[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\
---------------------------------------------------------------------------
    \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). 
---------------------------------------------------------------------------
    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: [email protected] 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

                                 
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