wind development.
My question is this, if the Administration is going to slow
oil and gas development, what can we expect to see with
offshore wind? Are we also going to go through the same slow
methodical process with that, especially when we are looking at
making sure we stand up all these energy sources?
Secretary Salazar. Thank you, Congressman, and thank you to
you for your service on the Migratory Bird Commission and your
great work there with Congressman Dingell on the conservation
agenda for the country.
With respect to the question on the offshore wind in the
Atlantic, let me just say that we are moving forward as quickly
as we possibly can, and I do have a SWAT team that I have
assembled within Interior to take a look at how we can expedite
the effort. We have been working with all the states and opened
up an office now in your State, in Virginia, which will be the
Atlantic Wind Renewable Energy Office, and so this is a high
priority, and we will make sure that on this one we will not
fall behind the rest of the world in developing offshore wind.
Mr. Wittman. I think that is critical with our energy
portfolio. Let me ask a little bit more, too, about the
offshore oil and gas development. I know right now lease 220
site, the lease process there has been canceled. I am hopeful
that as we learn the processes and the problems that have
occurred in the development in the Gulf that we apply those,
especially there in Virginia, because I know there is interest
in making sure that that lease process goes forward.
Can you give us some idea about where you see the future
for the oil and gas lease off of Virginia as far as timewise? I
know, as I said, right now it is canceled. Do you see that
process being picked back up after we go through the analysis
and learning process here in the Gulf?
Secretary Salazar. Congressman, first, let me say that
President Obama and I have been clear that we see an energy
portfolio that, yes, very much pushes the new energy frontier
for America, but at the same time we recognize that oil and gas
is a part of our energy portfolio to date. And so we will see
efforts to continue to develop oil and gas in the Outer
Continental Shelf, and we will learn the lessons from the
Deepwater Horizon to make sure that as it is developed it can
be done in a safe way and a way that protects the environment.
With respect to Virginia, I would say this. Lease Sale 220
itself still had to undergo additional analysis, including
additional environmental analysis, and there are important
conflicts that you, Congressman Wittman, and the Governor and
others need to be aware of relative to the Department of
Defense and issues relating to that, that would also come out
in that process. So we look forward to working with you, and
the congressional delegation of Virginia and others as we move
forward.
Mr. Wittman. Very good, and one last question. In your
testimony you said that we were going to do everything in our
power to make our effective communities whole. As you know, in
the Gulf, obviously, the seafood industry has been affected as
well as the offshore oil and gas industry. As you know, that
effect transcends the borders of the Gulf states. It also
affects places like Virginia, Virginia seafood processors.
Sixty-five percent of the oysters processed in Virginia
come from the Gulf, so that effect extends beyond the Gulf
states' boundaries, and I just wanted to make sure that you are
doing everything through your agencies to make sure that we are
focusing on just not making folks whole in the communities in
the Gulf, but also how it affects seafood communities in states
like Virginia, and I know other East Coast states are also
closely tied to the Gulf seafood industry, so I just wanted to
make sure you were aware of that, and that we have assurances
that those things are going to be kept in mind as far as making
sure that we are making our affected communities whole.
Secretary Salazar. Thank you, Congressman Wittman. The
President and our team put together essentially a $20 billion
escrow account, which is a place where claims can be filed
through an independent administrator. There is an effort
underway to make sure that legitimate claims are being paid,
and so it will all be part of that process where claims that
are legitimate claims will be considered.
The Chairman. The Chair recognizes the gentleman from
Oklahoma, and promises him the Chair will not take out of his
time the minute and 43 seconds that Chairman Miller went
overtime.
Mr. Boren. Thank you, Mr. Chairman. Thank you so much for
holding this hearing and for allowing me to ask a question. I
also want to thank our panelists for being here today, and also
just want to say a special thank you. I know that you are all
living with this spill every day. I can't imagine the amount of
stress you are under; you know, all the hours that you are
putting into this. You know, we may disagree sometimes on
different points of policy, but I know that your heart is in
the right place and you are working really hard to try and get
this thing cleaned up as soon as possible and to get this leak
stopped. So I do want to say thank you.
To the Secretary, I also want to say thank you. Sometimes
we disagreed on energy policy at different points along the
way, but in Indian country I think we have worked really well
together, particularly helping out my district in Oklahoma. I
think you all are doing a tremendous job on the MMS reports, to
the ethics reforms, some of the things that you all are doing.
Some of the concerns I have, particularly in relation to
the offshore, we do have some Oklahoma companies that have
investments in the offshore. You know, they are not BP, they
are not Exxon. I mean, these are smaller companies that have
some investments, and the moratorium is affecting them.
As an example, Samson, which is based in Tulsa, Oklahoma,
because of the moratorium it is costing them hundreds of
thousands of dollars a day, and I have visited with some of the
executives. Some of them feel actually that it is unsafe to
have these rigs and everything out there without a clear
program and just kind of sitting out there for six months.
So as you make your determination, as you take some of
these recommendations like Mr. Cassidy pointed out, I hope you
will also take into account the loss of jobs that is going on.
Now to the onshore I have some information from IPAMS. This
is interesting. They sent us this paper. It says, ``A natural
gas and oil lease is a definite maybe. Maybe the lease will be
issued within a reasonable time period after the sale. Maybe
you will get through all the environmental analyses and
regulatory hurtles. Maybe you will get permission to drill.
Maybe your project won't be held up by legal challenges from
obstructionist groups, and maybe you will find oil and gas, but
definitely you will have to pay potentially millions of
dollars. The natural gas and oil industry pays billions of
dollars into the U.S. Treasury to obtain leases, $10 billion in
2008. Each lease is an at-risk investment with no guarantee
that energy resources will be found or that it will return any
revenue to the leaseholders.''
BLM right now is currently holding about $100 million worth
of unissued and suspended leases in Utah, Wyoming and Montana,
and Colorado. That is $100 million of the company's capital
that is being held by the Federal Government in a nonproductive
capacity. And the draft language of the bill, of the CLEAR Act,
as an example, and I would like you to touch on this, there is
a provision that eliminates non-competitive leasing, and so let
us say you have a lease and only one company bids on the
project, and you know, this is in an area where you are not
having lots of companies bid on it because the geology is not
proved up, because there may not--this may be what is called a
rank wildcat in oil country, but some company decides, hey, we
are going to put it on the line. We are going to drill up this
lease and pay for it, and here are some of the wildcat
developments that have happened recently: The Pinedale Andy
Cline in Wyoming; the Bock & Shale Play in North Dakota, and
Marcellus Shale in Appalachia. These are huge finds that would
not have happened without some of this, you know, wildcat
mentality, and I think under the draft of 3534 I am worried
about this non-competitive lease piece.
So as my time expires anything that you can touch on on
the--you know, hopefully in the six months on the offshore
maybe something can be worked out in that timeframe to start it
back up, and the second, the onshore, like the non-competitive
leasing and making it harder for these companies to prove up
their assets, I would like your thoughts on that.
Again, thank you for your efforts, and I do appreciate John
being in my class. He gets gold stars for being your brother.
Secretary Salazar. Thank you very much, Congressman Boren.
I appreciate the comments on the other work that we do because
this Department is a huge department, and we continue to work
hard on the issues relating to First Americans, including in
your state Cobell and so many other issues that are very
important to the Department and your country, and so I am proud
of the team that we that we can use to work on that broad
agenda.
With respect to the two questions that you ended your
comments with, let me take the six-month moratorium first. We
are working on that to see whether there are some adjustments
and some additional demarcations that might be able to be made.
We will have more on that in the days ahead, and we are
cognizant of all the important factors here, including
protection of workers, and the safety issues, protection of the
environment, as well as the economic issues relating to the
moratorium, so there are all very much on our minds.
Third, with respect to the issue concerning the CLEAR Act,
and the elimination of non-competitive leases, let me say there
has been significant reforms that we have undertaken within the
Bureau of Land Management, and in fact part of the reason that
those reforms are necessary are to be responsive to that IPAMS
sense that you always get a definite maybe. Frankly, in the
last administration, leases were handed out like pieces of
paper without doing the kind of proactive planning that is
necessary.
Director Bob Abbey and I have taken a different approach,
and that is that when leases are issued we want to have for
certainty that those leases are in fact going to be developed.
Now if you get a lease, more than likely it is going to be
subject to a protest because of the way that the system has
been set up over time. We are changing those things and it may
be appropriately, Congressman Boren, at anytime for you to come
and have a conversation with Director Abbey and what we are
doing in terms of those reforms at the BLM.
And perhaps, Mr. Chairman, at some point, I know you have a
very busy schedule here, but we would welcome the opportunity
to provide information the BLM and what it is doing on the
onshore relative to this particular issue and others.
The Chairman. Yes. Most definitely, Mr. Secretary. Thank
you.
Mr. Boren. Thank you, Mr. Chairman.
The Chairman. The gentleman's time has expired. The Chair
will advise all Members that the Secretary does have to leave
at 12:10. Dr. Bromwich will remain with us but, as always the
practice, Members can submit questions for the record, and I am
sure the Secretary or Direct Bromwich will get back to the
respective Members.
Secretary Salazar. Thank you, Mr. Chairman.
The Chairman. The Chair recognizes the gentleman from
Georgia, Dr. Broun.
Dr. Broun. Thank you, Mr. Chairman, Mr. Secretary.
I want to go back to a question very briefly that Mr.
Lamborn was giving you, and I don't think we got an answer.
Just yes or no, will you cooperate with IG on this
investigation about the disparity between your report and what
the engineers said in theirs?
Secretary Salazar. Congressman Broun, we have nothing to
hide and I am willing to cooperate with anybody. I am not aware
of----
Dr. Broun. Is that a yes?
Secretary Salazar. The answer is yes, we will--cooperate
with anybody.
Dr. Broun. Thank you so much. I appreciate it.
Secretary Salazar.--cooperate with anybody.
Dr. Broun. Just in the sake of time I apologize for cutting
you off.
I couldn't agree more with President Clinton's assessment
last week that our priorities must be to fix the leak, keep the
oil away from the shore, minimize the damage of the oil that
reaches the shore, and find out who did what wrong and hold
them accountable. But we do need to do the first three first,
and let us never forget that the victims who must be made whole
from this tragedy, and we cannot legislate, in my opinion,
until we accomplish these priorities and discover what went
wrong in the first place.
Now is one time when this Administration might want to put
politics aside and let a serious crisis actually go to waste.
I would like to bring to the attention of this Committee
two letters that I sent to the Administration last week, Mr.
Chairman, in my capacity as Ranking Member of the House
Committee on Science and Technology, Subcommittee on
Investigations and Oversight, outlining a troubling pattern of
politically motivated actions from this Administration in
dealing with the Gulf oil spill and demanding scientific
integrity moving forward. Mr. Chairman, I would like to as
unanimous consent that the two letters I have sent to the
President and to Secretary Salazar be entered into the record.
The Chairman. Without objection, so ordered.
[The letter to The President submitted for the record by
The Honorable Paul C. Broun, M.D., Ranking Member, Subcommittee
on Investigations and Oversight, follows:]
U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON SCIENCE AND TECHNOLOGY
SUITE 2321 RAYBURN HOUSE OFFICE BUILDING
WASHINGTON. DC 20515-6301
(202) 225-6375
http://science.house.gov
June 24, 2010
The President
The White House
Washington, D.C. 20500
Dear Mr. President:
The national tragedy unfolding in the Gulf of Mexico is impacting
the lives of millions in the Gulf Region and has attracted the
attention of the entire nation. In the months following the Deepwater
Horizon accident, BP, as well as federal, state, and local authorities,
have sought to halt the flow of the ruptured wellhead, contain leaking
oil and natural gas, prevent oil from reaching nearby shores and
wetlands, and mitigate the effects of the spill on the Gulfs ecosystem.
These are clearly daunting tasks. Despite the complexity involved, it
is the responsibility of BP, along with federal, state, and local
governments to meet these challenges. In order to surmount this hurdle,
all parties need to know they are receiving the best scientific and
technical advice possible--guidance free from political meddling or
special interest motivations. Because I feel so strongly that the
investigation, amelioration, and remediation of the Deepwater Horizon
incident should be guided by unfettered scientific and technical
advice, I am deeply concerned with a number of instances that have come
to light in the wake of this accident.
The Science and Technology Committee is no stranger to Commissions
tasked with investigating complex technical incidents. That is why I
was confused when your Administration announced the membership of the
National Commission on the BP Deepwater Horizon Oil Spill and Offshore
Drilling. \1\ Previous Commissions established to investigate accidents
such as the Challenger and Columbia Shuttle accidents all benefited
from vast and broad technical expertise. \2\ Unfortunately, I believe
the Commission, and ultimately the American people, would benefit from
representation by more technical and scientific members who have not
already come to conclusions before being presented with all the facts.
\3\ Press reports have already cited comments from Commission members
detailing their conclusions and hinting at what their findings and
conclusions will be--before ever being presented with details and facts
relating to the incident. \4\
---------------------------------------------------------------------------
\1\ White House Press Release, Subject: President Obama Announces
Members of the BP Deepwater Horizon Oil Spill and Offshore Drilling
Commission, June 14, 2010.
\2\ ``Investigation of the Challenger Accident'', Hearing before
the Committee on Science and Technology, House of Representatives, June
10, 1986 ``Space Shuttle Columbia'', Joint Hearing before the Committee
on Science and Technology, U.S. House of Representatives, and Committee
on Commerce, Science and Transportation, U.S. Senate, February 12,
2003.
\3\ John Broder, ``Panel Unlikely to End Deepwater Drilling Ban
Early,'' New York Times, June 21, 2010.
\4\ Seth Borenstein, ``Obama Spill Panel Big on Policy, Not
Engineering,'' Associated Press, June 20, 2010.
---------------------------------------------------------------------------
The conclusions, findings, and recommendations presented by
previous commissions were readily accepted and routinely implemented
because Congress and the American people trusted that the work
conducted by those Commissions was unbiased. I fear that as currently
constructed, the Commission will serve little purpose other than
rubberstamping your Administration's predetermined policy goals without
fully investigating the root causes of the incident. Based on the
composition of the Commission/it appears that the real task they are
being asked to undertake is to justify the offshore drilling
moratorium.
Therefore, I recommend that, to ensure its complete independence,
the Commission should report directly to you and to the Congress.
Additionally, 1 would suggest that the membership of the Commission be
expanded to include more scientific and technical members in a manner
similar to that of the Challenger and Columbia Commissions, and that
you solicit suggestions for new members from key Members of Congress.
I look forward to working with you to ensure that the American
public will view the work of the Commission as wholly independent and
unbiased.
Sincerely,
REP. PAUL BROUN, M.D.
Ranking Member
Subcommittee on Investigations And Oversight
cc: REP. BRAD MILLER
Chairman
Subcommittee on Investigations & Oversight
______
[The letter to Secretary of the Interior Ken Salazar
submitted for the record by The Honorable Paul C. Broun, M.D.,
Ranking Member, Subcommittee on Investigations and Oversight,
follows:]
U.S. HOUSE OF REPRESENTATIVES
COMMITTEE ON SCIENCE AND TECHNOLOGY
SUITE 2321 RAYBURN HOUSE OFFICE BUILDING
WASHINGTON. DC 20515-6301
(202) 225-6375
http://science.house.gov
June 24, 2010
The Honorable Kenneth Salazar
Secretary
Department of the Interior
1849 C Street NW
Washington, DC 20240
Dear Secretary Salazar:
The national tragedy unfolding in the Gulf of Mexico is impacting
the lives of millions in the Gulf Region and has attracted the
attention of the entire nation. In the months following the Deepwater
Horizon accident, BP, as well as federal, state, and local authorities,
have sought to halt the flow of the ruptured wellhead, contain leaking
oil and natural gas, prevent oil from reaching nearby shores and
wetlands, and mitigate the effects of the spill on the Gulf's
ecosystem. These are clearly daunting tasks. Despite the ' complexity
involved, it is the responsibility of BP, along with federal, state,
and local governments to meet these challenges. In order to surmount
this hurdle, all parties need to know they are receiving the best
scientific and technical advice possible--guidance free from political
meddling or special interest motivations. Because I feel so strongly
that the investigation, amelioration, and remediation of the Deepwater
Horizon incident should be guided by unfettered scientific and
technical advice, I am deeply concerned with a number of instances that
have come to light in the wake of this accident.
On May 27,2010, you issued a report titled ``Increased Safety
Measures for Energy Development on the Outer Continental Shelf.'' The
report stated that, ``The recommendations contained in this report have
been peer-reviewed by seven experts identified by the National Academy
of Engineering.'' The Academy selected these individuals because of
their extensive petroleum industry expertise and independent
perspective. Unfortunately, the expert opinions of those individuals
appear to have been manipulated to advance the Administration's policy
goal of preventing domestic oil production. In a letter to Governor
Jindal, and Senators Landrieu and Vitter, six of the eight peer-
reviewers chastised the Administration's manipulation of their expert
advice.
! In their letter they stated:
``the scope of the moratorium on drilling which is in the
executive summary differs in important ways from the
recommendation in the draft which we reviewed. We believe the
report does not justify the moratorium as written and that the
moratorium as changed will not contribute measurably to
increased safety and will have immediate and long term economic
effects. Indeed an argument can be made that the changes made
in the wording are counterproductive to long term safety.
The Secretary should be free to recommend whatever he thinks is
correct, but he should not be free to use our names to justify
his political decisions.\1\
On March 9, 2009 the President issued an executive memorandum on
scientific integrity tasking the Director of the Office of Science and
Technology Policy (OSTP) to develop recommendations within 120 days to
guarantee scientific integrity throughout the executive branch.\2\ I've
sought updates on the status of these recommendations for almost a year
now.\3\ They are still outstanding. Despite this delay, his memorandum
did lay out the following principle:
``Political officials should not suppress or alter scientific
or technological findings and conclusions...
(c) When scientific or technological information is considered
in policy decisions, the information should be subject to well-
established scientific processes, including peer review where
appropriate, and each agency should appropriately and
accurately reflect that information in complying with and
applying relevant statutory standards;''\4\
In March of 2006, the previous Administration issued guidance to
agencies to encourage
``the free exchange of ideas, data and information as part of
scientific and technical inquiry. Scientific and technical
information from or about Agency programs and projects will be
accurate and unfiltered.'' (emphasis added)\5\
In August of 2007, the previous Administration issued a memorandum
to agencies that said,
``[a]gencies are expected to conduct programs in accordance
with the highest standards of ethical and scientific
integrity.''6
We expect our government to provide both Congress and the public
the full results of their work without the filter that those with
opposing views might like to impose. Otherwise, we cannot have a full
and free scientific debate. While the Department of Interior report may
not have directly altered the scientific and technical advice of those
peer-reviewers, by implying that they agreed with the findings
contained in the report, it appears that the Department of Interior
clearly violated not only the spirit, but also the letter of several of
the principles previously noted.
The Department of Interior's deceptive misrepresentation of peer-
review in order to justify an offshore drilling moratorium presents a
troublesome view of how this Administration views the role of science
and technology relating to the Deepwater Horizon oil spill and the
continuing response. As U.S. District Judge Martin Feldman recently
wrote.
``Much to the government's discomfort and the Court's
uneasiness, the Summary [of the Department of the Interior
Report] also states that The recommendations contained in the
report have been peer reviewed by seven experts identified by
the National Academy of Engineering.' As the plaintiffs, and
the experts themselves:, pointedly observe, this statement was
misleading. The experts charge it was a 'misrepresentation.' It
was factually incorrect.''\7\
Therefore, by this letter, I request that the Department of
Interior provide to the Committee all records, as defined in the
attachment, relating to the Department of the Interior's report titled
``Increased Safety Measures for Energy Development on the Outer
Continental Shelf.'' This should include all drafts of the report and
records of changes that were made. These documents should be delivered
to room 394 Ford House Office Building by 5 p.m. on Friday July 2,2010.
If you have any questions or need additional information, please
contact Mr. Tom Hammond, Investigations and Oversight Subcommittee
Minority Staff, at (202) 225-6371.
Sincerely,
REP. PAUL BROUN, M.D.
Ranking Member
Subcommittee on Investigations And Oversight
cc: REP. BRAD MILLER, Chairman, Subcommittee on Investigations &
Oversight
cc: THE HONORABLE JOHN HOLDREN, Director, Office of Science and
Technology Policy, Executive Office of the President
enc
\1\ Letter from Kenneth E. Arnold, PE, NAE to Gov. Jindal, Senator
Landrieu, and Senator Vitter, undated (attached).
\2\ White House Memorandum, Subject: Scientific Integrity, March
9,2009.
\3\ Letter from Rep. Paul Broun to Director Holden, July 14,2010.
Letter from Rep. Paul Broun to Director Holden, October 2,2010.
Letter from Rep. Paul Broun to Director Holden, December
1,2010.
\4\White House Memorandum, Subject: Scientific Integrity, March 9,
2009.
\5\ NASA Policy on ``The Release of Information to News and Information
Media,'' pp. 1-2.
\6\ White House Memorandum, Subject: FY 2009 Administration Research
and Development Budget Priorities August 14,2007.
\7\ Hombeck Offshore Services, LLC Et Al. V. Kenneth Lee ``Ken''
Salazar Et Al., No. 10 Civ. 1663 (E.D.L.A. June 22, 2010).
ATTACHMENT
1. The term ``records'' is to be construed in the broadest sense
and shall mean any written or graphic material, however produced or
reproduced, of any kind or description, consisting of the original and
any non-identical copy (whether different from the original because of
notes made on or attached to such, copy or otherwise) and drafts and
both sides thereof, whether printed or recorded electronically or
magnetically or stored in any type of data bank, including, but not
limited to, the following: correspondence, memoranda, records,
summaries of personal conversations or interviews, minutes or records
of meetings or conferences, opinions or reports of consultants,
projections, statistical statements, drafts, contracts, agreements,
purchase orders, invoices, confirmations, telegraphs, telexes, agendas,
books, notes, pamphlets, periodicals, reports, studies, evaluations,
opinions, logs, diaries, desk calendars, appointment books, tape
recordings, video recordings, e-mails, voice mails, computer tapes, or
other computer stored matter, magnetic tapes, microfilm, microfiche,
punch cards, all. other records kept by electronic, photographic, or
mechanical means, charts, photographs, notebooks, drawings, plans,
inter-office communications, intra-office and intra-departmental
communications, transcripts, checks and canceled checks, bank
statements, ledgers, books, records or statements of accounts, and
papers and things similar to any of the foregoing, however denominated.
2. The terms ``relating,'' ``relate,'' or ``regarding'' as to any
given subject means anything that constitutes, contains, embodies,
identifies, deals with, or is in any manner whatsoever pertinent to
that subject, including but not limited to records concerning the
preparation of other records.
______
Fax to: Gov. Jindal: 225-342-7099
Senator Landrieu: 202-224-9735
Senator Vitter: 202-228-5061
From: Kenneth E. Arnold, PE, NAE
3031 Shadowdale
Houston Texas 77043
832-212-0160
cc. Dr. Robert Bea, Department of Civil and Environmental Engineering,
University of California at Berkeley
Dr. Benton Baugh, President, Radoil, Inc. Ford Brett, Managing
Director, Petroskills
Dr. Martin Chenevert, Senior Lecturer and Director of Drilling
Research Program, Department of Petroleum and Geophysical
Engineering, University of Texas
Dr. Hans Juvkam-Wold, Professor Emeritus, Petroleum
Engineering, Texas A&M University
Dr. E.G. (Skip) Ward, Associate Director, Offshore Technology
Research Center, Texas A&M University
Thomas E. Williams, The Environmentally Friendly Drilling
Project
A group of those named in the Secretary of Interior's Report,
``INCREASED SAFETY MEASURES FOR ENERGY DEVELOPMENT ON THE OUTER
CONTINENTAL SHELF'' dated May 27, 2010 are concerned that our names are
connected with the moratorium as proposed in the executive summary of
that report. There is an implication that we have somehow agreed to or
``peer reviewed'' the main recommendation of that report. This is not
the case.
As outlined in the attached document, we believe the report itself
is very well done and includes some important recommendations which we
support. However, the scope of the moratorium on drilling which is in
the executive summary differs in important ways from the recommendation
in the draft which we reviewed. We believe the report does not justify
the moratorium as written and that the moratorium as changed will not
contribute measurably to increased safety and will have immediate and
long term economic effects. Indeed an argument can be made that the
changes made in the wording are counterproductive to long term safety.
The Secretary should be free to recommend whatever he thinks is
correct, but he should not be free to use our names to justify his
political decisions.
The Primary Recommendation in the May 27, 2010 report, ``INCREASED
SAFETY MEASURES FOR ENERGY DEVELOPMENT ON THE OUTER CONTINENTAL SHELF''
Given by Secretary Salazar to The President Misrepresents our Position
The National Academy of Engineering recommended us as contributors
and reviewers of the recent Department of Interior ``30 Day Review'' of
the BP Oil Spill. We were chosen because of our extensive petroleum
industry expertise, and independent perspectives. The report states:
``The recommendations contained in this report have been peer-
reviewed by seven experts identified by the National Academy of
Engineering. Those experts, who volunteered their time and expertise,
are identified in Appendix 1. The Department also consulted with a wide
range of experts from government, academia and industry.''
The BP Macondo blow out was a tragedy for eleven families, and an
environmental disaster of worldwide scale. We believe the blowout was
caused by a complex and highly improbable chain of human errors coupled
with several equipment failures and was preventable. The petroleum
industry will learn from this; it can and will do better. We should not
be satisfied until there are no deaths and no environmental impacts
offshore--ever. However, we must understand that as with any human
endeavor there will always be risks.
We broadly agree with the detailed recommendations in the report
and compliment the Department of Interior for its efforts. However, we
do not agree with the six month blanket moratorium on floating
drilling. A moratorium was added after the final review and was never
agreed to by the contributors. The draft which we reviewed stated:
``Along with the specific recommendations outlined in the body of
the report, Secretary Salazar recommends a 6-month moratorium on
permits for new exploratory wells with a depth of 1,000 feet or
greater. This will allow time for implementation of the measures
outlined in this, report, and the consideration of information and
recommendations from the Presidential Commission as well as other
investigations into the accident.
``In addition, Secretary Salazar recommends a temporary pause in
all current drilling operations for a sufficient length of time to
perform additional blowout preventer function and pressure testing and
well barrier testing for the existing 33 permitted exploratory wells
currently operating in deepwater in the Gulf of Mexico. These immediate
testing requirements are described in Appendix 1.''
We agree that the report and the history it describes agrees with
this conclusion. Unfortunately after the review the conclusion was
modified to read:
``The Secretary also recommends temporarily halting certain
permitting and drilling activities. First, the Secretary recommends a
six-month moratorium on permits for new wells being drilled using,
floating rigs. The moratorium would allow for implementation of the
measures proposed in this report and for consideration of the findings
from ongoing investigations, including the bipartisan National
Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.
``The Secretary further recommends an immediate halt to drilling
operations on the 33 permitted wells, not including the relief wells
currently being drilled by BP, that are currently being drilled using
floating rigs in the Gulf of Mexico. Drilling operations should cease
as soon as safely practicable for a 6-month, period.''
We believe the moratorium as defined in the draft report addresses
the issues evident in this case. We understand the need to undertake
the limited moratorium and actions described in the draft report to
assure the public that something tangible is being done. A blanket
moratorium is not the answer. It will not measurably reduce risk
further and it will have a lasting impact on the nation's economy which
may be greater than that of the oil spill.
The report highlights the safety record of the industry in drilling
over 50,000 wells on the U.S. Outer Continental Shelf of which more
than 2000 were in over 1000 feet of water and 700 were in greater than
5000 feet of water. We have been using subsea blowout preventers since
the mid-1960s. The only other major pollution event from offshore
drilling was 41 years ago. This was from a shallow water platform in
Santa Barbara Channel drilled with a BOP on the surface of the
platform.
The safety of offshore workers is much better than that of the
average worker in the US, and the amount of oil spilled is
significantly less than that of commercial shipping or petroleum
tankers. The U.S. offshore industry is vital to our energy needs. It
provides 30% of our oil production, is the second largest source of
revenue to the U.S. Government ($6 Billion per year), and has a direct
employment of 150,000 individuals. The report outlines several steps
that can be taken immediately to further decrease risk as well as other
steps that should be studied to determine if they can be implemented in
a way that would decrease risk even more.
This tragedy had very specific causes. A blanket moratorium will
have the indirect effect of harming thousands of workers and further
impact state and local economies suffering from the spill. We would in
effect be punishing a large swath of people who were and are acting
responsibly and are providing a product the nation demands.
A blanket moratorium does not address the specific causes of this
tragedy. We do not believe punishing the innocent is the right thing to
do. We encourage the Secretary of the Interior to overcome emotion with
logic and to define what he means by a ``blanket moratorium'' in such a
way as to be consistent with the body of the report and the interests
of the nation.
The foregoing represents our views as individuals and does not
represent the views of the National Academy of Engineering or the
National Research Council or any of its committees.
Kenneth E. Arnold, PE, NAE
Dr. Robert Bea, Department of Civil and Environmental Engineering,
University of California at Berkeley
Dr. Benton Baugh, President, Radoil, Inc. Ford Brett, Managing
Director, Petroskills
Dr. Martin Chenevert, Senior Lecturer and Director of Drilling Research
Program, Department of Petroleum and Geophysical Engineering,
University of Texas
Dr. Hans Juvkam-Wold, Professor Emeritus, Petroleum Engineering, Texas
A&M University
Dr. E.G. (Skip).Ward, Associate Director, Offshore Technology Research
Center, Texas A&M University
Thomas E. Williams, the Environmentally Friendly Drilling Project
______
Dr. Broun. Thank you. In my letter to the President, I
asked that additional Members with broad technical expertise be
added to the newly created National Commission on the BP
Deepwater Horizon Oil Spill and Offshore Drilling. Currently
only two scientists or engineers sit on that commission. I also
requested that the commission report to Congress, not just to
the White House. Before pursuing legislative fixes, it might
make more sense to wait until this commission and other
investigations taking place finish their work.
In my second letter, which I sent to you, Mr. Secretary, I
discuss the Department of the Interior's recently produced
report titled ``Decreased Safety Measures for Energy
Development on Outer Continental Shelf.'' As you are aware, the
findings of this report were used to justify an offshore
drilling moratorium in the Gulf. However, shortly after the
report was released we discovered that the Administration had
manipulated the findings of six of the eight peer reviewers
from the National Academy of Engineering.
The misrepresentation of the peer reviewers'
recommendations, in order to justify an offshore drilling
moratorium, presents troublesome patterns of how this
Administration views the role of science and technology
relating to this disaster. This is not the first time that this
Administration's scientific integrity has been questioned.
In addition, it appears that these politically motivated
actions have become a bad habit with how the Administration has
dealt with the Gulf oil spill. The Administration's misdirected
focus during this crisis reeks of political opportunism.
Mr. Secretary, the letter I sent you outlines previously
defined principles of scientific integrity, and raise many of
the concerns I just mentioned. Can you please share with me the
methods used to produce this report?
Secretary Salazar. Congressman Broun, I would be happy to
respond to those questions, and let me say a few points first.
In terms of timing relative to legislative action and the
ongoing crisis on the Gulf Coast, we can walk and chew gum at
the same time. We can deal with containing the spill and
killing the swell and protecting the great assets of the Gulf
Coast, but we can also move forward with ideas like some of the
idea that Chairman Rahall and others have championed in this
Committee in terms of a reform agenda.
In September 19, I believe, of last year when I appeared
before this Committee, and one of the subjects that was dealt
with at that point in time was an organic act or what was then
known as the MMS. So these are issues that have been in the
hopper for a long time, and they are issues which I believe can
be dealt with and should be dealt with now.
I also believe that the sooner we deal with these issues in
terms of a legislative framework and providing the resources
that are needed to be able to do the enforcement and the
inspections required will allow us to get to what many of you
want to get to sooner, and that is to have an OCS program that
can move forward safely and protective of the environment.
Second, with respect to your statement on
misrepresentation, let me just say with all due respect,
Congressman Broun, you are wrong. There is nothing of the
nature as you speak. The letter, as I have testified in this
Committee, that I wrote to the President said that we were
submitting a set of safety recommendations. Those safety
recommendations are part of what has guided our efforts with
respect to the notice to lessees. It is beginning to move
forward with respect to a new safety regime in the Outer
Continental Shelf.
I also in that letter said I was recommending that we move
forward with a moratorium, and I believe the moratorium was
ripe then, I believe the moratorium is ripe today because we
need to learn the lessons, and right now--I don't want to
repeat what I have already said, but there are a number of
issues that need to be addressed at this point.
Dr. Broun. Mr. Secretary, I certainly hope you can walk and
chew gum at the same time, and I trust that you can. I
respectfully disagree with you on the moratorium, and from a
scientific basis.
I would also ask that a detailed response to my letter that
I have just mentioned be provided in writing in a timely manner
and include all the documents and drafts related to the report.
I would remind you that your Department and the Administration
must comply promptly with congressional requests from a Member
of Congress, especially one who sits on two committees with
jurisdiction over your Department.
And as far as your final comment, I think a lot of the
American people believe that the decisions made just reek of a
political agenda, and not a scientifically driven agenda.
The Chairman. The gentleman's time has expired.
Dr. Broun. I believe strongly that policy cannot be made by
science, but science can drive policy, and I hope that we can
have science integrity, and I look forward to your response,
Mr. Secretary. Thank you so much.
The Chairman. The gentleman's time has expired. The
gentleman from Massachusetts, Mr. Markey.
Mr. Markey. Thank you very much.
The Obama Administration has authorized 17,500 National
Guard troops to respond to this disaster in the four affected
states: Louisiana, Mississippi, Alabama and Florida. However,
it is only the Governor of a state that can actually deploy
these troops, and thus far only 1,675 are active. According to
news reports, the Governor of Louisiana has only deployed 1,053
troops out of 6,000 that has been authorized. Alabama has
deployed 432 of 3,000. Florida had deployed only 97 of 2,500,
and Mississippi has activated 58 troops out of 6,000.
Mr. Secretary, this is the worst environmental disaster in
our nation's history. There is a hurricane in the Gulf.
Shouldn't the Governors of these four states immediately deploy
all of the National Guard troops that have been authorized to
respond?
Secretary Salazar. Congressman Markey, the answer is yes as
they are needed, and Secretary Napolitano, Director Bromwich
and I were on the Gulf Coast probably within, we have been down
there 10 times there in Houston since it started, but we made a
call from the command center to Secretary Gates and to the
White House, and essentially gave the authorization to the
states to move forward with the Coast Guard within a few days
after this incident occurred.
So it is before me. Frankly, surprising that you do not
have the Governors of these states moving forward with the
deployment of these National Guard's troops, and we know at the
end of the day the cleanup responsibilities ultimately are
going to be paid for by BP.
Mr. Markey. I agree with you, Mr. Secretary. I think we
should really have an all hands on deck mentality, and not
using these National Guard troops at this time I think really
is a mistake.
Mr. Secretary, we are now confronted with a situation in
which hurricane season has arrived, and the well remains
uncapped. Mr. Secretary, not only does BP's oil spill response
plan for the Gulf of Mexico not adequately prepare for the
event of a hurricane if there was a spill, it does not contain
the word ``hurricane''. Mr. Secretary, I sent a letter to BP
today asking what preparations they had made for a hurricane in
the spill response area. It is clear that BP wasn't prepared
for this kind of a double whammy--a hurricane on top of an oil
spill.
We do know in the BP response plan that they are prepared
to evaluate walruses from the Gulf of Mexico even though no
walruses live there in the last three million years. At the
same time BP did not mention the word ``hurricane'' in their
response plan.
Do you believe, Mr. Secretary, that not just BP, but every
oil company has a responsibility to actually have as part of
their spill response capability, the ability to deal with a
hurricane?
Secretary Salazar. I do. The answer is yes.
Mr. Markey. And have you talked to them right now about the
level of preparation they have for a hurricane?
Secretary Salazar. We have been approached by all of the
major companies that have any significant ongoing activity in
the Gulf of Mexico with a request that the moratorium that we
have in place be lifted, and one of the questions that I asked
these companies, and they were all the executives of these
companies, was do you believe that there is a capability right
now to respond to another oil spill if one were to occur in the
Gulf of Mexico, and those are the kind of questions that need
to be asked and they need to be answered before there is any
lifting of the moratorium.
Mr. Markey. Well, I have introduced legislation to require
oil companies to have real safety response plans that don't
plan on protecting walruses in the Gulf, and don't plan on it
always being sunny, 75 degrees without a breeze going through
the Gulf because, unfortunately, we are seeing it right now as
this hurricane at the beginning of the season descends on the
Gulf. There could be catastrophic consequences as a hurricane
hits an oil spill.
Finally, Mr. Secretary, BP's CEO Tony Hayward has said that
BP did not have the tools in its tool kit to respond to this
type of disaster. What is worse, the CEO of Exxon, Chevron,
ConocoPhillips all said that their companies would not have
been able to respond any better.
Mr. Secretary, would you agree there needs to be a research
program to develop twenty-first century oil safety and spill
response technologies to ensure that if oil companies are going
to drill ultra deep, then the technologies are there to make it
ultra safe, and if an accident does occur that the technologies
can respond ultra fast to that spill?
Secretary Salazar. Congressman Markey, yes, I do believe
that and let me, if I may, just add a comment to that. That is,
in what really has become I consider to be an Apollo 13-type of
a project that has gone on for a very long time. One of the
things that is going on is essentially you have the most
significant laboratory of learning.
Yes, the consequences are dramatic and horrible from this
oil spill, but there is a lot to be learned from what has
happened with respect to the ongoing effort to containment what
has worked, what has failed, et cetera, and so as a collective
responsibility of Interior, of the Congress, of the industry,
we need to make sure that those lessons are being learned, and
then applied to the future and your focus on oil spill response
capability is indeed a very high priority.
Mr. Markey. Thank you, Mr. Secretary. Thank you, Mr.
Chairman.
The Chairman. The gentleman from Louisiana, Mr. Fleming.
Mr. Fleming. Thank you, Mr. Chairman, and thank you,
gentlemen, for coming today and answering our questions.
I want to get back to the moratorium. As my colleague Dr.
Cassidy calls it so eloquently a jobs moratorium, at least to
us in Louisiana. Just to quote something out of the report
from, or actually the response by Judge Feldman to the
moratorium request. It says,``The report makes no effort to
explicitly justify the moratorium,'' and I think that is really
the crux of this. It says it does not discuss any irreparable
harm, which is a true barrier that must be overcome in order to
put that in place, and yet, as I understand it, there are
attempts to put in place another moratorium and I want to ask,
Mr. Secretary, have you read or are you familiar with the
letter from Governor Jindal dated June 29, regarding his
response to a request by your Department to ask for comments on
the new moratorium?
Secretary Salazar. I have seen the letter from Governor
Jindal.
Mr. Fleming. Mr. Chairman, I would like to enter this into
the record with unanimous consent.
The Chairman. Without objection, so order.
[The letter submitted for the record from The Honorable
Bobby Jindal, Governor, State of Louisiana, follows:]
BOBBY JINDAL
Governor
State of Louisiana
Post Office Box 94004
Baton Rouge, LA 70804-9004
June 29, 2010
Honorable Ken Salazar
U.S. Department of Interior
1849 C Street, NW
Washington, D.C. 20240
Re: Restructured OCS Deepwater Drilling Moratorium
Dear Secretary Salazar:
Thank you for your request for comment on the Department of
Interior's concept to restructure the deepwater drilling moratorium.
The State of Louisiana's priority is both to ensure that offshore
drilling is conducted with the utmost safety and regulatory oversight
and to ensure the environment and natural resources of the State are
protected. Unfortunately, your request for comments by today on a
concept without the ability to review and comment on a specific
proposal does not comply with the Department's obligation, as required
by 43 U.S.C. Sec. 1331, et seq., and 43 U.S.C. Sec. 1334(a), in
particular.
The State has not been provided any documents. Not only should a
draft of the proposed moratorium be submitted, but also all documents
supporting the proposal. Without these documents, the State cannot
undertake a meaningful review and therefore a meaningful consultation
cannot take place. Moreover, such a short time frame to receive
comments is insufficient for the State to analyze the proposed
moratorium, especially when the State has not been given any documents
to analyze.
As I noted in my letter to you dated June 2. 2010, and as we stated
in the attached amicus curiae brief to the U.S. District Court, a six-
month deepwater moratorium will have a devastating effect on
Louisiana's economy as the rigs may move to other countries for several
years to come. The Louisiana Department of Economic Development
estimated the loss of over 10,000 Louisiana jobs within just a few
months. In addition, Louisiana stands to lose substantial tax revenues
as result of six month moratorium due to a significant decline in
income and sales taxes. It is critical that a six-month blanket
moratorium not be imposed on our deepwater activity and that options
are considered that allow for the continued drilling activity in the
Gulf of Mexico
The State is prepared to provide meaningful and timely feedback on
any specific proposal, which ideally would propose to safely and
promptly resume operations in the Gulf in a manner that protects the
workers and the citizens of this State and the Gulf region, as well as
provides the energy this country so desperately needs.
Sincerely,
Bobby Jindal
Governor
Attachment: Amicus Curiae Brief
______
Mr. Fleming. Well, I will just mention a couple of things
in it. It says, `The State of Louisiana's priority is both to
ensure that offshore drilling is conducted with utmost safety
and regulatory oversight, and to ensure the environment and
natural resources of the state are protected.`
``Unfortunately, your request for comment by today,'' which
was June 29, yesterday, ``comments by today on a concept
without the ability to review and comment on a specific
proposal does not comply with the Department's obligations as
required by 43 U.S.C. 1331 and 43 U.S.C. 1334[a] in
particular.''
What he is saying here, in essence, is you are asking us to
comment on this new moratorium but you haven't given us any
documentation. Are you willing, sir, to delay putting forth
this moratorium until you indeed provide those documents to the
Governor and allow him to comment on those?
Secretary Salazar. Congressman Fleming, first, I am
confident that the imposition of the moratorium was a correct
decision, and I respectfully disagree with the District Court
decision, and Department of Justice, and Interior has taken
that up on appeal to the Fifth Circuit. We believe that
decision was correct.
We also believe that the last 70 days essentially by
themselves, if you will, make an Exhibit A as to why the
moratorium is essential. Seventy-one days of following all of
the efforts to try to deal with this blowout tell us that
industry does not have the ability to quickly deal with this
kind of blowout scenario. So until we get to the point where we
believe that we can have that assurance of safety we will
continue to have our hand on the pod's button.
Mr. Fleming. In other words, no, you will not delay the
moratorium and allow the Governor or the State of Louisiana to
make those comments and input. Is that the----
Secretary Salazar. We worked closely with Governor Jindal
on a number of----
Mr. Fleming. OK.
Secretary Salazar.--different points, but we are going to
move forward and we are going to do what is right.
Mr. Fleming. OK, I will accept that as a no.
Well, just to kind of hit the top points here, in the first
moratorium we had eight scientific experts who disagreed and
did not feel that it was appropriate to put this into place. We
have a history of over 40 years and over, I think, about 3,600
drilling units out there in the Gulf, which have never had a
problem. To this day, we still don't know what went wrong. We
had BP and Transocean here just the other day. They were
shrugging their shoulders. They say, even we don't know what
went wrong.
I see the smile on your face. They probably know more than
what they say they know, and I would agree with you on that.
But I don't think we have actually come to an exact answer as
to what happened. And then we have the letter on the comments,
on which our Governor was not allowed to give input, and then
finally we are talking about proposing legislation here by July
14th, and we don't even know what went wrong.
So, isn't this, sir, really more about politics than it is
about policy, and certainly about science?
Secretary Salazar. Absolutely not, Congressman Fleming. The
fact is that the President and our Administration have acted to
deal with what is a national crisis that we are facing in the
Gulf of Mexico. We have not done anything based on any
political motivation here. We have a problem, and our job is to
fix the problem, and that is what we are about, and part of
fixing the problem is getting the kind of legislative framework
and support so that we can assure that there is safety, the
right kinds of standards, and the right kind of enforcement
with respect to the Outer Continental Shelf, which is part of
the reason why I think this hearing is such an important
hearing to have.
Mr. Fleming. And I will respectfully disagree. I think this
is more about the Rahm Emanuel, ``Never let a crisis go to
waste'' despite what we hear from the Administration. Mr.
Secretary, the facts really don't add up to anything other than
this is a, in my opinion and I think to many on the panel here,
that this is more about political manipulation. Thank you, sir.
The Chairman. The gentleman's time has expired. The
gentleman from Maryland, Mr. Sarbanes.
Mr. Sarbanes. Thank you, Mr. Chairman.
First of all, I wanted to thank Secretary Salazar for your
visit the other day to Maryland as part of the President's
Great American Outdoors Initiative, and I think being on this
listening to us even as you are managing the Gulf spill is
critical because you are hearing from Americans all across the
country as to what their perspective is going forward on
offshore drilling and oil and gas development more broadly, and
so I thank you for that, and it was really a treat to have you
there in Annapolis.
The second thing I just wanted to mention is, and
Congressman Wittman spoke to this a little bit, but, of course,
I am particularly focused because of the Chesapeake Bay on this
Lease Sale 220. I know that has been withdrawn at this point. I
just wanted to say that going forward you can put me in the
category of those who will be pretty resistant to putting it
back on the table because I think that the sensitivity of that
area off the coast of Virginia is critical to the health of the
Chesapeake Bay, and the potential risk there is just too high.
Also, when you look at other areas that are going to
probably be off limits because of the Department of Defense
concerns and so forth, we are talking about something marginal,
I think.
I did want to ask a couple of question. The first was we
have had plenty of testimony in a number of different
committees about the flaws in the response plans that were
developed by BP and the rest of the industry, and I know that
currently in law there is some process by which these companies
sort of certify as to the accuracy and due diligence behind
these plans, but it is not all that robust from what I can
gather, and I was interested in your perspective and Director
Bromwich's as well on whether you think it might be a good idea
to have the CEOs of these companies have to, in effect,
personally certify to the adequacy of these plans, that they
have gone through a rigorous process, and potentially with that
personal certification bears some civil liability if it turns
out that the right kind of practices were not in place, and the
process wasn't carried forward because I think that would
create the right kind of behavior modification within the
industry if you have people at the top who are responsible for
this.
Secretary Salazar. Congressman Sarbanes, first, thank you
for your leadership with No Child Left Inside, and all the work
that you are doing with respect to young people and connecting
them to the outdoors.
Second, with respect to your very important question, it is
something that needs to be looked at relative to how we look
forward with oil spill response plans that are in fact
workable. There is no doubt at all that there is an oil spill
response plan that is being actuated today as we speak in the
Gulf of Mexico, and it has been underway since April 20. There
is also no doubt that it has been inadequate. So the kind of
questions that you raise are exactly the kinds of questions we
are all examining as we decide how we are going to move
forward. I will turn it over to Director Bromwich to amplify.
Mr. Bromwich. I think your suggestion about requiring a
certification is an interesting one. It is obviously a pattern
on certifications that are required by CEOS and CFOs, required
by Sarbanes-Oxley legislation.
I know from having been in the private sector for a number
of years that that requirement for certification has focused
the mines of corporate executives on their responsibilities,
and has forced them to engage more deeply in making sure that
the information that was contained in corporate financial
statements are correct. And so as a result of that experience
in the corporate sector, I think your proposal has to be taken
very seriously.
Mr. Sarbanes. Thank you, and I have about 40 seconds left
so the second question real quick is, there is a pilot project
in the proposed legislation that Chairman Rahall has developed
which would look at the opportunity to measure more accurately
and through the use of technology exactly what is coming out at
the wellhead in terms of the volume of gas and oil that is
emitted there, and I think the idea is over time to develop
that as another source of figuring out what the right kind of
royalty payment should be.
What I am curious about is whether you think it is a good
idea to ultimately cut to the chase and say that we are going
to determine the royalties by applying it right against what is
coming out of the wellhead because the process for determining
royalties is kind of a hocus-pocus one once you get further up
the chain. So I would like your reaction to the proposal to
actually use that volume measured at the wellhead as the basis
for determining royalty.
Secretary Salazar. Congressman Sarbanes, first, the whole
question of royalty simplification is something which we have
been working on. I have not reviewed this particular language
in the legislation, but we would be happy to do that, and to
get back to the Chairman and you with respect to our response
on the legislation.
Second, let me say one of the things that we have learned
in this 71-day ordeal is that there was a significant lack of
instrumentation relative to what is happening on the well, on
the blowout preventer, and a whole host of other things, so
Secretary Chu and our whole science team that we have had
focused on this problem has actually brought much of their
knowledge on instrumentation and pressure valves and a whole
host of other things into this equation. So I think this will
be one of the lessons learned from this Deepwater Horizon
tragedy.
Mr. Sarbanes. Thank you very much. I yield back.
The Chairman. Thank you. Mr. Secretary, we know yo have to
go. Thank you.
Secretary Salazar. Thank you very much, Mr. Chairman, and
distinguished members of the Committee.
The Chairman. Our next Member is the gentleman from
Colorado, Mr. Coffman.
Mr. Coffman. Thank you, Mr. Chairman.
Mr. Bromwich, the question I had was for Secretary Salazar
but I will go ahead and address it to you, and that is because
it concerns MMS, which you have a brand new name for it now,
but when Secretary Salazar addressed the ethics questions, a
number of questions that came out of, I think, the September
2008 IG report that I think were well addressed, I think, by
Secretary Salazar, but President Obama in his Oval Office
speech a couple of weeks ago, when discussing MMS, said, and I
quote, ``The pace of reform was just too slow.'' And what I
think that he referred to was the other problems at MMS outside
the ethics issues that were to the competency and execution of
their oversight of offshore drilling.
Obviously, MMS has been a problem agency for a very long
time. In the late 1990s, someone at MMS failed to include a
price threshold on OCS leases and GAO estimated this cost the
U.S. taxpayers up to $14 billion. Even though the work done by
Secretary Salazar to clean up MMS in Denver, the Denver office,
though there were still problems at MMS Gulf Operations, on
various press releases that four monthly inspections of the
Deepwater Horizon in this past year were not done; that permits
were approved in as little as five minutes; and other
indications that MMS was just not doing a good enough job.
How much do you think that these errors contributed to the
disaster, particularly not doing the inspections on Deepwater
Horizon, and do you think that they should have been addressed
more vigorously?
Mr. Bromwich. The short answer is I don't know, and I don't
think we know whether and to what extent the failure to do
comprehensive timely inspections contributed in any way to the
disaster. I think the evidence that has come before the public
so far, and it is obviously fragmentary, is that there were a
combination, as I think has been referred to before, of human
and equipment errors that is the responsibility of BP.
It is undoubtedly true, though, that the resources of my
agency that it can allocate to inspections is grossly
inadequate. I believe there are 62 inspectors to inspect the
thousands of installations in the Gulf alone, and that is in
stark contrast to the numbers in other parts of the country, so
there is absolutely no question that this agency has been
inadequately staffed with respect to inspections, and that is
something that really needs to change.
Mr. Coffman. How about inadequate leadership?
Mr. Bromwich. I was brought in because of my experience in
leading agencies, and I hope to make a big difference in this
agency.
Mr. Coffman. So your view is that it is not just papered
over by more money. The fact is that people weren't doing their
job that were assigned to do their job, and that the Secretary
of the Interior was not aware during the 16-month tenure that
these people were not doing their job.
Mr. Bromwich. Well, you are making statements and
assumptions that haven't come from me.
Mr. Coffman. Do you think that the Secretary was aware that
these inspections were not taking place?
Mr. Bromwich. No, I didn't say that either. I don't know
whether this was preventable by timely and repeated inspections
or not, and I think we will never know that. That is what I am
saying and----
Mr. Coffman. Won't----
Mr. Bromwich. Let me finish, please.
Mr. Coffman. No. Won't the investigation look at the issue
of the failure of this Department to conduct inspections, and
what the ramifications of the failure relate to this crisis?
Mr. Bromwich. I think there are multiple investigations
going on that will explore that issue. Whether anyone is ever
going to be able to draw a specific cause and effect
relationship between inadequate number of inspectors and
inadequate inspectors----
Mr. Coffman. Don't you want to know that? Don't you want to
know whether or not the failure to conduct these inspections
related to this crisis? Don't you want to know that?
Mr. Bromwich. Of course. Of course. We all do.
Mr. Coffman. And you are going to find that out, I hope.
Mr. Bromwich. I am not going to find that out but the
multiple investigations are going to find that out, that is
right.
Mr. Coffman. Chairman, I yield back.
The Chairman. The gentleman from Arizona, Mr. Grijalva is
recognized.
Mr. Grijalva. Thank you, Mr. Chairman, and at the offset I
have a couple of questions for Mr. Bromwich, but at the offset
let me say that I am a Member of Congress that is very
appreciative of the recommendations that Secretary Salazar made
to the President for the moratorium on deep sea drilling. I
think that was prudent, it was necessary, and given what we
know up to this point, the lack of response capability by the
company, lacks oversight by the agency, a coziness that has
been brought up time and time again between the agency, and
this is not all new. This has been a decade of building, and
while the moratorium is bringing hardship to many, I think it
is still the wise and prudent thing to do until we are sure
that another catastrophe is not going to finish devastating
that region. This has taken 10 years to get here, and in those
10 years, you know, all the things that we are finding out now
have been building, and I think it is important to stop, pause,
and reassess where we are at, and where we need to be in the
future.
I think there are also some parallels, Mr. Chairman,
between offshore and onshore, and the comments that were made
by the Secretary about the necessity to talk to the Bureau of
Land Management in terms of their permitting process, their
categorical exclusion process regarding NEPA, their inspections
and oversight, I think is an appropriate next step.
The question I have, Mr. Bromwich, is in your view what
changes need to be made in the industry's behavior to improve
environmental and safety performance?
We have been talking for the last few months about how to
reorganize your agency and other government agencies, how we
are going to fund the cleanup, what organic legislation needs
to be put together, but we have talked less about what the
companies themselves can do to prevent the disaster that we are
dealing with.
What steps would you like to see taken in the short and the
medium and in the long terms to make sure that this doesn't
happen again, and where that part of that responsibility is
falling on industry and their behavior, and your comments on
that?
Mr. Bromwich. Thank you. Thank you very much, sir.
I think it is necessarily a cooperative relationship
between the Department of the Interior and my agency
specifically and the oil companies, oil and energy companies.
We will certainly welcome the suggestions that they have on how
to enhance and tighten up necessary regulation, but it is
essentially my agency's responsibility and the Interior
Department's agency to take a look at the regulations that
exist and make determinations as to whether they are adequate
based on what we now know and what we are learning about the
risks that offshore drilling can create.
And so we are going to be taking a very hard look at
whether the existing regulatory structure is adequate. We know
that the resources that have been allocated to regulation and
enforcement have been inadequate, and so I think we have to
look at both, both the regulations that exist and the resources
allocated to regulation and enforcement.
I think there have been a lot of allegations and I think
significant evidence that there has been too cozy a
relationship between regulators and the industry. That is not
going to continue. We are going to have an arm's-length, tough,
aggressive regulatory program. It is going to be fair, it is
going to be even-handed, but it is going to be tough, and in
cases of violations of the regulations substantial sanctions
will be imposed, and in the case of willful violations of the
regulations extraordinarily serious sanctions will be imposed.
Mr. Grijalva. Mr. Director, one other question that I
brought up a couple of times that has to do with BP Atlantis
and the whistleblower who has been telling anybody that would
listen that the rig is operating without engineer approved
safety documents.
I asked for a set of documents at a subcommittee hearing,
and as you go forward with the reorganization a couple of
questions: how are we going to deal better with those
whistleblower claims and concerns; and two, the lingering
question about BP Atlantis, and if that has been fully and
properly and scientifically looked at in terms of not having to
deal with any spillage or any catastrophe there.
Mr. Bromwich. Let me take your second question first. I
don't know the exact status of the examination of the BP
Atlantis matter. I have been on the job eight days as you know,
and I know that there are people looking at it and resources
being allocated to looking at it, but I can't give you a
specific account of where that stands.
With respect to more generally dealing with whistleblower
complaints, one of the reasons I created the unit last week,
the Investigations and Review Unit, is to specifically give me
a SWAT type capability to deal with allegations, including
whistleblower allegations, and to run them to ground very
quickly to determine whether there is substance behind them or
not.
I think that in my tenure as Inspector General for the
Department of Justice from 1994 to 1999, I had a lot of
experience dealing with whistleblower allegations. I learned
that certainly not all whistleblower allegations are true, but
that they need to be taken seriously. They cannot assume to be
false because in fact many of the allegations that on first
blush appeared to be frivolous turned out to be true, and many
allegations that appeared to be accurate turned out to not have
evidence to support them. So whistleblowers are important.
Their allegations need to be taken seriously, and they need to
be investigation serious, and I am going to do that.
Mr. Grijalva. Thank you. Thank you, Mr. Chairman.
The Chairman. The gentleman from California, Mr.
McClintock.
Mr. McClintock. Thank you, Mr. Chairman.
Mr. Bromwich, the President and the Secretary have spoken
extensively about the need to reduce America's reliance on
foreign oil and also after this disaster, upon the need to
reduce our reliance, particularly on deep sea drilling, and yet
the Secretary today in his written testimony boasts of
canceling the upcoming Beaufort and Chukchi lease sales in the
Arctic, removing Bristol Bay altogether from leasing both the
current five-year plan as well as the next five-year plan,
removing the Pacific Coast in the Northeast entirely from any
drilling under a new five-year plans, and I am just wondering
how do we reduce our reliance on foreign oil by putting off
limits American, domestic supplies?
Mr. Bromwich. I don't think anybody is putting off limits
domestic supplies. I think, as the Secretary said, what seem to
be dictated by the Deepwater Horizon accident was pushing the
pause button, trying to figure out what happened, and what we
learned should shape our deepwater drilling policy. So my
understanding is that a large number of entities are
investigating that matter. I am sure the Secretary and
certainly I will be looking very carefully at what those
investigations conclude, and that will shape, I assume, the
Secretary's decisions and the Administration's policy as to
what to do.
Mr. McClintock. By pushing that pause button though you are
making us more and more reliant on foreign oil supplies, and by
placing surface production off limits you are making us more
and more reliant on deep sea drilling.
Mr. Bromwich. My understanding is that in response to the
quite unexpected and unprecedented disaster in the Gulf, the
President and the Secretary thought that the actions that they
had taken were the prudent things to do. I wasn't around when
those decisions were made, but that is my understanding as to
what the reasons were.
Mr. McClintock. That judgment is open to very, very serious
question.
Let me move to the disaster itself. Blowouts have occurred
before. Why is it that there was no contingency plan in place?
Mr. Bromwich. I can't answer that question. I don't know
the answer.
Mr. McClintock. According to published reports, there was a
contingency plan that involved corralling and burning the oil
as it reached the surface, and that was shelved by the
Department of the Interior as the disaster unfolded.
Mr. Bromwich. I have no knowledge of that.
Mr. McClintock. We keep seeing reports of the Jones Act
interfering with the volunteering of foreign vessels for the
assistance in this bill. We saw a report last week of oil
skimmers being shutdown by the Coast Guard because they didn't
go through a proper Coast Guard inspection for life vests. We
have, of course, heard the complaints of the Governor of
Louisiana that he cannot get permission to build berms to
protect his coast.
The picture is becoming one of a tangled and dysfunctional
bureaucracy tripping over itself. Would you care to comment on
that now that you have inherited that mess?
Mr. Bromwich. Well, my sense is that this disaster was
unexpected, unprecedented, and therefore they really could not
and there was not a plan for dealing with specifically what
happened. I know the government has mobilized its resources,
and were they ready and was it as smooth an efficient operation
from day one? I think the answer to that is no. I think the
Administration has acknowledged that the answer was no. But I
think that now as we are on day 70 or 71 my impression again
from listening to accounts and the development of a
concentrated and coordinated effort is that things are vastly
improved, and that real progress is being made.
Mr. McClintock. We keep hearing these assurances but the
Coast Guard incident occurred just a week ago. What is going to
be done--well, let me just ask you this question. On the Jones
Act itself, why is it that the Administration has not waived
that Act so that additional resources can be brought to bear on
the problem?
Mr. Bromwich. I don't know the answer to that. You may have
lost your answer when Secretary Salazar left. I really don't
know the answer to that.
Mr. McClintock. One of the disadvantages of being a
freshman. Thank you.
Mr. Grijalva [presiding]. Thank you. Ms. DeGette.
Ms. DeGette. Thank you very much, Mr. Chairman, and I would
like to welcome you, Mr. Bromwich. I think you will be happy
you took this job. I hope so because you come with great
recommendations.
Mr. Bromwich. Thank you.
Ms. DeGette. When Mr. Coffman was asking you about the
agency and the resources of the agency, one of the answers you
gave about what is admittedly a very poor regulatory oversight
scheme before in the MMS was that the agency needs more
personnel to be able to review these applications, and as you
can imagine in Congress here we hear this all the time. I mean,
everybody needs more personnel. Everybody needs more resources,
and certainly we can't disagree that MMS or now the new
regulatory scheme will need adequate resources and personnel,
but as someone who spent years overseeing the FDA you could put
a limited resources and personnel and still not do the job.
So I am wondering if you could talk briefly about your
intent as well as requesting new resources and personnel--kind
of prioritize some of these applications and these processes,
because it is true there are many, many offshore sites.
However, it is also true that there are very few deepwater
sites and certainly even fewer with the complexity of this
site. And so it would seem that as you are revamping the agency
you are going to need to take those things into consideration.
I am wondering if you can share any initial thoughts with us.
Mr. Bromwich. First, thank you for your kind words. Second,
yes, they are only preliminary and initial thoughts. I think
that in addition to getting an enhancement of resources, which
I think there is almost universal acknowledgement that the
agency needs, we need to examine the way that the inspectors
and inspection teams have done their work. We also need to
examine the way that the people who were reviewing lease
applications and permit applications have prioritized what they
are doing.
I can tell you that there will be a top to bottom review of
all aspects of what my agency currently does with an eye first
to ensuring safety and environmental soundness, but also making
sure that drilling that should go on needs to go on does go on.
Ms. DeGette. What is your timeframe for that review, and I
am assuming you will be happy to come back and talk to this
Committee about your findings and your plans?
Mr. Bromwich. Absolutely. I don't have a timetable yet for
it. I have, frankly, spent most of my time here up on the Hill
in front of various committees, so I literally have not been
able to even yet talk to most of my staff. So I don't want to
give you an estimate as to how long it will take that I am
giving you totally on the fly.
Ms. DeGette. I am assuming you are moving with all due
speed though because of this----
Mr. Bromwich. Faster than that, yes.
Ms. DeGette. OK.
Mr. Bromwich. Absolutely.
Ms. DeGette. I want to ask you a couple of specific
questions you might not yet know the answer to these questions
but, Mr. Chairman, we are looking at this CLEAR Act and it has
a lot of reforms that we believe are important to updating the
regulatory scheme. One of the areas that I specifically want to
talk about is Section 229, which is online availability to the
public of information relating to oil and gas chemical use.
What this section does is it requires that the list of
chemicals used in drilling or completing a well on BLM land
made available online within 30 days of completion. This
requirement is similar to a requirement in a bill that
Representative Hinchey and I introduced on disclosure of
components of hydraulic fracturing fluid, and so I am very
supportive of this section of the bill.
I am wondering if your agency favors disclosure of the
chemicals that are used in drilling on BLM Land.
Mr. Bromwich. The short answer is I don't know. As you
describe the proposal, it sounds intuitively like an appealing
requirement. Whether there are reasons why it is not as good an
idea as it sounds like to me, I don't know, so again that is
the best answer I can give you at this time.
Ms. DeGette. Would you mind having someone from your agency
supplement your answer so that we can get some sense as we move
forward with this legislation?
Mr. Bromwich. Absolutely.
Ms. DeGette. I will tell you as someone who has known Ken
Salazar longer any anybody in Congress I would assume he would
support it, but we will let your agency speak for itself.
Mr. Bromwich. And just so you know, my inclination is to be
as transparent as possible on almost everything. I just don't
know if there are reasons that I am not aware of that militate
against it.
Ms. DeGette. Sure.
Mr. Bromwich. So I don't want to make a commitment that I
would then later have to retract.
Ms. DeGette. Sure. Section 226 of this CLEAR Act requires
the Interior Department to develop best management practices
for environmentally responsible development of oil and gas on
Federal lands. What types of best management requirements would
you consider in implementing this provisions, and have you
learned anything from the Deepwater Horizon catastrophe that
will inform those best management practices?
Mr. Bromwich. The short answer is that this again I am
sorry to say is something that I have not yet had the chance to
look at, but certainly in other fields that I have worked in
both in government and outside of government paying close
attention to what best management practices are and trying to
formulate them in a reasonable way is an important part of
making things work better.
Ms. DeGette. I am sure we all look forward to your next
appearance so you can explain all of these issues.
Mr. Bromwich. Great. Thank you.
Ms. DeGette. Thank you, Mr. Chairman.
Mr. Lamborn. Mr. Chairman.
Mr. Grijalva. The gentlelady's time has expired.
Mr. Lamborn. Mr. Chairman. May I suggest to my colleague
from Colorado that she is probably the number two person who
has known the Secretary the longest, and I would suggest John
Salazar has known him longer.
[Laughter.]
Ms. DeGette. Point well taken and the record will be
corrected.
The Chairman. The gentleman from Louisiana, Mr. Cassidy is
recognized on his own time.
Mr. Cassidy. Thank you, Mr. Chairman.
Mr. Bromwich, you know, when the Secretary said that his
boot is on the neck of BP, the workers back home feels like the
boot is on their neck, and, of course, they are the ones who
are not hurting Tony Hayward, it is the rig workers. Now, as it
turns out it is not just the deepwater rigs it is also back
home, and I know there is a different message coming out of the
Department, that there is, in effect, a de facto moratorium on
shallow-water drilling, that, sure, we hear it is going to be
an easy process and Bob Abbey came by and spoke about it, but
it is not.
What do I have here? As of May 6, only two shallow water
permits have been issued. They were rescinded quickly. Then
some others were put out, but these are not for new rigs. There
are approximately 17 shallow water rigs now idle waiting for
work that would be provided through the issuance of new
drilling permits, and notably the 17 idle rigs were all
operating prior to the job moratorium. They represent more than
38 percent of the available marketable rigs.
Now how can we kind of get a straight statement, or let me
just ask you, I don't want to it pejoratively, and I apologize.
I am hearing from back home that there is a de facto
moratorium. In the Members' brief the other day you said no,
no. What is the story?
Mr. Bromwich. Well, my understanding is that there is not a
de facto moratorium; that there are some additional
requirements that have been imposed by the notice to lessees
that have gone out within the last 30 days. My understanding is
that there are specific--that completed applications that
satisfy those new requirements have been filed as I think the
day before yesterday, and my understanding is that my agency is
looking at those with the intention of granting those that
merit it.
So there is no de facto moratorium that I am aware of. I
have certainly given no instructions, Mr. Cassidy, to slow,
walk or stop applications, and I think it is a matter of
companies complying with the new requirements that have been
imposed. So there is no de facto moratorium, but I think that
the new requirements are what is taking the additional time.
My understanding, Mr. Cassidy, and I think we talked about
this at the meeting last Thursday, is that my agency is doing
everything possible through frequent phone calls with members
of the affected industry to try to answer----
Mr. Cassidy. Not to be rude, I accept that.
Mr. Bromwich. Yes.
Mr. Cassidy. So ideally, and it was after that that I felt
reassured, and then yesterday I get this which tells me, no,
indeed there is still, in fact, a de facto moratorium.
Mr. Bromwich. And what is that?
Mr. Cassidy. This is messages from back home.
Mr. Bromwich. OK. OK. My understanding, again, from talking
to participants on those phone calls is that they felt and
believed that they had answered questions that the industry was
posing to them, and that people felt a lot more sure about what
they expectations were. So there may be a disconnect between
what my people believe is being communicated and what may be
understood. I suspect that there is not a misunderstanding on
the part of people who were actually on the call and who had an
opportunity to ask the questions and get their questions
answered, but as the answers trickle down the line perhaps
something is being lost in the translation.
Mr. Cassidy. We will research it and come back to you.
Mr. Bromwich. Yes, that sounds appropriately.
Mr. Cassidy. Now speaking about the CLEAR Act, there
actually seems to me kind of a weirdness here in the sense that
when it comes to what went wrong we have a sense from the White
Paper of what went wrong, and what definitely can be taking
place to allow OCS drilling to proceed, particularly since your
agency has these plans on file. But we won't proceed with that
even though we have a definite White Paper with specific
recommendations, et cetera.
On the other hand, the CLEAR Act, which we yet haven't had
the commission, and there are all these uncertainties regarding
what really went wrong from other aspects, for example, the
response, we are going to proceed with without hearing the
commission.
Now there seems to be a kind of oddness about that. We
don't proceed where we have definite answers but we proceed
before we have answers on those other areas where we have no
answers. Your thoughts on that.
Mr. Bromwich. Well, again, my ninth day on the job, I
haven't read the CLEAR Act, I don't know what the specific
requirements are that are contemplated in the CLEAR Act so I
really cannot speak to the disconnect you are sensing. I am
happy to come back later on when I am better informed on the
specific provisions in the CLEAR Act, but I am really not able
to help you today.
Mr. Cassidy. That is fair, that is a fair question. Before
I go on to another, I am almost out of time, in deference to
colleagues I will yield back. Thank you.
The Chairman. The gentleman from Washington, Mr. Inslee.
Mr. Inslee. Thank you. It seems to me as we go forward to
try to prevent another tragedy like this we ought to take a
look at how we do a regulatory system in aviation, and in my
evaluation of this industry this appears to be wildly below the
safety standards of the aviation industry, in large part
because of our FAA regulatory system.
In the aviation context the way it works is the FAA
essentially establishes a standard of performance that you will
not have, for instance, a loss of hydraulic system that
controls your control surfaces more than one in a billion take-
offs or some number. It establishes a statistical expectation
for the industry to meet.
It then requires the industry to provide engineering data
to show that every particular critical system will meet that
statistical expectation, and then it is rigorously evaluated.
It seems to me that is a template that we ought to consider
following in this industry.
An alternative way is to provide specific item-by-item
requirements as to each particular process, or maybe we do
both. I guess the question is as we go forward should we create
an expectation of a statistical performance level for every
critical part of this process and then expect the industry to
provide engineering data that their systems will meet that? It
seems to me that is a systematic way of going about this that
makes sense. What are your thoughts about that kind of
approach?
Mr. Bromwich. I am not nearly as familiar as you are with
the standards in the aviation industry or the particular
regulatory scheme that has been established by the FAA. I think
the truth is that the regulation in this field, that is, the
oil and gas field and the offshore in particular, has a lot to
learn from a lot of places. And so as we craft what will be a
newly revamped and reformed regulatory regime I think and hope
that we are going to be looking at a wide variety of regulatory
schemes, kind of best practices if you will, and see how
relevant and analogous they are to what we need to impose, and
so I hope we take what is good from column A, what is good from
column B, and what is good from column C, and therefore create
sort a best of class, best of breed regulatory scheme.
So I am very interested in the aspects of the FAA
regulatory scheme that you are describing. I am not
knowledgeable yet enough to have an opinion as to how much of
that is graphable on the oil and gas regulation that I am going
to be responsible for, but I am interested in talking with you
about that further.
Mr. Inslee. Well, I would like to do that. For instance,
the blowout preventer, highly technical, sophisticated piece of
equipment that has some analogy to aircraft, and I think we do
need to establish performance standards that are several orders
of magnitude higher than we have right now. You know, for
instance, we found in our investigation that as many as 50
percent of these things failed under actual conditions. Nobody
gets on an airplane if 50 percent of them crash.
So, I will look forward to working with you. I will be
proposing some amendments in that regard.
Mr. Bromwich. Terrific.
Mr. Inslee. The second thing we think we ought to have is
an expectation that the industry uses best available
technology. That is also an expectation in the industry, that
the best available technology in fact will be used. What are
your thoughts about that performance standard?
Mr. Bromwich. Again, intuitively it sounds sensible to me.
It is a little bit puzzling why an industry would use anything
other than that. I know that cost considerations loom large. I
understand that these companies are properly out to make a
profit, but they certainly should not and cannot do that at the
expense of taking the necessary precautions.
Mr. Inslee. Well, unfortunately, I think that has been the
case just with one thing we have come across. For instance,
having a remote acoustically activated device that would
activate the blowout preventer if the communications was lost
with the drill rig, it is used in other countries, not here. It
is the best available technology and I think we want to move
forward.
By the way, we have found several sort of red lights that
BP ran through consciously; a decision not to do a cement log
test to find out if you had a problem with gas escape; a
decision to go with six centralizers rather than 21 as the
analysis called for; a decision to use the long string rather
than a liner, all of which created increased risks of failure.
Were any or all of those signed of by MMS? Do you know yet
whether that happened?
Mr. Bromwich. I don't know the answer to that. I am
confident that in the multiple investigations that are being
conducted those specific questions are in the process of being
answered.
Mr. Inslee. Thank you. I look forward to working with you.
Mr. Bromwich. You, too. Thank you.
Ms. Bordallo [presiding]. I thank the gentleman from
Washington, and now I would like to recognize myself. I have a
few questions for--I am sorry, I am sorry. I would like to
recognize the gentlelady from Wyoming.
Ms. Lummis. Thank you, Madam Chairman.
Mr. Bromwich, you are the head of the Bureau of Ocean
Energy. What experience do you have in ocean energy whether it
is oil and gas or wave energy or wind energy?
Mr. Bromwich. I don't have any experience in ocean energy.
I do have some experience in the energy sector. I have
represented a number of energy clients on nonocean-related
matters during my last 10 plus years of law practice, but I
have no specific expertise on ocean energy.
I would point out that one of the things I did as a lawyer
was to gain expertise on matters that I previously knew nothing
about, and did a two-year-long investigation of the Houston
Police Department crime lab, which was one of the most, if not
the most expensive forensic science investigations ever done. I
don't know much forensic science, but I recruited a crack team
of forensic scientists who were the best in the business, and
as a result of working with them, I learned a tremendous amount
about it and put out a lengthy, nearly 300-page report in the
summer of 2007 that has been widely acclaimed as one of the
best examinations of a forensic lab ever done.
So I don't think that a lack of experience specifically
with ocean energy disables me from learning about it from
people who do have the technical expertise, and learning enough
of the technical issues to be able to do my job appropriately.
Ms. Lummis. Thank you. I now have some questions about the
draft bill in front of me, and as Secretary Salazar said, we
are dealing with a national crisis in the Gulf of Mexico, and
you have called it an unprecedented disaster. So I am curious
why this bill deals with changing BLM's permitting and leasing
authority. Director Bob Abbey of the BLM was in here and told
this Committee when he testified that he did not believe it was
a wise idea to remove leasing and permitting authority from the
BLM. So I am curious why a draft that is intended to deal with
a national crisis in the Gulf of Mexico includes that
provision.
I am further curious about why a bill that is supposed to
deal with a national crisis in the Gulf of Mexico changes the
requirements for issuing oil and gas on BLM and Forest Service
land so it would require the issuance in areas where energy
development would not conflict with other land uses.
You know, by its very nature the multiple use concept that
is articulated in FLMA and the National Forest Management Act
requires a matter of resolving inevitable conflicts, so I find
that curious.
I also find it interesting that this bill that is supposed
to be dealing with a national crisis in the Gulf of Mexico
changes onshore lease sales from a sealed bid process to--
excuse me--changes onshore lease sales to a sealed bid process,
removing the ability to use live auction bids. Interestingly,
you did away with the royalty-in-kind program, which used a
sealed bid process whereas onshore used a live auction, and now
you are taking the bid process that was used in royalty-in-kind
and applying it to the onshore in a bill that is supposed to
deal with the national crisis in the Gulf of Mexico.
Fascinating.
Another thing in a bill that is supposed to deal with a
national crisis in the Gulf of Mexico changes provisions to the
Federal Oil and Gas Royalty Simplification and Fairness Act
taking out the negotiations which occurred in the 1990s between
industry and the Federal agencies under the Clinton
Administration, and at that time the states, which I was
involved with, and takes away the provisions that were intended
to work with industry, protecting the agency from having to
meet deadlines, removing provisions where industry has to meet
deadlines, and all along that bill, which was a delicate
balance between industry, the state and the Federal Government,
just completely threw the states under the bus at the time it
was enacted.
So I am looking at this bill and saying this is supposed to
deal with a national crisis in the Gulf of Mexico? Most of this
bill has absolutely nothing to do with the national crisis in
the Gulf of Mexico, and so I am disappointed. I would just say
that we are not using the culmination of these hearings, which
are focused on the national disaster in the Gulf of Mexico, to
craft legislation to deal with the national disaster in the
Gulf of Mexico. We are using this legislation to deal with
many, many other subjects that require much more discussion and
vetting than is going to occur within the national crisis in
the Gulf of Mexico when that, I believe, is where our attention
should like, and Madam Chairman, my time is up.
Ms. Bordallo. I thank the lady from Wyoming, and now I
would like to recognize the gentleman from California, Mr.
Costa.
Mr. Costa. Thank you very much, Madam Chairwoman.
I have a couple questions kind of in the weeds and I know
you have been there eight days so----
Mr. Bromwich. Not eight full days yet.
Mr. Costa. Seven and a half.
Mr. Bromwich. Seven and a half days.
Mr. Costa. All right, very good. Well, we will see how we
do, and then I would like to ask some broader general
questions.
In the technical area in this legislation, Mr. Director,
Section 222 of the ll requires bi-annual reports from the
lessees to address the steps taken for diligent developed
lease. This means that lessees would have to compile at least
eight reports as I understand it during a lease term. If they
don't develop a lease within that term, they would have to
relinquish the lease anyway. Do you think this extra paperwork
is necessary, and do you suspect there is a better way of
trying to address this for the holders of these Federal leases?
Mr. Bromwich. The answer is I don't know whether it is
necessary. I don't know what the----
Mr. Costa. Would you take a review of that----
Mr. Bromwich. Sure.
Mr. Costa [continuing]. As you are looking at this and get
back to us?
Mr. Bromwich. Absolutely.
Mr. Costa. Another Section 221 of the CLEAR Act requires
you to define an establish the diligent development benchmarks
for oil and gas leases. Again, you are not an expert in this
area, you have already submitted that, but I think we know that
finding and developing the appropriate energy sources is not a
standardized process, whether we are talking about shallow or
deepwater. I am wondering how your new rearranged agency is
going to deal with the topography, the reservoir
characteristics and composition of these resources as well as
the environmental considerations, market conditions, and
economic factors that would define the benchmarks.
I mean, when you find the carbon footprint, having been out
there, and I Chair the subcommittee, so we are going to be
talking some more and we will see more of you, but I have also
been to the Middle East, and like there is an 8-in-10 chance
you put a hole in the ground in Iraq, and you are going to have
a significant find, and it is about 40 percent in the Gulf. So
developing where a significant carbon find is, whether it be
oil or gas, is not a slam dunk to say the least. So I am just
wondering how this is going to work under Section 221.
Mr. Bromwich. I can't give you a detailed answer to that. I
look forward to working with you.
Mr. Costa. Would you get back to me on that as well?
Mr. Bromwich. Yes.
Mr. Costa. OK, let us talk about more like 50,000 feet up.
Mr. Bromwich. OK.
Mr. Costa. Maybe you can respond to these.
Mr. Bromwich. Sure.
Mr. Costa. Do you think that the use of shallow and
deepwater--use of oil and gas in shallow and deepwater sources
will continue to be a part of our nation's energy portfolio in
the foreseeable future?
Mr. Bromwich. My understanding is that it will, yes.
Mr. Costa. I mean, I don't see any way out of it within the
next 10 or 12----
Mr. Bromwich. I don't think anybody does.
Mr. Costa. OK. So obviously you role, in part, is to ensure
that we can do it as safely as possible.
Mr. Bromwich. That is exactly right.
Mr. Costa. Then how do you plan to use this situation as an
opportunity to restore confidence by the American public that
in fact we can do this safely?
Mr. Bromwich. Well, I think one of the advantages of having
so many investigations of what went wrong with the Deepwater
Horizon is that we will have a wealth of information
accumulating over the next few months as to what the specific
issues were that caused the blowout and caused the
extraordinary and devastating spill that is now being dealt
with. I think that once that evidence has been accumulated, it
is analyzed, it is synthesized, that needs to be presented to
the American people in an understandable way so that that can
generate the confidence that the drilling that will continue on
the future, both in shallow water and deepwater will be done in
an environmentally safe and sound manner.
Mr. Costa. A technical question again. You did comment that
when you look at the personnel available with Minerals and
Management Service today to go out there and do the appropriate
determination as to whether or not even the existing
regulations are being followed as wilfully and adequate, have
you taken upon yourself to begin to make an evaluation as to
what you are going to need, the necessary personnel to--
Mr. Bromwich. Oh, yes, absolutely. In fact, there is a lot
of good work that has already gone on in the Department.
Mr. Costa. How much are you going to need to----
Mr. Bromwich. I think it is a very substantial number. The
Department is still working through those numbers.
Mr. Costa. Have you done a comparative analysis between the
Secretary's proposal--again, I know you are new--for the
reorganization and the proposal that we are looking at in this
legislation?
Mr. Bromwich. I don't have that kind of comparison.
Mr. Costa. I would like you to be able to sit down and do
that and get back to us, and then we may use that as a means
for a subcommittee hearing to do that comparative analysis or
at least have that conversation.
Mr. Bromwich. Very good.
Mr. Costa. All right. My time has expired. Thank you.
Mr. Bromwich. Thank you very much.
Mr. Costa. And we look forward to having some more
conversations and I wish you good luck.
Mr. Bromwich. Terrific.
Mr. Costa. And obviously our nation's long-term success in
terms of all the energy tools that are in our energy toolbox
depend upon the job that you do, so we look forward to
continuing to work with you.
Mr. Bromwich. Thank you.
Ms. Bordallo. I thank the gentleman from California, Mr.
Costa, and now I would like to recognize the acting Ranking
Member, Mr. Gohmert from Texas.
Mr. Gohmert. Thank you, Madam Chair, and appreciate your
patience, Mr. Bromwich, and obviously what is going on right
now are votes. We have already had this hearing interrupted
once with votes, and in that we recognize the importance of
special education teachers, named a post office, recognized the
California cities' anniversary, and named a V.A. outpatient
clinic, and right now we are voting on the previous question in
rule. My vote won't have an effect in those and so I preferred
to stay here and finish so that you would not have to sit
through another hour and come back.
Mr. Bromwich. Thank you. I appreciate it.
Mr. Gohmert. And I appreciate the Chair's indulgence in
doing that, and it is obviously pretty tough to be on the job
for eight days and then come and get a grilling over what is
going on in an event that people on both sides of the aisle are
very upset about.
Mr. Bromwich. Right.
Mr. Gohmert. And I recognize that, and it says a lot about
you, that you are willing to come in here and deal with that.
Mr. Bromwich. Thank you.
Mr. Gohmert. And I appreciate it. I had hoped to ask the
Secretary about his comments directly. Since he had to leave,
all I can do is comment, and get the takeaway from it. But in
response to Mr. Markey, Secretary Salazar basically indicated
his state should employ all the National Guard troops they
need, and he was surprised the states did not move forward with
deploying troops and doing what they need.
Now in hearing from my former classmate here in Congress,
Bobby Jindal, they felt so frustrated because they have had to
get permission from people to do all the different things they
are doing, and it seemed like--I know there was one time where
they just moved ahead and then got permission as they were
about to start anyway, but it sounds like since the Secretary
is surprised that the states did not move forward with what
they need, that the wonderful takeaway from the hearing today
based on the Secretary's statements is that Governor Jindal and
other Governors just need to do what they need. They have full
authorization to do that. They don't have to worry about
getting government approval, and that way in the future they
can avoid having the Secretary of the Interior be surprised
that they didn't move forward with what they need. They just
need to go ahead and do it, and not ask permission from another
Federal authority, not the Coast Guard, not the Interior, not
FEMA, not anybody else that is being sent down there to stand
in the way of what they need to do. They just need to do it and
that way the Secretary won't have to be surprised that the
states haven't done what they need to do.
And I could not believe he would sit here and say that.
With all the things that have not been done with regard to the
inspections, and I know as you get into this I am going to be
anxious to hear your take on what all has occurred and not
occurred. Well, we had Director Birnbaum in here when she was
still director, and I had asked about these offshore
inspectors.
Now, you are coming into this, and I am telling you, having
heard the testimony, I am telling you something has got to be
done. You have go unionized offshore inspectors, and she told
us that the check and balance was to send a pair together. That
way they can watch each other. They can report on what the
other is doing and not doing, and that way they will make sure
that both of them are really doing their job because they know
the other is watching over their shoulder.
When I asked her wouldn't it have been a good idea if the
last unionized pair that went out to the Deepwater Horizon rig
had not been a father and son team, she indicated it was under
investigation. She really couldn't comment. I am telling you
she was not willing to say this, but we should not have father
and son teams going out there. That whole system has got to be
changed. And if there are restrictions on travel or hours they
can work, it has got to be done.
I do want to ask, though, how long was the moratorium or
maybe it is still going on for coal mining in West Virginia
after the 29 miners were killed? Is that still in place?
Mr. Bromwich. I don't know the answer to that.
Mr. Gohmert. OK. Was there ever a moratorium?
Mr. Bromwich. I don't know the answer to that.
Mr. Gohmert. Well, I can tell you there was not one, and I
would like to know why not. If we have to have a moratorium,
not just on the unsafe practices British Petroleum may have had
and that may be going on on some of their rigs, because we know
they have a dismal safety record compared to other companies,
but then also take out their competitors with a moratorium,
then why would there be no moratorium when 29 coal miners are
killed? That makes no sense at all.
And also, because of your experience and all, the Secretary
said he believed the moratorium on drilling was correct. As you
know from your background, it is not enough to believe
something, you have to have evidence, and the court was shocked
that there was not evidence; that it was clearly arbitrary and
capricious based on the lack of evidence; and so please now
that you are in place with your background you can help them
understand you don't do things based on beliefs, you do them
based on evidence, and I think you can have a profound effect
in that regard.
Mr. Bromwich. Well, thank you.
Mr. Gohmert. Do you have a comment?
Mr. Bromwich. Just to respond briefly to one of your
points. As you know, the Department and the Department of
Justice are appealing the judge's decision.
Mr. Gohmert. I know that. They announced that before they
even read the opinion. That would have been a good idea.
Mr. Bromwich. Well, I am not sure that is true.
Mr. Gohmert. They said that.
Mr. Bromwich. OK. But I know they believe the judge's
decision was wrong and that is why they moved for a stay, and
an expedited appeal to the Fifth Circuit.
Mr. Gohmert. Some of the worst decisions or votes in this
Congress have been when people did not read the bills, and so I
would recommend the DOJ do the same thing before they decide to
appeal.
But anyway, I would appreciate your looking into these
matters. These are really serious matters. You are walking into
a fire storm. I recognize that. I appreciate your willingness
to do that, but we are going to have to get some answers, and I
hope you will be able to get them sooner rather than later.
Thank you.
Mr. Bromwich. Thank you very much, Congressman.
Ms. Bordallo. I thank the gentleman from Texas, Mr.
Gohmert, and welcome to the hearing, Mr. Bromwich.
Mr. Bromwich. Thank you.
Ms. Bordallo. I understand you have been in the job eight
days, and you have been to several hearings, is that correct?
Ms. Bordallo. That is correct. This is my third.
Ms. Bordallo. Well, you are a brave soul.
Mr. Bromwich. Thank you.
Ms. Bordallo. I have a few questions to ask. Last week you
testified before the Senate Energy Committee that you needed to
study the proposed reorganization so you could make a
recommendation about it. Now, does this mean that splitting up
MMS into three agencies, as you announced in the secretarial
order, is that not set in stone? Do you believe this is a good
thing?
Mr. Bromwich. Thank you very much for your question. When I
was asked to take this job, I was informed that there was a
proposal that had already been made to divide the then existing
MMS into three different pieces. Secretary Salazar said he
thought it was fair and appropriate that I have the ability to
understand the reorganization proposal and make any
modifications that I thought were appropriate based on my
learning more about it and getting comfortable with it.
Although this is my third hearing and there have been a lot
of other things I needed to do, I have had further
conversations both with the Secretary and with people who have
spent a good amount of time dealing with this issue, studying
the issue, dealing with employees in my organization to get
their views on things, and I am far more comfortable today on
day eight than I was on day one that that is the right path
forward.
Ms. Bordallo. So you are looking to the three-way split?
Mr. Bromwich. Based on what I know, that makes quite a bit
of sense.
Ms. Bordallo. Thank you. And Mr. Bromwich, I understand
that there are some additional subsea tests that are being
conducted on the blowout preventers being used on the relief
wells, and that such testing was previously thought to not be
possible. Would you describe in more detail what type of tests
are being run?
Mr. Bromwich. I wish I could but I can't. I don't know the
specifics of what kind of subsea tests are currently being
conducted.
Ms. Bordallo. All right.
Mr. Bromwich. As I said before, there are multiple
investigations ongoing. I have not had time, frankly, to find
out where the different investigations are. There is one that
is jointly being conducted by my agency and the Coast Guard.
The next set of public hearings are scheduled for the week of
July 19. I plan to go down there for at least part of that, as
part of the process, in which I learn more about the specific
issues that are being explored in that investigation.
Ms. Bordallo. That is fair enough. Thank you.
And my last question, do you believe that a training
academy for inspector such as is proposed in Mr. Rahall's draft
would be a good idea? And do you think there would be any
efficiencies in having a combined onshore and offshore
inspection force?
Mr. Bromwich. It is a very intriguing idea. One of the
things that I have already begun to focus on is how we get an
experienced, competent, capable cohort of inspectors, not
father and son teams, but teams of inspectors who know what
they are doing, that gain experience in what they are doing,
and yet don't suffer from the kind of coziness with industry
that my agency has been so criticized for.
So, we are exploring that. One of the things I want to
explore is a program to recruit talented petroleum engineering
students straight out of school, pair them with senior
inspectors, the best that I have got, and bring them along a
whole new generation of inspectors who are devoted to public
service, and are not looking around the corner for a job with
industry two or four or six years down the road.
I think we have to find a way to establish the
independence----
Ms. Bordallo. Absolutely.
Mr. Bromwich [continuing]. Of the inspectors, and make sure
that their commitment is to the public interest to the safety,
to the protection of the environment, and that they are not
looking around the corner at the oil company that is going to
pay their salary three years down the road.
Ms. Bordallo. Thank you. Thank you very much. I would like
to thank you, and be sure you thank the Secretary, Mr. Salazar.
I know he had to leave. And thank you for your time today. Yes?
The Ranking Member, go ahead.
Mr. Gohmert. I would just like to make a request or an
answer in writing. Our time on the hearing is about to
conclude. But we had had a hearing in here a year or so ago
where Inspector General Devaney had investigated the 1998-1999
offshore leases from which the price adjustment language, which
was intentionally pulled----
Mr. Bromwich. The which language? I am sorry.
Mr. Gohmert. The price adjustment language dealing with the
price of oil was pulled for those two years, and he had
indicated in here, because obviously when something happens
that costs us hundreds of millions or billions of dollars to
the Treasury, I don't care what party anybody is in, we ought
to want to get to the bottom of it, and anyway he had indicated
that there were at least two or three people that he had not
interviewed because they had left government service. One
person that was not interviewed apparently was even involved in
signing the notices for these leases and whatnot, and it turned
out she went to work for British Petroleum for eight years, and
came off that employment last June when the press release from
Secretary Salazar indicates she went back to work for Minerals
Management.
I am not sure in the breakup where Sylvia Baca will be
working, but I think it would be interesting to know if her
responsibilities involve anything at all, and now that she is
back in government service, if the IG's office would be alerted
that somebody they may not have interviewed before about what
costs this country so much money might be interviewed by the IG
now to determine more answers than we were able to get, or that
the IG was able to get previously. So just to find out where
all that sits, has the IG been alerted that she is back, and so
we can find out what job she had, does it involve BP and that
kind of things. But I appreciate it.
Mr. Bromwich. My understanding, Congressman, is that she is
recused from any and all BP matters.
Mr. Gohmert. Yes, we were told that previously, but what
one person thinks is any and all matters may not be to all
appropriateness to somebody else.
Mr. Bromwich. Fair enough.
Mr. Gohmert. But I have heard recused from matters before
that might be a conflict, and I would really like to know
exactly what those are. Thank you.
Mr. Bromwich. Thank you.
Ms. Bordallo. I thank the gentleman. Also, Director
Bromwich, you were asked many questions today which you were
not able to answer so I am sure that you will be able to supply
the Committee with the answers to these questions, and the
record of this hearing will be held open for 10 days. Is that
correct? Yes.
The Committee will now recess until the end of these votes,
I think there are three votes down on the Floor, we are going
into the second one, so it will probably be about 15 minutes
before we introduce the second panel. And I thank you again,
Director Bromwich, for being with us this morning.
Mr. Bromwich. Thank you very much.
Ms. Bordallo. And now the Committee stands in recess.
[Recess.]
Ms. Bordallo. The Full Committee of the Natural Resources
will now come to order, and we welcome the second panel of
witnesses. I would like to welcome Ms. Janis Searles Jones,
Vice President for National Conservation Policy and Legal
Affairs, Ocean Conservancy; and Dr. David E. Dismukes, Ph.D.,
Associate Executive Director and Director of Policy Analysis,
Center for Energy Studies, Louisiana State University.
I welcome you both, and we will begin with you, Ms. Jones.
STATEMENT OF JANIS SEARLES JONES, VICE PRESIDENT FOR NATIONAL
CONSERVATION POLICY AND LEGAL AFFAIRS, OCEAN CONSERVANCY
Ms. Jones. Thank you, Congressman Bordallo.
Chairman Rahall, Ranking Member Hastings, and distinguished
members of the Committee, thank you for the invitation to
participate in today's hearing. My name is Janis Jones. I am
the Vice President of Programs for Ocean Conservancy, a
national conservation organization that has promoted healthy
and diverse ocean ecosystems since 1972. I have worked on
marine issues for almost 15 years and I serve as an adjunct
faculty member of the Northwestern School of Lewis and Clark,
Northwestern School of Law at Lewis and Clark College.
The oil spill in the Gulf of Mexico is a human and
environmental tragedy. Lives have been lost, livelihoods have
been destroyed, and the region is being subjected to what the
President has called the worst environmental disaster America
has ever faced. We may never be able to calculate the full
economic and ecological impact of the BP Deepwater Horizon
spill. We do know that in the Gulf region alone fishing and
coastal tourism provide $14.5 billion annually in wages and
income impacts, and support over 820,000 jobs, and we know that
our current OCS policy has been both an economic and
environmental failure.
As this Committee recognized long before the current
tragedy, there is an urgent need for reform of our Outer
Continental Shelf regime, and the time for action is now. The
Discussion Draft under consideration today represents a
significant step forward. The CLEAR Act addresses five key
challenges facing our nation.
First, our national policy for the OCS is inadequate and we
lack meaningful standards to protect the environment and ocean
and coastal economies.
The amendments contained in the Discussion Draft would
begin to balance an OCS policy that is focused far too much on
oil and gas development and far too little on the consequences
of such development. The standard against which we must measure
decisions about whether, and if so under what conditions, to
permit OCS development must be one that protects the heath of
marine ecosystems. We believe the Discussion Draft should be
improved to reflect that standard.
Second, the process for planning and implementing OCS oil
and gas activities is badly broken.
The amendments contained in the Discussion Draft would
begin to address the process that has been implemented to
shield full and fair consideration of the risks and
consequences of OCS development. OCS planning, exploration, and
development must be subjected to meaningful environmental
analysis which requires baseline information, appropriate
geographic scales of analysis, and must involve expert agencies
other than the MMS or it successors.
The Discussion Draft take some great strides in that
direction, such as requiring consultation with NOAA, but could
be further strengthened.
Third, at the BP Deepwater Horizon continues to painfully
demonstrate, there are insufficient standards for oil spill
prevention and response.
The Discussion Draft proposes significant improvements,
including more rigorous safety and technology standards and
more robust spill response plans. We support the amendments and
suggest further strengthening the provisions by requiring
consideration of the availability of oil spill response
infrastructure at the five-year plan level, and by conditioning
the issuance of exploration permits on a real world
demonstration of response capability.
Fourth, despite the importance of coastal and marine
ecosystems and the risks posed by oil and gas activities, there
is no dedicated funding for ocean, coastal and Great Lakes
conservation and management.
The Discussion Draft's creation of a new Ocean Resources,
Conservation and Assistance Fund is an action that is long
overdue and one that we strongly support.
Finally, as every commission that has examined ocean policy
since the late sixties has concluded, a single sector approach
to ocean governance is fundamentally flawed and has led to
conflicts among users and the degradation of marine ecosystems.
The exiting oil and gas planning process is a stark example of
why we must move to a system of multi-objective regional
planning for the conservation and management of marine
resources.
The Discussion Draft moves in the right direction and
should be broadened to address multiple objectives, not juts
energy activities.
Offshore drilling for oil and gas, to the extent it is to
consider in the wake of the disaster in the Gulf, must be
considered only as a bridge to a clean energy future. It cannot
continue under a system that fails to protect the ocean and
coastal economies and ecosystems upon which we all rely. The
need for reform is urgent. I thank the Committee for seeking to
address that need, and for the opportunity to testify.
[The prepared statement of Ms. Jones follows:]
Statement of Janis Jones, Vice President of Programs, Ocean Conservancy
Chairman Rahall, Ranking Member Hastings and Members of the
Committee, thank you for the invitation to participate in today's
hearing. My name is Janis Jones and I am the Vice President of Programs
for Ocean Conservancy, a national marine conservation organization that
has promoted healthy and diverse ocean ecosystems since its founding in
1972. I have worked on marine issues for almost fifteen years, and I
serve as an adjunct faculty member of the Northwestern School of Law at
Lewis and Clark College in Portland, Oregon.
What we are currently witnessing in the Gulf is a human and
environmental tragedy. Even as the disaster continues to unfold, many
of its underlying causes are clear: regulators who uncritically
accepted the assurances of the oil industry regarding the safety of
offshore drilling, inadequate safety and environmental standards, and a
false notion that the risk of an accident of this magnitude was so
insignificant that it was unworthy of evaluation. It is noteworthy, Mr.
Chairman, that this Committee had identified many of the systemic
failures that enabled such practices to occur during hearings last
year, and that the Consolidated Land, Energy, and Aquatic Resources
(CLEAR) Act was introduced before the current tragedy in the Gulf
began. I would like to thank the Committee for its work to revise that
legislation in recent weeks, and for releasing the Discussion Draft
under consideration today.
Continued offshore drilling must be considered only as a bridge to
a clean energy future; and it cannot continue under a system that fails
to protect adequately the coastal and ocean ecosystems--including
living coastal and marine resources and habitat--on which we all rely.
The law governing oil and gas activities in the Outer Continental Shelf
(OCS) lacks provisions that protect ocean and coastal environments and
the economies that depend on them; it largely excludes expert agencies
from the development process; and it lacks integrated planning to
consider and address conflicts and maximize resource protection and
sustainable production. The federal agency charged with administering
OCS oil and gas activities has proved incapable of effective regulation
and oversight, and our ability to prepare for, respond to, and clean up
oil spills has not kept pace with advances in drilling and extraction
technologies. The Discussion Draft takes important steps to correct
these shortcomings.
Overall we view this Discussion Draft as a very positive step
forward in addressing an urgent set of problems. My testimony focuses
mainly on the provisions that affect ocean and coastal ecosystems. The
first section of my testimony identifies key weaknesses or gaps in
current ocean and energy policy that Congress should address as it
moves forward with energy reform legislation. The second section
highlights provisions in the proposed legislation that Ocean
Conservancy supports as constructively addressing those weaknesses or
gaps. The third section discusses provisions of the Discussion Draft
that we believe should be strengthened.
I. WEAKNESSES OR GAPS IN CURRENT OCEAN AND ENERGY POLICY: PRIORITIES
FOR CHANGE
For purposes of this testimony, key shortcomings in ocean and
energy policy can be grouped into five categories: (1) an inadequate
national policy for the OCS and a lack of substantive standards to
protect the environment and ocean and coastal economies; (2) flawed
processes for planning and implementing OCS oil and gas activities; (3)
insufficient standards for oil spill prevention and response; (4) a
lack of dedicated funding for ocean, coastal, and Great Lakes
conservation and management; and (5) a failure to integrate oil and gas
activities with other ocean planning and management decisions. The
following paragraphs briefly describe these problems and suggest
solutions.
First, our national OCS policy focuses too much on development and
extraction of oil and gas, and not enough on the consequences of doing
so. Congress should amend the policy to recognize that oil and gas
activities on the OCS are appropriate only in those areas where it can
be demonstrated that oil and gas activities can proceed with minimal
risk to the health of ocean ecosystems. In addition to policy
shortcomings, the OCS Lands Act (OCSLA) does not contain meaningful,
substantive standards to ensure protection of the marine environment.
The statute should be amended to prioritize protection and maintenance
of healthy marine and coastal ecosystems. Congress should ensure that
baseline science is in place before OCS areas are leased, important
ecological areas are placed off-limits to leasing and drilling, and
facilities use the best available technologies and safety procedures to
maximize the protection of workers, ocean and coastal ecosystems and
the coastal businesses and economies that rely on them.
Second, the existing process for making decisions about and
managing oil and gas activities on the OCS does not do enough to
empower governmental agencies with the greatest expertise in ocean
issues. OCSLA gives the Secretary too much discretion to permit oil and
gas activities where they do not belong and risks substantial harm to
ocean and coastal ecosystems. This process should be changed to give
expert agencies--such as the National Oceanic and Atmospheric
Administration (NOAA), the U.S. Fish and Wildlife Service (USFWS), the
U.S. Coast Guard (USCG), and others--a greater role in decisions about,
and preparation of environmental analyses for, OCS oil and gas
activities. Further, planning and leasing decisions involve such broad
areas of the ocean that there is little opportunity for meaningful
environmental analysis or public participation before exploration and
drilling activities proceed. OCS planning areas should be smaller and
precisely focused only on specific lease tracts to facilitate more
meaningful review.
Third, as the aftermath of the BP Deepwater Horizon continues to
demonstrate painfully, current standards for oil spill prevention and
response are inadequate. Congress should change federal law to require
more rigorous safety and technology standards and more robust spill
response plans. For example, OCS operators should be required to plan
for worst-case spills, including impacts from and response to blowouts.
OCS drilling safety equipment should be certified by an independent
third-party, should use the best available technology, and should
incorporate redundant blowout prevention systems. To be effective in an
emergency, sufficient response capability must be on site and able to
be mobilized immediately, and a demonstration of that capability must
be made before activity commences.
Fourth, despite the importance of coastal and marine ecosystems and
the risks posed by oil and gas activities, there is no dedicated source
of funding to support conservation and management in these regions.
Congress should invest revenues derived from offshore development in a
fund dedicated to ocean and coastal restoration and conservation.
Fifth, decision-making about oil and gas activities on the OCS is
largely disconnected from other ocean planning and management
decisions. This single-sector approach contributes significantly to
conflicts among users and the degradation of marine ecosystems.
Congress should move to a system that relies upon multi-objective
regional planning for the conservation and management of marine
resources.
The Discussion Draft contains various provisions that address, or
begin to address, many of these problems. Below, Section II highlights
critical provisions that make positive changes and should be retained
as the CLEAR Act moves forward in the legislative process. Section III
discusses provisions that should be strengthened or added to the CLEAR
Act to ensure effective and comprehensive reform.
II. PROVISIONS OF THE CLEAR ACT THAT IMPROVE OCEAN AND ENERGY POLICIES
The following paragraphs highlight selected provisions of the
Discussion Draft that are particularly important and should be carried
forward. \1\ In some instances, this testimony recommends changes to
these provisions, detailed in Section III, that are intended to further
strengthen or clarify the current proposed legislative language.
---------------------------------------------------------------------------
\1\ This Section includes provisions that Ocean Conservancy feels
are particularly important or noteworthy. If a particular provision is
not listed in this Section, it does not indicate that Ocean Conservancy
does not support the provision.
---------------------------------------------------------------------------
A. Title I: New Department of the Interior Agencies
Until recent restructuring within the Department of Interior (DOI),
DOI's Minerals Management Service (MMS) was responsible for the
administration of oil and gas activities on the OCS, including
evaluation, planning, regulation, and collection of revenue generated
through lease sales and royalties. The Deepwater Horizon disaster
brought to the public's attention the potential conflicts between the
agency's revenue-generating, planning, and environmental and safety
enforcement functions. Additionally, reports and investigations by the
U.S. Government Accountability Office (GAO) and DOI's Office of
Inspector General (OIG) have revealed a troubling history of MMS's
failure to effectively track, collect, audit, and enforce royalty and
other payments due from industry. And in recent years, reports have
revealed an inappropriately close relationship between MMS employees
and industry members, instances of unlawful behavior, and an MMS
culture of disregard for ethical and substantive duties.
For all of the above reasons, we support the CLEAR Act's
abolishment of MMS, creation of three separate DOI agencies, and other
statutory changes. The following provisions are particularly important:
the abolishment of MMS (Section 107) and the creation of
separate agencies--the Bureau of Energy and Resource Management
(Section 101), the Bureau of Safety and Environmental Enforcement
(Section 102), and the Office of Natural Resources Revenue (Section
103)--to carry out MMS's functions and duties;
with some changes noted below, the requirement that the
Secretary of the Interior create an independent office within the
Bureau of Energy and Resource Management to carry out environmental
studies and to conduct environmental analyses (Section 101(c)(3));
the requirement that the Secretary of the Interior
certify annually that certain Bureau of Energy and Resource Management,
Bureau of Safety and Environmental Enforcement, and Office of Natural
Resources Revenue officers and employees are in compliance with ethics
laws and regulations (Section 104), and the requirement that Bureau of
Safety and Environmental Enforcement inspectors are qualified, trained,
and meet the highest ethical standards (Section 102(e));
with some changes noted below, the creation of an
independent audit and oversight program to monitor administration of
the revenue program (Section 103(d)); and
with some changes noted below, the creation of an OCS
Safety and Environmental Advisory Board to provide independent
scientific and technical advice to the Secretary of the Interior and
the Directors of the Bureau Energy and Resource Management and the
Director of the Bureau of Safety and Environmental Enforcement (Section
109).
B. Title II: OCSLA Reform
As noted above, OCSLA sets forth an inadequate and outdated
national OCS policy and lacks meaningful environmental and safety
standards. Title II of the Discussion Draft makes many important and
positive changes to OCSLA. While these changes will require additional
modification to be most effective--see Section III, below--Title II
makes great strides in improving OCSLA. Among the most important
provisions are amendments that, among other things:
remedy flaws in the national OCS policy (Section 203);
require the Secretary of the Interior to promulgate new,
more protective regulations and in so doing, to consider the views of
the Secretary of Commerce on matters that may affect the marine and
coastal environment (Section 205);
change the leasing provisions of OCSLA to disqualify
parties not in compliance with certain safety or environmental
requirements from bidding on OCS leases and require the Secretary of
the Interior to consult with the Secretary of Commerce before holding
an OCS lease sale (Section 206);
direct a portion of OCS revenue into a new Ocean
Resources Conservation and Assistance (ORCA) fund (Section 207);
eliminate the use of categorical exclusions to approve
exploration plans, extend the deadline for approving exploration plans,
impose more robust requirement for drilling plans, provide for
consultation with the Secretary of Commerce before approving
exploration permits, and set forth more protective standards for
drilling (Section 208);
require the Secretary of the Interior to adhere to more
protective substantive standards when developing five-year oil and gas
leasing programs--including requirements to minimize environmental
damage and consider three consecutive years of science--and to invite
and consider comments from the Secretary of Commerce during the
formulation of the plan (Section 209);
direct the Secretary of the Interior to cooperate with
the Secretary of Commerce to conduct studies of areas of the OCS open
to leasing (Section 210);
require more rigorous and more frequent inspections of
drill rigs (Section 212); and
require Development and Production Plans (DPP) for
facilities in the Gulf of Mexico, provide for more robust DPPs, and
prohibit the use of categorical exclusions for approving DPPs (Section
214);
C. Title VI: OCS Coordination and Planning
In addition to amending specific statutes like OCSLA to provide
greater protection for ocean and coastal resources, we must also reform
our overall approach to siting marine uses and managing our ocean. We
need management approaches that integrate across federal and state
jurisdictions and consider more holistically ecosystem services and the
different uses that our oceans provide. The CLEAR Act begins to move in
this direction with the changes in Title VI. As outlined in section III
below, we recommend further strengthen this Title to truly provide for
multi-objective planning; however, we support many of the concepts
addressed in Title VI, including:
increased coordination between state and federal agencies
on decisions affecting ocean resources;
comprehensive regional assessments of ocean ecosystems
including important ecological areas, habitats, and species, as well as
current and potential uses; and
regional planning to proactively and transparently
consider the tradeoffs made in allowing for ocean uses, while providing
for the protection of marine ecosystem health.
In addition, we strongly support Section 605, which creates an
Ocean Resources Conservation and Assistance (ORCA) fund. If oil
companies are going to continue to make billions of dollars from
activities that put ocean and coastal resources at risk, a portion of
the revenue from those activities should be made permanently available
for efforts to protect, maintain, and restore the health of ocean and
coastal ecosystems. Coastal state and tribal governments play an
important role in managing and protecting ocean and coastal resources.
We support allocating a percentage of the ORCA funds to those
governments, provided there is not a connection between the amount of
funding received and proximity to oil and gas activities. The CLEAR Act
avoids such a connection, thereby reducing the risk of providing
further incentives for offshore drilling.
D. Title VII: Miscellaneous Provisions
Title VII of the Discussion Draft includes several important
sections that should be carried forward. We particularly support the
following Sections:
Section 701, including its provisions to repeal
incentives and royalty relief for deepwater drilling in the Gulf of
Mexico and to repeal certain development and production incentives in
Planning Areas offshore Alaska;
Section 704, which precludes the Secretary of Commerce,
the Administrator of NOAA, or Regional Fishery Management Councils from
developing or approving fishery management plans or amendments that
permit or regulate offshore aquaculture, and which invalidates any
permit issued pursuant to this authority to conduct offshore
aquaculture. We recommend adding language to clarifying that DOI also
lacks authority to regulate offshore aquaculture, given MMS's previous
interest in this issue. Because the Magnuson Stevens Fishery
Conservation and Management Act does not provide the Secretary of
Commerce with the authority to regulate offshore aquaculture, we
support H.R. 4363, which establishes a national regulatory framework
developed specifically to address the unique environmental concerns
associated with offshore aquaculture;
Section 705, which prevents exploration, development, or
production of minerals of the Outer Continental Shelf in areas seaward
or adjacent to areas where a state moratorium is in effect;
Section 707, which would provide new authority for states
to develop and revise plans for improved oil spill response under
authorities of the Coastal Zone Management Act; and
Section 708, which requires the President to promote
collaboration among federal agencies with ocean and coastal related
functions; support Regional Ocean Partnerships; and establish a
National Ocean Council.
E. Title VIII: Gulf of Mexico Restoration
The Deepwater Horizon blowout and spill is a human and
environmental tragedy. Coastal communities in the Gulf of Mexico--and
coastal and marine ecosystems--are suffering and will continue to feel
the effects of the spill for years to come. Effective restoration
efforts will require the cooperation of and coordination among many
federal, state, local and private interests over a sustained period. We
support the effort to facilitate and coordinate restoration activities,
including establishing a Gulf of Mexico Restoration Planning Program,
establishing a long-term monitoring and research program in the region,
and establishing a migratory species emergency habitat restoration and
establishment program for the Gulf coast. As noted in Section III,
below, the Committee should clarify how the provisions of Title VIII of
the CLEAR Act will relate to processes mandated under existing law.
III. PROVISIONS THAT SHOULD BE STRENGTHENED OR ADDED TO THE CLEAR ACT
TO ENSURE EFFECTIVE AND COMPREHENSIVE REFORM
While the CLEAR Act would enact many significant amendments, the
Committee should consider clarifying or strengthening some portions of
the draft bill to ensure that reforms are substantive and meaningful.
The following section describes, in a general fashion, recommended
changes to the Discussion Draft. We would welcome the opportunity to
provide to the Committee specific legislative language, in the form of
recommended line edits, for Title II, Subtitle A and Title VI of the
Discussion Draft.
A. Title I: New Department of the Interior Agencies
Section 101(c)(3) of the Discussion Draft requires the Secretary of
the Interior to create an independent office within the Bureau of
Energy and Resource Management that would carry out environmental
studies required under Section 20 of OCSLA and conduct environmental
analyses for programs administered by the Bureau. The Discussion Draft
requires this independent office, in carrying out its ``studies,'' to
consult with relevant federal agencies including the Bureau of Safety
and Environmental Enforcement, the USFWS, the U.S. Geological Survey
(USGS), and NOAA. The bill should be amended to clarify that the
independent office is required to consult with these other agencies not
only with respect to environmental studies pursuant to OCSLA section
20, but also with respect to the environmental analyses noted in
Section 101(c)(3)(A)(iii)(II). In addition, the list of federal
agencies with which the office shall consult should be expanded to
include the Environmental Protection Agency (EPA) and the USCG.
Title I also requires the Secretary to create an audit and
oversight program within the Office of Natural Resource Revenue,
charged with overseeing the activities of the Office of Natural
Resource Revenue (Section 103(d)). This auditing program may not be--or
may not be perceived as--truly independent if it resides within the
Office it is charged with overseeing. The Committee should change the
Discussion Draft such that the independent auditing program is located
in an office outside the Office of Natural Resource Revenue, for
example in the Office of Inspector General.
Section 109 requires the establishment of an OCS Safety and
Environmental Advisory Board, but provides little direction as to who
may serve on the Board. Under the bill as drafted, it is possible that
the Board could be dominated by members who are part of, or have close
ties to, the oil and gas industry. The bill should limit to the number
of Board members who currently work for, or have in the recent past
worked for, the oil and gas industry.
B. Title II: OCSLA Reform
The paragraphs below describe many recommended changes to Title II
of the Clear Act and/or additional amendments to OCSLA, but do not set
forth every recommended edit.
Section 203
Section 203 of the Discussion Draft does much to remedy flaws in
the national OCS policy. However, the Committee should make additional
changes to ensure that the policy is mandatory and consistent with the
substantive protections included in the Act. For example, Section 203
of the bill should be revised to provide that the OCS ``shall'' be
managed in a manner that ``minimizes''--not just ``recognizes''--the
potential impacts of development. In amending OCSLA Section 2,
paragraph 6, the bill should provide that ``exploration, development,
and production of energy and minerals on the outer Continental Shelf
shall be allowed only when those activities can be accomplished in a
manner that does not endanger life....'' These additional changes will
establish a strong and consistent policy.
Section 205
Section 205(a)(1) amends OCSLA to require the Secretary of the
Interior to promulgate rules and regulations, but only when the
Secretary determines those rules are ``necessary and proper.'' This
section should eliminate Secretarial discretion by striking the words
``as he determines to be necessary and proper.'' With respect to
OCSLA's language on lease cancellation, the draft bill should change
the current standard in OCSLA Section 5(a)(2)(A)(i)--that continued
activity ``would probably cause serious harm''--to ``could cause
serious harm.'' The draft bill should amend current OCSLA Section
5(a)(8) to require regulatory provisions for the compliance with not
only the Clean Air Act, but the Marine Mammal Protection Act (MMPA),
the Endangered Species Act (ESA), the Clean Water Act (CWA), and the
National Environmental Policy Act (NEPA). And in addition to requesting
and giving ``due consideration to the views of the Secretary of
Commerce,'' the Section 205 should also require the Secretary of the
Interior to request and give due consideration to USFWS, EPA, and the
USCG.
Section 206
Section 206 of the CLEAR Act should include additional amendments
to strengthen and clarify OCS leasing provisions. For example, it
should amend Section 8(b)(4) to clarify that the rights of OCS lessees
are conditional: they entitle the lessee to an exclusive right ``to
seek authorization to'' explore, develop, and produce. Section 206
should require the Secretary of the Interior to request from the
Secretary of Commerce a review of proposed lease sale environmental
impact statements, not just a review of the lease sale itself. Also,
the Secretary of Commerce should have more time to conduct this review,
and Secretary of the Interior should be required to modify the proposed
lease sale as recommended by the Secretary of Commerce's review.
Section 206 should also be amended to include a new substantive
standard to ensure that OCS leasing does not endanger marine life.
Section 208
This Section of the Discussion Draft makes significant improvements
to OCSLA Section 11, but should go further to improve OCSLA's
provisions relating to exploration. To begin, the bill should make
additional amendments to subsection (a) of OCSLA Section 11 to prohibit
duplicative geological or geophysical survey efforts in the same area
of the OCS and to ensure the use of the best available technologies and
practices to minimize impacts to aquatic life. As written, the
Discussion Draft requires the Secretary to approve an exploration plan
if, among other things, an operator meets a strict new spill response
standard. This should be changed to require the Secretary to approve an
exploration plan ``only'' if the operator meets the new response
standard. OCSLA Section11(g) should be further amended such that the
Secretary of the Interior is not only required to consult with the
Secretary of Commerce, but also with other relevant natural resource
and environmental agencies, including USFWS and EPA. The best available
technology standard and technical systems analysis required by the
proposed new OCSLA Section 11(j) should apply to OCS exploration plans
that contain proposals to drill a well in frontier areas as well as
exploration plans that proposed to drill a well in deepwater areas.
Finally, the language concerning disapproval of an exploration plan--
the proposed new OCSLA Section 11(k)--sets too high a standard and
should be modified.
Section 209
OCSLA Section 18 requires the Secretary of the Interior to prepare
a five-year oil and gas leasing program. The Discussion Draft makes
important changes to this section, but should further modify provisions
concerning the five-year leasing program to ensure they include
substantive protective standards. For example, the bill should provide
a standard to ensure that only specific, limited areas are made
available for leasing so that the leasing schedule is focuses on
relevant areas of the OCS. It should also include a provision that
requires the Secretary of the Interior to conform the five-year program
to relevant marine spatial plans. It should exclude important
ecological areas from the five-year leasing program. The bill should
also require the Secretary of the Interior to consider, when preparing
five-year leasing programs, the availability of infrastructure to
support oil spill response. In addition to requiring the Secretary of
the Interior to invite and consider suggestions from NOAA, the bill
should require the Secretary to invite and consider suggestions from
other natural resource and environmental agencies, including USFWS and
EPA.
Section 210
Section 210 should further amend OCSLA Section 20 to require at
least three years of baseline environmental data must be gathered
before energy or mineral exploration or development activities are
permitted. Baseline data should include (1) weather, water, wind, ocean
chemistry, and other environmental data; (2) wildlife assessments,
including but not limited to fish, birds, invertebrates, and marine
mammals; and (3) data on the benthic environment.
Section 211
Section 211 strengthens the ``best available and safest
technologies'' standard in OCSLA, but it does not go far enough; there
are still exceptions and qualifiers that could reduce significantly the
impact of this requirement. The bill should further amend OCSLA Section
21 to remove the exceptions and qualifiers and simply require OCS
facilities to use the best available and safest technologies. Section
211 also requires the Secretary of the Interior to identify and publish
a list of the best available technologies. The bill should require the
Secretary to enter into an agreement with the National Academy of
Engineering for periodic written review of the list, to make the
written review public, and to report to Congress any disagreement with
any findings or recommendations made in the review.
C. Title VI: OCS Coordination and Planning
As noted above, we support many of the concepts in Title VI related
to regional coordination and planning. Our oceans urgently need a more
integrated system with ecosystem based management at its core, as
called for by both the Pew Ocean Commission and the U.S. Commission on
Ocean Policy, and as advanced by the recent work of the President's
Interagency Ocean Policy Task Force. As currently drafted, Title VI
would make important advances in coordination and planning, but would
also risk creating another single-sector approach to ocean management.
We suggest broadening the objectives of Section 602 and 603 to address
multiple objectives, of which energy planning would be one. Moreover,
in order to provide for the ``long-term economic and environmental
benefit of the United States,'' the protection, maintenance, and
restoration of marine ecosystem health, must be prioritized within the
overall purpose statement.
Regional Assessments required by Section 603 will be critical in
providing the science and data necessary for any multi-objective
regional planning. As such, the bill should be amended to include
additional requirements for robust environmental baseline data, as well
as assessments of existing and emerging threats to marine ecosystem
health, impacts of drilling, and effectiveness of clean-up
technologies. It should also require identification and prioritization
of additional science needs. Given the ocean science expertise within
NOAA, these assessments should be conducted jointly by the Secretary of
the Interior and the Secretary of Commerce.
In addition, we support finalization of the President's Interagency
Ocean Policy Task Force work to establish a National Ocean Policy and
Framework for Coastal and Marine Spatial Planning. The draft policy and
framework have benefitted from significant agency, stakeholder, and
public input. We suggest modifying Title VI to align with the proposed
structures to avoid potentially overlapping and duplicative planning
processes. Our suggestions include modification of the geographic scope
for assessments, plans, and regional bodies, and establishment of
regional bodies by the President in consultation with the National
Ocean Council, established in Section 708.
Section 605 creates the ORCA fund to be administered by the
Secretary of Commerce for the conservation, protection, maintenance,
and restoration of ocean, coastal and Great Lakes ecosystems. Thirty-
five percent of the funding would be made available through a
competitive grants program. To enhance federal agency communication and
coordination we suggest that the National Ocean Council, established in
section 708, approve the final selection of the Ocean, Coastal, and
Great Lakes competitive grant proposals, based on the recommendations
of the Secretary of Commerce. With this approval process, review by a
statutorily mandated Review Panel, as provided for in Section
605(c)(2), is unnecessary. Instead, Congress should direct the
Secretary of Commerce to establish procedures and criteria for
evaluating grant proposals that include appropriate broad,
interdisciplinary review.
Under Section 605, Regional Ocean Partnerships would be eligible
for ten percent of the ORCA funding. We suggest modifications to the
definition of Regional Ocean Partnership in Section 3 in order to
ensure that the regional bodies established pursuant to Section 602 are
also eligible for this funding.
D. Title VII: Miscellaneous Provisions
Section 702 requires the Secretary of the Interior to issue
regulations establishing a ``production incentive fee'' on oil or gas
wells producing in commercial quantities. The fee is set at $2 per
barrel of oil and 20 cents per million BTU of natural gas. The draft
bill should clarify whether the monies collected pursuant to this
section will be deposited into the General Treasury or used for some
specific purpose.
Section 710 provides that funds made available pursuant to the
CLEAR Act cannot be used to fund or carry out activities for which a
responsible party (as defined by the Oil Pollution Act (OPA)) is
liable. This section should be modified to allow CLEAR Act funds to be
used, but to require that responsible parties remain liable and must
reimburse any expenditures.
E. Title VIII: Gulf of Mexico Restoration
Sections 801 and 802 establish a Gulf of Mexico Restoration Program
and a Gulf of Mexico Long-Term Environmental Monitoring and Research
Program. The activities to be undertaken pursuant to these programs
appear to overlap significantly with processes that OPA requires
federal and state natural resources trustees to undertake. For example,
Section 801(c), which calls for a restoration plan, appears to overlap
significantly with OPA's requirement that trustees develop and
implement ``a plan for the restoration...of the natural resources under
their trusteeship.'' 33 USC. Sec. 2706(b).
The Committee should clarify the relationship between the
requirements of Title VIII and the requirements of OPA, including OPA
regulations and NOAA Natural Resource Damages Assessment (NRDA)
guidance. If the Restoration Plan and/or Monitoring and Research
Program requirements set forth in Sections 801 and 802 are intended to
establish or replace requirements for a NRDA process, the draft should
make that clear, and should provide more detailed legislative language.
Sections 801 and 802 should also provide for more opportunities for
public participation in the Restoration and Monitoring programs.
Section 801(d)(2)'s definition of restoration programs and projects
should be changed to add the word ``enhancement'' after the word
``replacement.'' In Section 802(b), the bill should be amended to
require that the research and monitoring program address not only
physical, chemical, and biological characteristics, but also
``ecological'' characteristics.
IV. CONCLUSION
The CLEAR Act makes significant strides in addressing a host of
shortcomings in the administration of oil and gas activities on the OCS
and in other areas of law and policy. Additional targeted improvements
would maximize the effectiveness of these reforms. I look forward to
working with the Committee as the CLEAR Act moves forward in the
legislative process. The need for action is urgent and I commend you
again for moving forward with reform legislation. Thank you again for
this opportunity to testify.
______
Ms. Bordallo. I thank you very much for your testimony, Ms.
Jones, and now I would like to recognize Dr. Dismukes.
STATEMENT OF DR. DAVID E. DISMUKES, ASSOCIATE EXECUTIVE
DIRECTOR AND DIRECTOR OF POLICY ANALYSIS, CENTER FOR ENERGY
STUDIES, LOUISIANA STATE UNIVERSITY
Dr. Dismukes. Thank you. Good afternoon, Madam Chairperson
and Committee members. It is an honor to be here this
afternoon.
My name is David Dismukes. I am a Professor and the
Associate Executive Director for the Center for Energy Studies
at the Louisiana State University.
The Center for Energy Studies was created by the Louisiana
Legislature in 1982, and our purpose is to examine energy-
related research that impacts our citizens, our environment,
and our economy.
There are a number of positive provisions that are included
in the bill before you this afternoon that I think will go a
long way in helping improve offshore energy regulation. Some of
those include the break up of the Minerals Management Service
into separate regulatory and governance structures that will
look at planning and at revenue collection and enforcement
separately.
Some of the other positive aspects of the bill include the
professional resources that will be dedicated to the Minerals
Management Service--I mean, to the successor agencies and the
ability to go in and seek out the best talent to go in and
examine pressing issues in energy regulation as well as in
safety and environmental performance. The increased standards
associated with reporting are also going to be, I think, a
positive aspect associated with improved regulation for the
offshore areas, as well as the benchmarks that were talked
about at length earlier in the hearing that I think create a
unique opportunity in offshore regulation on a foregoing basis.
I think Congress is missing an opportunity there though
without changing those and maybe enhancing those a little bit
by setting rewards and penalties to meeting those benchmark
targets. By giving profit incentives for performing in best of
class or exceeding those classes and by invoking symmetrical
penalties for not meeting those standards I think you will go a
long way in encouraging the types of research and development
that you are thinking about in this particular provision of
this legislation for mitigating spills and improving technology
in oil and gas activities.
However, despite a lot of those good provisions that are in
the bill there are a number of deficiencies, particularly as
they relate to Louisiana. The first and one of the most
important ones have to do with the provisions that would remove
the current incentive programs for deep gas drilling in the
shallow waters of the Gulf of Mexico, as well as provisions
that would remove the incentive program for the deepwater Gulf
of Mexico itself. Those provisions are essentially job killers
for a lot of people along the Gulf of Mexico.
There are 250,000 people in the Gulf states that make their
living just directly in either exploration, production, or
services for the oil and gas business along the Gulf states.
There are 100,000 of those that live and work in the coastal
counties and parishes of the Gulf of Mexico alone, and many of
those are engaged in these deepwater activities as well as some
of these emerging activities with deep gas. Removing those
incentives will make the Gulf a much less attractive place than
it has been over the last 10 to 15 years, and will discourage
job creation in that area.
Another deficiency that is in the bill is an opportunity to
address a longstanding inequity associated with the mineral
revenue process between the states and the Federal Government,
and that is the opportunities of sharing revenues with the
coastal states that are impacted by these activities. The
provisions that are in this bill that would share 10 percent
among a wide range of coastal states regardless of their
participation in energy production right now is one that is
somewhat difficult. Louisiana as well as the other coastal
states have made big contributions in terms of supporting
existing as well as current and future energy production, and
certainly accelerating those energy revenue-sharing provisions
that were in earlier legislation is an opportunity that could
be included in this bill as well.
I want to thank you for the opportunity of speaking before
you this afternoon, and look forward to the questions that you
may have.
[The prepared statement of Dr. Dismukes follows:]
Statement of David E. Dismukes, Ph.D., Professor, Associate Executive
Director, and Director of Policy Analysis, Center for Energy Studies,
Louisiana State University
Chairman Rahall, Ranking Member Hastings, and Committee members,
thank you for the opportunity to appear before this Committee to share
my opinions on the proposed Consolidated Land, Energy, and Aquatic
Resources Act (``CLEAR'') that is the subject of today's hearing.
My name is David E. Dismukes and I am a Professor and Associate
Executive Director for the Center for Energy Studies at the Louisiana
State University in Baton Rouge, Louisiana. The Center for Energy
Studies is a state-funded research institute that was created by the
Louisiana Legislature in 1982 to examine energy-related issues
impacting our economy, citizenry, and environment.
The Center takes a multidisciplinary approach to examining or
supporting a wide range of energy-related research. For the past 15
years, one area of concentration has been issues associated with
offshore oil and gas exploration and production, much of which has been
done on the behalf of the Minerals Management Service (``MMS'').
The proposed CLEAR Act that is the subject of today's hearing is
certainly an ambitious piece of legislation designed to change offshore
energy regulatory policies in the aftermath of the Deepwater Horizon
accident. The Bill includes a number of positive provisions. For
instance, Sections 101 to 103, and Section 107, collectively, would
allocate the planning, leasing, and inspection functions of the former
Minerals Management Service into three new bureaus. This separation
should help instill greater confidence in each bureau's independence
and remove the conflicts of interest that were perceived to be inherent
within the old MMS regulatory and governance structure.
Another important regulatory provision included in the Bill is the
framework for buttressing each of these new regulatory agencies'
professional staff, allowing them to recruit and retain the best
available talent in the market within specialized skill areas.
An additionally important provision included within this
legislation is the establishment of benchmarks and performance metrics
that evaluate operator success at meeting expected environmental and
safety standards. However, in developing these provisions, Congress may
be missing a unique opportunity to create a performance-based
regulatory structure that establishes a symmetrical system of penalties
and rewards that can lead to both improved offshore environmental and
safety outcomes, and private sector research in technologies that will
lead to both profitable and environmentally positive outcomes.
While the bill includes a number of positive provisions, it
includes several important deficiencies. I would like to focus on the
two most important deficiencies from Louisiana's perspective. The first
deficiency in the bill is that it would remove the offshore GOM deep
gas drilling and deepwater drilling incentives. These provisions are
simply job killers for a large number of oil and gas employees along
the GOM. Today, there are more than 250,000 people directly employed in
oil and gas related activities along the GOM states, more than 100,000
of whom live and work along the coastal parishes and counties of the
Gulf alone. The Deepwater Royalty Relief Act of 1995 is widely credited
along the GOM as re-invigorating the Gulf as a viable producing basin
after a long period of dormancy.
This deepwater activity will be significantly reduced, if not
potentially lost, if these incentives are removed. It would be a
fallacy to assume that this deepwater activity could simply be made up
from increased conventional exploration and production opportunities in
shallow water or on the shelf. The shallow-water GOM is a relatively
mature basin that has seen significant production declines in both
crude and natural gas over the last decade. The only recent
opportunities for new and expanded shallow water activity were the
deep-drilling gas opportunities facilitated by the Energy Policy Act of
2005. Unfortunately, the proposed bill under consideration today would
eliminate even those emerging opportunities and shut down tens of
thousands of jobs for Louisiana oil and gas workers, as well as all of
the additional small businesses that are located along the coast, and
rely on these offshore activities for their livelihood.
In addition to being job killers, these two provisions would also
challenge our national energy security as the GOM accounts for 30
percent of all domestic crude oil production, and prior to Hurricane
Katrina, the region accounted for more than 25 percent of all domestic
natural gas production. There are roughly 120 active deepwater wells in
the GOM that account for 21 percent of all domestic crude oil supplies.
Removing deepwater incentives would erode this 21 percent contribution
quickly, resulting in significant impacts on our imports of foreign
sources of oil, our trade deficit, and our budget deficit.
The second deficiency in this bill is its failure to address a
long-standing inequity in the mineral revenue process. Louisiana and
other GOM states have supplied the U.S. with a significant share of its
energy production, transportation, and refining capacity for more than
a century, and have supported offshore oil and gas activities for more
than 50 years. Yet despite this contribution, the GOM states have
received few to no bonuses, rentals, or royalties created by the
production just off our shorelines.
Instead of remedying this inequity, the proposed bill would
allocate 10 percent of the annual federal mineral revenue from offshore
production into a number of competitive grant programs that would be
available to all coastal states regardless of their historic or current
energy production contributions. Congress should use this opportunity
to create a permanent remedy to this inequity by including revenue
sharing provisions for those states that are actively supporting
offshore energy production activities regardless of whether they are
fossil fuel or renewable based.
I thank you for the opportunity to appear before your Committee to
speak about these timely and important energy regulation issues.
______
Ms. Bordallo. Thank you very much, Dr. Dismukes, and now we
will go forward with questions. First, I ask unanimous consent
to submit for the record statements by Kevin Costner, the Pew
Environment Group, and the Nature Conservancy. Hearing no
objection from the Committee, so ordered.
[A statement submitted for the record by Kevin Costner,
Founder, CINC, follows:]
Statement submitted for the record by Kevin Costner, Founder, CINC, and
Co-Founder/Partner, Ocean Therapy Solutions, WestPac Resources
Link to video demonstration of CINC technology: www.ots.org
Mr. Chairman, Members of the Committee thank you for inviting me to
testify before your legislative hearing on this important piece of
legislation. As you know, for personal reasons, I am unable to appear
before you, but instead am submitting written testimony for the record.
I am grateful for this opportunity.
For the past seventeen years, I have invested in and commercially
adapted a transfer of technology from the Department of Energy at
Costner Industries Nevada Corporation (CINC). At CINC we manufactured a
rugged, robust, portable and commercially viable centrifugal force
machine that can separate large volumes of water from oil. We developed
five different sizes with the largest able to handle up to 200 gallons
per minute in a variety of adverse conditions and able to separate
various viscosities with both oil and water outputs 99.9% pure. Simply
put, this is the ``best available technology'' at this time for
cleaning up any size oil spill. This was all accomplished with over $20
million of my own money.
This machine has had a life of its own. I've been along for the
ride, from dreaming about the possibility, to engineering success, to
disbelief and frustration when I was met with an apathetic response,
right up to this moment. I am proud that this technology can now be
part of the immediate solution to remediation in the Gulf, though I am
disappointed with the events, which ultimately shed light on its
capabilities.
In the last two weeks I made two trips to DC, to testify before
Congress. I was asked to explain how or why this 21st century
technology, which is unparalleled in its efficiency for separating oil
and water, has sat idly on the shelves while we continued to use booms
and skimmers to rake oil pollution across our precious oceans, lakes
and rivers. Of course spills continued after the Exxon Valdez, despite
industry rhetoric, and of course they will continue long after the
world has moved its attention off this most recent tragedy in the Gulf.
In my testimony I have been consistent in asking for mandated safety
protocols, not just on oil rigs, but anywhere oil has the potential to
meet water, be it salt or fresh, bays, lakes or smaller streams and
tributaries. And I will continue to work to see that this machine was
used as I intended it to be--as a first and most efficient responder to
mitigate oil spills of any size around the world.
I believe this Committee's bill begins to address the critical need
for escalated oil spill response capabilities in this country.
Long term needs
Shortly after the Deepwater Horizon rig exploded and sank, I formed
Ocean Therapy Solutions (OTS) with a renewed intention to put my
machines to work, to give the people of the Gulf a chance to fight
back, to give the Gulf and everything in it's ecosystem a shield of
protection.
As has been announced, OTS is deploying 32 machines to the Gulf in
partnership with BP to address the immediate Deepwater Horizon
catastrophe. (Ten will be operational in the Gulf by July 5, and the
remaining 22 by August 20.) Equally important is BP's commitment to a
continued partnership with OTS and their desire to ensure a legitimate
response capability in the future. BP COO Doug Suttles said of our
machine: ``This is real technology with real science behind it, and it
passed all of those tests'' in reference to a series of rigorous tests
BP put our machine through in difficult environments. If Doug is right,
CINC will lead as I intended it to, and change the way we think about
21st century oil spill response.
Achievable response plans
The establishment of the Bureau of Safety and Environmental
Enforcement within the Mineral Management Service (MMS) is a critical
first step in ensuring thorough and consistent monitoring within the
oil industry. The establishment of an independent Training Academy
takes us one step further by ensuring we have well-trained safety
officers to keep the best interests of the nation in mind as they
enforce compliance.
I support the redundancies and overall emphasis placed on safety in
the Committee's Bill H.R. 3534. This is a major step forward in dealing
with the country's painfully obvious outdated oil spill safety systems
and a nod to the classic logic of--one can never be too safe. There are
multiple references in the bill that would require drilling plans to
have ``the capabilities and technology to respond immediately and
effectively to a worst-case oil spill in real-world conditions in the
area of the proposed activity.'' I would add that these plans need to
establish a dual framework to include both A) first response
capabilities; and B) long term recovery and environmental monitoring.
As we move forward, our response plans need to reflect
realistically the best available technology and be individually
tailored for each particular oil or mineral recovery program. They
cannot be plagiarized of thoughtlessly reproduced. It is true what out
mothers said, that trying to cut corners, never saves you any time in
the end.
Some people thought we wouldn't see another big spill after the
Exxon Valdez. Unfortunately we are facing 60,000 barrels of oil gushing
into the Gulf every day, with no end in sight and no greater clean up
capabilities than we had during the Exxon Valdez. So how did we get
here? And how is it that we haven't spent the last twenty years
preparing for another spill?
The plans that got us here, that claimed they could clean up
250,000 gallons a day, that were rubber-stamped by the MMS can no
longer be tolerated. Hypothetical projections of an industry's response
capabilities are no longer good enough. Not after what we've seen in
the Gulf. We need proven technologies and an institutional support
structure to foster the growth of improved technologies into the
future.
Elevate and invest in clean spill technology
I for one support and believe this bill closes a critical loophole,
in that it will require the Secretary of Interior to publish a list of
``best available technologies for. . .oil spill response'' within six
months of passage. As you know I battled to get CINC technology before
virtually every major U.S. oil company and every government agency
involved in regulating the oil industry. It took this catastrophe to
get their attention focused on the incredible output of this
technology.
I hope that by establishing the ``Offshore Technology Research and
Risk Assessment Program,'' a third party verification for all safety
related equipment, new technology will have the chance to be tested and
ready for deployment before spills occur. A published list of these
technologies should create transparency within the system and allow
those technologies that should be included a way forward within the
industry. Indeed the hope is for a combined analysis of industry
trends, and the reviews of best available technologies to guide federal
research dollars toward the develop 22nd Century oil spill technology.
I would ask in this vein, not as a guy hawking his product, but as
a citizen, an ocean lover and coastal resident that we also choose to
emphasize and advance clean oil spill technologies. We can do better
than we are right now, using technologies that pollute to clean up
pollution. We need to think bigger and dream more ambitiously about
where technology can take us. We need to actually move beyond booms and
skimmers, which have been our first line of defense against oil spills
for the last hundred years.
I've thought that way and continue to think that way as I evolve in
this space, footing the bill to push the envelope of progress. It took
only three years of heavy research and development to move the
centrifuge patent I purchased from the Department of Energy from a six-
inch device for separating metals, to a rugged, portable, eight-foot
tall machine that could separate 200 gallons of water and oil every
minute. Today it is evident that this technology has eclipsed all other
current oil spill technology, and we've been here for over a decade.
The bar can and should be raised now.
Additionally, my company has begun an exciting collaboration with
Edison Choest, the largest oil servicer in the Gulf. We are in the
final stages of designing and engineering emergency response ships that
would be staged strategically throughout the Gulf. These ``fire truck''
vessels would be able to be onsite within two hours of an oil spill
incident. This collaboration could fundamentally change the world's
approach to oil spill recovery. We won't stop there.
If we have the intellect and technology to dig down thousands of
feet into the earth's core, I believe we have the intellect and the
technology to hunt down underwater oil plumes, to engage and grapple
with oil out on the blue water, before it ever has a chance to hit our
shores. We will continue to get better and expand our capabilities so
that when the next spill happens, even fishermen have small-scale
centrifuges on board and ordinary citizens become the cavalry, running
defense against spills to protect their own communities. Any authorized
Research & Development (R&D) program must be funded to its maximum to
ensure the United States can contribute to the solution if we are
indeed the ones creating the problem.
Investing in American solutions
As a business owner with a manufacturing plant in Carson City,
Nevada I appreciate the ``buy and build America'' provision in this
bill. I agree that we need to recapture our manufacturing base in this
country. As I have demonstrated, we can accomplish great things if
there is a strengthened collaboration between the private sector and
technologies developed and patented by the Federal laboratories.
CINC has bridged the gap for oil response up to this point, but we
need to start thinking now about the 22nd Century. We need an R&D plan
for environmental technologies that can match our hunger for growth and
natural resources as our society continues to mature. Coupled with the
advancement of research and investment in new technologies this new
``buy and build America'' provision, can put America back to work and
make us a leader in oil spill prevention and response. I believe this
section is a step in the right direction.
Conclusion
Everyone is now well aware of the fact that both the oil industry
and the federal government hampered a more robust research and
development program by significantly underfunding research and
development programs. This bill, if passed, will do a great deal to
change that. But this disaster has also shown that our response system
needs to be flexible in times of emergency to deploy proven
technologies. The American people need to be able to count on someone
of authority to make those decisions, in that moment, when their safety
and the health of environment are at stake.
I believe there is good will in the Congress to change this. It is
my hope that this bill will bring safety and openness in this system.
Thank you.
______
[A letter submitted for the record by Karen Steuer,
Director, Government Relations, Pew Environment Group,
follows:]
June 29, 2010
The Honorable Nick J. Rahall II
Chairman
Committee on Natural Resources
1324 Longworth House Office Building
United States House of Representatives
Washington, DC 20510
Dear Chairman Rahall:
On behalf of The Pew Environment Group, I am writing to commend you
for your leadership in developing a legislative proposal to address the
systemic fiscal and environmental problems that have afflicted the
Department of the Interior offshore oil and gas program for many years.
Please include this letter supporting your ``Discussion Draft,
Amendment in the Nature of a Substitute to H.R. 3534 dated June 22,
2010'' into the Committee on Natural Resources' June 30, 2010 hearing
record.
Congress has not enacted significant amendments to the Outer
Continental Shelf Lands Act (OCSLA) since 1978. In the 32 intervening
years, advancements in technology have allowed extraction of oil and
gas from ever-deeper waters and in new areas, but the regulation and
environmental review of all OCS drilling operations has not kept pace.
Clearly the technology for extraction has far outstripped responsible
Outer Continental Shelf (OCS) planning and the capacity and quality of
oil spill prevention and response capabilities. The tragedy of the
ongoing Gulf oil spill disaster reminds us of the paramount importance
of allowing offshore oil and gas development to occur only in
appropriate places, and only if there are effective policies and
practices in place to assure the safety of workers and protection of
the environment.
The Discussion Draft contains a number of vital reforms of the
Outer Continental Shelf oil and gas program. We are especially
supportive of the provisions in Title II that:
remedy flaws in the national OCS policy (Section 203);
require the Secretary of the Interior to promulgate new,
more protective regulations and in so doing, to consider the views of
the Secretary of Commerce on matters that may affect the marine and
coastal environment (Section 205);
change the leasing provisions of OCSLA to disqualify
parties not in compliance with certain safety or environmental
requirements from bidding on OCS leases and require the Secretary of
the Interior to consult with the Secretary of Commerce before holding
an OCS lease sale (Section 206);
direct a portion of OCS revenue into a new Ocean
Resources Conservation and Assistance (ORCA) fund (Section 207);
eliminate the use of categorical exclusions to approve
exploration plans, extend the deadline for approving exploration plans,
impose more robust requirement for drilling plans, provide for
consultation with the Secretary of Commerce before approving
exploration permits, and set forth more protective standards for
drilling (Section 208);
require the Secretary of the Interior to adhere to more
protective substantive standards when developing five-year oil and gas
leasing programs--including requirements to minimize environmental
damage and consider three consecutive years of science--and to invite
and consider comments from the Secretary of Commerce during the
formulation of the plan (Section 209);
direct the Secretary of the Interior to cooperate with
the Secretary of Commerce to conduct studies of areas of the OCS open
to leasing (Section 210);
require more rigorous and more frequent inspections of
drill rigs (Section 212); and
require Development and Production Plans (DPP) for
facilities in the Gulf of Mexico, provide for more robust DPPs, and
prohibit the use of categorical exclusions for approving DPPs (Section
214);
Title II does much to remedy the flaws in OCSLA and we look forward
to working with the Committee to strengthen additional provisions of
the Discussion Draft to ensure the reforms are substantive and
meaningful. These provisions include but are not limited to the
following:
We recommend Section 203 be revised to provide that the
OCS ``shall'' be managed in a manner that ``minimizes''--not just
``recognizes''--the potential impacts of development.
To strengthen OCS leasing standards, we recommend Section
206 clarify that the lessee is only entitled to an exclusive right ``to
seek authorization to'' explore, develop, and produce. Section 206
should require the Secretary of the Interior to request from the
Secretary of Commerce a review of the proposed lease sale environmental
impact statement, not just a review of the lease sale itself. The
Secretary of Commerce should have more than 30 days to conduct this
review.
As written, Section of 208 requires the Secretary to
approve an exploration plan if, among other things, an operator meets a
strict new spill response standard. We recommend this be changed to
require the Secretary approve an exploration plan ``only'' if the
operator meets the new response standard. The best available technology
standard and technical systems analysis required by the proposed new
OCSLA Section 11(j) should apply to OCS exploration plans that contain
proposals to drill a well in frontier areas as well as exploration
plans that propose to drill a well in deepwater areas.
We recommend Section 209 provide a standard to ensure
that only specific, limited areas are made available for leasing in the
five-year program to help focus the leasing schedule. Section 209
should require the Secretary of the Interior to consider, when
preparing five-year leasing programs, the availability of
infrastructure to support oil spill response and important ecological
areas.
We applaud the Committee's effort to begin to address the difficult
challenge of broader ocean management with the changes included in
Title VI, specifically:
increased coordination between state and federal agencies
on decisions affecting ocean resources;
comprehensive regional assessments of ocean ecosystems
including important ecological areas, habitats, and species, as well as
current and potential uses;
regional planning to proactively and transparently
consider the tradeoffs made in allowing for ocean uses, while providing
for the protection of marine ecosystem health; and
creation of an Ocean Resources Conservation and
Assistance (ORCA) fund.
In addition, we anticipate and support finalization of the
President's Interagency Ocean Policy Task Force work to establish a
National Ocean Policy and Framework for Coastal and Marine Spatial
Planning. This would create a regional planning process for ocean
management and has benefitted from significant agency, stakeholder, and
public input. We suggest modifying Title VI to better coordinate with
the structure for that work so as to avoid overlapping and duplicative
planning processes.
We are supportive of provisions in Title VII that:
repeal incentives and royalty relief for deepwater
drilling in the Gulf of Mexico and to repeal certain development and
production incentives in Planning Areas offshore Alaska (Section 701);
preclude the Secretary of Commerce, the Administrator of
NOAA, or Regional Fishery Management Councils from developing or
approving fishery management plans or amendments that permit or
regulate offshore aquaculture, and which invalidate any permit issued
pursuant to this authority to conduct offshore aquaculture (Section
704);
prevent exploration, development, or production of
minerals of the Outer Continental Shelf in areas seaward or adjacent to
areas where a state moratorium is in effect (Section 705);
provide new authority for states to develop and revise
plans for improved oil spill response under authorities of the Coastal
Zone Management Act (Section 707); and
require the President to promote collaboration among
federal agencies with ocean and coastal related functions; support
Regional Ocean Partnerships; and establish a National Ocean Council
(Section 708).
Finally, with respect to Title VIII, we support the effort to
facilitate and coordinate restoration activities, including
establishing a Gulf of Mexico Restoration Planning Program,
establishing a long-term monitoring and research program in the region,
and establishing a migratory species emergency habitat restoration and
establishment program for the Gulf coast.
In conclusion, we appreciate your leadership in taking on the
daunting task of reforming the federal government's offshore energy
programs, both in terms of your proposals to assure a fair return to
taxpayers for use of their assets by the oil and gas industry, and your
commitment to protecting the environment from irresponsible practices.
We look forward to working with your Committee in moving these reforms
forward.
Sincerely,
Karen Steuer
Director, Government Relations
Pew Environment Group
(202) 491-4535
CC: Members, Committee on Natural Resources
______
Statement submitted for the record by Robert Bendick
on Behalf of The Nature Conservancy
Mr. Chairman and members of the Committee, I appreciate this
opportunity to present The Nature Conservancy's recommendations for
H.R. 3534. My name is Robert L. Bendick, Jr. and I am the Director of
U.S. Government Relations at the Conservancy.
Introduction
The Nature Conservancy is an international, non-profit conservation
organization working around the world to protect ecologically important
lands and waters for nature and people. Our mission is to preserve the
plants, animals and natural communities that represent the diversity of
life on Earth by protecting the lands and waters they need to survive.
We are best known for our science-based, collaborative approach to
developing creative solutions to conservation challenges. Our on-the-
ground conservation work is carried out in all 50 states and more than
30 foreign countries and is supported by approximately one million
individual members. We have helped conserve nearly 15 million acres of
land in the United States and Canada and more than 102 million acres
with local partner organizations globally.
We commend Chairman Rahall and the Committee for creating such a
comprehensive bill. Taken together, its provisions can play a critical
role in the conservation of America's watersheds, natural areas and
marine ecosystems for their many long-term benefits to our society.
We believe this is an extremely important piece of legislation for
the future of America's lands and waters. The catastrophic Deepwater
Horizon Oil Spill in the Gulf of Mexico has made the need for passage
of this bill more urgent than ever and further demonstrates the
importance of a comprehensive approach to energy production and to
addressing the long term and immediate impacts of such production.
Our testimony covers most sections of the bill because, as the bill
and circumstances have changed since its initial introduction, we find
that much of this legislation is important to the Conservancy's
mission. Thus we respectfully provide comments on the following
sections:
Title II--Federal Oil and Gas Development
Title IV--Full Funding for the Land and Water
Conservation and Historic Preservation Funds
Title V--Alternate Energy Development
Title VI--Outer Continental Shelf Coordination and
Planning
Title VIII--Gulf of Mexico Restoration
We are also prepared to provide legislative language very quickly
for any of these sections where you feel that would be useful.
Title II--Federal Oil and Gas Development
The Conservancy commends the Committee for the very comprehensive
reforms to the Outer Continental Shelf (OCS) leasing process that are
contained in title II of the draft bill. We believe that these
amendments would fundamentally restructure the Outer Continental Shelf
Lands Act (OCSLA) so that it can serve as a safety and environmental
statute that will better protect the coastal resources that Americans
treasure.
Following are the principles that the Conservancy would suggest to
reform the OCS leasing programs, principles that we find well-reflected
in the provisions of the draft bill.
The current OCSLA was written to encourage the development of
energy and mineral resources on the OCS. Under OCSLA, the Department of
Interior is to balance the need for energy development with possible
harm to coastal and marine biodiversity and habitats. In trying to
reach this balance, the Department of Interior accepted risks that led
to the Deepwater Horizon Oil Spill. OCSLA should be amended so that
energy and mineral development only occurs if it will not harm coastal
and marine environments. OCSLA must include clear standards for safety
and environmental protection.
Under OCSLA there are four steps in the Government's oil and gas
decision-making process: 1) the Department develops a five-year leasing
plan for the entire OCS; 2) it conducts specific lease sales; 3) it
approves exploration plans submitted by companies holding leases; and
4) it approves permits for production wells. Several reforms are needed
in this four-step process:
Up-to-date baseline data on the physical and biodiversity
characteristics of each OCS area must be in hand before the area can be
considered for the leasing program.
Environmental assessments under NEPA for the leasing plan
and individual lease sales must have concurrence from NOAA and must
respond to comments from other federal and state environmental
agencies.
Lease sale areas must be drawn more tightly and be
amenable to complete analysis so that potential environmental impacts
can be fully assessed.
OCSLA should specify the minimum information requirements
for exploration plans including information about the specific
technology that will be used to assure safety and respond to accidents.
The Department must have sufficient time (at least 90
days with extensions if necessary) to fully review exploration plans.
No part of the decision-making process should be exempted
from appropriate environmental reviews under categorical exclusions
from NEPA requirements.
Adequate resources have not been available to carry out inspections
of offshore exploration and production facilities in the Gulf of Mexico
region. OCSLA should be amended to require a schedule of inspections
for each type of facility including monthly inspections for drilling
rigs. Inspectors should be thoroughly trained. Fees from producers
should be required at the time that exploration plans and development
applications are submitted to cover the cost of inspections and
training. The inspection and safety branch of the Department should be
subject to very tight ethics standards that do not allow employment in
the oil and gas industry for five years after any inspector leaves the
inspection agency.
OCSLA should be amended to encourage the development and use of
better technology for safety and spill prevention on facilities
operating on the OCS. The Department of Energy should be directed to
establish a technology development program and maintain a clearinghouse
for technology information. OCSLA should require the use of best
available safety and prevention technologies for activities in high
risk areas (e.g., deepwater, locations with significant currents, and
remote locations).
OCSLA should be amended to provide that beginning within three
years, particular dispersants may not be used (or may not be used for
specific purposes or in large quantities) unless specifically permitted
for that use by the Environmental Protection Agency.
The ``mitigation hierarchy'' should be fully applied to energy and
mineral activities on the OCS. Exploration or production that may
adversely affect areas of high biodiversity value on the OCS or on, or
adjacent to, other coastal waters (as determined by NOAA and FWS) must
be avoided. Exploration and production plans must be carried out to
minimize impacts in other areas. Any impacts to biodiversity or habitat
that do occur must be fully offset. Similar requirements are included
in the onshore oil and gas and alternative energy sections of the bill
and would also serve an important purpose here.
It is evident that the response plan prepared by BP for the
Deepwater Horizon drilling platform was wholly inadequate. OCSLA and
the Oil Pollution Act should be amended to provide that exploration
plans may only be approved if they are accompanied by response plans
that detail response capacity (oil recovery including vessels, booms,
relief well plans and equipment; and wildlife protection measures) to
respond to the worst case release in the specific area where the
exploration plan is to be carried out.
The liability limits for damages should be increased to reflect the
availability of private insurance in the marketplace for smaller
companies and be lifted altogether for large oil and gas companies with
self-insurance capability. The Oil Spill Liability Trust Fund should be
increased in size and amended to facilitate government response to
large spills when responsible parties do not have the capability.
In addition to these principles, as discussed below, the
Conservancy also urges that OCS leasing be conducted in accordance with
comprehensive regional marine plans that integrate all ocean uses to
achieve the maximum benefit for the American people.
Title IV--Full Funding for the Land and Water Conservation and Historic
Preservation Funds
The Nature Conservancy strongly and enthusiastically supports
Chairman Rahall's commitment to fully fund the Land and Water
Conservation Fund (LWCF). This is the most significant proposal to
invest in federal land protection in nearly a decade and can be an
important step to a comprehensive program to conserve by various means
America's most significant watersheds, ecosystems and metropolitan
greenways.
More specifically, Title IV of H.R. 3534 would provide full,
permanent and dedicated funding for the LWCF, the principal source of
land acquisition funding for the National Park Service, U.S. Fish and
Wild Service, Bureau of Land Management and the U.S. Forest Service.
Such an action would accelerate the fulfillment of the President's
promise to fully fund LWCF by FY 2014. It would also provide core
funding to realize the America's Great Outdoors Initiative that has
been advanced by the Obama Administration including funding for the
conservation of working landscapes through conservation easements and
support for increasing access by hunters and anglers to public lands.
The Committee's Discussion Draft would modify H.R. 3534 by
substituting language more closely tracking S. 2747, the Land and Water
Reauthorization and Funding Act introduced by Senators Bingaman and
Baucus. Rather than amending the LWCF by mandating a particular formula
for the federal and state-side programs of LWCF, the Discussion Draft
would allocate $900 million to the purposes of LWCF. Such an approach
would continue to provide discretion to the Administration and Congress
to allocate particular funding levels to the federal and state-side
programs, plus two competitive matching grant programs that fund land
acquisition by states and counties--the Forest Legacy and Cooperative
Endangered Species Conservation Fund, both of which are now funded
through LWCF. Enhanced and dedicated funding for states to match their
own ongoing conservation funding initiatives would allow the states to
play an even more significant role in protecting natural areas for
their multiple benefits and in providing places for outdoor recreation
for America's families.
The U.S. has been a leader in conservation for well over a century.
Even during the struggles of the Civil War, President Lincoln provided
protection for Yosemite Valley. In 1872, the Congress set aside
Yellowstone National Park as the world's first national park. And at
the turn of the last century, President Theodore Roosevelt created
numerous National Monuments, National Forests and the first national
wildlife refuge.
In 1965, responding to a commission created by President Eisenhower
and legislation proposed by President Kennedy, Congress created the
Land and Water Conservation Fund to provide a reliable source of
funding to conserve landscapes throughout the nation. Since then, it
has been the source of funding for numerous federal protected areas,
including West Virginia's Monongahela National Forest and Canaan Valley
National Wildlife Refuge, Washington's North Cascades National Park,
Colorado's Great Sand Dunes National Park, Montana's Rocky Mount Front
Conservation Area, Florida's Everglades National Park, the Appalachian
National Scenic Trail and a host of other irreplaceable components of
our natural heritage.
We are, today, faced with unprecedented threats to the integrity of
natural, recreational, scenic, and cultural resources and the long-term
conservation of our nation's lands and waters. From our nation's cities
and metropolitan areas to remote backcountry locations, Americans
depend on natural areas, working landscapes and cultural sites in
fundamental and diverse ways. Accelerating climate change, continuing
population growth, development and other land-use pressures,
alternative and traditional energy production, constrained federal and
state budgets, and the increasing separation of young people from
experiences with nature all demand rapid action if our most important
lands and waters are to be protected.
The need to invest in land conservation is well appreciated by
voters throughout the nation. In November, 2008, nearly three-fourths
of state and local ballot measures for new land and water funding were
approved, authorizing $8.4 billion in new land and water conservation
investments. Yet, there continue to be unmet conservation needs in
federal conservation areas and in many of our states.
Recent public opinion polling demonstrates strong voter support for
continued funding of the LWCF, particularly in light of the recent Gulf
oil spill. For example, when asked whether some of the funds from
offshore drilling fees should continue to go to the LWCF, an
overwhelming majority of voters--86 percent--are supportive. And 77% of
voters favor dedicating at least $900 million annually to the LWCF. \1\
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\1\ Polling of 800 voters throughout the United States was
conducted from May 11-13 2009 by the bipartisan research team of Public
Opinion Strategies (R) and Fairbank, Maslin, Maullin, Metz & Associates
(D).
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There is a national need for expanded and new land and water
programs to conserve the network of natural lands and waters,
recreational open spaces, working landscapes, urban and metropolitan
parks, and cultural and historic sites that:
Provide a foundation for our economy through sustainable
jobs, including within working rural landscapes of forest and
agricultural lands and in the expanding tourism and recreation
industries. (A more detailed description of the economic and other
benefits of land conservation is attached).
Provide sufficient clean water and other ecological
services for a growing U.S. population.
Help ecosystems withstand the impacts of climate change
so that they can continue to provide habitat for the full range of
native species and serve the needs of human communities.
Provide access to outdoor recreation and healthy exercise
for every American from young people living in cities and suburbs to
hunters and fishermen seeking traditional outdoor activities.
Reflect the natural and historic heritage and cultural
diversity of the American people.
Full and dedicated funding of the Land and Water Fund through this
legislation would be an immensely important step forward, but in itself
it is not sufficient to create the network of healthy natural areas and
metropolitan greenspaces needed to sustain the character and quality of
the lives of all Americans. A revitalized Land and Water Conservation
Fund should be the foundation for the efforts of states, federal
agencies, local communities and non-profit organizations to work
together to restore and conserve whole watersheds and large landscapes
for their multiple benefits.
The Conservancy also urges the Committee to include in any final
legislation provisions to provide full and permanent funding to both
the Payments in Lieu of Taxes (PILT) and Refuge Revenue Sharing
programs. These important programs provide payments to counties where
land has been taken off the local property tax roles and put into
federal ownership. In some counties, protection of nationally
significant natural resources impacts the tax base that funds local
government services, including schools and public safety. Fully funding
PILT and the Refuge Revenue Sharing programs would provide an important
complement to fully funding LWCF and would honor the federal
government's commitment to impacted communities.
Conservation of our country's land and water is not a luxury but is
an essential part of our economy, our health and welfare and our way of
life. While our country has made wonderful conservation progress over
the last hundred years, we have not yet conserved sufficient land and
water to protect the many values of natural lands and working
landscapes against the threats they now face. We applaud Chairman
Rahall for his leadership in proposing to fully fund the LWCF, the core
component of a renewed commitment to conserve landscapes throughout the
nation.
Title V--Alternate Energy Development
The Nature Conservancy supports the development of renewable
sources of energy as an important strategy to mitigate climate change
emissions. While desirable to reduce greenhouse gas emissions and
diversify energy supplies, renewable sources of energy require much
larger areas of land to produce the same amount of energy as the fossil
sources they will replace. We, therefore, urge that renewable energy
development be carefully planned and that any adverse impacts to
wildlife habitat and ecosystem functions be fully remedied.
We strongly support the thrust of Title V to quickly evolve the
process for development of wind and solar energy resources on public
lands away from the present ``first come, first served'' right of way
approach to a more comprehensive leasing approach, with appropriate
provisions to allow an orderly transition from the current approach
We support the requirement in sections 501(b) and 502 to issue
comprehensive regulations establishing best management practices,
including incorporation of the full mitigation hierarchy (avoid,
minimize, and if necessary offset) across the full range of adverse
impacts of wind and solar development. Any such regulations should be
in addition to and fully consistent with the provisions of the
Endangered Species Act. These additional requirements, if strengthened
as indicated below, will help ensure that the development of wind and
solar energy is accomplished in a rational manner while ensuring that
such development involves the least possible adverse impact on other
important values associated with and societal benefits derived from
public lands. In partnership with the Environmental Law Institute, the
Conservancy has recently completed extensive research on the use of
mitigation in the U.S. We believe that the rigorous application of the
mitigation hierarchy by Federal agencies using an ecosystem framework
for making decisions can avoid severe environmental damage and can
result in the much more effective expenditure of compensatory funds. A
comprehensive approach to mitigation using new and existing State and
Federal plans as a framework for decision-making can both improve
environmental protection and facilitate siting of alternative energy
facilities.
While we support the thrust of Title V, we also believe that its
provisions can and should be strengthened in important ways:
The siting of renewable energy facilities is hampered by
a lack of the necessary scientific data on biodiversity impacts and
governmental mechanisms to employ such data in comprehensive plans. A
comprehensive long-range regional framework should be developed to
collect the scientific data necessary to optimally site renewable
energy facilities, consider cumulative impacts, provide for the full
application of the mitigation hierarchy (avoid, minimize, or offset)
with regard to environmental impacts, and coordinate energy and
transmission development with other land uses.
The Secretary of the Interior should, as an essential
step in developing a comprehensive leasing approach, be required to
identify areas of federal land suitable for wind and solar energy
development that would minimize conflict with other uses including
recreation and habitat for wildlife, taking into consideration
completed and ongoing efforts to identify such areas and the results of
consultation and coordination with other federal agencies, state and
local officials, industry participants, environmental organizations,
and other stakeholders. These planning efforts should define the total
capacity (load limits) for renewable energy production from wind and
solar resources in the geographic region covered by the plan and should
include an analysis of the impact of full capacity utilization on other
competing land and resource uses in the region.
This will help ensure that the leasing program will:
consider the potential cumulative effects of a full
build out of such facilities on biodiversity, water resources,
including natural aquifers, springs, seeps, perennial or
ephemeral streams, and washes, and other key resources within
areas identified for leasing;
allow rational coordination with the improvement and
expansion of necessary transmission facilities and other
associated infrastructure;
facilitate the orderly development of facilities within
areas made available for leasing; and
allow full development with the least possible impact on
natural systems and other values and benefits derived from
public lands.
Title V should contain express and detailed siting
criteria and require such criteria to be incorporated into the
regulations implementing the leasing program. Inclusion of such
criteria will allow Congress to ensure that the leasing program is
implemented in a manner that minimizes the impacts of development on
other resources and the need for associated infrastructure through
economies of scale and ``clustering'' of development, where possible in
already disturbed areas, while maximizing production--in other words,
to help concentrate renewable development in areas that do not involve
significant ecological impacts.
Title V should specifically address water use by solar
thermal facilities in desert basins. Given the extremely dry conditions
in the regions likely to host significant solar energy development,
even the modest water requirements of dry-cooled concentrating solar
and photovoltaic facilities may represent considerable stress on the
limited local water resources. In addition, climate change models
project that the desert will become even drier in the future, making
water resources in the desert all the more precious and subject to
overuse. Wet-cooling of solar-thermal facilities may be incompatible
with these dry ecosystems.
Therefore, we recommend that as a pre-condition of being granted a
permit or lease, every solar energy developer should be required to
submit for approval an evaluation of their water supply needs, a
proposal for the source of that water, an assessment of potential
impacts of their water use on biodiversity, a comprehensive water
monitoring plan to identify any adverse impacts on the local water
resources, and detailed mitigation measures for estimated water
resource impacts including contingency measures for unforeseen impacts
detected by later monitoring. As a condition for operation, the
permitted entity should be required to pay for implementation of the
approved water monitoring plan.
Title V should provide additional guidance, consistent
with and supplemental to regulations and guidance implementing the
Endangered Species Act of 1973, concerning and mechanisms for the
effective mitigation of the impacts of wind and solar energy
development to encourage a shift from traditional, and frequently
ineffective, small-scale, ``on site'' mitigation efforts to a much more
effective, larger scale mitigation regime by:
incorporating the requirement to apply ecosystem-based
management (as defined in section 3(6)) in the best management
practices required by section 502(3) and in the regulations
required by section 501(b);
when suitable private lands are not available allowing
the Secretary to identify areas of land suitable as mitigation
lands to offset the impacts of wind and solar energy
development, and to withdraw those lands permanently from uses
incompatible with accomplishing mitigation objectives; and
requiring that mitigation funds dedicated to restoration
or enhanced conservation management of public lands be in
addition to historical levels of appropriated funding dedicated
management of those lands.
We recommend that income from such rents and royalties be allocated
as follows:
20 per cent to the State within which the income from
production is derived;
20 percent to the county or counties from which the
income from production is derived;
45 percent to a newly established Treasury account
designated the ``Wind and Solar Energy Habitat Conservation Fund'', to
be available without further appropriation and available until
expended, as supplemental funds to be used for conservation purposes
over and above required mitigation in ecosystems with extensive wind
and solar development by the Secretary of the Interior, transferred as
supplemental funds for those purposes to other federal agencies, or
granted for those purposes to states, tribes, or qualified non-
governmental organizations, or, as determined by the Secretary,
included as supplemental funds to the Land and Water Conservation Fund.
For a specified period, 15 percent to fund improvements
in the system for reviewing and resolving bids for leases for the
development of wind and solar energy, with a specified cap on the
maximum funding allocated to such purposes, with provision that
following the specified period, these funds will be allocated to the
Wind and Solar Energy Habitat Conservation Fund.
In order to allow realization of the full mitigation and
conservation benefit of funds allocated to the Wind and Solar Energy
Habitat Conservation Fund, we also recommend that non-federal
recipients of such funds be specifically authorized to:
Create an interest-bearing, non-wasting endowment for the
management of mitigation lands; and
Use such funds to satisfy matching funds or cost share
requirements of any federal conservation program.
Modification of the provisions of Title V to adopt the
recommendations above would, in our view, greatly strengthen its
provisions and would facilitate the rapid and orderly development of
wind and solar energy production facilities on federal land while also
minimizing the impacts of such development on biodiversity, habitat,
water resources, and other values derived from public lands and
allowing for the full, effective, and sustainable mitigation of any
such impacts.
Title VI--Outer Continental Shelf Coordination and Planning
Offshore Energy Development and the Creation of an Ocean Resources
Conservation and Assistance Fund
The Nature Conservancy applauds the proposed creation of the Ocean
Resources Conservation and Assistance Fund. Reinvesting a portion of
OCS revenues into the protection, maintenance, and restoration of
ocean, coastal and Great Lakes ecosystems is long overdue and was
called for by the U.S. Commission on Ocean Policy. We strongly support
these provisions of the bill.
In addition, the regional coordination and planning provisions for
offshore energy development in Title VI could lead to significant
improvements over the current processes. In particular, the Conservancy
supports the bill's inclusion of an ecosystem-based and multi-objective
context for planning as well, a regional approach and greater reliance
on spatial data and spatial planning, and taking into account the
potential impacts of climate change and the need to adapt to such
change. To further strengthen the bill, we propose the following
changes to ensure that regional planning fully considers ecological,
economic, and social objectives for the allocation of ocean space, and
adequately considers conservation priorities and marine ecosystem
health.
Expand the scope of regional strategic plans to address
important issues in addition to offshore energy. We propose expanding
the purpose and objectives of this Title to allow the Councils to
engage in more comprehensive planning for multiple offshore uses,
including but not limited to offshore energy development. Authorizing
the Councils to look holistically at ocean uses will better enable them
to consider multiple objectives and cumulative effects. We would like
to see this legislation support planning and actions that move ocean
management towards a more multi-objective, integrated approach, rather
than reinforcing non-integrated, sector by sector decision making.
However, if a more comprehensive approach is not feasible at present,
we suggest a phased approach where the Councils may start with offshore
energy planning and then expand over time to incorporate additional
management issues.
Increase the number and geographic coverage of the
regions. The regions currently proposed in H.R. 3534 do not align with
existing regional governance structures, federal agency jurisdictions,
marine ecology, and in some cases are too large to function effectively
(i.e. Atlantic region). Moreover, certain regions that are experiencing
the pressure of offshore energy development are excluded including the
Great Lakes and island territories. We suggest the legislation reflect
the nine regions as laid out in the President's Interim CMSP Framework,
with the recognition that some regions like Alaska may need to be
divided into sub-regions to recognize the geographic breadth and
logistical constraints of planning and coordination at such a large
scale.
Stakeholder Input to the Councils. We recommend adding
language to this Title ensuring stakeholder input to the councils and
permitting stakeholders to be appointed to advisory committees or task
forces as needed to obtain necessary expertise and advice as input into
regional assessments and strategic plans.
Council Leadership. To achieve science-based, multi-
objective planning that appropriately accounts for ecosystem conditions
and impacts, assessments and strategic plans need to be administered
jointly by representatives from the Department of the Interior and the
National Oceanic and Atmospheric Administration (NOAA). The Secretaries
of Commerce and Interior should also share equal responsibility for
appointing members and guiding and approving the work of the Councils.
Plan Revisions. In reviewing and revising the Strategic
Plans, we recommend adding language stating the process should be
adaptive, include public participation, and use best available science.
Establish Funding Source for the Councils. Presently
there is no funding mechanism to support the assessments and strategic
plans to be developed by the Regional Outer Continental Shelf Councils.
Solutions include adding a specific authorization within the Department
of Interior budget or amending the allocation within the ORCA fund to
permit the Councils to use the funds in addition to the Regional Ocean
Partnerships.
Strengthen the definitions. In Sec. 3 of this bill, we
recommend strengthening the definitions of ecosystem based management
to make clear that cumulative impacts are more than just considered but
the agencies are directly managing for them. In addition, the
definition of ``marine ecosystem health'' should emphasize marine
habitats in addition to species. There should also be provisions taking
into account the need to adapt to climate change.
Title VIII--Gulf of Mexico Restoration
The Deepwater Horizon disaster has now become the largest offshore
oil spill in U.S. history. The oil still spreading across the Gulf is
also an unprecedented environmental catastrophe in one of the most
important and productive ecosystems on Earth. Coming on top of decades
of degradation, merely cleaning up the effects of the spill will not be
enough to save the Gulf's ecosystems and all the benefits it provides
for the people of the Gulf and the nation. We need a bold vision and
comprehensive plan for reversing the long trend of decline and
restoring the Gulf to good health. The Conservancy is grateful to the
Committee for including the structure for this program in title VIII of
the bill.
The health of the Gulf's ecosystems is important to the future of
the Gulf Region and the nation. Long seen as a major producer of
seafood, trade and energy, the Gulf is also home to globally important
biological diversity. Warmed by subtropical waters and harboring a
complex suite of habitats that includes barrier islands, hyper-saline
bays, coastal marsh estuaries, mangrove forests, shellfish reefs, sea
grass beds, coral reefs, deep water open ocean, and the delta of the
largest river on the North American continent, the Gulf of Mexico is
one of the most productive places on the planet. The lives and
livelihoods of 24 million Americans living along this coast are linked
to the health, resilience and sustainability of the Gulf's ecosystems.
The economy of the United States as a whole is tightly linked to the
energy, shipping and other industries that operate in the Gulf region.
The full impact of the spill on the Gulf's ecosystems will not be
known for some time. Scientists tell us that a spill of this magnitude
would have profound effects on the healthiest of ecosystems, but the
risks to Gulf coastal habitats are greatly magnified by the decades of
degradation that preceded it. A host of disturbances affecting the Gulf
include alteration of critical freshwater and sediment inflows,
construction of levees and canals in coastal wetlands, conversion and
development of coastal prairies and forests, dredging and unsustainable
harvest of shellfish beds, and incompatible use of coral reefs and sea
grass beds that have been severely damaged. As a result, many thousands
of acres of marshland and other habitats have been lost, fisheries and
shellfish stocks have declined, dozens of species have become
threatened or endangered, and the resiliency of these systems in the
face of natural or man-made disturbances has been compromised.
Degradation of our coast affects the services provided by these
ecosystems. The ability to dampen storm surges is lost as marsh and
barrier island habitat disappears, vital economic fisheries decline,
the cost to maintain critical human infrastructure needs increases, and
the way of life for millions of people becomes more threatened.
BP must be held accountable for the full cost and extent of damages
associated with the effects of the spill, but given what's at stake,
the nation's response must go well beyond cleaning up the current
spill. With the degraded state of the Gulf, limiting our efforts to
only cleaning up the direct effects of the spill will not be sufficient
to sustain this critical ecosystem.
Our vision is to reverse the long decline of the Gulf to re-build a
healthy and improving Gulf ecosystem that can continue to provide its
many benefits to future generations. We need a robust long-term effort
to protect and restore Gulf coastal ecosystems, across 5 states from
Texas to Florida, restoring critical habitats and the ecological
processes that sustain them. What needs to be done to achieve this
vision is well understood:
Restore clean freshwater in-flows to key estuaries,
especially the Mississippi, providing the freshwater and sediments
needed to re-build marshes while reducing the nutrient loads that
create dead zones in the Gulf.
Restore millions of acres of estuarine and coastal
habitat, such as oyster reefs, seagrass beds, marshes and migratory
bird areas that provide critical nursery habitat to re-build Gulf
fisheries and protection for Gulf communities from storms and sea level
rise.
Ensure ongoing oil and gas development in the Gulf
minimizes impacts to important natural resources, is carried out in
safe and responsible manner, and contributes to the long-term
restoration of Gulf ecosystems.
Title VIII creates a structure to coordinate these efforts across
the entire Gulf ecosystem. Led by a chairperson working in the White
House, a task force of agencies would integrate the many efforts that
are ongoing and stimulate planning for the large-scale projects,
especially restoration of freshwater flows and sediments, that are
essential to recovering the biological bounty the Gulf once produced.
We have three suggested changes in the draft language:
First, we urge that the Chair of the Task Force be given
a stronger role in coordinating the environmental restoration work
across federal programs. One means to this end would be the
presentation of a combined Gulf of Mexico restoration budget as part of
the President's budget presentation each year. This would highlight the
projects and programs that are being carried out by each Federal agency
to implement the restoration plan developed by the Task Force. A
similar approach was taken in the 1980s to coordinate the $600 million
acid rain research program carried out by the National Acid
Precipitation Assessment Program.
Second, we think that the Task Force should identify
priorities for restoration and not simply list every project that every
government agency might propose. And we believe that addressing the
impacts of subsidence and erosion in the Mississippi River Delta should
receive the highest priority in the early years of the effort. It is
not necessary to reinvent the restoration agenda in the Delta. The work
is ready to begin immediately and is of the greatest importance to the
health of the entire ecosystem.
Third, we urge that Congress find a dedicated source of
funding to support this restoration effort. Crude oil and petroleum
products are taxed today at a rate of eight cents per barrel to create
the Oil Spill Liability Trust Fund that responds to the acute impacts
of oil spills. The Gulf of Mexico ecosystem has been damaged by the
chronic impacts of the same industry over many decades and it seems
reasonable to us that this same tax mechanism be used to correct the
damage that has been done. We urge that Congress increase the tax by
ten cents per barrel and that these funds be dedicated to Gulf of
Mexico restoration for a period of at least ten years. We fully
appreciate that the tax is not the jurisdiction of the Natural
Resources Committee and will need to be pursued at a later point in the
legislative process.
Summary
The provisions of H.R. 3534 discussed here are critically important
to America's well being. This bill is about giving the American people
the means to shape the future of the land and water so critical to the
health of our citizens and to the character and quality of their lives.
It is about carrying on the highly successful conservation tradition
that filmmaker Ken Burns calls in his film on our National Parks,
``America's best idea'' in the face of a new wave of threats that could
undo those conservation accomplishments. It is, in this very difficult
and contentious world, about our being responsible citizens and
remembering at this critical period in history what Theodore Roosevelt
said a hundred years ago:
``It is time for us now as a nation to exercise the same
reasonable foresight in dealing with our great national
resources that would be shown by any prudent (person) in
conserving and wisely using the property which contains the
assurance of well-being for (ourselves and our) children''.
Thank you for the opportunity to present The Nature Conservancy's
recommendations for H.R. 3534, The Consolidated Land, Energy, and
Aquatic Resources Act of 2010.
______
Ms. Bordallo. I would like to begin with you, Ms. Jones. I
have a few questions here. Do you buy the argument that this
bill would be a job killer or do you think it establishes a
balance between various resource-dependent industries,
including oil and gas, fishing, and tourism?
Ms. Jones. I think that continuing to do OCS exploration
unsafely is the job killer. When you look at the number of jobs
that are supported by having a healthy ecosystem, a healthy
marine resource, commercial fishing, recreational fishing,
tourism and tourism-related jobs, it is a substantial number of
job.
We recognize that there are oil and gas jobs that are
affected as well, but this is not just about oil and gas jobs,
and it is not just about oil and gas exploration. It is about
how we actually manage our ocean resources responsibly and how
we make sure that the marine resources are healthy enough to
support all of our coastal economies.
Ms. Bordallo. Do you think the Discussion Draft adequately
separates the planning, the leasing, and inspection functions
in MMS, and does it address conflict of interest issues
sufficiently?
Ms. Jones. There is no question that MMS is a broken
agency. It has been demonstrated quite adequately, that it has
been captured by the agency that is it supposed to regulate.
The separation in the Discussion Draft I think is very useful,
separating leasing, in particular, from the environmental
analysis, from the revenue collection is particularly
important.
I do think in addition to that there is a critical need to
interject a broader view and a broader consideration in making
these OCS decision because they affect, as demonstrated by the
disaster, not to just oil and gas but other marine resources. I
think one of the positive things in the bill as well is to
include NOAA, for example, as our nation's oceans agency, and
give them a more critical role in expressing their views about
OCS decisions.
Ultimately the most important thing, however, is to make
sure that the standard for pursuing OCS development is one that
is protective of marine health. It is our view that it is more
important to change the nature of the job than it is to
restructure the agency, but we do think that the Discussion
Draft provisions are helpful.
Ms. Bordallo. Following up on your mention of NOAA, can you
explain further what current expertise NOAA offers that should
be included in the planning and the leasing process?
Ms. Jones. NOAA has the ability to do some of the
widespread surveys that are needed to more fully develop our
understanding and develop some baseline information that is
lacking in the marine context. It is the agency where most of
the marine resource experts are housed. The Fish and Wildlife
Service also has expertise as does EPA and the Coast Guard.
NOAA stands out, but we would also support the inclusion of
some of those other resource agencies, making sure that as
Mineral Management Service's successor makes these OCS
decisions again there are a broader set of considerations, not
just about oil and gas development but about the effect of that
development on the environment and the effect on our coastal
economies as well.
Ms. Bordallo. Thank you. Thank you, Ms. Jones.
Dr. Dismukes, I have a couple of questions for you. You are
obviously very concerned about the fact that the bill would
repeal the deepwater royalty relief provisions from the Energy
Policy Act, but I would like you to address a few facts.
There have been over 2,6000 deepwater leases issued since
these royalty relief provisions came into effect. Companies bid
over 9 billion for these leases, and the number of those leases
that would have royalty free oil today zero. Because all of
these leases have clauses that say that if the price of oil is
greater than about $40 a barrel, there will be no royalty
relief.
In 2008, companies bid roughly 4 billion for nearly 700
deepwater leases while oil was approaching $150 a barrel. I
believe that it defies common sense to argue that any of those
companies in 2008 or any of them today expect oil to go below
$40 a barrel.
So how is it credible to say that repealing this provision
would result in massive job losses and compromise national
energy security?
Dr. Dismukes. Well, I think for a variety of reasons. The
provisions that are included in the Deepwater Royalty Relief
Act provided, in addition, a floor for operators that want to
develop these particular areas in case those prices do wind up
falling. They provide security and a sound investment
environment for them in the Gulf of Mexico, and if you look at
one of the reasons why operators have returned to the Gulf, a
lot of it has to do with the regulatory certainty and stability
that has been created historically over the last 10 to 15 years
from provisions, and like the Deepwater Royalty Relief Act.
So I would disagree that the legislation has not had a
profound impact on the industry. Over 21 percent of our
domestic crude oil supplies come from deepwater activities and
from deepwater production. Most of that occurred after 1995
when the deepwater legislation was passed.
Ms. Bordallo. Thank you. Thank you very much, Dr. Dismukes.
And now we have our Ranking Member, Mr. Cassidy from
Louisiana who has a few questions.
Mr. Cassidy. Thank you, Madam Chair.
Dr. Dismukes, again I feel like I am channeling folks from
back home when I point out that when the Secretary says that
his foot is on the neck of BP, they actually feel as if it is
on the neck of the roustabouts, the rig workers, you know where
I am going with that.
Dr. Dismukes. Yes, sir.
Mr. Cassidy. Can you discuss if this, and one thing you
just said is that there is a great need for certainty when it
comes to drilling.
Dr. Dismukes. Yes, sir.
Mr. Cassidy. An atmosphere of uncertainty creates caution.
Caution inhibits investment. Fair statement?
Dr. Dismukes. Yes, sir, that is correct.
Mr. Cassidy. So can you comment upon the economic impact of
this job moratorium, if I may put it that way, the way folks
back home describe it, upon the number of workers, the average
wage per worker, those jobs relative to jobs in other fields,
et cetera?
Dr. Dismukes. Well, the oil and gas industry pays an above-
average wage in south Louisiana, as you well know, and is a
significant employer within the state as well as in other
communities along the Gulf Coast. The current moratoria has the
potential of being very devastating on the deepwater side as
well as some of the activities that you commented on earlier
about decreases in shallow water activity that we are starting
to hear stories and information about.
There is, as I mentioned before, about 100,000 people just
in the coastal parishes alone, in the coastal parishes and
counties along the Gulf of Mexico that are dedicated to just
the direct jobs associated with oil and gas activity, not the
multiplier jobs I am talking about, but directly in
exploration, directly in production, and directly in in-
services.
If we look over the next six months just for the moratoria
along, we are looking at probably in the near term as much as
3,000 jobs lost, increasing to as much as 6,000 by the time we
approach the end of the moratorium up to a maximum of close to
10,000 jobs, if not more, and that is really based on our
forecasts at the current price levels of where crude oil is. If
those prices were to increase and oil and gas activity--that
would be foregone oil and gas activity that we would be taking
advantage of that we could not because of those increases in
price, so certainly there are additional opportunities there.
Some of the conventional wisdom is that we may not make it
to the six months, that we may go longer than that because the
moratorium may----
Mr. Cassidy. Keep in mind the moratorium technically has
not started because it only begins with the first meeting, and
the first meeting has not yet been held.
Dr. Dismukes. Right.
Mr. Cassidy. And then it is only after consideration of
those findings, so indeed it truly may be that the moratorium,
six-month moratorium which we are what--it is now May 20 I
think was when it was first announced--it is going to be much
longer than that.
Dr. Dismukes. Right. And even if, depending on when we
start this, at the end of six months it is probably not likely
that you will have a flash cut into moving right after the six
months. There may be another permitting process that will go
anywhere from 90 to 120 days more than that that are going to
create additional delays in bringing more rigs back on line, so
those will create employment impacts as well.
Mr. Cassidy. OK. And I think there is a misconception that
this moratorium is going after Tony Hayward, in the sense that
it is BP executive who is suffering from this, and he may be.
He wants his life back. On the other hand, those folks I know
in south Louisiana, south Mississippi and Texas who work on
these rigs, can you describe the type of job that we are
talking about?
Dr. Dismukes. Anything from technical positions, tool
pushers and people that are involved in the day-in and day-out
drilling operations, engineering jobs, service jobs that will
come out and provide catering services, that will provide
fluids, drilling fluids, other types of support equipment that
is needed, rental equipment, marine transport back and forth to
the boats. There are a wide variety of people that service this
industry from the shoreline.
Mr. Cassidy. So, working-class, middle-class folks and
small business people.
Dr. Dismukes. Primarily, particularly in the service end of
the business where you have a lot of homegrown businesses in
Louisiana, a large portion of those activities being there in
the service bases along the coast.
Mr. Cassidy. Now, I think of a service base, for example,
you mentioned catering, as being fairly cash-flow dependent.
Have you done any analysis of how these small businesses will
do if this moratorium stretches out?
Dr. Dismukes. They will have to find other opportunities or
they will have to start shutting down operations and laying
people off.
Mr. Cassidy. So the jobs moratorium, as somebody calls it
back home, could truly be a jobs moratorium?
Dr. Dismukes. It could result in significant job losses and
it is of great concern for the state right now.
Mr. Cassidy. I yield back.
Ms. Bordallo. I thank the Ranking Member, and now I would
like to recognize the gentlelady from California, Ms. Capps.
Ms. Capps. Thank you, Madam Chairwoman.
It is my conviction that every phase of the offshore
drilling, exploration, development and production, can result
in significant impacts to the environment, and that is why I
believe the Interior Department should prepare an EIS, an
Environmental Impact Statement, at every phase of the drilling
process. We have made some gains in this area in the Pacific
Region. For example, seismic surveys off the coast of Santa
Barbara require a separate environmental review. I believe this
is a good step to ensure meaningful opportunity for public
participation in the OCS review process.
Ms. Searles Jones, do you agree that requiring more in
depth environmental reviews would provide decisionmakers with
critical information concerning potential significant impacts
from drilling?
Ms. Jones. Congresswoman Capps, absolutely. One of the
problems with the current OCS statutory scheme, which this
Discussion Draft takes some great strides in addressing, is
that decisions are made at such a great level of remove that
commit us to a course of action that by the time we get to the
ability to do any site-specific meaningful analysis that is
full and fair, that considers a range of alternatives, that
displays all of that information for the decisionmaker and for
the public, that really doesn't happen.
The exploration stage, the exploration permit is when that
should happen, the current law requires the Minerals Management
Service to approve permits within 30 days after the agency has
deemed it to be submitted. The agency's course of practice has
been to not start any environmental analysis until after it has
deemed the exploration plan as submitted, and so it basically
has created a situation where it feels like it only has 30 days
to make that decision, and sometimes the lease sale analysis
that has preceded the exploration plan is on the order of tens
of millions of acres, which is not a meaningful scale of
analysis, and we really cannot display the effects. We cannot
have a discussion about what the consequences might be. The
decisionmaker is denied information that it needs to actually
make a good decision, and so that is one of the key features
that this Discussion Draft advances that kind of analysis.
Ms. Capps. Thank you very detailed. Let me follow up. As
the President has noted, one necessary outcome of BP's oil
spill must entail lessening our reliance on fossil fuels and
facilitating the implementation of a clean energy policy. This
is a long-term goal.
When the Department prepares an EIS for offshore drilling,
do you think it is a good idea to require a range of
alternatives, including conservation, efficiencies, and
renewable sources of energy that are capable of avoiding or
minimizing the impacts of that drilling?
Ms. Jones. That is a great question, and I think two things
that this Discussion Draft starts to do that we can do a little
bit better is to make these decisions and make these
considerations not just about oil and gas exploitation, but
more broadly about energy production and how we are actually
going to meet our energy needs, and to expand the range of
alternatives to actually consider the effects on other sectors.
There is some language in the Discussion Draft that moves
toward considering other types of resources as you are doing
the assessments, and I think that is a very positive thing.
Ultimately every commission that has ever looked at ocean
governance has said we have to move away from single sector-by-
sector-by-sector management.
When you are in a single sector statute like OCSLA, Outer
Continental Shelf Lands Act, it would be a significant advance
to have that kind of consideration of a broad range of
alternatives that includes different types of energy
development as well, and understands what the tradeoffs are in
making an OCS decision, for example, for renewable site.
Ms. Capps. Madam Chair, I would like to request that this
witness be charged with expanding on those thoughts in writing
to submit to the record for the purposes of this hearing if it
is your wish.
Ms. Bordallo. Hearing no objections, so ordered.
Ms. Capps. Thank you. And I see the yellow light is on, I
have a couple more questions which I could ask now or could I
just press on if you do not mind, Mr. Ranking Member?
In my opinion, the Department should be required to assess
the response and spill capacity for various spill scenarios in
the environmental review process. Now, as we have seen all too
clearly most cleanup efforts are only 10 to 15 percent
effective. I saw that with the boom that was laid in 1969 off
the Santa Barbara coast, the same effects were seen with the
kind of spill response that is currently going on today.
Requiring an analysis is critical to ensure that the public and
decisionmakers are not misled into believing that spills can be
effectively cleaned up if they really cannot. This CLEAR Act
does require a thorough analysis of the impacts associated with
various cleanup methodologies.
Now, here is my particular question to you, which may be
need to be elucidated a little bit more in this bill. Do you
agree that these impacts must be addressed up front, up front
is the operative word, not after a spill occurs so that not
only those methods that will--so that those methods that will
avoid exacerbating spill impacts are allowed?
In other word, we should be clear ahead of time about which
spill cleanup methods are appropriate in which scenarios.
Ms. Jones. I think that is absolutely true. One of the
clearest lessons learned with the deepwater disaster is that we
were not prepared. We did not have a spill response plan. We
did not have adequate response capability. The states are in an
exceedingly difficult situation because the spill response plan
simply did not deal with a disaster of this magnitude.
It is also true that our technological approaches to
actually dealing with oil spills are very limited and they have
not changed much since the Exxon Valdez days, so we are doing
the same thing we were doing in the Exxon Valdez, and with
Exxon Valdez we only recovered about 10 percent of the oil.
Ms. Capps. Right.
Ms. Jones. So the reality is once it is in the water we
have a very limited set of tools to deal with it, and it is
absolutely our view that we should have to demonstrate under
real world conditions that we are actually capable of dealing
with a worst case spill before we actually go ahead and do
exploration and production.
Ms. Capps. If I could ask a question at a different level
now. Should the Federal Government provide additional technical
and financial resources to assist the coastal states for their
oil spill planning logistics response and recovery? Getting to
the point that some of the particularities, as I mentioned
about what is required in California now with our seismic
studies that are required up front, should there be both a
requirement and also the resources for doing it to particular
states and regions that they could implement specific requests?
Ms. Jones. Absolutely.
Ms. Capps. And then finally, and thank you for you
indulgence, Madam Chair, why is the Gulf of Mexico restoration
program, which is not intended to supplant the existing natural
resource damage process, why is this program important to
understanding the chronic impacts of this oil spill?
Ms. Jones. That is a good question, and I think one thing
that would be useful in the Discussion Draft would be to
clarify the relationship of the restoration program in the bill
with the existing restoration work that will happen under the
Oil Pollution Act of 1990, the existing natural resource damage
assessment process.
We are witnessing an oil spill of a scale that we have
never confronted before. We have a lot of lessons that we can
learn from the Exxon Valdez, but the reality is that this is a
completely new situation. We have never applied this volume of
dispersants before. We have a lot of different habitat types up
and down the coast from sandy beaches to marshes. The
restoration effort will be very long term. It will require a
lot of resources and a constant monitoring and evaluation of
that process is very important.
And that is one of the other things that this bill helps
do. Prevention is the most important thing, but once oil gets
in the water if you do not have good information about your
baseline conditions restoration is much more difficult. So, I
think this bill does a lot of good things to both work on the
prevention side, but also try to make the restoration side a
little bit more possible.
Ms. Capps. Thank you. At what point would the baseline be
made? Would that be part of this legislation or would that be
up to the Gulf of Mexico restoration program?
Ms. Jones. If my memory is correct in terms of where the
sections are in here, there is a provision in here that is part
of the Outer Continental Shelf Lands Act amendment----
Ms. Capps. Yes, that is a baseline.
Ms. Jones.--that require some baseline collection.
Ms. Capps. Thank you. Thank you very much.
Ms. Bordallo. I thank the gentlelady from California. Now I
would like to recognize the Ranking Member, Mr. Cassidy.
Mr. Cassidy. Ms. Jones, and I know you didn't intend to but
there is oftentimes a kind of confusion where people suggest
that renewable energy, as they typically mean solar and
windmills which provide electricity, can in some way supplant
transportation fuel, which is typically fossil fuel.
Now, are you suggesting that we can supplant our
transportation requirements with renewables?
Ms. Jones. It is undeniable right now, Congressman Cassidy,
that our economy is heavily dependent on fossil fuels. It is
also undeniable that fossil fuels are ultimately a finite
resource, and that there are significant----
Mr. Cassidy. Yes, but that peak oil concept, if you will,
has been continually disprove in the sense that we continue to
have more oil discovered, more natural gas discovered. I accept
that it is finite in the sense that everything is finite except
maybe God, except definitely God. On the other hand, there
still seems to be a heck of a lot more than we thought there
was.
Ms. Jones. And let me be clear. I appreciate your
perspective. I don't think that anyone on this Committee
thinks--well, I actually don't know if this is true, but I
suspect that no one on this Committee thinks that investments
in renewables is a bad idea, and ultimately looking at the long
term that that is the future of domestic energy production.
Given our relative consumption rates and our production rates,
clearly we need to invest in alternative forms of energy as
well.
I appreciate what you say about this being a fossil fuel-
based economy, and I think that is part of the challenge for
us, is how as a nation do we turn a little bit and turn the
corner toward having a more diverse and renewable energy
portfolio so that we can actually----
Mr. Cassidy. But even if we say that currently windmills
and solar provides about 1 percent of our electrical grid, and
almost none of our transportation needs, there are a few
electric cars but that is about it, and there is a big dead
zone off the mouth of the Mississippi from fertilizer coming
down the Mississippi, and that dead zone in the Gulf of Mexico
is related to fertilizers used to grow corn to make ethanol, I
am a little dubious about the renewables for transportation
fuel. Your thoughts?
Ms. Jones. I am not an transportation fuel renewables
expert but I would observe that part of what we need to do is
to grapple more broadly with that energy policy question.
Mr. Cassidy. But there is actually a dichotomy, isn't
there, between electricity and transportation? And again, we
often blur that line when we speak about renewables, we
typically mean, again, biomass or windmills or solar, but that
has almost no relationship at all to transportation needs.
Ms. Jones. I would agree that it has almost no relationship
right now to the way our transportation system currently
operates, but necessity is the mother of invention, and part of
what I think is that if we invest more in different forms of
technology, electric cars, hybrid cars, there are other
alternatives out there, and they are worthy of pursuit.
Mr. Cassidy. Dr. Dismukes, this CLEAR Act has really a kind
of novel concept. If a state declares a moratorium on offshore
drilling, then the Federal waters are off limit meaning that
effectively the state owns a Federal resource. If you happen to
live in Oregon or someplace else, I am specifically not saying
Louisiana, you own that, and you can tell the people in Kansas
even though your tax dollars are otherwise flowing and lowing,
nevertheless we own it and we deny you access except for
Louisiana. I am struck by that and I would like your
perspective on this.
In Louisiana, we generate all this Gulf of Mexico activity,
and yet the money is spread out across the nation, so it is
kind of like what is theirs is theirs, and what is ours is
theirs if I want to speak of it from a Louisiana perspective.
What would be your thoughts?
Dr. Dismukes. I would agree. Certainly there is an
inconsistency in that policy. I do think that states should
have some say-so over the activities that occur off their
shoreline. There should be some sharing in that activity
between the Federal Government and the state governments, but I
don't think there has been historically that fair sharing
relationship as it relates to the offshore energy production
that has occurred to date in the Gulf of Mexico, particularly
as it relates to the Gulf states.
You see those types of provisions for onshore production
and mining on Federal lands where you have at least 50/50
sharing relationships, and when the reclamation dollars come
back they are far in excess of 50 percent going back to the
states, and yet you don't have those same kind of relationships
for the Gulf Coast states for all the energy production that
they do, and not just the energy production that is offshore,
but all the supporting infrastructure that is onshore that
provides all the gasoline and the nature gas, and the gas
transportation, and the gas processing, all the petrochemical
facilities that are in the state that make these plastic
bottles that makes the plastic that goes onto the name tags
that are here, and all the infrastructure, the refined product
pipelines that originate in the area, all the other aspects
that are there because of that energy production.
Mr. Cassidy. And so you don't have to comment on what I am
about to say, the tyranny of the Federal Government is in the
boot of our roustabouts and rig workers, denying them the
opportunity to work for something which has no scientific
basis--if you listen to the National Academy of Engineering--
and it is also in the boot of our state in the sense that it
allows other states--at least in this bill--to effectively have
control over their Federal resources, but it doesn't accord the
same to us. It continues to put in a job moratorium, which we
would object to, on the grounds that it is their right. It
seems like a bad deal for Louisiana.
I yield back. Thank you.
Ms. Bordallo. I thank the gentleman, and I would like to
thank the two witnesses, and I do apologize for the long time
you spent here in the hearing room. We had votes, and so I
thank you for your patience.
I would also like to remind you that the hearing record
will be open for 10 days. The members of the Committee may have
additional questions, so please be advised, and we hope that
you can answer them in a timely manner.
Without further business here the Full Committee of Natural
Resources now stands adjourned.
[Whereupon, at 2:13 p.m., the Committee was adjourned.]
[Additional material submitted for the record follows:]
[A letter submitted for the record by Blancett Ranches
follows:]
Congressman Rahall:
Thank you for holding the hearings on new and revised regulations
for an Industry that is long overdue.
I am a sixth generation rancher in Northwest New Mexico. Our family
has being on the same lands for parts of three centuries. The ranch
encompasses 30 sections of mostly federal lands and a federal grazing
permit.
Early in January and again in March, we notified Conoco Phillips we
would be putting cattle out on the lower end of the grazing allotment.
After being off the ranch for the last five years, we returned this
year with our cattle. We restored the water and wells that were not
maintained in our absence. The grass was high, well and spring water
clean, and the pastures well rested after a 5 years.
What was not right was the contamination on the well sites
throughout the lower end of the ranch. We documented the problems with
pictures and test results of the contamination with a local lab. All
test results from the labs of contaminates were very high and well
above limits allowable. Our information was given to Bureau of Land
Management in Farmington and Washington, the New Mexico Game and Fish,
your office and several other congressional offices in DC. To date BLM
has made no attempt to address the concerns. We as ranchers are charged
with the surface stewardship of the land and water for both our
livestock and the wildlife. We are rendered powerless because the
government entities will not enforce the regulations or recognize the
standing of other resources.
The San Juan Basin is the largest producing Natural Gas field in
North America. The resource dollars from the San Juan Basin number in
the BILLIONS each year. Our Basin has been designated a sacrifice area
for decades on the altar of the oil and gas industry. With as much
money as is generated in our area, we should have the best run gas and
oil operation in the Nation and instead it is the worst in the Rocky
Mountain West.
Thank you.
Blancett Ranches (established in 1882)
Tweeti Blancett
Linn Blancett
Box 55
Aztec, NM 87410
______
The documents listed below submitted for the record have
been retained in the Committee's official files.
Alexander, Ryan, President, Taxpayers for Common Sense
Action, Letter dated July 12, 2010, addressed to members of the House
Committee on Natural Resources;
Costner, Kevin, Founder, Costner Industries Nevada
Corporation and Co-Founder/Partner, Ocean Therapy Solutions, WestPac
Resources, Video attached via website;
Defenders of Wildlife, Natural Resources Defense Council,
and the Wilderness Society, Letter to Chairman Nick Rahall dated July
7, 2010;
Emrich, Ron, Executive Director, Preservation New Jersey,
Inc., Letter dated July 14, 2010, addressed to Chairman Nick Rahall;
Erickson, Peggy, Executive Director, Heritage Tourism
Alliance (HTA), Letter dated July 12, 2010, addressed to Chairman Nick
Rahall;
Giffords, The Honorable Gabrielle, a Representative in
Congress from the State of Arizona, Letter submitted for the record;
Griggs, Gary, Chair, Ocean Protection Council Science
Advisory Team, and Director, Institute of Marine Sciences, University
of California Santa Cruz, Document entitled ``Ocean Protection Council
Science Advisory Team Consensus Statement on Ocean Observing'';
Maryland Association of Historic Districts, Testimony
dated July 12, 2010;
Meadows, William H., The Wilderness Society, Letter dated
July 13, 2010, addressed to members of the House Committee on Natural
Resources;
Pierpont, Ruth, President, National Conference of State
Historic Preservation Officers, and Director, Division for Historic
Preservation, New York State Office of Parks Recreation and Historic
Preservation, Letter dated July 13, 2010, addressed to Chairman Nick
Rahall;
Project on Government Oversight, Document dated July 12,
2010, entitled ``POGO Recommendations for Improvements to the CLEAR
Act, H.R. 3534, to Strengthen Oversight and Accountability and End the
Cozy Relationship Between Interior and Industry'';
Publish What You Pay, Document dated July 7, 2010,
entitled ``Recommendations on Enhancing Transparency and Accountability
Measures in H.R. 3534'';
Smithberger, Mandy, Project on Government Oversight,
Document entitled ``CLEAR Act Provisions that POGO Hopes Will Survive
Markup'';
Tercek, Mark R., President and CEO, The Nature
Conservancy, Letter dated July 8, 2010, addressed to Chairman Nick
Rahall;
Trozzo, Charles L., Chairman, Alexandria Historical
Restoration and Preservation Commission, Letter dated July 13, 2010,
addressed to Chairman Nick Rahall; and
Wayne, Lucy B., President, American Cultural Resources
Association, Letter dated July 12, 2010, addressed to Chairman Nick
Rahall.
______
[A letter submitted for the record by William H. Meadows,
The Wilderness Society, follows:]
The Wilderness Society
1615 M Street NW
Washington, DC 20036
Ph (202) 833-2300
June 29, 2010
The Honorable Nick Rahall II
Chairman
House Committee on Natural Resources
1324 Longworth House Office Building
United States House of Representatives
Washington, DC 20510
Dear Chairman Rahall:
On behalf of The Wilderness Society and our 500,000 members and
supporters, I am writing to commend you for your leadership in
developing your legislative proposal to address the systemic fiscal and
environmental problems that have accumulated and afflicted the
Department of the Interior's onshore and offshore oil and gas programs
for many years. Please include this letter supporting your proposal
into the Committee on Natural Resources' June 30, 2010 hearing record.
The abject tragedy of the ongoing Gulf oil spill disaster reminds
us of the paramount importance of allowing offshore oil and gas
development to occur only in appropriate places, and only if there are
effective policies and practices in place to assure the safety of
workers and protection of the environment. Moreover, your proposal
recognizes the grave risks to the terrestrial environment from the
``drill at any cost'' policies put in place during the past decade,
policies which encouraged the extraction of oil and gas resources from
our onshore public lands at the expense of a healthy environment. And,
your proposal addresses a number of vexing problems in the fiscal
management of our federal oil and gas programs that have needed to be
rectified for a long time.
The ``Discussion Draft'' contains a number of vital reforms of the
Outer Continental Shelf oil and gas program. We are especially
supportive of provisions in Title II, Subtitle A that: strengthen
environmental review standards for the protection of marine life and
coastal areas; require specific and practical oil spill prevention and
clean-up plans; require the use of ``best availability technology'' to
assure safe drilling operations; and provide more flexibility for the
Interior Department to review exploration and development plans. The
Draft also contains important fiscal reforms of the offshore program.
Provisions of Title II, Subtitle B of the ``Discussion Draft that
are of priority importance to The Wilderness Society include: the
``diligent development'' provisions of Sec. 221(a); the directive
limiting lease sales to no more than 3 per year per state in Sec.
224(b); the increases in yearly rental rates and minimum royalty rates
in Sec. 224(c); the elimination of non-competitive lease sales in Sec.
224(d); the requirement that Interior mandate ``best management
practices'' for operations on federal leases in Sec. 226; the bonding,
reclamation, and restoration requirements of Sec. 227; the wildlife
sustainability requirements in Sec. 228; and the chemical disclosure
requirements in Sec. 229. With respect to the chemical disclosure
provision in Sec. 229, we recommend amending the language to require
that companies publicly disclose the chemicals they intend to use on
federal drill sites at least 15 days before such chemicals are
deployed, in addition to the requirement that disclosure of actual
chemicals used be disclosed 30 days after operations are completed. We
also strongly urge inclusion of Sec. 308 of H.R. 3534 as introduced,
which repeals Sec. 390 of the Energy Policy Act of 2005 (EPACT). The
misuse of this provision of EPACT has been well-documented by the
Government Accountability Office, and should be repealed. Finally, we
urge you to include Sec. 221 of H.R. 2337 introduced in the 109th
Congress, which protects the rights of surface owners over federal oil
and gas deposits.
We strongly support Title IV of the ``Discussion Draft'', which re-
authorizes the Land and Water Conservation Fund with permanent funding,
and re-authorizes the National Historic Preservation Fund, also with
permanent funding, and establishes a new Ocean Resources Conservation
and Assistance Fund. These programs have contributed so much to our
nation's natural and cultural heritage, and we commend your commitment
to assuring that they are perpetuated and adequately funded into the
future. The BP oil spill highlights the need for sustained investment
of OCS proceeds, through LWCF and the National Historic Preservation
Fund, in land conservation. OCS production has always been predicated
on the idea that the depletion of one national, non-renewable natural
resource must be balanced by the long-term protection of threatened
habitats, beaches, waterways, and other special places across America.
As the devastating effects of the Deepwater Horizon spill demonstrate,
OCS production can itself be a major threat to our nation's already-
limited inventory of natural resources. Full, reliable funding of LWCF
and the National Historic Preservation Fund is needed to provide a fair
environmental return to the public, and accordingly, it is time to
renew the commitment to conservation through full and permanent funding
both programs.
Title V of the ``Discussion Draft'' is a major step forward in
improving the federal authorization and environmental review processes
governing wind and solar development on federal lands. We commend the
Committee for calling on the Department to promulgate rules within 18
months that clarify where and how leasing should proceed. We recommend
that Sec. 501(f) require the Department to issue guidance setting out
how the backlog of wind and solar applications inherited by this
Administration will be worked down in an expedient, fair, and
environmentally responsible manner. Additionally, we recommend
inserting language in Sec. 502 clarifying that wilderness-quality
lands, lands managed for conservation purposes, and important habitat
should be avoided or excluded from leasing. Finally, we recommend that
Sec. 503 authorize a portion of royalty and other revenues to be used
to enhance the Department's ability to protect sensitive wildlife and
ecosystems to mitigate the unavoidable impacts of solar and wind
development.
Finally, with respect to Title VIII, we recommend that in
authorizing significant spending on restoration, that care be taken to
ensure that the restoration strategies are chosen with an eye towards
the future. The Global Change Research Program has identified important
projected climate-driven changes in the Gulf, for example, which need
to guide restoration priorities or else there is significant risk that
the restoration work could be in vain and the money wasted.
Accordingly, we suggest that the definition of ``restoration programs
and projects'' be clarified by adding the following clause to the end
of section 801(d)(2): ``,taking into account the future alteration of
regional conditions reasonably projected to be brought about by climate
change and ocean acidification;''
In conclusion, we greatly appreciate your leadership in taking on
the daunting task of reforming the federal government's energy
programs, both in terms of your proposals to assure a fair return to
taxpayers for use of their assets by the oil and gas industry, and your
commitment to protecting the environment from irresponsible practices,
the consequences of which are all too apparent to anyone watching the
nightly news. We look forward to working with your committee in moving
these reforms forward.
Sincerely,
William H. Meadows
______
[A letter submitted for the record by the National
Federation of Regional Associations for Coastal and Ocean
Observing follows:]
National Federation of Regional Associations
for Coastal and Ocean Observing
June 30, 2010
The Honorable Nick J Rahall, II
Chairman
House Natural Resources Committee
1324 Longworth Office Building
Washington DC
The Honorable Doc Hastings
Ranking Member
House Natural Resources Committee
1324 Longworth Office Building
Washington DC
Dear Chairman Rahall and Ranking Member Hastings:
We would like to express our strong support for section 605 of the
Consolidated Land, Energy and Aquatic Resources Act of 2010 (Discussion
Draft, Amendment in the Nature of a Substitute to H.R. 3534). Section
605 would establish the Ocean Resources Conservation and Assistance
(ORCA) Fund for grants to coastal states, long-term ocean and coastal
observations, and regional ocean partnerships. The importance of these
investments is well documented, and unfortunately, the Deepwater
Horizon disaster further demonstrates the tremendous need for such
support.
Public Law 111-11 formally established and authorized an Integrated
Coastal and Ocean Observing System in 2009 to provide sustained
observations for our nation's coasts and Great Lakes. The ORCA Fund
would allocate the resources to build, operate and maintain this
system, providing a sustained source of emergency response
capabilities, including critical ocean data and models for planners and
responders, like those needed in the Gulf of Mexico now. But it will
also allow the realization of broader benefits of an integrated ocean
observing system, including those relevant to climate and ecosystem
trends, water,quality, marine operations, and coastal hazards.
A sustained ocean observing system for the nation is fundamental to
improving our understanding and stewardship of the oceans and coasts.
Had such system been fully funded and implemented before the Deepwater
Horizon spill, responders would not be faced with the current dearth of
ocean observations in the Gulf of Mexico that limits plume tracking,
modeling, and response. We thank you for-our commitment to our coasts
and Great Lakes and your support for an Ocean Resources Conservation
and Assistance Fund.
Sincerely,
Mark R. Abbott, Dean, College of Oceanic & Atmospheric Sciences, Oregon
State University
Alaska Ocean Observing System
Applied Science Associates, Inc. South Kingstown, RI
Larry Atkinson, Slover Professor, Old Dominion University
Nancy Bird, President, Prince William Sound Science Center
Wendell S. Brown Professor of Oceanography, University of Massachusetts
at Dartmouth
California State Coastal Conservancy
Caribbean Regional Association for Integrated Ocean Observing
Council of American Master Mariners
Richard E. Dodge, Ph.D., Dean, Nova Southeastern University
Oceanographic Center
Ian Dutton, President & CEO, Alaska SeaLife Center
John W. Farrington, University of Massachusetts-Dartmouth
Newell Garfield, Romberg Tiburon Center, San Francisco State University
Great Lakes Observing System
Gary Griggs, Institute of Marine Sciences, University of California,
Santa Cruz
Dr. Burt Jones, University of Southern California Dr. Pete Jumars,
University of Maine
Krista Kamer, California State University Council on Ocean Affairs,
Science and Technology (COAST)
Michael Kellogg, San Francisco Public Utilities Commission
Steven E. Lohrenz, Chair and Professor, Department of Marine Science
University of Southern Mississippi
Maritime Association of the Port of NY/NJ
Gil McRae, Director, FL Fish and Wildlife Conservation Commission
Captain Richard McKenna, Marine Exchange of Southern California
Mid-Atlantic Coastal Ocean Observing Regional Association
Mark A. Moline, Center for Coastal Marine Sciences, California
Polytechnic State University
Mike Munger, Executive Director, Cook Inlet Regional Citizens Advisory
Council
Northwest Association of Networked Observing Systems
Northeast Regional Association for Coastal Ocean Observing, Rye, NH
Ocean Inquiry Project, Seattle WA
Oregon Department of Land Conservation & Development
John Payne D POST Staff Scientist and US Coordinator
Pacific Islands Ocean Observing System
Port Gamble S'Klallam Tribe
Quinault Indian Nation
Roffer's Ocean Fishing Forecasting Service, Inc., West Melbourne, FL
Sea-Bird Electronics, Inc. Bellevue, WA
Dr. Peter Sheng, Professor, University of Florida
Mark Siegmund, Chairman, Society for Underwater Technology--Houston
Branch, TX
Dr. Moby Solangi, President and Chief Executive Officer, Institute for
Marine Mammal Studies, MS
Dr. Tom Soniat, Co-founder, Oyster Sentinel, LA
Southeast Coastal Ocean Observing Regional Association
Southern California Coastal Ocean Observing System
Elizabeth Smith, Chesapeake Bay Observing System
Sound Ocean Systems, Redmond, WA
Dr. Gregory W. Stone, Director, Coastal Studies Institute and WAVCIS
Laboratory, LA
William Sydeman, Farallon Institute for Advanced Ecosystem Research
Darryl Symonds, Director of Marine Measurements Product Lines, Teledyne
RD Instruments
John Ricker, Santa Cruz County of Environmental Health Services
Dr. Carolyn Thoroughgood, Professor of Marine Science and Policy,
College of Earth, Ocean, and Environment, University of Delaware
Dr. Larry Warrenfeltz, IHMC Director for Sponsored Research, Florida
Institute for Human and Machine Cognition, FL
Dr. Robert Weisberg, Professor, University of South Florida, FL
Neil Werner, Executive Director of the Hood Canal Salmon Enhancement
Group
Dr. Brian Taylor, School of Ocean & Earth Science & Technology
University of Hawaii at Manoa
J.P. Walsh, East Carolina University
Dr. Libe Washburn, University of California Santa Barbara
Woods Hole Oceanographic Institution
______
[A letter submitted for the record by the Southern Utah
Wilderness Alliance follows:]
Southern Utah Wilderness Alliance
425 East 100 South
Salt Lake City, UT 84111
76 S Main Street
Moab, UT 84532
122 C Street NW, Ste 240
Washington, DC 20001
June 29, 2010
The Honorable Nick Rahall II
Chairman
House Committee on Natural Resources
1324 Longworth House Office Building
United States House of Representatives
Washington, DC 20510
Dear Chairman Rahall,
Thank you for your efforts in reforming the federal government's
oil and gas program. We support the substance outlined in the current
discussion draft of your bill, H.R. 3534, the Consolidated Land,
Energy, and Aquatic Resources Act of 2009 (CLEAR).
We strongly support the inclusion Sec. 308 of H.R. 3534 as
introduced, which repeals Sec. 390 of the Energy Policy Act of 2005
(EPACT). This section of law was abused under the previous
administration to exempt drilling projects on public lands from
important National Environmental Policy Act analyses. SUWA's recent
settlement of a legal challenge brought against the federal
government's misuse of this practice has now ended the use of
categorical exclusions in cases of extraordinary circumstances, making
the case for a more permanent statutory fix even more compelling. The
misuse of categorical exclusions in the Nine Mile Canyon region in
particular threatened Utah's tremendous wilderness and cultural
resources by exempting projects from cumulative impact analysis. Repeal
of this section of law will go to further restore balance to the
government's oil and gas program and protect Utah's nationally
recognized wilderness resources.
Thank you again for your continued efforts to protect our natural
resources and restore balance to the federal government's oil and gas
program. We look forward to seeing your efforts result in robust and
meaningful legislative reform.
Best Regards,
Richard Peterson-Cremer
Legislative Director
Southern Utah Wilderness Alliance
______
[A letter submitted for the record by the Powder River
Basin Resource Council follows:]
June 29, 2010
The Honorable Nick Rahall, II
Chairman
House Committee on Natural Resources
1324 Longworth House Office Building
United States House of Representatives
Washington, DC 20510
Dear Chairman Rahall,
On behalf of the Powder River Basin Resource Council and our 1,000
members, many of whom are impacted by oil and gas development, I write
to commend you on your efforts to implement much needed reforms for the
oil and gas industry. We believe these reforms will help address some
longstanding regulatory failings regarding onshore activities of the
oil and gas industry. Please include this letter supporting your
proposal into the Committee on Natural Resources' June 30, 2010,
hearing record.
The elements of the legislation of direct importance to our
landowners impacted by oil and gas development concern the need for the
industry to be adequately bonded in order to assure reclamation and
restoration of our lands. As you know, the coal industry, under SMCRA,
is required to be bonded for the exact cost of reclamation. There is no
reason to require less of the oil and gas industry.
We are also supportive of the provisions to reduce impacts from oil
and gas drilling and to require this industry to disclose to the public
and affected landowners chemicals they use in drilling and production
operations.
Finally, we urge you to support an additional amendment to the bill
to provide more real protections for split estate surface landowners
when federal minerals are developed beneath their property.
We thank you for your leadership and look forward to the passage of
this important and long overdue legislation.
With Best Regards,
Bob LeResche
Chair, Powder River Basin Resource Council
cc: Representative Lummis
______
[A letter submitted for the record by Larry Schweiger,
President & CEO, National Wildlife Federation, follows:]
June 30, 2010
Honorable Nick J. Rahall
Chairman - House Committee on Natural Resources
1324 Longworth House Office Building
Washington, DC 20515
Dear Chairman Rahall,
On behalf of our four million members and supporters and 47 state
and territorial affiliates we write in support of the Consolidated
Land, Energy, and Aquatic Resources Act of 2010. While there are some
areas that should be strengthened and improved, overall the CLEAR Act
includes many of the most urgent and necessary reforms in response to
the worst oil spill in Americas History.
We are especially encouraged by its provisions assuring better
environmental, safety, leasing and permitting practices both offshore
and onshore. Noteworthy are the repeal of categorical exclusions,
mandatory Best Management Practices, as well as chemical disclosure of
all materials related to exploration on federal leases.
We also support provisions in CLEAR that would promote responsible
renewable energy development. By providing more certainty for project
proponents while balancing the needs of wildlife and developers, the
bill represents a significant step toward an expansion of renewable
energy across the country. We are particularly pleased that CLEAR
establishes a commercial wind and solar leasing program, requires
Interior Department regulations on mandatory best management practices,
off-site impact mitigation, and ongoing reclamation of a project site,
and promotes fiscal management reforms intended to ensure the
government is receiving ``fair market value'' for taxpayer-owned
resources.
We appreciate the efforts in CLEAR to enhance investments in land,
oceans and Great Lakes conservation and especially appreciate the
dedicated funding for the Land and Water Conservation Fund.
Unfortunately, as it now stands, the Ocean Resources Conservation and
Assistance Fund does not adequately address the needs of the ecosystem
most impacted by the BP spill. Much of the oil inundating the marshes
and wetlands of the Mississippi Delta cannot be cleaned up. Instead, we
will need to invest in the long-term restoration of the coast including
funding large scale diversions of freshwater and sediment from the
Mississippi Delta to these coastal areas. Through these efforts, we can
over-time, restore the health of this internationally significant
ecosystem. We urge that the bill be amended over the course of the
legislative process to ensure dedicated funding for Mississippi Delta
restoration and expedite the 16 projects already authorized in the
Water Resources Development Act of 2007.
We also believe CLEAR could be improved with Education Act (H.R.
3644). This bill education programs nationwide. An educated citizenry
will make better, more informed decisions about their energy sources.
Other measures we suggest to improve CLEAR:
Increase royalty rates from believe the bill should
include language on the split estate issue that remain private
landowners that do not own the minerals under issue passed the full
House of Representatives in the 110 2005 Energy Policy Act that
requires BLM to act on a lease within 30 days of receipt of
application. We feel this is far too short of time to do a thorough
review of the application.
Dedicate some portion of the to protect sensitive
wildlife and ecosystems, including ensuring the conservation of lands
essential for natural resource adaptation to unavoidable climate
change. forms, first, enhance the Department's ability to guide
development to smart places with appropriate mitigation requirements
and second, restoration, mitigation, and land acquisition to help
offset the impacts of development. Furthermore, we would recommend
language to guide the Department's siting decisions during the 18 month
transition to a leasing program.
Once again, thank you for your leadership in creating a balanced
approach to our current energy needs and making an investment to our
clean energy future. other members of the committee to enact the
strongest and most effective oil spill response legislation possible.
Sincerely,
Larry Schweiger
President & CEO
National Wildlife Federation
______
[The Section-by-Section Analysis of the Discussin Draft
follows:]
Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act of 2009
H.R. 3534
Section-by-Section
Of The
Amendment In The Nature of a Substitute Discussion Draft
(June 22, 2010, 5:25pm)
Sec. 1. Short Title.--The title of the bill is the ``Consolidated
Land, Energy, and Aquatic Resources Act of 2009.''
Sec. 3. Definitions.--
The term ``administrator'' means the Administrator of the
National Oceanic and Atmospheric Administration (NOAA)
The term ``affected Indian tribe'' means an Indian tribe
with federally reserved rights affirmed by treaty, statute, order, or
other law.
The term ``alternative energy'' means electricity
generated by a ``renewable energy resource'', which is defined as wind,
solar, geothermal, marine hydrokinetic, biomass, landfill gas, and
qualified hydropower, as defined by Section 1301(c) of the Energy
Policy Act of 2005 (26 U.S.C. 45(c)).
The term ``coastal state'' is given the same definition
as in the Coastal Zone Management Act, where it means any of the states
bordering the Atlantic, Pacific, Gulf of Mexico, Long Island Sound,
Arctic Ocean, or the Great Lakes. Puerto Rico and the insular areas are
also included in the definition under the CZMA (16 U.S.C. 1453).
The term ``Department'' means the Department of the
Interior.
The term ``ecosystem based management'' means an
integrated approach to management considers an entire ecosystem, aims
to maintain ecosystems in a healthy and sustainable condition,
emphasizes the protection of the ecosystem as a whole, considers the
cumulative impacts of all activities occurring within the ecosystem,
explicitly accounts for the interconnectedness within an ecosystem, and
integrates ecological, social, economic, cultural, and institutional
perspectives.
The term ``Federal land management agency'' means the
Bureau of Land Management, U.S. Forest Service, U.S. Fish and Wildlife
Service, and the National Park Service.
The term ``function'' means authorities, powers, rights,
privileges, immunities, programs, projects, activities, duties, and
responsibilities.
The term ``important ecological area'' means an area that
contributes significantly to local or larger marine ecosystem health or
is an especially unique or sensitive marine ecosystem.
The term ``Indian land'' has the same definition as under
the Indian Tribal Energy Development and Self-Determination Act of 2005
(25 U.S.C. 3501(2)), which includes all lands within Indian
reservations, pueblo, or rancherias, lands held in trust by the United
States for tribes or individuals, and certain other lands.
The term ``marine ecosystem health'' means the ability of
an ecosystem in ocean and coastal waters to support and maintain
patterns, important processes, and productive, sustainable, and
resilient communities of organisms, having a species composition,
diversity, and functional organization resulting from the natural
habitat of the region, such that it is capable of supporting a variety
of activities and providing a complete range of ecological benefits.
The term ``minerals'' has the same definition as in the
Outer Continental Shelf Lands Act (OCSLA; 43 U.S.C. 1331 et seq.),
where it means oil, gas, sulphur, geopressured-geothermal, and all
other minerals authorized by Congress to be produced from federal
lands.
The term ``nonrenewable energy resource'' means oil and
natural gas.
The term ``Outer Continental Shelf'' has the same
definition as in the Outer Continental Shelf Lands Act (OCSLA; 43
U.S.C. 1331 et seq.), where it means all submerged lands lying outside
of 3 geographical miles (roughly 3 nautical miles) from the coastline
of most states, and outside of 9 geographical miles (roughly 9 nautical
miles) from the Gulf of Mexico coastlines of the states of Florida and
Texas.
The term ``public land State'' means Alaska, Washington
Oregon, California, Idaho, Nevada, Utah, Arizona, Montana, Wyoming,
Colorado, and New Mexico.
The term ``Regional Ocean Partnership'' means
collaborative initiatives between two or more states to implement
policies or activities under authorities granted to the states under
the Coastal Zone Management Act (16 U.S.C. 1451 et seq.).
The term ``renewable energy resource'' means wind, solar,
geothermal, biomass, landfill gas, incremental hydropower, free-flowing
hydropower, wave, tidal, current, and ocean thermal energy.
The term ``Secretaries'' means the Secretary of the
Interior and the Secretary of Commerce.
The term ``Secretary'' means the Secretary of the
Interior.
The term ``surface use plan of operations'' means a plan
for the use and restoration of Federal lands for energy development
approved by either the Bureau of Land Management or the Forest Service.
The terms ``Federal land'', ``lease'', ``lease site'',
and ``mineral leasing law'' have the same definitions as under the
Federal Oil and Gas Royalty Management Act (30 U.S.C. 1701 et seq.).
The term ``Tribe'' has the same definition as under the
Indian Self-Determination and Education Assistance Act (25 U.S.C.
450b(e)).
Title I--Creation of New Department of the Interior Agencies
Sec. 101. Bureau of Energy and Resource Management.--This section
would establish a Bureau of Energy and Resource Management (BERM), with
a mandate to manage the leasing and permitting for renewable energy,
non-renewable energy, and mineral resources on all onshore and offshore
Federal lands in the United States; however, leasing on Indian lands
would not be handled by BERM. The BERM Director would be appointed by
the President and subject to Senate confirmation. Subsection (d) would
provide additional authority and direction to the Secretary for
conducting studies and collecting data that are necessary to fulfill
the Secretary's environmental responsibilities under the Outer
Continental Shelf Lands Act; a separate office within BERM would be
responsible for managing the Bureau's environmental studies and
analysis activities. Under subsection (f), the Bureau of Land
Management and Forest Service would retain their authorities as the
multiple-use managers of lands under their jurisdiction, and would be
responsible for ensuring that energy production on Federal lands is
done in an environmentally sound matter, through the identification of
lands and waters that are eligible for energy development, the
establishment of best management practices, the authorization of
waivers to lease stipulations, the establishment and enforcement of
appropriate financial assurances to ensure proper site reclamation,
environmental site inspections, authority to issues notices of non-
compliance for violations of permits and surface use plans, and other
activities as deemed necessary by the Secretary. Bureau of Safety and
Environmental Enforcement (BSEE; established in Section 102) employees
would also have the authority to issue notices of noncompliance and
issue civil penalties for land-use violations observed during BSEE
inspections.
Sec. 102. Bureau of Safety and Environmental Enforcement.--This
section would establish a Bureau of Safety and Environmental
Enforcement (BSEE), with a mandate to carry out all the safety and
environmental regulatory activities, including inspections, on all
onshore and offshore Federal lands in the United States. The BSEE
Director would be appointed by the President and subject to Senate
confirmation. Subsection (d) would give BSEE the following
responsibilities: oversight for BERM's OCS National Environmental
Policy Act (NEPA) reviews; suspension or cancellation of leases in the
event that activities under those leases threatens health or the
environment; developing health, safety, and environmental regulations
for operations on onshore and offshore federal lands, including
mandatory Safety and Environment Management programs; conducting
investigations; and implementing the new Offshore Technology Research
and Risk Assessment Program established under Section 211 of this Act.
Subsection (e) would require that BSEE inspectors be highly qualified
and well-trained, and would establish a National Oil and Gas Health and
Safety Academy (``Academy'') for training the national oil and gas
inspector workforce. Subsection (e) would also allow the Secretary to
work with educational institutions and the oil and gas industry to
create appropriate training and continuing education programs outside
the Academy.
Sec. 103. Office of Natural Resources Revenue.--This section would
establish an Office of Natural Resources Revenue (ONRR), which would be
responsible for collecting and disbursing all royalties and other
revenues from energy and mineral related activities on onshore and
offshore federal lands, auditing such collections, and promulgating
regulations relevant to revenue collection and management. Subsection
(d) would create an independent program within ONRR to carry out
auditing and oversight of revenue collection. The ONRR would be headed
by a Deputy Assistant Secretary appointed by the President and subject
to Senate confirmation.
Sec. 104. Ethics.--This section would require that the Secretary of
the Interior certify that all BERM, BSEE, and ONRR employees that
interact with oil and gas companies are in full compliance with all
Federal employee ethics laws and regulations.
Sec. 105. Direct Hiring Authority for Critical Scientific and
Technical Personnel.--This section would allow the government to better
compete for talent with industry by providing the Secretary authority
to hire highly-qualified technical personnel for BERM, BSEE, or ONRR
outside of the civil service system. In addition, subsection (c) would
allow the Secretary to hire certain individuals for up to 4-year terms
at enhanced salaries if those individuals bring extremely high levels
of crucial expertise, provided that there are no more than 40 such
hires at any one time at BERM or BSEE. Subsection (d) allows the
Secretary to rehire former employees without a reduction of termination
of their annuities.
Sec. 106. References.--This section would ensure that all
references to functions that previously existed in the Minerals
Management Service or in the Bureau of Land Management energy program
are transferred to the appropriate new entities created in this Act.
Sec. 107. Abolishment of Minerals Management Service.--This section
would formally abolish the Minerals Management Service (MMS), and
ensure that all completed administrative proceedings, pending
administrative proceedings, and pending civil actions related to MMS
are not affected by this abolishment.
Sec. 108. Conforming Amendment.--This section would add the titles
of the heads of the new agencies to the appropriate pay scale section
of the U.S. Code.
Sec. 109. OCS Safety and Environmental Advisory Board.--This
section would create a new safety and advisory board under the Federal
Advisory Committee Act. This board would be tasked with providing to
the Secretary advice on safety and environmental issues surrounding
energy and mineral development issues on the Outer Continental Shelf.
Title II--Federal Oil and Gas Development
Subtitle A--Safety, Environmental, and Financial Reform
of the Outer Continental Shelf Lands Act
Sec. 201. Short Title.--This title of this subtitle is the ``Outer
Continental Shelf Lands Act Amendments of 2010.''
Sec. 202. Definitions.--This section would amend the Outer
Continental Shelf Lands Act (OCSLA) to add a definition for ``safety
case''. A safety case is defined as a body of evidence that provides a
basis for determining whether a system is adequately safe for a given
application in a given environment, and requirements for its use in
offshore drilling operations have been adopted by a number of countries
around the world, including Norway and the United Kingdom.
Sec. 203. National Policy for the Outer Continental Shelf.--This
section would amend Section 3 of the OCSLA to require a more balanced
approach to energy development that acknowledges the other resources of
the OCS, and to emphasize that energy-related activities should be
conducted without harming the marine, coastal, or human environments.
Sec. 204. Jurisdiction of Laws on the Outer Continental Shelf.--
This section would amend Section 4 of the OCSLA to ensure that the laws
of the United States also apply to renewable energy facilities on the
OCS. Currently, U.S. laws clearly apply to oil and gas facilities, but
court rulings indicate that renewable energy facilities, such as
offshore windmills, may not be covered.
Sec. 205. OCS Leasing Standard.--This section would amend Section 5
of the OCSLA to clarify the authority of the Secretary to issue
regulations related to operational safety and environmental protection
on the OCS, and would require the Secretary to issue regulations
mandating: independent third-party certification of crucial pieces of
safety equipment (such as blowout preventers); new requirements for
subsea testing and secondary activation of blowout preventers;
independent third-party certification of the well casing and cementing
procedures; adoption of safety and environmental management systems by
operators on the OCS; and compliance with other environmental and
natural resource conservation laws. The Secretary would also be
required to consult with the Secretary of Commerce on any regulation
that may affect the marine or coastal environment. This section would
also require that the Secretary provide to the public, free of charge,
any documents incorporated by reference into any OCS-related
regulations.
Sec. 206. Leases, Easements, and Rights-of-Way.--This section would
amend Section 8 of the OCSLA by adding three new subsections related to
royalties and financial assurances. New subsection 8(q) would require
the Secretary to conduct a bonding study at least once every five years
to determine if financial assurance levels are adequate for operations
on the OCS. New subsection 8(r) would require the Secretary to conduct
a fiscal system review at least once every three years that would
outline in-place royalty and rental rates and indicate whether the
Secretary intended to modify those rates. New subsection 8(s) would
require the Secretary to conduct a comparative fiscal review at least
once every five years, in which would assess the overall oil and gas
fiscal system of the United States and compare it to systems in place
in other countries. Subsection (b) of Section 206 would disqualify a
company from bidding for new leases if it was not meeting safety and
environmental requirements on its existing leases, or if it had
outstanding obligations under the Oil Pollution Act of 1990. Subsection
(c) would amend the alternative energy leasing subsection of OCSLA to
delete ambiguous language from Section 388 of EPACT (43 U.S.C. 1337(p))
that could be interpreted to allow non-energy development under the
Secretary's offshore alternative energy leasing authority. The section
would also provide for non-competitive authorizations if an applicant
were seeking to carry out short-term meteorological or marine testing.
Subsection (d) would require the Secretary to request a review by the
Secretary of Commerce of any proposed lease sale. Subsection (e) would
eliminate the authority of the Secretary to lease a tract greater than
5,760 acres.
Sec. 207. Disposition of Revenues.--This section would amend
Section 9 of the OCSLA to provide for yearly mandatory funding of $900
million for the Land and Water Conservation Fund, $150 million for the
Historic Preservation Fund, and 10% of total offshore revenues for a
new Ocean Resources Conservation and Assistance (ORCA) Fund, as created
by Section 605 of this Act.
Sec. 208. Exploration Plans.--This section would amend Section 11
of the OCSLA to strengthen and create new requirements for exploration
plans, as well as eliminate the 30-day deadline for approval of those
plans. Exploration plans would be required to include blowout scenarios
with estimated timelines for drilling a potential relief well, and an
analysis of the impact of a worst-case-scenario discharge from
drilling. Categorical exclusions would no longer be allowed for
approving plans, and a plan would only be able to be approved if the
applicant has demonstrated capability and technology to respond
immediately to a worst-case-scenario oil spill. Subsection (d) would
add additional requirements for obtaining drilling permits, including a
full engineering review of the well and safety systems that certifies
that best available technology will be used. New subsection 11(j) adds
additional requirements for deepwater wells, and new subsection 11(k)
would provide additional authority for the disapproval of a plan if the
exploration activities would probably cause damage to the marine,
coastal, or human environments.
Sec. 209. OCS Leasing Program.--This section would amend Section 18
of the OCSLA to provide for additional consideration of environmental
factors in the preparation of 5-year leasing plans. This section would
also require consultation with the Secretary of Commerce during the
preparation of those plans. In addition, a new subsection 18(i) is
added, which would establish a research and development program
designed to improve the ability to estimate oil and gas resources and
address gaps in environmental data on the OCS.
Sec. 210. Environmental Studies.--This section would amend Section
20 of the OCSLA to require environmental studies, in cooperation with
the Secretary of Commerce, at least once every three years of OCS areas
where oil and gas lease sales are scheduled. Subsection (b) would
direct the Secretary to conduct research on the impacts of deepwater
oil spills and the use of dispersants.
Sec. 211. Safety Regulations.--This section would amend Section 21
of the OCSLA to require more frequent studies by the Secretaries of
Interior and Homeland Security on the adequacy of health and safety
regulations relevant to operations on the OCS. This section would also
broaden the requirement to use best available and safest technologies,
and require the Secretary to publish lists of the best available
technologies for key areas of well design and operation, including
blowout preventers and oil spill response technologies. New subsection
21(g) would mandate regulations requiring all operators to have safety
cases before they could receive new permits to drill. New subsection
21(h) would create an Offshore Technology Research and Risk Assessment
Program designed to research and assess industry trends, new drilling
technologies, and oil spill response technologies, among other topics.
Sec. 212. Enforcement of Safety and Environmental Regulations.--
This section would amend Section 22 of the OCSLA to require monthly
inspections of drilling rigs, more frequent investigations of safety-
related incidents on the OCS, investigations of all allegations brought
by employees of operators or contractors, and certifications from
operators, operators' Chief Executive Officers, and independent third
parties regarding compliance with safety and other regulations.
Sec. 213. Remedies and Penalties.--This section would amend Section
24 of the OCSLA to increase civil penalties from $20,000 per day to
$75,000 or $150,000 per day, depending on the violation. Subsection (b)
raises the maximum criminal fine under the Act from $100,000 to
$10,000,000.
Sec. 214. Uniform Planning for OCS.--This section would amend
Section 25 of the OCSLA to strengthen and create new requirements for
development and production plans, and to ensure that such requirements
extend to all areas of the OCS, whereas in existing law the Gulf of
Mexico is exempt. As with exploration plans, this section would require
development and production plans to include blowout scenarios with
estimated timelines for drilling a potential relief well, and an
analysis of the impact of a worst-case-scenario discharge from
drilling. Approval of plans through categorical exclusions would no
longer be allowed. This section would also require applicants to
provide a comprehensive survey of the marine and coastal environment
within their proposed area of operations, and to use production
platform as observation stations for collecting data for the Integrated
Coastal and Ocean Observing System. Development and production plans
would not be able to be approved unless the applicant has the
demonstrated ability to effectively remediate a worst-case release of
oil from activities conducted under the plan.
Sec. 215. Oil and Gas Information Program.--This section would
amend Section 26 of the OCSLA to require lessees to provide additional
data on drilling operations to the Secretary, and to provide it in
electronic format in real-time, or as quickly as possible if real-time
is not feasible. This section would also delete provisions requiring
the government to pay for data reproduction costs.
Sec. 216. Limitation on Royalty-in-Kind Program.--This section
would amend Section 27 of the OCSLA to eliminate the authority for the
Secretary to conduct a regular royalty-in-kind program.
Sec. 217. Repeal of Royalty Relief Provisions.-- This section would
repeal the shallow-water-deep-gas, deep-water, and Alaskan OCS royalty
relief provisions that were enacted in the Energy Policy Act of 2005
(EPAct) (P.L. 109-58).
Sec. 218. Registry Requirements.--This section would amend Section
30 of the OCSLA to clarify that U.S. immigration laws apply to
facilities on the OCS, and to require that all vessels conducting
operations on the OCS pursuant to the OCSLA, including drilling rigs,
be flagged in the United States. This section also would add an
``intention of Congress'' section that states that energy development
activities on the OCS should be conducted in a way so as to support
domestic industry and jobs.
Sec. 219. Developing Innovations in Oil Spill Containment and
Response Technologies.--This section would add a New Horizon Oil Spill
Containment and Response Technology grant program to the OCSLA. This
program would provide competitive grants for research into new
technologies for preventing, modeling, responding to, and cleaning up
from oil spills.
Subtitle B--Safety, Environmental, and Financial Reform
of the Federal Onshore Oil and Gas Leasing Program
Sec. 221. Diligent Development.--This section would require the
promulgation of regulations establishing diligent development
benchmarks for oil and gas leases. The regulations would have to
provide for extending those benchmarks in situations where diligent
development is not possible due to environmental or other restrictions
beyond a lessee's control.
Sec. 222. Reporting Requirements.--This section would require
lessees to report twice a year on the steps that are being taken to
develop each of their non-producing leases. This information would be
put into an electronic searchable database available to the public.
Currently, according to the Department of the Interior's Inspector
General (OIG Evaluation C-EV-MOA-0009-2008, ``Oil and Gas Production on
Federal Leases: No Simple Answer,'' February 2009), the Department does
not know exactly what is occurring on non-producing leases.
Sec. 223. Notice Requirements.--This section would require the
Secretary of the Interior to notify the public, surface land owners,
and holders of special use recreation permits (such as outdoor
recreation companies, hosts of annual events, etc.) when relevant lands
are being offered for oil and gas leasing.
Sec. 224. Oil and Gas Leasing System.--This section would amend
Section 17 of the Mineral Leasing Act (30 U.S.C. 181 et seq.) to make
changes in the federal oil and gas leasing system, such as requiring
the receipt of fair market value, changing the bidding system from oral
to sealed bids, changing the requirement of a minimum four lease-sales
per state per year to a maximum of three lease sales per state per
year, allowing the Secretary to evaluate the value of the lands
proposed for lease, and eliminating non-competitive leasing. The
national minimum acceptable bid would be raised from $2 per acre to
$2.50 per acre, and rentals would be raised from the current structure
of $1.50/acre for the first five years and $2/acre for the remaining
years, which has not been adjusted since 1987, to $2.50/acre for the
first five years and $3/acre for the remaining years. The Secretary
would also be given explicit authority to increase rental rates if
necessary to enhance financial returns to the United States and to
promote more efficient management of oil and gas resources on federal
lands.
Sec. 225. Electronic Reporting.--This section would authorize the
Secretary to inform Congressional committees of large pipeline right-
of-way applications and proposed lease reinstatements electronically
instead of through a paper copy, if the committee requests.
Sec. 226. Best Management Practices.--This section would require
oil and gas operators on federal lands to adhere to best management
practices, with site-specific adjustments allowed to account for
special circumstances.
Sec. 227. Surface Disturbance, Reclamation.--This section would
amend Section 18 of the Mineral Leasing Act to require the submission
of interim and final reclamation plans along with each application for
a permit to drill. Lessees who had not completed reclamation activities
on existing leases no longer in production would be unable to obtain
new leases. This section also requires the Secretary to set the amount
of required financial assurances high enough to ensure that reclamation
can be undertaken if necessary, and to establish reclamation standards.
Sec. 228. Wildlife Sustainability.-- This section would direct the
Secretaries of Interior and Agriculture to plan for and manage areas
under their respective jurisdictions in order to maintain sustainable
populations of native and desirable non-native species of plants and
animals, consistent with the requirements of existing law. If
conditions beyond the Secretary's control prevent sustainability, the
Secretary concerned would be required to protect the survival of
species and certify that management activities do not increase the
likelihood of extirpation. The Secretaries would be required to
establish monitoring programs using identified focal species to
evaluate sustainability and to coordinate management at the federal and
state levels.
Sec. 229. Online Availability to the Public of Information Relating
to Oil and Gas Chemical Use.--This section would require the list of
chemicals (as well as information about those chemicals) used in
drilling or completing a well to be posted online within 30 days after
completion of drilling the well.
Title III--Oil and Gas Royalty Reform
Sec. 301. Amendments to Definitions.--This section would add
additional detail to the definition of ``mineral leasing law'' in the
Federal Oil and Gas Royalty Management Act of 1982, as amended (FOGRMA)
(30 U.S.C. 1701 et seq.); would clarify the definition of ``designee''
under FOGRMA in order to allow the Secretary to correspond with a
designee only, as opposed to having to contact each individual lessee
(that has designated a designee) in writing as is required under
current law; would allow penalties to be assessed for permit violations
as opposed to just lease violations as is currently the case; would
include a definition of ``compliance review'' (increasingly used
reviews of royalty payments that are less intensive than audits) in
FOGRMA; and would modify a definition of ``marketing affiliate'' that
existed in regulation by no longer requiring that the affiliate's sole
function be the marketing of the lessee's production.
Sec. 302. Compliance Reviews.--This section would provide statutory
authority for the Secretary to conduct compliance reviews of royalty
payments, and require any uncovered discrepancies to be referred to an
auditor. The Secretary would have to provide notice to payors that a
compliance review was being conducted.
Sec. 303. Clarification of Liability for Royalty Payments.--This
section would clarify that designees would be liable for royalty
payments under a lease, and that lease owners and operators would be
liable for their pro-rated share of payment obligations under a lease.
Sec. 304. Required Recordkeeping.--This section would require oil
and gas records to be kept by payors for seven years instead of the
current six, which would align that timeframe with the statue of
limitations for the government established under the Royalty Fairness
and Simplification Act of 1995 (P.L. 104-185) to collect unpaid
royalties.
Sec. 305. Fines and Penalties.--This section would amend FOGRMA to
double fines for underpayment or late payment of royalties, and would
also double the penalty for theft. These penalties have not been
increased since 1983. The section would also extend the statute of
limitations for oil and gas leases held by violators.
Sec. 306. Interest on Overpayments.--This section would eliminate
the requirement, under current law, that the Federal government pay
interest on royalty overpayments made by operators. This would
eliminate the incentive that operators have to make errors in their
favor on their royalty calculation and receive a guaranteed return of
the payment made in error plus interest.
Sec. 307. Adjustments and Refunds.--This section would eliminate
the opportunity for lessees to make adjustments to their royalty
obligations after a compliance review or audit is completed on a lease
in question, and would limit the ability to make adjustments to four
years after the date royalties were initially due. Currently, lessees
are allowed to make adjustments for a full six years even after MMS has
already completely a compliance review or audit.
Sec. 308. Conforming Amendment.--This section would repeal a
section of FOGRMA that related to a study on noncompetitive leases that
was due in 1983.
Sec. 309. Obligation Period.--This section would establish that in
the case of an adjustment made by a lessee that results in an
underpayment, the lessee would be obligated to repay that amount (plus
interest) from the date the lessee makes the adjustment, thus extending
the statute of limitations on that royalty payment. This would enable
OFEML to audit such lease during the ensuing six-year cycle.
Sec. 310. Notice Regarding Tolling Agreements and Subpoenas.--This
section would allow the Secretary to correspond only with the lease
designee in the case of subpoenas or agreements to pause the statute of
limitations.
Sec. 311. Appeals and Final Agency Action.--This section would
extend the timeframe for the Secretary to issue final decisions on any
appeals on demands or orders to pay royalties or penalties to 48
months, from the current 33 months.
Sec. 312. Assessments.--This section would repeal a section of
FOGRMA that prohibits the Secretary from imposing assessments on payors
who chronically submit erroneous royalty reports.
Sec. 313. Collection and Production Accountability.--This section
would establish a pilot project for the automated transmission of
electronic data from offshore wellheads and meters to the federal
government, in order to improve the accuracy and efficiency of data and
royalty collection.
Sec. 314. Natural Gas Reporting.--This section would require the
Secretary to implement the steps necessary to ensure accurate reporting
of heat content values of natural gas, which is a key component to
determining the amount of royalties owed..
Sec. 315. Penalty for Late or Incorrect Reporting of Data.--This
section would establish a penalty for companies that file late or
incorrect data, to be set at a level the Secretary would determine is
sufficient to ensure that companies file correct data on time, but no
less than $10 per incorrect line of data. The filing of late or
inaccurate reports creates considerable administrative difficulties for
the government, and charging a penalty for faulty reporting has shown
in the past to incentivize the filing of fully accurate and on-time
data. A similar penalty was previously imposed by regulation, but was
repealed last year.
Sec. 316. Required Recordkeeping.--Section 103 of FOGRMA currently
gives the Secretary of the Interior the authority to require lessees,
operators, or anyone involved in developing, producing, transporting,
purchasing, or selling oil or natural gas from federal lands to provide
records to the federal government upon request, if the Secretary
implements such authority by rule. The current regulations promulgated
under section 103, however, apply only to lessees and operators,
ignoring the federal government's authority to audit natural gas
purchasers. Section 216 would require the Secretary to amend existing
regulations to encompass the full authority granted under FOGRMA.
Sec. 317. Limitation on Royalty-In-Kind Program.--This section
would eliminate the ability for the Secretary of the Interior to run a
regular program for taking oil or gas royalties in kind..
Sec. 318. Shared Civil Penalties.--This section would eliminate a
disincentive for states and tribes to diligently pursue royalty
violators. Under current law, any civil penalties that are collected
under FOGRMA due to the work of State or Tribal auditors are divided
evenly between the states or tribes and the Federal government. The
amount the state or tribe receives from the civil penalty is then
subtracted from the amount of money they would have received under
their cooperative agreements with MMS. This means that, currently,
state and tribal auditors receive no benefit for any work they do in
identifying royalty violators.
Sec. 319. Applicability to Other Minerals.--This section would
extend the civil and criminal enforcement authority in FOGRMA, as
amended to coal and other solid minerals on federal lands, as well as
to solid mineral mining or alternative energy development on the Outer
Continental Shelf.
Sec. 320. Entitlements.--This section would require the Secretary
to publish final regulations regarding procedures for reporting
royalties on entitled shares of production from unitized leases when
lessees do not actually sell their share of production from that lease.
Title IV--Full Funding for the Land and Water Conservation Fund
Subtitle A--Land and Water Conservation Fund
Sec. 401. Amendments to the Land and Water Conservation Fund Act of
1965.--This section would establish that all language in this subtitle
would amend the Land and Water Conservation Fund (LWCF) Act of 1965 (16
U.S.C. 460l-4 et seq.).
Sec. 402. Extension of the Land and Water Conservation Fund.--This
section would extend the authorization of the LWCF until 2040.
Sec. 403 Permanent Funding.--This section would provide for $900
million to be available to the LWCF each year out of OCS receipts
without further appropriations.
Subtitle B--National Historic Preservation Fund
Sec. 411. Permanent Funding.--This section would provide for $150
million to be available to the Historic Preservation Fund (HPF) each
year out of OCS receipts without further appropriations, and would
extend the authorization of the HPF until 2040.
Title V--Alternative Energy Development
Sec. 501. Commercial Wind and Solar Leasing Program.--This section
would establish a leasing program for wind and solar projects on
Federal lands, in contrast to the special-use permits and rights-of-way
authorizations that are used now. The Secretary would not be allowed to
lease Forest Service lands for renewable energy over the objections of
the Secretary of Agriculture. Final regulations establishing a leasing
program would be required to be published within 18 months after the
date of enactment, and leasing would be required to commence no later
than 90 days after issuance of the regulations. Subsection (d) would
eliminate the ability to site commercial solar or wind projects on BLM
or Forest Service land using a right-of-way or special use permit,
although subsection (f) would allow rights-of-way or special use
permits to be issued for projects that have submitted a plan of
development or installed a data collection device prior to the date of
enactment of the bill. Subsection (e) would allow for the issuance of
noncompetitive leases for noncommercial testing purposes, and the
Secretary would have the authority to award preference to holders of
noncompetitive leases during a commercial lease sale. Subsection (g)
would require the Secretary to promulgate diligent development
requirements for solar and wind leases.
Sec. 502. Land Management.--This section would require the
Secretary to issue regulations for solar and wind leasing, establishing
the lease terms, bonding requirements, and land reclamation
requirements.
Sec. 503. Revenues.--This section would require the Secretary to
set rates for rentals, royalties, etc., at a level to ensure a fair
return to the United States and encourage development of wind and solar
energy on federal lands.
Sec. 504. Recordkeeping and Reporting Requirements.--In order to
allow for future audits or compliance reviews of renewable energy
production on federal lands, this section would require lessees, permit
holders, or renewable energy operators to maintain records for seven
years.
Sec. 505. Audits.--This section would provide authority for the
Secretary to conduct audits of onshore wind and solar leases.
Sec. 506. Trade Secrets.--This section would allow confidential or
proprietary information to be made available by the Secretary to other
federal agencies if necessary to carry out the provisions of this Act
or other federal law.
Sec. 507. Interest and Substantial Underreporting Assessments.--
This section would allow interest to be charged on late royalty
payments for wind and solar leases, and also would establish a civil
penalty of up to 25% for underpayments, in addition to making royalty
violators subject to the civil penalty provisions of FOGRMA. The
Secretary would have the authority to waive penalties if the
underpayment is corrected before the payor receives a notice from the
Secretary of that underpayment, and for other reasons. This section
would also establish joint and several liability for royalty payments
on a lease.
Sec. 508. Indian Savings Provision.--This section would ensure that
the rights and interests of Indian tribes are not affected by this
Subtitle.
Title VI--Outer Continental Shelf Coordination and Planning
Sec. 601. Regional Outer Continental Shelf coordination.--This
section would address the need for long-term, coordinated planning to
guide OCS energy development within the context of other activities
occurring in OCS regions established in the Atlantic, Pacific, Gulf of
Mexico and Alaska.
Sec. 602. Regional Outer Continental Shelf Councils.--This section
would establish Regional OCS Councils (Councils). Council membership
would include representatives of relevant Federal agencies, coastal
State Governors, affected Tribes, and representatives from stakeholder
groups such as the relevant Regional Ocean Partnership, Regional
Fishery Management Council, and interstate marine fisheries commission.
Sec. 603. Regional Outer Continental Shelf strategic plans.--
Strategic Plans would be prepared and completed by each of the Councils
within 2 years after completion of an initial OCS Region assessment and
would be used by the Department in developing 5-year OCS leasing plans
under the OCS Lands Act.
Sec. 604. Regulations.--This section would direct the Secretaries
to promulgate regulations to administer this Title.
Sec. 605. Ocean Resources Conservation and Assistance Fund. A
percentage of all OCS revenues would be deposited into an Ocean
Resources Conservation and Assistance (ORCA) Fund, established by this
section, which would provide grants to coastal states and Regional
Ocean Partnerships for activities that contribute to the protection,
maintenance, and restoration of ocean, coastal and Great Lakes
ecosystems including: the development and implementation of
comprehensive, science-based plans for monitoring and managing the wide
variety of uses affecting the oceans, coasts and Great Lakes
ecosystems; activities to improve the ability of those ecosystems to
become more resilient and adapt to and withstand the impacts of climate
change and ocean acidification; planning for and managing coastal
development to minimize the loss of life and property associated with
sea-level rise and the coastal hazards resulting from it; research,
assessment and monitoring that contribute to these purposes;
strengthened planning for coastal State oil spill response; and the
implementation and operation of an integrated ocean observation system.
Sec. 606. Waiver.--This section would exempt the Councils from the
Federal Advisory Committee Act.
Sec. 607. Transition Period.--To ensure uninterrupted leasing and
development of our nation's OCS resources while the Strategic Plans are
being prepared, this section would allow the Secretary to continue the
preparation and execution of 5-year plans under the OCS Lands Act, and
the leasing of areas for offshore alternative energy under the existing
alternative energy rule, until the Strategic Plans are approved.
Sec. 608. Alternative Energy on the Outer Continental Shelf.--Prior
to approval of a strategic plan, the Secretary of the Interior would
continue to implement the rule for Renewable Energy and Alternate Uses
of Existing Facilities on the OCS. Approval of strategic plans would
not affect projects for leases approved under that rule, nor tracts of
the OCS for which competitive alternative energy leasing process under
that rule has been initiated prior to submittal of the Plan for
approval.
Title VII--Miscellaneous Provisions
Sec. 701. Repeal of Certain Taxpayer Subsidized Royalty Relief for
the Oil and Gas Industry.--This section would repeal the shallow-water-
deep-gas, deep-water, and Alaskan OCS royalty relief provisions that
were enacted in the Energy Policy Act of 2005 (EPAct) (P.L. 109-58).
Subsection (c) would repeal language from EPAct that provided for lease
extensions and royalty relief in the National Petroleum Reserve-Alaska.
Sec. 702. Conservation Fee.--This section would impose a fee of $2
per barrel of oil, or 20 cents per million Btu of natural gas, for
production from existing federal onshore and offshore leases. This fee
would expire on December 31, 2021.
Sec. 703. Leasing on Indian Lands.--This section would ensure that
nothing in the bill would amend or modify leasing as it is currently
carried out on Indian lands by the Bureau of Indian Affairs.
Sec. 704. Offshore Aquaculture Clarification.--This section
clarifies that the Secretary of Commerce and the Regional Fishery
Management Councils do not have the authority to develop or approve
fishery management plans for the purposes of permitting or regulating
aquaculture in the Exclusive Economic Zone of the United States.
Sec. 705. State Moratoria.-- This section would prohibit the
Secretary from issuing a lease on OCS lands that are seaward or
adjacent to a coastal State which has a moratorium on offshore oil,
gas, and mining activities.
Sec. 706. Liability for National Wildlife Refuges.-- This section
would amend the National Wildlife Refuge System Administration Act of
1966 to hold any person or instrumentality which destroys, causes the
loss of, or injures a refuge resource, or any living or nonliving
resource of the refuge system or marine national monument, liable to
the United States. This section authorizes the Secretary to use the
amounts recovered for costs of response actions and damage assessments.
Sec. 707. Strengthening Coastal State Oil Spill Planning and
Response.--This section would amend Section 306 of the Coastal Zone
Management Act of 1972 to provide grants, not to exceed $750,000, to
eligible coastal States to revise relevant plans of management programs
to ensure sufficient oil spill response capabilities.
Sec. 708. Federal Coordination and Collaboration--This section
would direct the President to establish policies and processes to
promote better coordination and collaboration between Federal agencies
with ocean and coastal related functions, to ensure adequate public
comment and to support Regional Ocean Partnerships.
Sec. 709. Information Sharing.--This section would amend Section
388(b) of the Energy Policy Act of 2005 (Public Law 109-58) to require
other federal agencies to provide data and information to the Secretary
of the Interior in support of the Coordinated OCS Mapping Initiative.
Sec. 710. Savings Clause.--This section would ensure that no funds
from this Act would be able to pay any cost that any responsible party
under the Oil Pollution Act of 1990 is liable for.
Title VIII--Gulf of Mexico Restoration
Sec. 801. Gulf of Mexico Restoration Program.--This section would
establish a Gulf of Mexico Restoration Task Force, composed of the
heads of the relevant Federal agencies and the Governors of the Gulf
Coast States, to develop and publish a long-term restoration plan
within one year after the date of enactment. The Plan would identify
processes and strategies for coordinating and implementing Federal,
State, and local restoration programs and projects, using the best-
available science.
Sec. 802. Gulf of Mexico Long-Term Environmental Monitoring and
Research program.--This section would direct the Secretary through NOAA
to establish a long-term, comprehensive marine environmental monitoring
and research program on the impacts of the Deepwater Horizon oil spill
on the marine and coastal environment of the Gulf of Mexico, to remain
in effect for a minimum of 10 years. The program would be developed in
cooperation with the USGS and in consultation with the National
Oceanographic Leadership Council, the Gulf Coast States, academic
institutions, and other monitoring experts. Data from the program would
be available to governmental and non-governmental personnel and the
public.
Sec. 803. Gulf of Mexico Emergency Migratory Species Alternative
Habitat Program.--This section would establish an emergency migratory
species alternative habitat program to support projects along the
Northern coast of the Gulf of Mexico to ensure that migratory species
have alternative habitat available for use outside of areas impacted by
the oil spill.
______
[A Summary of the Discussion Draft follows:]
Summary of the
Discussion Draft
Amendment in the Nature of a Substitute
[of June 22, 2010 (5:25 p.m.)]
H.R. 3534
The ``Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act ''
The Discussion Draft maintains and builds upon the
``Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act'' (H.R.
3534), as introduced by House Natural Resources Committee Chairman Nick
J. Rahall last year and which was the subject of two days of hearings
by the committee. In recognition of the enormous sea change caused by
the Deepwater Horizon incident, the draft would enact significant and
wide-ranging amendments to ensure that oil and gas development in the
U.S. is done efficiently while protecting human safety and the
environment. The draft would also create an Oceans Resources
Conservation and Assistance Fund (ORCA) with oil and gas leasing
revenues and fully fund the Land and Water Conservation Fund (LWCF) and
the Historic Preservation Fund (HPF).
The Discussion Draft would:
Reorganize and Consolidate Energy Leasing Programs for Greater
Efficiency & Effectiveness
Abolish the Minerals Management Service and divide it
into three separate entities:
o The Bureau of Energy and Resource Management (BERM), which
would manage leasing & permitting both offshore and onshore oil
and gas and renewable energy-related activities, and conduct
necessary environmental studies;
o The Bureau of Safety and Environmental Enforcement (BSEE),
which would conduct all inspections and investigations, and
issue health, safety, and environmental regulations for both
offshore and onshore oil and gas and renewable energy-related
activities; and
o The Office of Natural Resource Revenue (ONRR), which would
collect all offshore and onshore oil and gas and renewable
energy-related revenues.
Ensure that only qualified individuals serve as oil and
gas inspectors under strict ethical standards.
Create a training academy for federal oil and gas
inspectors.
Improve the Federal Offshore Leasing Program's Safety & Environmental
Protections
Eliminate the use of Categorical Exclusions under NEPA to
approve exploration or development plans.
Require the inclusion of meaningful blowout and worst-
case scenario response plans in all drilling plans.
Require applicants to have technology that is
demonstrated to be able to respond to a worst-case release of oil.
Ensure compliance with environmental and natural resource
conservation laws.
Extend the 30-day deadline for the review of exploration
plans to 90 days.
Require monthly inspections of all drilling rigs.
Create a Robust Planning Process for Energy Development on the Outer
Continental Shelf
Establish regional ocean councils for the Atlantic,
Pacific, Gulf of Mexico, and Alaska regions, which would prepare marine
spatial strategic plans to guide OCS energy development.
Direct 10% of OCS revenues into a new Ocean Resources
Conservation and Assistance (ORCA) Fund, which would be used to
protect, maintain, and restore ocean, coastal, and Great Lakes
ecosystems.
Increase the involvement of NOAA in the oversight of
offshore drilling activities.
Improve Federal Onshore Energy Leasing Programs
Require federal oil and gas lessees to diligently develop
their leases.
Repeal Section 390 of the Energy Policy Act of 2005
relating to categorical exclusions.
Impose ``best management practices'' on oil and gas
lessees to ensure they operate in an environmentally sustainable
manner.
Establish a competitive wind and solar leasing program
for Federal lands, while allowing non-competitive leases for research
and testing.
Improve the Federal Oil and Gas Royalty Collection Program
Permanently end the Royalty-In-Kind program, which was
the source of a major scandal regarding overly-cozy relationships
between private industry and government regulators.
Eliminate the practice of paying interest to oil and gas
companies when they overpay royalties.
Enhance the ability of the government to go after oil and
gas lessees that chronically or intentionally shortchange the American
people of their rightful royalties.
Repeal unnecessary royalty relief provisions.
Fully Fund the Land and Water Conservation Fund, the Historic
Preservation Fund and the Oceans Resources Conservation and
Assistance Fund
Provide mandatory full funding, beginning in 2011, for
the Land and Water Conservation Fund (LWCF), the Historic Preservation
Fund (HPF), and the Oceans Resources Conservation and Assistance Fund
(ORCA).
Assess a conservation fee on existing leases that are
producing oil or gas from 2011 through 2021 to pay for full funding of
the LWCF, the HPF, and the ORCA.
Establish a Restoration Planning Program for the Gulf of Mexico
Establish a Gulf of Mexico Restoration Planning Program
to ensure that Federal and State restoration efforts are coordinated
and based on the best available science to achieve the maximum
restoration benefits for species, habitats and communities in the Gulf.
Establish a long term monitoring and research program to
ensure the impacts of the spill on the marine and coastal environment
are fully documented, understood, and mitigated.
Establish an emergency habitat restoration and
establishment program to ensure that species that migrate through the
Gulf, particularly waterfowl and other birds, have habitat available
outside the areas impacted by the spill.
______
[A letter submitted for the record by Pat Sweeney,
Director, Western Organization of Resource Councils, follows:]
WORC
Western Organization of Resource Councils
110 Maryland Avenue, NE, Suite 306, Washington, DC 20002
(202) 547-7040 FAX (202) 543-0978
E-mail: dc@worc.org http://www.worc.org
June 29, 2010
The Honorable Nick Rahall, II
Chairman
House Committee on Natural Resources
1324 Longworth House Office Building
United States House of Representatives
Washington, DC 20510
Dear Chairman Rahall,
I am writing to express the support of WORC and its members for
your bill, the Consolidated Land, Energy, and Aquatic Resources Act of
2009, H.R. 3534. WORC agrees that reforms are needed to ensure that our
federal energy resources are managed in a safe and fiscally-sound
manner, particularly in the areas of onshore oil and gas development.
Please include this letter of support in the Natural Resource
Committee's June 30, 2010 hearing record.
As you know, many of WORC's members are farmers, ranchers and other
rural landowners who are directly affected by the development of
federal energy resources. We are not opposed to energy development, but
we believe that changes are needed to defuse the controversies
surrounding irresponsible oil and gas development.
We urge you to include further protections for surface owners over
federal oil and gas reserves, and repeal of the categorical exclusions
from environmental review created by the Energy Policy Act of 2005. The
CLEAR Act with these additions will provide badly needed changes to
planning, leasing and development of onshore federal oil and gas
resources.
The Gulf disaster has focused the nation's attention on the dangers
of offshore drilling, yet many of the same risks apply to onshore oil
and gas drilling, particularly in the case of federal minerals:
The Bureau of Land Management (BLM) has multiple, often
conflicting responsibilities including land use planning, environmental
review, leasing, revenue collection, permitting, inspections, and
enforcement.
Limited resources force trade offs between facilitating
development, protecting multiple uses, exercising oversight, and
protecting the interests of taxpayers.
Use of toxic chemicals poses risks to health, safety and
the environment, yet the oil and gas industry is exempted from many
environmental standards with which other industries must comply.
People living in affected communities don't have the
information they need to test their air or water for pollutants because
little, if any, information about toxic chemicals used is made
available to the public.
The people who rely on the land, air and water bear the
brunt of the impacts, but have little or no ability to ensure
responsible development. Onshore, this is often farmers and ranchers,
who own the land above federal oil and gas.
Corporate liability is limited: In the case of onshore
drilling, bonding requirements are 50 years out-of-date, putting
taxpayers and landowners at risk for the cost of cleanups.
Your bill includes common sense reforms that would address many of
these critical issues, and help ensure that an appropriate balance is
struck between developing our important federal oil and gas resources
and protecting drinking water, air quality, agricultural lands,
wildlife habitat, and the health of communities.
These provisions from Title II, Subtitle B are of particular
importance to WORC:
Bonding and Reclamation
Sec. 227 requires complete and timely reclamation of lease tracts,
and restoration of any adversely affected lands or surface waters,
through Interim and Final Reclamation plans that restore oil and gas
sites to a condition approximate or equal to that which existed prior
to the surface disturbance, including restoration of natural vegetation
and hydrology, habitat restoration, salvage, storage and reuse of
topsoils, control of erosion, invasive species and noxious weeds, and
natural contouring.
Sec. 101(f)(6) requires reclamation bonds sufficient to assure the
completion of reclamation if the work were to be performed by the
Secretary in the event of forfeiture. This requirement will result in
long-overdue updates to BLM's fifty-year-old onshore oil and gas
bonding standards, which have been repeatedly criticized by the
Government Accountability Office and others.
Chemical Disclosure
Sec. 229 requires public disclosure of the often-toxic chemicals
used in drilling and completion of oil and gas wells on federal leases,
giving people living near oil and gas sites the information they need
to test their drinking water supplies and protect their families.
Best Management Practices
Sec. 226 requires the use of safety and environmental standards
(now voluntary) to ensure the sound, efficient, and environmentally
responsible development of oil and gas in a manner that avoids,
minimizes, and mitigates actual and anticipated impacts from oil and
gas development.
In addition, we urge inclusion of the following:
Protections for Surface Owners
As you know, millions of acres of federal oil and gas lie beneath
private land. Under current law, the Stockraising Homestead Act of
1916, landowners have limited rights to consultation and compensation,
and face serious damages to their land and way of life. While Sec. 223
requires notification of surface owners in advance of leasing and
permitting, additional protections are needed. We strongly urge you to
include Sec. 221 of H.R. 2337 from the 110th Congress.
End Categorical Exclusions
``Categorical exclusions'' created by the Energy Policy Act of 2005
(EPAct) create a short cut to required environmental review and
analysis for various types of oil and gas activities. We also urge
inclusion of Sec. 308 of H.R. 3534 as introduced, which repeals Sec.
390 of EPAct.
We thank you for your leadership on these critical issues, and look
forward to working with you and your committee toward passage of the
CLEAR Act.
Sincerely,
Pat Sweeney, Director
Western Organization of Resource Councils
______
[A letter submitted for the record by the Theodore
Roosevelt Conservation Partnership follows:]
THEODORE ROOSEVELT CONSERVATION PARTNERSHIP
555 11TH ST NW
6TH FLOOR
WASHINGTON, DC 20004
202-639-8727
WWW.TRCP.ORG
June 30, 2010
Honorable Nick J. Rahall II
Chairman
House Committee on Natural Resources
1324 Longworth House Office Building
Washington, DC 20515
Honorable Doc Hastings
Ranking Member
House Committee on Natural Resources
1203 Longworth House Office Building
Washington, DC 20515
Dear Chairman Rahall and Ranking Member Hastings:
The hunting, fishing and conservation organizations listed below
would like to thank you and other members of the House Committee on
Natural Resources for addressing many of the concerns of sportsmen
regarding the impacts of energy development on fish and wildlife in the
discussion draft of the Amendment in the Nature of Substitute for the
Consolidated Land, Energy and Aquatic Resources Act of 2010 (H.R.
3534).
We are pleased with the overall approach allowing pre-leasing
analysis, evaluation of development plans before permitting and better
coordination with federal and state agencies for offshore development.
We also support this legislation addressing the deficiencies in policy
and process that may have lead to the current problems in the Gulf of
Mexico and the mitigation of impacts and restoration of habitats and
values hurt by the BP spill. Specifically, we applaud the following
provisions of H.R. 3534 and urge your continued support of these
important points:
1. Establishment of the independent Office of Environmental
Science;
2. Commitment to fully fund the Land and Water Conservation Fund
at $900M without the need to go through annual appropriations;
3. Establishment of a ``due diligence'' standard;
4. Notification of affected stakeholders before leasing and
development and the opportunity for public involvement in the process;
5. Adjustments to the leasing process for onshore lease sales and
making Best Management Practices mandatory;
6. Inclusion of reclamation and wildlife sustainability planning,
protection of corridors and more effective monitoring processes;
7. Clear direction for coordination with other federal and state
agencies;
8. Requirement for disclosure of chemicals involved in energy
development;
9. Establishment of a leasing process for solar and wind
development on federal lands;
10. Establishment of the Ocean Resources Conservation and
Assistance Fund;
11. Establishment of liability for damages to national wildlife
refuges; and
12. Clarification that the changes contained will not affect
states' authority to manage fish and wildlife within their boundaries
and their ability to manage hunting and fishing.
We understand that in response to the tragedy in the Gulf, energy
policy will be considered in the near future and we applaud the
committee for beginning the process to address the needs of fish and
wildlife in H.R. 3534. Please enter this letter into the official
hearing record and contact any of the organizations listed below for
assistance with issues involving fish and wildlife and energy
development.
Sincerely,
Gordon Robertson
American Sportfishing Association
Ralph Rogers
North American Grouse Partnership
Mike Schlegel
Pope & Young Club
Joe Hamilton
Quality Deer Management Association
Chris Wood
Trout Unlimited
Thomas M. Franklin
Theodore Roosevelt Conservation Partnership
Bruce Leopold
The Wildlife Society
Gray Thornton
Wild Sheep Foundation