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



 
                 LEGISLATION TO RESPOND TO THE BP OIL 
                  SPILL AND TO PREVENT FUTURE OIL WELL 
                  BLOWOUTS
=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 30, 2010

                               __________

                           Serial No. 111-140


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov



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                    COMMITTEE ON ENERGY AND COMMERCE

                 HENRY A. WAXMAN, California, Chairman
JOHN D. DINGELL, Michigan            JOE BARTON, Texas
  Chairman Emeritus                    Ranking Member
EDWARD J. MARKEY, Massachusetts      RALPH M. HALL, Texas
RICK BOUCHER, Virginia               FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
BART GORDON, Tennessee               NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York             ROY BLUNT, Missouri
GENE GREEN, Texas                    STEVE BUYER, Indiana
DIANA DeGETTE, Colorado              GEORGE RADANOVICH, California
  Vice Chairman                      JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California               MARY BONO MACK, California
MICHAEL F. DOYLE, Pennsylvania       GREG WALDEN, Oregon
JANE HARMAN, California              LEE TERRY, Nebraska
TOM ALLEN, Maine                     MIKE ROGERS, Michigan
JANICE D. SCHAKOWSKY, Illinois       SUE WILKINS MYRICK, North Carolina
CHARLES A. GONZALEZ, Texas           JOHN SULLIVAN, Oklahoma
JAY INSLEE, Washington               TIM MURPHY, Pennsylvania
TAMMY BALDWIN, Wisconsin             MICHAEL C. BURGESS, Texas
MIKE ROSS, Arkansas                  MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York          PHIL GINGREY, Georgia
JIM MATHESON, Utah                   STEVE SCALISE, Louisiana
G.K. BUTTERFIELD, North Carolina     PARKER GRIFFITH, Alabama
CHARLIE MELANCON, Louisiana          ROBERT E. LATTA, Ohio
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA M. CHRISTENSEN, Virgin 
    Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE L. BRALEY, Iowa
PETER WELCH, Vermont
                 Subcommittee on Energy and Environment

               EDWARD J. MARKEY, Massachusetts, Chairman
MICHAEL F. DOYLE, Pennsylvania       RALPH M. HALL, Texas
JAY INSLEE, Washington               FRED UPTON, Michigan
G.K. BUTTERFIELD, North Carolina     ED WHITFIELD, Kentucky
CHARLIE MELANCON, Louisiana          JOHN SHIMKUS, Illinois
BARON P. HILL, Indiana               JOHN B. SHADEGG, Arizona
DORIS O. MATSUI, California          STEVE BUYER, Indiana
JERRY McNERNEY, California           GREG WALDEN, Oregon
PETER WELCH, Vermont                 SUE WILKINS MYRICK, North Carolina
JOHN D. DINGELL, Michigan            JOHN SULLIVAN, Oklahoma
RICK BOUCHER, Virginia               MICHAEL C. BURGESS, Texas
FRANK PALLONE, Jr., New Jersey
ELIOT ENGEL, New York
GENE GREEN, Texas
LOIS CAPPS, California
JANE HARMAN, California
CHARLES A. GONZALEZ, Texas
TAMMY BALDWIN, Wisconsin
MIKE ROSS, Arkansas
JIM MATHESON, Utah
JOHN BARROW, Georgia


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Edward J. Markey, a Representative in Congress from the 
  Commonwealth of Massachussetts, opening statement..............     1
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     3
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     4
    Prepared statement...........................................     6
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     8
Hon. Jay Inslee, a Representative in Congress from the State of 
  Washington, opening statement..................................     9
Hon. Joseph R. Pitts, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     9
Hon. G.K. Butterfield, a Representative in Congress from the 
  State of North Carolina, opening statement.....................    10
Hon. Steve Scalise, a Representative in Congress from the State 
  of Louisiana, opening statement................................    10
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................    11
Hon. Parker Griffith, a Representative in Congress from the State 
  of Alabama, opening statement..................................    13
Hon. Roy Blunt, a Representative in Congress from the State of 
  Missouri, opening statement....................................    14
Hon. Lois Capps, a Representative in Congress from the State of 
  California, opening statement..................................    14
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................    15
Hon. Gene Green, a Representative in Congress from the State of 
  Texas, opening statement.......................................    16
Hon. Michael C. Burgess, a Representative in Congress from the 
  State of Texas, opening statement..............................    17
Hon. Jim Matheson, a Representative in Congress from the State of 
  Utah, opening statement........................................    18
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................    19
Hon. Jane Harman, a Representative in Congress from the State of 
  California, opening statement..................................    19
Hon. Charlie Melancon, a Representative in Congress from the 
  State of Louisiana, opening statement..........................    20
Hon. Peter Welch, a Representative in Congress from the State of 
  Vermont, opening statement.....................................    21
Hon. Eliot L. Engel, a Representative in Congress from the State 
  of New York, opening statement.................................    22
Hon. John Sullivan, a Representative in Congress from the State 
  of Oklahoma, prepared statement................................    83

                               Witnesses

David Hayes, Deputy Secretary, Department of the Interior; 
  Accompanied by Steve Black, Counselor to the Secretary.........    22
    Prepared statement...........................................    25
John Martinez, Consulting Production Engineer, Production 
  Associates.....................................................    60
    Prepared statement...........................................    63
Elgie Holstein, Senior Director For Strategic Planning, 
  Environmental Defense Fund.....................................    67
    Prepared statement...........................................    69

                           Submitted Material

Summary of Blowout Prevention Act of 2010........................    86


 LEGISLATION TO RESPOND TO THE BP OIL SPILL AND TO PREVENT FUTURE OIL 
                             WELL BLOWOUTS

                        WEDNESDAY, JUNE 30, 2010

                  House of Representatives,
            Subcommittee on Energy and Environment,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:34 a.m., in 
Room 2322, Rayburn House Office Building, Hon. Edward J. Markey 
[chairman of the subcommittee] presiding.
    Present: Representatives Markey, Inslee, Butterfield, 
Melancon, McNerney, Welch, Dingell, Engel, Green, Capps, 
Harman, Gonzalez, Matheson, Barrow, Waxman (Ex Officio), Upton, 
Hall, Stearns, Whitfield, Shimkus, Blunt, Pitts, Bono Mack, 
Sullivan, Burgess, Scalise, Griffith, and Barton (Ex Officio).
    Also Present: Representative Stupak.
    Staff Present: Bruce Wolpe, Senior Advisor; Brian Cohen, 
Senior Investigator and Policy Advisor; Greg Dotson, Chief 
Counsel, Energy and Environment; Jeff Baran, Counsel; Michal 
Freedhoff; Alex Barron, Professional Staff Member; Melissa 
Cheatham, Professional Staff Member; Robb Cobbs, Policy 
Analyst; Caitlin Haberman, Special Assistant; Peter Ketcham-
Colwill, Special Assistant; Karen Lightfoot, Communications 
Director, Senior Policy Advisor; Lindsay Vidal, Special 
Assistant; Mary Neumayr, Minority Counsel; Aaron Cutler, 
Minority Counsel; Andrea Spring, Minority Professional Staff 
Member; Peter Spencer, Minority Professional Staff Member; and 
Garrett Golding, Minority Legislative Analyst.

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN 
        CONGRESS FROM THE COMMONWEALTH OF MASSACHUSETTS

    Mr. Markey. Welcome. Welcome to the legislative hearing on 
the Legislation to Respond to the BP Oil Spill and to Prevent 
Future Oil Well Blowouts. 5,000 feet below the Gulf of Mexico 
in dark frigid waters lies an ineffectual inert steel structure 
five stories high. A few hundred miles from the spill's source, 
a hurricane is barreling through the Gulf disrupting the 
response to the disaster. These two events are emblematic of BP 
and the oil industry's lack of attention to safety and 
inadequate response capabilities for a catastrophic spill.
    The Gulf of Mexico response plan for BP includes walruses 
which haven't called the region home for 3 million years, yet 
if you look for the word ``hurricane'' in their response plan, 
you won't find it in BP's contingency plans.
    Over the course of the past 2 months, the Energy and 
Commerce Committee has conducted a vigorous investigation of 
the causes of the BP Deepwater horizon disaster. We have held 
numerous hearings in this subcommittee and in the Oversight and 
Investigations Subcommittee. We have worked hard to uncover the 
truth about the causes of the disaster, in part to ensure that 
the responsible parties are held fully accountable. But it is 
equally important, if not more so, that we use the knowledge we 
have gained about the BP Deepwater horizon disaster to ensure 
that such a thing will never happen again. That is what today's 
hearing is all about. The committee's investigation has raised 
serious concerns about the adequacy of industry practices and 
regulatory standards with regard to oil and gas drilling. As 
the ongoing catastrophe in the Gulf of Mexico makes clear, the 
stakes could hardly be higher, nor is this an isolated 
incident.
    In 1979 the IXTOC blowout in the Gulf of Mexico and the 
2009 blowout in Australia both involve shallow water wells and 
caused massive environmental damage. This subcommittee, because 
of its jurisdiction over energy, exploration and production, 
has a responsibility to address this critical issue. That is 
why full committee chairman, Henry Waxman, Chairman Bart 
Stupak, and I yesterday introduced the Blowout Prevention Act 
or BP Act of 2010. Historically regulation of offshore drilling 
has required the use of best available safest technologies 
taking costs into account. But regulators have had little or no 
congressional guidance on what this standard requires. And 
current regulations plainly are not adequate.
    The bill, now before the subcommittee, responds to this gap 
by establishing minimum standards for well drilling 
technologies and practices for offshore and other high risk 
wells. The legislation is based on the basic concept of defense 
in depth, it requires multiple lines of defense against a 
blowout and ensures that these defenses aren't redundant so the 
failure of one does not lead to cascading failures of the 
entire system as occurred with BP's Macondo well. First, the 
legislation sets minimum standards for blowout preventers, the 
last line of defense against the blowout like the one that 
occurred on April 20th. These standards require that blowout 
preventer mechanisms to seal wells in the event of an emergency 
are effective and redundant. The legislation also requires new 
standards governing well design and cementing to ensure 
multiple redundant barriers within the well against 
uncontrolled oil or gas flow that could lead to a blowout.
    The BP Act also includes a number of provisions to improve 
regulatory oversight of high risk wells. It requires periodic 
updating of regulatory standards and establishes an independent 
technical advisory committee to help ensure that safety 
standards are adequate. The legislation also requires 
independent third-party certification of blowout preventers and 
well designs and establishes whistleblower protections for rig 
workers.
    And finally, it requires periodic and unannounced 
inspections and establishes strict civil and criminal 
penalties. This bill is not written in stone. It is the 
beginning of a process. We look forward to the input of our 
witnesses today and to working with our colleagues on both 
sides of the aisle to improve this legislation and move it 
forward through the legislative process. I now turn to 
recognize the ranking member of the subcommittee, the gentleman 
from Michigan, Mr. Upton, for his opening statement.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Well, thank you, Mr. Chairman. The BP spill is 
an environmental and economic disaster on a scale that we have 
never seen before. We need to ensure to the best of our ability 
that such a disaster cannot and does not happen again. Our 
domestic energy resources power our economy and keeps America 
working. The oil industry is under the microscope now for sure, 
and they should be. We need to learn from this accident, make 
any needed changes and then move forward.
    Clearly in light of what happened on Deepwater Horizon rig, 
new safety and oversight regulations are needed, but the 
question still remains what actions are necessary to approve 
safety without blocking our much needed domestic reserves. I 
look forward to working on a bipartisan piece of legislation 
that ensures the safety and effectiveness of offshore drilling. 
The joint investigation into the cause of the Deepwater Horizon 
blowout, explosion and spill are currently being conducted by 
the Coast Guard and MMS. In addition, President Obama announced 
the Presidential Commission that will investigate those 
relevant facts and circumstances concerning the root causes of 
the Deepwater Horizon's explosion fire and oil spill and 
develop options to guard against and mitigate the impact of any 
oil spills associated with offshore drilling in the future.
    I agree that we need to investigate, get to the bottom of 
what really happened and develop standards, new standards, 
based on the lessons learned. However, the Coast Guard 
investigation is not complete. The President's Commission has 
yet to meet. I am all for improving the safety of offshore 
drilling, but we should wait for the investigations to be 
concluded before we prematurely pass legislation that may not 
improve safety and could possibly make matters worse. We should 
call a hearing when they have completed the investigation to 
hear what they have discovered. Legislation--legislating 
Deepwater drilling safety must be a bipartisan basis and we 
must develop sound science and actual evidence and conclusions 
from that ongoing investigation.
    In addition to any--to my practical concerns about 
legislating before the Presidential Commission has even met, 
there are a few troubling provisions in the draft legislation 
that we are looking at today that I fear will serve as a de 
facto drilling ban for both offshore and onshore wells, oil and 
natural gas. Legislation that prevents this from safely 
developing our domestic oil and gas resources would be 
catastrophic to our economy, destroying potentially tens of 
thousands of jobs almost overnight and would severely weaken 
our national security as we import more and more oil and gas 
from abroad. Specifically, the legislation defines a high risk 
well so broadly that it covers nearly every offshore and 
onshore oil and natural gas well.
    Clearly we should be using a scientific definition that 
relies on sound engineering principles. Not every well is high 
risk. Additionally, the legislation requires a standard 
certification that equals a 100 percent standard. Nothing in 
our lives is up to 100 percent certainty standards. Risks are 
everywhere. Crossing the street to get into a car, flying on a 
plane, installing a windmill off the shore of Nantucket, even 
riding in an elevator. If we are going to require an 
unattainable list of certification before we allow otherwise 
safe drilling to occur, let's at least be honest with the 
American people and call the legislation what it really is, a 
ban on American made energy. I do have some other comments with 
the content of the draft but I will end here so we can hear 
from our witnesses. We have a lot at stake. I yield back.
    Mr. Markey. I thank the gentleman. The chair recognizes the 
chairman of the full committee, the gentleman from California, 
Mr. Waxman.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Chairman Markey, I want to thank you for 
today's hearing on the Blowout Prevent Act of 2010. We are now 
more than 2 months into this largest environmental disaster in 
U.S. history. 11 workers are dead, the Macondo well continues 
to pour thousands of barrels of oil into the Gulf of Mexico 
each day, BP's clean-up effort continues to be inadequate and 
an entire way of life along the Gulf of Mexico is being 
threatened. It is time for Congress to act, investigations are 
ongoing and will continue to tell us more about the causes of 
this accident, but we know enough already to begin crafting 
legislative solutions.
    And I want to disagree with my colleague from Michigan. If 
we don't know enough to start fashioning legislative solutions, 
then I don't think we know enough to start drilling, which I 
hear many of our colleagues on the other side of the aisle 
insist that we do. Why should we allow more drilling if we 
can't assure that the drilling is going to be done safely, and 
there is a plan in place that can clean up any oil spill should 
that happen.
    Thanks to this subcommittee and Chairman Stupak's 
Subcommittee on Oversight, this disaster, as we have seen in 
our investigation, could have been prevented. BP made a series 
of risky decisions before the explosion that destroyed the 
Deepwater Horizon. These decisions save time and money for BP, 
but increase the risks of a catastrophic blowout. When BP CEO 
Tony Hayward appeared before the Subcommittee on Oversight and 
Investigations, we asked him to explain these decisions. He 
tried to dodge responsibility telling us repeatedly he was not 
involved in the decisions, and he tried to shift blame to 
others. BP chose a risky well design on the Macondo well that 
provided minimal barriers to prevent dangerous gases from 
flowing to the wellhead. They ignored their contractor's advice 
about how to properly cement the well.
    They failed to conduct a critical cement test. And they 
failed to properly circulate well fluids. The legislation we 
are considering would set strict new requirements to ensure 
that these basic well controlled guidelines cannot be ignored 
at any high risk well. BP says it relied on the well's blowout 
preventer as the last line of defense. But we know that blowout 
preventers are not foolproof, not even close. They can't shear 
pipe to seal the well if there is not a tool joint--if there is 
a tool joint or other obstruction preventing blind shear rams 
from closing. They don't have appropriate redundancy built in.
    Too often, a single problem can cause systematic blowout 
preventer failure. And blowout preventers and their emergency 
control systems are not adequately tested once they are put in 
place. This proposed law would fix these problems. It requires 
redundant systems to shut down runaway wells, it requires 
third-party testing to make sure blowout preventers will work 
when needed, and it establishes a new aggressive oversight and 
testing regime with unannounced site visits by Federal 
regulators.
    BP took advantage of a lack of resources and a failure in 
the regulatory culture at the minerals management service. The 
Agency handed over too much authority relying on the industry 
to police itself. This self-policing approach could work only 
if everybody behaves responsibly. All it takes is one bad 
actor, one well that falls behind schedule and one too many 
corners cut before the disaster results. The legislation before 
the committee sets out to change this culture of complacency. 
It requires the appropriate regulator to set tough standards 
and create a committee of independent experts to check their 
work and make sure they do their jobs.
    The independent committee must review available 
technologies, assess industry practices and regulations and 
provide the best most up-to-date technical and regulatory 
advice so that we have the best possible set of rules for 
drilling high risk wells. It is too late to stop the explosion 
and blowout on the Deepwater Horizon, but we can continue our 
work to determine what happened and hold the appropriate 
parties accountable and make sure that this type of catastrophe 
blowout--catastrophic blowout never happens again.
    This legislation is an important first step to ensuring 
drilling safety at high risk wells, and I look forward to 
hearing our witnesses' views on the matter and to working on a 
bipartisan basis on this legislation. We need to make sure that 
we act decisively and rapidly in response to the disaster in 
the Gulf. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Waxman follows:]
    [GRAPHIC] [TIFF OMITTED] 77917A.001
    
    [GRAPHIC] [TIFF OMITTED] 77917A.002
    
    Mr. Markey. I thank the gentleman. The chair recognizes the 
ranking member of the full committee, the gentleman from the 
State of Texas, Mr. Barton.
    Mr. Barton. Thank you, Mr. Chairman. Before I give my 
opening statement, I do want to congratulate my friends on the 
Democratic side for their victory last night in the 
congressional baseball game. In spite of the best efforts of 
Mr. Scalise and Mr. Shimkus and several others on this 
committee on our side, the D side one, it was 4 to 4 going into 
the top of the seventh, and then we had our own spill of errors 
and malfunctions and our blowout preventer didn't work very 
well.
    The final score was 13 to 5. So my hats are off to my 
friends on the Democratic side. And my heart goes out to all of 
the folks on my side who worked so hard for the game.
    Mr. Green. Will the chairman yield?
    Mr. Barton. I would be happy to.
    Mr. Green. Could we get a new battery for that blowout 
preventer?

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. We will work on it.
    Anyway, Mr. Chairman, I have a formal opening statement I 
am going to submit for the record. I just want to summarize to 
say that we have had a strong offshore drilling safety record 
in the Gulf of Mexico. This is the first major spill. 
Unfortunately, since it is a very catastrophic spill, both in 
terms of loss of life, in terms of amount of environmental 
damage and also economic damage, so no one is happy about that. 
I think the bipartisan investigation that this committee is 
conducting is uncovering the facts. I would agree with what I 
think Chairman Waxman said just now, that this was probably a 
preventible accident. I would also agree that it doesn't appear 
that BP followed best practices in terms of industry. And I 
would also agree that those best practices need to be updated 
and improved so that if at all possible, we don't let this 
happen again.
    I would point out that while it is important for Congress 
to act, and I think myself and all Republicans are prepared to 
work in a bipartisan basis on this bill, it is better to do it 
right than to do it fast. This draft bill is a work in 
progress. There are some things in it that I think are very 
positive. The third-party testing idea I think is a good idea.
    I do believe, though, that the citizen suit provision in 
the bill is problematic. I am not sure that we want to do a 
citizen suit for this type of an activity. And I think, as Mr. 
Upton pointed out in his opening statement, we need to work on 
the definition of what a high risk well is. As currently 
drafted, the high risk could be construed to be every well that 
is potentially drilled in the United States both onshore and 
offshore.
    And having said that, we want to improve safety procedures, 
we want to make it possible to continue drilling both in an 
environmentally safe and an economically positive way in the 
Gulf of Mexico and the other OCS areas. So we stand ready to 
work in a bipartisan basis to see if the draft before us can be 
improved so that it can be supported. And with that, Mr. 
Chairman, I yield back.
    I do want to point out that Mr. Waxman has scheduled a 
markup downstairs, so some of us are going to have to be 
running back and forth to the other subcommittee markup, but we 
look forward to hearing from our witnesses and hearing the 
testimony. Thank you, Mr. Chairman.
    Mr. Markey. I thank the gentleman.
    The chair recognizes the gentleman from Washington State--I 
am sorry, the chair recognizes the gentleman from Washington 
State, Mr. Inslee.

   OPENING STATEMENT OF HON. JAY INSLEE, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF WASHINGTON

    Mr. Inslee. Thank you. I just want to reiterate Mr. 
Waxman's comments that while we may not know the exact 
mechanism of this failure, we do know that there were multiple, 
multiple stop signs that BP ran through that could have 
resulted in this failure, so we are prepared to legislate in 
this regard and should do in a prompt and reasonable manner. I 
just want to say there are three things I hope we will consider 
in this draft. Number one, I hope that we will consider 
bringing to this industry the same level of safety and 
engineering expertise that we enjoy in the aviation industry. 
The FAA provides us a template about how to insist on using 
engineering to achieve statistical probabilities of success.
    And I believe in this draft we should add a provision that 
will make sure that we have an engineering system analysis of 
every system involved in deep shore drilling that will reach 
statistical probability of success. We don't have that now, and 
I hope that we will consider adding that to this draft.
    Second, I hope we will consider beefing up the provisions 
on what the requirements are for using the best available 
technology. We simply need to use the best available technology 
in this industry given the enormous risks entailed in deepwater 
drilling. We should make a requirement. We will be offering 
amendments in that regard. The third is we have got to make 
sure we use remote triggering devices for these blowout 
preventers. Other nations do this. It is a requirement that we 
should have, and look forward to working on this legislation.
    Mr. Green. [Presiding.] The chair recognizes Mr. Shimkus--
oh, Mr. Pitts for two minutes.

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Pitts. Thank you, Mr. Chairman. Thank you for holding 
this hearing on legislation written in response to the BP oil 
spill. The oil spill was a tragic event in the history of our 
country. Not only have lives been lost, but massive amounts of 
oil have been leaked into the ocean causing horrible effects, 
some of which we know now and some of which will take years to 
discover. First and foremost, the leakage of the oil must be 
stopped, the environmental damage must be repaired. And, in 
addition, it is imperative that we thoroughly understand what 
happened aboard Deepwater Horizon before, during and after the 
explosion. We must know what caused this horrific event so that 
it will never happen again. It is of utmost importance that due 
diligence is done by those investigating the root causes of the 
Deepwater Horizon blowout explosion.
    While we acknowledge the need to focus on drilling safety 
and ensuring the response of blowout preventers, I am concerned 
that we are considering the bill before us today before the 
joint investigation has been completed. While we are in the 
process of finding out what exactly happened, I think it would 
be wise for this body to use caution from trying to come up 
with a solution that may or may not fix safety concerns.
    As we move forward, I hope that the approach of this 
committee is prudent and measured. We want to, we need to 
promote drilling safety, yet at the same time we want to do 
this with knowing all the facts with the thorough knowledge of 
what is broken and the expertise on how to fix it. I look 
forward to hearing from our witnesses today, and I yield back.
    Mr. Green. The Chair recognizes Mr. Butterfield for two 
minutes.

OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE STATE OF NORTH CAROLINA

    Mr. Butterfield. Thank you very much, Mr. Chairman. Let me 
start by thanking Chairman Markey for his relentless pursuit of 
the truth during this great tragedy. I say it is not premature 
for us to begin the process of legislating and addressing this 
terrible tragedy. From the beginning Chairman Markey has asked 
tough questions, he has demanded transparency and exercised his 
fall authority to investigate the blowout on the Deepwater 
Horizon rig. His work has produced tremendous insight into BP's 
failure to exercise due care. The American people deserve oil 
and gas companies that self-regulate out of respect for the 
safety of their employees and the environmental sustainability 
of their surroundings. Unfortunately, as the facts continue to 
come into clear view it appears that the financial bottom line, 
not the safety or the concern over environmental risk, was the 
primary concern. This is an enormous tragedy, all of us agree 
on that, but it necessitates a thorough review, and yes an 
overhaul of our regulatory strategy. The draft under discussion 
today begins the conversation, it is not an end point, it 
begins that conversation. We begin knowing that Federal 
officials lack the needed power to require the best 
technologies and practices, and knowing that the technology of 
high risk drilling has far outpaced the rule making to provide 
the public with security and certainty. We begin by playing 
catchup today. Thank you, Mr. Chairman. I yield back.
    Mr. Green. Mr. Scalise for two minutes.

 OPENING STATEMENT OF HON. STEVE SCALISE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF LOUISIANA

    Mr. Scalise. Thank you, Mr. Chairman. Over 2 months after 
the onset of the Deepwater Horizon disaster, oil continues to 
pour into the Gulf and invade our coastal wetlands. If this 
catastrophe has taught us anything, it is that we must focus on 
offshore drilling safety. We must bring together engineers and 
scientists to develop safety improvement strategies so that a 
disaster like the Horizon never happens again. I think it is 
worth noting that the President and his administration 
discarded the advice and safety recommendations of their own 
panel of experts and engineers in the initial 30-day safety 
report in order to pursue a 6-month drilling ban that those 
same experts say will actually jeopardize the long-term safety 
of offshore energy exploration.
    Instead of focusing on safety, some in Congress are more 
interested in pursuing their own political agendas than 
addressing the issues we are battling in the Gulf. This takes 
our focus away from where it should be, on improving the safety 
of our domestic energy production. The Oil Pollution Act of 
1990 states that the president shall ensure effective and 
immediate removal of a discharge. On numerous occasions the 
President has said that from day one, he has been on the ground 
and in charge. But if that is the case where was the President 
when State and local officials waited nearly a month for 
approval of a plan to construct sand berms and protect our 
valuable marsh.
    And after approving only a small portion of the plan, why 
did the administration's bureaucrats recently halt construction 
of these critical berms for nearly a week while oil continued 
to pour in our wetlands? If Congress really was interested in 
helping us, pass legislation that actually helps us. If there 
is anything we should all agree on it is that our first 
priority and our focus needs to be on capping the well and 
protecting the Gulf Coast from the oil. And to be clear, this 
bill does absolutely nothing to stop the oil or solve the 
problems we are battling.
    Of course, we all want to improve the safety of offshore 
energy production, but this bill, as it stands now, seems like 
a Trojan horse to shut down domestic energy production both 
offshore and on. And make no mistake, shutting down domestic 
energy production will shift millions of American jobs overseas 
and will leave our country more vulnerable to oil spills from 
even more imported oil. We need to continue the investigations 
into the explosion and sinking of the Horizon and make sure 
that this type of tragedy doesn't happen again.
    But some people in this town seem determined to exploit our 
disaster and the tragic consequences of this event to pursue 
their own political agenda. And that is not only unfortunate, 
Mr. Chairman, it is also disgraceful and a slap in the face to 
the people of the Gulf Coast who are battling the effects of 
this disaster every single day. The oil is moving faster than 
the Federal response. We need answers and we need leadership by 
the President. Unfortunately, we have neither, and Louisiana's 
people and ecosystem are paying the price. Thank you, and I 
yield back.
    Mr. Green. The chair recognizes Chairman Dingell.

OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Dingell. Mr. Chairman, I thank you. I was very 
impressed. I have an admirable statement which I will insert in 
the record in the hope that everyone will find it useful 
reading. I was very impressed with the comments of my 
colleague. He is telling us the story of a tale of two 
presidents. He is only telling us the tale of one president, 
but he has got the two mixed. We are harvesting here a 
situation which is created by a long series of deregulatory 
actions taken by the prior administration.
    I had not intended to make a partisan comment today, 
because I don't think this is a partisan matter, but it appears 
other members seek to do so, and I think there needs to be some 
correction. The reason for this mess in the Gulf is the fact 
that for a long period of time, we were drill baby drill, and 
we had that as part of our national policy. We also had 
deregulatory actions. And we have found out the blessing of 
these deregulatory actions brought about an economic collapse 
in securities and in the national economy, and now we are 
finding that it works also on natural resources.
    And we are harvesting a policy of making it easy to do the 
drilling and other things without seeing to it that they are 
properly scrutinized or taken care of. This administration had 
little, if anything, to do with it. And they are proceeding as 
fast as they can, because political pressures will tolerate no 
less. But the harsh fact of the matter is that we ought not be 
making a partisan fight out of this matter and rather seek to 
figure out how it is we are going to address the problem. I 
take offense at the comments just made, and I think it is time 
that we understand that we have to address this as a problem 
and not to run around and make a lot of pointless partisan 
criticisms of the current administration. The BP cut corners, 
the record will show. The climate was set where that could be 
done by the prior administration. And we are seeing a situation 
where not only could that occur, but that important statutes 
like NEPA, of which I just happen to be the author, were in 
good part disregarded.
    NEPA says whenever an action which has major impact upon 
the environment is taken, that there must be an environmental 
impact statement filed. The practice of the prior 
administration was to waive NEPA whenever it could. NEPA does 
happen to be onerous, but the reason it is onerous is it 
requires that you take care to avoid things that are going to 
be hurtful and bad with regard to the environment. So you have 
got to go out and identify them and you have to go out and find 
out how you can best address them or minimize the hostile and 
adverse impact.
    So they went ahead and hurried the process where it became 
no longer a practice to apply that to all components of a 
government action like leasing. They had a big environmental 
impact statement, but they never went into the specifics of the 
particular drilling. And now we are finding that this has a 
major impact on the human environment, just that one hole that 
they are drilling.
    Now, having said these things, again I repeat, that what we 
should be doing is addressing the problem before us, not making 
a lot of partisan statements. BP is supposed to do the clean-
up, and the government is screwing around to see to it that it 
be done. The minerals service at the Interior Department did a 
poor job. Quite frankly, it has become almost as corrupt as 
Sodom & Gomorrah, and it had to be cleaned out. The President 
did appoint a new head, and regrettably, the new head had to be 
disposed of because she did not do the job needed doing.
    Now our attention is gotten and we intend to do something 
about these matters. But again, it is time to address what went 
wrong and understand that major problems exist, like the fact 
that BP doesn't have the capability to do what it is they 
should do, and they cut corners and saved money instead of 
looking to the public wellbeing. I think we should now 
concentrate on cleaning up the mess and to see to it that it 
doesn't occur again, and not to engage in a massive partisan 
finger pointing. Thank you, Mr. Chairman.
    Mr. Green. Thank you, Chairman. The chair recognizes Mr. 
Griffith for two minutes.

OPENING STATEMENT OF HON. PARKER GRIFFITH, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ALABAMA

    Mr. Griffith. I would like to thank the chairman for 
calling this important hearing today. My nephew leaves from a 
little small city in Louisiana and flies 90 miles by helicopter 
onto a big rig every month to work, and I grew up fishing the 
Gulf and traveling the oil canals of south Louisiana. I might 
say that one of the provisions of the bill to have unannounced 
site visits is going to be very difficult, as most helicopters 
are noisy and will have to land on the rigs with the crew in an 
announced flight plan. So this bill certainly needs a lot of 
revision and a lot of thoughtfulness that it does not have as 
yet. I do not understand why we are here to discuss legislation 
to respond to a spill that is still in the progress of being 
investigated. The April 20th explosion left us all wanting 
answers, especially the families of the 11 who died in the 
accident. But just because we want answers and want to prevent 
this from happening does not mean that we should rush to pass 
sweeping policies.
    I might point out that BP is mentioned over and over again, 
and yet we have aimed a regulatory shotgun at the entire 
industry, even those with great safety records. This is a 
punishment for those who have been doing their work well. It is 
the duty of Congress to find out exactly what happened so that 
we can most effectively craft policy to prevent future 
incidents like this and protect the people that we are sent to 
Washington to represent.
    Our number one priority must be stopping the flow of oil, 
bringing the well under control and being able to finish the 
investigation is the most important step toward being able to 
ensure safety when producing our valuable resources. This is a 
time for engineering and action, not for knee jerk policy 
capitalizing on this crisis. I appreciate you coming today to 
testify, I look forward to your testimony and I yield back the 
balance of my time.
    Mr. Green. The chair recognizes Mr. McNerney for 2 minutes.
    Mr. McNerney. Thank you, Mr. Chairman, for calling this 
important hearing. I spent some of my career in the energy 
industry, and when a device is supposed to be a fail safe 
device it is supposed to fail safety. What happened in the 
Deepwater Horizon was a tragedy, but an avoidable tragedy. 
While I agree the investigation may be ongoing, it is clear 
that the blowout preventer did not prevent a blowout. We need 
to put the provisions in place as soon as possible to make 
absolutely sure that insulation standards, testing procedures 
and device requirements are met and followed which will truly 
prevent this kind of failure in the future. I yield back.
    Mr. Markey [presiding]. The chair recognizes the gentleman 
from Missouri, Mr. Blunt.

   OPENING STATEMENT OF HON. ROY BLUNT, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MISSOURI

    Mr. Blunt. Thank you, Mr. Chairman, and thank you for 
holding this hearing on the Blowout Prevention Act of 2010. It 
has been 10 weeks since the Deepwater Horizon rig exploded and 
soon after sank into the Gulf of Mexico. While the main 
priority is clearly to stop the leak and focus on the clean-up 
we can, I believe, simultaneously look for effective ways to 
prevent this type of catastrophe from happening, and frankly, 
to determine how this problem could have been prevented as it 
appears to have been preventible. We need to learn the right 
lessons from the disaster to ensure that we respond 
appropriately.
    Weeks ago, Mr. Chairman, I introduced legislation that 
would better prepare us in the future, doesn't turn over 
production of the Gulf to only the big oil companies and still 
holds private companies responsible for the clean-up cost and 
responsible for the economic damages. The bill before us today 
is not without concern. Many of those have been mentioned 
already. I am hopeful that we will be able to address what 
seems to be an overly broad definition of a high risk well and 
the citizen suit provision.
    Within the context of our national energy policy, we have 
the opportunity to examine and implement plans that strengthen 
our ability to produce domestic oil and gas in an 
environmentally safe manner, continuing in our pursuit of 
energy independence from foreign oil. We should be looking at 
what steps energy explorers and producers should be taking to 
ensure that American energy can be safely found and efficiently 
used in the future. I am hopeful that this subcommittee can 
find ways to protect the environment and safely produce 
American energy, considering both the environmental and 
economic challenges we face along the Gulf today.
    To that end, Mr. Chairman, I look forward to working with 
you, the ranking member and the chairman and members of the 
full committee as we try to move forward and find these 
solutions. Thank you, Mr. Chairman.
    Mr. Markey. We thank the gentleman. The chair recognizes 
the gentlelady from California, Mrs. Capps.

   OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Capps. Thank you, Mr. Chairman, for calling this 
morning's hearing. As the chairman said previously, the errors 
that led to the BP oil spill were identifiable and preventible. 
BP centered the well pipe for cementing with six braces rather 
than the 21 braces recommended by its own cement contractor. BP 
used a method of constructing the well that has been criticized 
for being substandard. And when BP activated its blowout 
preventer, it failed to properly deploy. These and other facts 
point to a systemic breakdown by BP and the safety and 
management of its offshore drilling activities.
    But it is not just BP, Mr. Chairman. Time and time again, 
the entire industry has assured us that oil and gas drilling 
are safe. They said the technology had become so advanced that 
a blowout was highly unlikely, if not impossible, and they 
would be prepared in case it happened. Cozy relationships 
between the industry and its Federal regulators were 
undoubtedly a part of the problem as well.
    So it is clear, the system regulating offshore drilling is 
broken, and if we don't do something about it, it could lead to 
additional failure. And that is why I support the bill before 
us this morning. It makes technological fixes to prevent 
another catastrophic oil spill. It raises safety requirements 
for BOPs and other safety equipment and practices during 
offshore drilling.
    In order to ensure the accountability of these regulations 
the bill establishes an independent technical advisory 
committee, a very valuable resource, which will be useful.
    Finally, the bill includes language that I authored to 
increase the civil and criminal penalties to those who violate 
the law. This is a good bill that will set us on a new and 
constructive path. But I think it is worth pointing out that at 
the end of the day, no matter what changes we make offshore 
drilling will remain a risky business. Accidents do happen, and 
the environmental and economic consequences of these accidents 
is very massive. And the more--the deeper we drill and the more 
complex ways the more massive consequences result.
    The country deserves a better policy, a comprehensive 
policy, to prevent oil spill disasters from happening again. So 
thank you, Mr. Chairman, for holding this hearing and for 
advancing a bill to reduce the risks from offshore drilling. I 
yield back.
    Mr. Markey. We thank the gentlelady. The chair recognizes 
the gentlelady from California, Mrs. Bono Mack.
    Mrs. Bono Mack. Thank you, Mr. Chairman. I will waive.
    Mr. Markey. The Chair recognizes the gentleman from 
Florida, Mr. Stearns.

 OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. Stearns. Good morning. And thank you, Mr. Chairman, and 
thank you Mr. Upton for having this hearing, the Blowout 
Prevention Act. I think, like many members, I applaud many of 
the provisions that are contained in this legislation, such as 
requiring a more thorough response plan, increasing the civil 
and criminal penalties for those individuals who knowingly 
violate the law, implementing more stringent safety standards 
and requiring the applicant to certify that they can drill a 
relief well in a timely manner.
    But I am also concerned that some provisions of this 
legislation are too broad or even unattainable and may have 
been designed to simply prevent oil and gas development in the 
United States. For example, because it would be nearly 
impossible for a drill operator to determine whether a 
potential blowout would lead to substantial harm, the high risk 
well designation would not only encompass all offshore oil and 
gas rigs, but could potentially encompass all onshore oil and 
gas rigs as well.
    Perhaps, Mr. Chairman, we should wait to see what the 
Commission, the results of their investigation, before we pass 
legislation. And as we have seen before in the cap and trade 
bill and the chemical security bill, this legislation contains 
a citizen suit provision that would allow anyone to commence a 
civil action if they believe a company is in violation of this 
Act. And because attorney fees are enumerated as a potential 
remedy, it would incentivize trial attorneys to pursue 
litigation against anyone regulated against this regulation.
    I welcome the witnesses, I look forward to their testimony 
and I hope in the future that we will have regular order on 
this bill so we can work together to address some of the 
concerns that I have expressed and ensure that limited Federal 
resources are used effectively to address the increased safety 
concerns with those wells that are truly at high risk. Thank 
you, Mr. Chairman.
    Mr. Markey. We thank the gentleman. The chair recognizes 
the gentleman from Texas, Mr. Green.

   OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Green. Thank you, Mr. Chairman, for holding this 
hearing on the Blowout Prevention Act of 2010. I appreciate 
both our panels for being here today and discuss our 
committee's proposed legislative response to the Deepwater 
Horizon disaster, and I look forward to your testimony. The 
legislation we have here to discuss is important, and I 
appreciate the chairman's effort to ensure our natural 
resources are safely produced and that the workers tied to this 
production are safe at all times and we eliminate potential 
environmental risk.
    However, I have some concerns about how this will be 
accomplished in the bill and how reasonable some of the 
requirements and procedures established in this bill would be. 
It is important that we keep in mind that when our own 
Subcommittee on Oversight and Investigations revealed numerous 
existing key safety precautions were neglected by BP prior to 
the Deepwater Horizon disaster and didn't even meet the 
standards of the American petroleum institute, the API.
    So again, I support the safety regulations being put in 
place where they are warranted, and certainly enforcement ones 
on the books. There are numerous provisions that may be 
impossible to implement unless your goal is to eliminate 
drilling in our country, and that is my concern. One example in 
the bill, on page 31, page 31 right at the top, it is, and I 
will quote, an appropriate Federal official. The term 
appropriate Federal official means the Secretary of Energy, 
Secretary of Interior, the administrator of the Environmental 
Protection Agency is designated a significant responsible 
provided in this Act by the President of the United States. You 
need to have one agency. You don't have to have a revolving 
agency depending on who is the president.
    And I suggest we change that to the Department of Interior 
in consultation with the EPA and the Department of Energy, 
because the Department of Interior is reforming what they need 
to do. Although, I guess since we have three agencies, we can 
even say the President can name a future draft choice. There 
are concerns I have. We need a balanced approach of this issue 
that ensures the safety of our workers and our environment 
while ensuring that our domestic producers, including the 
hundreds of small businesses tied to productions remain viable.
    And again, Mr. Chairman, I hope to work with you before we 
go to markup, and even before the full committee so we can 
actually get a bill that allows for production safely and 
responsibly of our natural resources. And if we don't produce 
them in the Gulf of Mexico, we are going to easily have to 
import them from other parts of the world. And I yield back my 
time.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Texas, Dr. Burgess.

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE 
              IN CONGRESS FROM THE STATE OF TEXAS

    Mr. Burgess. Thank you, Mr. Chairman. You know, I never 
thought I would see the day when you don't want a good crisis 
to go to waste to become a governing philosophy, but it 
certainly seems to have now. I do question why the need for the 
haste with the hearing and the markup tomorrow when we haven't 
got all the facts in front of us. I am particularly disturbed 
that yesterday, our Committee of Oversight and Investigations 
was to have Secretary Salazar testify, but for whatever reason 
that testimony was pulled and the hearing postponed. You have 
to ask yourself why is Secretary Salazar being kept out of the 
Committee of Oversight and Investigations. It sort of seems 
like a crude attempt at a witness protection program.
    Mr. Hayes, I look forward to hearing from you today. We 
didn't get your testimony until late last night. I was grateful 
to receive it. Some of the words literally leapt off the page 
of the third paragraph: Overall, given the level of detail 
contained in this draft the administration will require 
additional time and analysis to fully address and assess the 
policy and the legal implications of its provisions before we 
can provide the subcommittee with a detailed position on this 
bill. I think that is well stated, and I only wish the 
committee had the foresight to comply with your request. You 
know, we heard from two women down in Shalmet, Louisiana, on a 
field hearing about this very issue. They were very concerned 
that what this committee might do would further cripple the 
economy of their communities. They said over and over again in 
ways that were extremely clear that they don't need to be 
crippled with new regulations, but someone, someone needs to 
enforce the existing regulation.
    So why isn't the Department of Interior and whatever we are 
calling MMS today, why are they not enforcing the regulations 
as they should be or they should have been? Where were they? So 
far the answers received can only suggest one answer, they were 
asleep at the switch.
    Today we are going to look at this legislation, we are 
going to open the door for additional suits. As Mr. Green says, 
really our own purpose is to regulate an industry that this 
Congress has been anxious to regulate for a long time. I only 
hope the damage that we do in the next several days is minimum. 
I will yield back the balance of my time.
    Mr. Markey. I thank the gentleman very much. And just for 
the record, we invited Secretary Norton and Secretary 
Kempthorne of the Department of Interior, plus Secretary 
Salazar to testify. Secretary Norton and Secretary Kempthorne 
could not be here this week. And so it is our intention to have 
all three them testify before the committee, but we did not, in 
fact, have that hearing because those two Secretaries could not 
be here.
    Mr. Burgess. Would the gentleman yield for just one moment? 
Secretary Salazar has been testifying in front of other 
committees without a buffer from the previous administration 
with no difficulty. I see no reason why he can't testify in 
front of our Committee on Oversight and Investigations.
    Mr. Markey. It was our judgment that historical perspective 
is necessary in order to understand the totality of this issue. 
And again, our intention is to have that hearing, and we will 
do so, hopefully as soon as we come back from the 4th of July 
break. The Chair recognizes the gentleman from Utah, Mr. 
Matheson.

  OPENING STATEMENT OF HON. JIM MATHESON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF UTAH

    Mr. Matheson. Thank you, Mr. Chairman. The goals of this 
draft legislation, the Blowout Prevention Act, are commendable. 
And I agree that all evidence points to the need for additional 
actions to prevent future oil well blowouts that led to the 
catastrophe we are seeing in the Gulf. However, I do have some 
concerns that the Blowout Prevention Act is moving very quickly 
through the legislative process without ample time to 
thoroughly understand the effects the requirements might have 
on future drilling operations both onshore and offshore. There 
are a number of questions that have been raised about this 
bill, which I hope can be addressed, or we can begin to address 
them during this hearing. Among the concerns or questions I 
have would be what constitutes a high risk well and how many 
oil and gas exploration or production wells would be 
categorized as high risk? How will the requirements in this 
bill affect the permitting and leasing process for onshore 
activities on Federal lands? How would the new Federal 
requirements affect current state regulation of well 
construction? What Federal agencies would be responsible for 
writing these rules?
    As you know, drilling a well in deep water is different 
from drilling one in shallow water, which is different from 
drilling in the Marcellus shell formation in Pennsylvania, 
which is different from a well in the Uinta basin in Utah? How 
will this legislation provide flexibility for well construction 
design and safety requirements based on these distinctions and 
avoid an inflexible one-size-fits-all requirement?
    Again, those are a few questions I would like to, if we 
could, have answered. But I do want to express my appreciation 
that we have the chance to review this legislation, I do think 
we need to take appropriate steps, and I look forward to 
continuing working with the committee to make sure we get this 
right. I yield back.
    Mr. Markey. The gentleman's time is expired. The chair 
recognizes the gentleman from Kentucky, Mr. Whitfield.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Mr. Whitfield. Mr. Chairman, thank you very much. And 
certainly we look forward to the testimony today. I think one 
of the themes that continues to occur in the Federal Government 
is that frequently we overreact, and particularly when we are 
dealing with complex issues as this is. And I agree with Mr. 
Matheson's comment about what is a high risk well. We need to 
know that. And when you start delegating to giving the Federal 
officials the authority to delegate their responsibility to the 
state to approve the commencement of drilling, that appears to 
me an effort made to simply start making extremely difficult to 
drill for our oil within our territorial waters.
    And someone else raised the question, is our goal here to 
stop all offshore drilling? So I really think it is premature 
to move a bill this complex so quickly. We need expert 
testimony. We need to really develop into the impact of this 
kind of legislation. And then I--we certainly want these wells 
to be drilled safely with precaution maximizing the opportunity 
that there will not be a blowout, but I also notice in here we 
have a $10 million criminal fine, we have ten years in prison 
criminal penalties, so we don't need to be putting an 
unnecessary damper on the exploration for oil to help make our 
country less dependent upon foreign oil. We need to be doing 
things to maximize safety, but also encourage development.
    So I think we need to move with great caution on this 
legislation, and I look forward to the testimony and the 
questions that are asked.
    Mr. Markey. We thank the gentleman. The chair recognizes 
the gentlelady from California, Ms. Harman.

  OPENING STATEMENT OF HON. JANE HARMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Harman. Thank you, Mr. Chairman. This committee is 
doing what it does best, regulating dangerous activity to 
protect the public. We have a recent history with toy safety, 
drug safety, auto safety and now we are going to try to improve 
deep water drilling safety. I think that the draft bill is very 
good. Improvements, I am sure, can be made. We are not rushing 
it out of here in 10 minutes. We have a discussion draft and 
tomorrow we will have a serious markup. But we will have 
additional witnesses, and the legislative process is the 
regular order. And the bill I am sure once it passes or when it 
passes will be better.
    I personally would prefer no deep water drilling because I 
think it is inherently unsafe, but I recognize that there are 
regional differences among us. They are not partisan 
differences, they are regional differences. And I also feel a 
bit sheepish that I hail from the land of one person, one car.
    Let me just mention that at the markup tomorrow I will 
offer an amendment, or hopefully it may be included in the 
manager's amendment, if we have one, to study whether drilling 
a relief well or--relief well simultaneously with drilling the 
main well makes sense. One of my constituents suggested this 
idea, and it seems to me to make sense, and I would like us to 
probe whether as a matter of legislative policy it makes sense.
    So I appreciate what you are doing, what we are doing, 
think it is consistent with the glorious history of this 
committee, and yield back the balance of my time.
    Mr. Markey. I thank the gentlelady. The chair recognizes 
the gentleman from Texas, Mr. Hall.
    Mr. Hall. Mr. Chairman, I will not use my time except to 
say that I have dealt with desperate situations like this 
before for all the years that I have been in politics, and I 
find that members of each party want to support their party's 
push or their party's thrust. Sometimes the penalty for not 
doing it is losing their committee or whatever. But I think--
and the way we used to handle things like this in the Texas 
Senate when anything this outrageous comes up that they are 
going to give a civil penalty of $10,000, a civil penalty is 
oK, but 10 years in jail.
    We set up an amendment, and I may do just that, an 
amendment to add on the death penalty for the second time they 
do it or add on for every person who is an employee of that 
company gets 10 years or the--that is how outrageous it can be. 
I yield back my time.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the gentleman from Louisiana, Mr. Melancon.

OPENING STATEMENT OF HON. CHARLIE MELANCON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF LOUISIANA

    Mr. Melancon. Thank you, Mr. Chairman. Mr. Dingell, thank 
you for your comments. The Gentlelady Bono Mack at the opening 
of the hearing, thank you for your comments about keeping this 
thing from being bipartisan. Let us work together. I have 
problems with the bill. We need to work through it. But as 
always, I appreciate the work of my colleagues on this 
committee as well as the rest of the body. I want to thank the 
Judiciary Committee for the fine work that they have done on 
the Spill Act, which will come to the floor today and I hope 
that you will all join me in supporting this great legislation 
that will give the 11 victims families the right to recover 
some measure of compensation for the losses they have suffered.
    Today is the 72nd day of oil leaking into the Gulf of 
Mexico and there is no defense or excuse for BP's inability to 
cap the oil well and stop this manmade disaster. But the panic 
you see from my constituents is because the damage doesn't stop 
when the well stops. The environmental impact of this leak will 
decimate our wetlands, leaving us even more vulnerable to 
summer storms and hurricanes which threaten to arrive in a 
week. And we may never see our fisheries recovery. As you have 
heard me say many times before, our livelihood and our way of 
life are slipping away from each of us each day this well will 
continue to pollute our waters. I believe this is a time that 
demands action. I want to see BP throwing everything they have 
got at the problem.
    There will be times for PR and commercials later. I want to 
see the rest of the industry continuing to give unfettered 
support and resources to this disaster. After this leak is 
contained, this country will continue to demand affordable 
energy, and we intend in Louisiana to work hard and provide it 
for them. But we as a State and as a Nation can never let this 
happen again.
    As has been mentioned in this committee before, it seems 
that the speed of expiration and innovation, great strengths in 
our country, left behind comparable research and development in 
the field of response and recovery. We are drilling with 21st 
century technology but still using 20th century methods to 
contain and clean up the spill. Because our State and our 
people have committed to give so much to power the rest of this 
country, I think it is fair to ask that every company and every 
agency involved in offshore energy production to cooperate and 
determine a safer path forward. I hope this hearing today plays 
a part in that discussion.
    We need to find a middle ground between drill baby drill 
and a moratorium to keep the committee going in our area and it 
is a difficult task for me to stand in oil up top my ankle 
asking for more oil, but it is important to our lives and our 
livelihoods. I yield back my time.
    Mr. Markey. I thank the gentleman. And we thank the 
gentleman for his incredible work in Louisiana and the Gulf and 
the Congress on behalf of his people. The chair recognizes the 
gentleman from Georgia, Mr. Barrow. The chair recognizes the 
gentleman from Vermont, Mr. Welch.

  OPENING STATEMENT OF HON. PETER WELCH, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF VERMONT

    Mr. Welch. Thank you, Mr. Chairman. It is often said that 
Congress does two things: One, it does nothing and, two, it 
overreacts. This is a time when I hope we get it right. This 
committee has provided some real leadership, the chairman took 
a bipartisan delegation to the Gulf shortly after this 
catastrophe occurred. And as the information has unfolded in 
significant part because of the diligence of this committee, 
including the spill cam that made visible to all Americans what 
was spewing from the floor of the Gulf.
    It has allowed us to get more and more information about 
what happened. And, in fact, when you get that information, it 
is clear that BP cut every corner possible when it came to a 
choice between safety and saving money. And it is also clear 
that the government agency, the mining and mineral services did 
not do its job and the whole point of the inquiry and the 
investigation was to find out what happened and what we can do 
to prevent this both with better regulation that works on 
behalf of the environment and the people and also safety 
standards that BP cut short. So this is timely and I look 
forward to working with you, Mr. Chairman and my colleagues on 
both sides of aisle for Congress to get this right.
    Mr. Markey. We thank the gentleman very much. The chair 
recognizes the gentleman from Texas, Mr. Gonzalez.
    Mr. Gonzalez. Thank you, Mr. Chairman. I will waive my 
opening statement.
    Mr. Markey. And the chair recognizes the gentleman from New 
York, Mr. Engel.
    Mr. Engel. Thank you, Mr. Chairman. In the wake of this 
tragedy, serious questions have been raised about the cause of 
the explosion and the adequacy of industry practices and 
regulatory standards relating to oil and gas drilling.
    Mr. Markey. Is the gentleman's microphone on?

 OPENING STATEMENT OF HON. ELIOT L. ENGEL, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEW YORK

    Mr. Engel. Sorry. Thank you. In the wake of the tragedy, 
serious questions have been raised about the causes of the 
explosion and the adequacy of industry practices and regulatory 
standards relating to oil and gas drilling. We must take action 
to improving industry practices and strengthen regulatory 
standards to try to ensure that this never happens again. 
Before us today is the Blowout Prevention Act of 2010, the 
legislation establishes a number of standards and procedures to 
help ensure that the use of appropriate safety equipment and 
practices during high risk oil and gas and drilling activities. 
It is good legislation. I think it can be improved.
    In particular, I would like to discuss with witnesses the 
addition of acoustic backup control systems and other emergency 
backup control systems. What really frustrates all of us is 
that we had been told time and time again that things of this 
magnitude really could never happen; and that if it did happen, 
there would be all kinds of safeguards in place. And we see now 
that was really not the case. So I have a hard time believing 
oil executives when they give us reassurances that this is a 
ones in a lifetime thing and it can't happen again. I thank 
you, Mr. Chairman. I thank you for pushing this bill.
    I thank you for the hearings we have had. I think the 
American people want to get to the bottom of this. I am very, 
very upset with this. And obviously this is a catastrophe of 
monumental proportions for our lifetime and generations to 
come. I yield back.
    Mr. Markey. We thank the gentleman very much. All time for 
opening statements from the members has expired.
    We now turn to our witness, David Hayes. He is the Deputy 
Secretary of the Department of Interior. Deputy Secretary Hayes 
has played a leading role in organizing the administration's 
response to the BP oil spill in the Gulf of Mexico and is an 
expert on energy and natural resources policy. This is his 
second tour of duty at Interior. He also served as Deputy 
Secretary during the Clinton administration. Welcome back to 
the committee. Mr. Hayes, whenever you are ready. Please begin.

 STATEMENT OF DAVID HAYES, DEPUTY SECRETARY, DEPARTMENT OF THE 
    INTERIOR, ACCOMPANIED BY STEVE BLACK, COUNSELOR TO THE 
                           SECRETARY

    Mr. Hayes. Thank you, Mr. Chairman and Ranking Member Upton 
and members of the subcommittee. Let me apologize for being a 
few minutes late. We had a fender bender on the way, but no 
serious injuries to be sure. I am accompanied here by Steve 
Black, counselor to the Secretary. Steve is the primary author 
of the 30-day report that I will talk about a little bit that 
we provided to the President on May 27th. And that mirrors a 
lot of the points made in your proposed legislation. Let me 
just also say, Mr. Chairman, at the outset, that we appreciate 
your leadership in this matter. We also appreciate the 
leadership of Chairwoman Waxman and the full committee. We want 
to continue to work with all committee members as we deal with 
this horrific problem. And it is in that spirit that we are 
here today. We endorse the aim behind the Blowout Prevention 
Act of 2010. In fact, many of its provisions are right in line 
with recommendations that we are now implementing 
administratively under the ample authority of the Outer 
Continental Lands Act. And I will go through that briefly in a 
moment. I would like to just take a couple of minutes, if I 
can, to give a little bit of context here in terms of how we 
are approaching these issues and then return to your 
legislation, and I look forward to questions and answers with 
the committee.
    Just to step back and provide a little bit of context. 
Secretary Salazar recognized when he came in the door on 
January 20th with me and a small group that there were serious 
issues with the Minerals Management Service. At that time, the 
issues were associated with the revenue side of the 
organization and the scandal in Lakewood, Colorado. The 
Secretary took immediate action on the ethics side and on the 
prosecution side and then in the succeeding months, also looked 
at the regulatory underpinnings of the problem of revenue 
collection and, in fact, proposed to and we are now 
implementing the abolishment of the royalty in kind program 
because structurally it provided the impetus and the 
opportunity if you will for inappropriate relations between 
regulators and the regulated industry.
    And the Secretary also looked very hard at the outer 
continental shelf and issues a writ large as the Secretary 
looked at a proposed new 5-year plan for the outer continental 
shelf. We had four public hearings, a half a million comments 
on all issues dealing with the outer continental shelf. It led 
to a conservative approach that the Secretary and the President 
implemented in canceling lease sales in the Arctic because of 
concerns about spill response capability, and in taking some 
areas completely off the possibility of outer continental shelf 
drilling, including Bristol Bay in Alaska because of 
environmental concerns.
    As to deep water, the National Academy of Sciences was 
commissioned in the late fall to review the inspection program 
by the Minerals Management Service because we were concerned 
about the adequacy of that program. We also in the two budgets, 
we had prior to the accident asked for substantial budget 
increases for the Mineral Management Service and in particular 
the inspection capacity of the Minerals Management Service.
    After the accident, of course, we have redoubled, tripled 
and quadrupled our efforts to deal with the obvious problems 
that led to the accident, even as we continue to explore the 
root cause of it. In particular, the President asked the 
Secretary to deliver within 30 days a report that would suggest 
safety improvements that could be taken and should be taken 
immediately and also in the medium and long term to increase 
the safety of offshore drilling. That report was submitted on 
May 27th. It is a comprehensive report and it is clear that 
your committee staff and you have reviewed it carefully because 
many of the concepts appear in the draft bill that you are 
reviewing today.
    Also as you know, the Secretary and the President, within 
the last 10 days, announced a new head of the Minerals 
Management Service, Mike Bromwich, and the Minerals Management 
Service reorganization is proceeding. It is now the Bureau of 
Ocean Energy Management, Regulatory and Enforcement, and it is 
being divided into three parts that separate out the regulatory 
and enforcement and also the revenue sections.
    With regard to the bill before you, we look forward to 
working with you and members of the committee on the bill. The 
30-day report that we put out and that Mr. Black, in 
particular, led, has many of the same concepts, certification 
of equipment, third party review of equipment, new inspection 
reporting requirement, new casing and cement design 
requirements, new fluid displacement procedures.
    These already are being implemented, but we had a notice to 
lessees on June 8th that laid out immediate requirements. We 
are also doing emergency rulemakings. We have a 6-month process 
of rulemakings that will generate new rules under our current 
authority for secondary control system requirements, ROV 
interventions, new emergency back-up control system and 
inspection and implementation requirements, including line 
shear rams, new testing requirements, new cementing well 
control requirements.
    We are working very, very hard along these lines. We see 
many of the same things in your legislation. We are proceeding 
under current authority and believe that we can and will 
implement many of the aims of your legislation, but we look 
forward to working with you as you proceed to markup and 
through consideration of the bill. We would be delighted to sit 
down with your staffs and review in detail where we are in our 
regulatory processes and help identify and have a dialogue with 
you with regard to any gaps you see or any complementary 
actions you think would be useful to pursue.
    With that, Mr. Chairman, I will close. And I look forward 
to answering any questions from the subcommittee.
    [The prepared statement of Mr. Hayes follows:]
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    Mr. Markey. We thank you very much, Mr. Hayes. The chair 
will recognize himself for a round of questions. Would you like 
Mr. Black to be able to make any comments, or is he there just 
to answer questions?
    Mr. Hayes. He is here to bail me out, Mr. Chairman, if 
necessary. Thank you.
    Mr. Upton. We don't use bailouts here anymore in this 
Congress.
    Mr. Markey. It is a lifeline. Mr. Hayes, in the past 2 
months, we have learned just how unprepared the oil and gas 
industry is to deal with blowout, especially those that occur 
deep beneath the surface of the ocean. We have learned that top 
hats, junk shots and riser cuts can't stop the oil from 
flowing. We have learned that skimmer, boom and fire can't stop 
the oil from washing ashore. We have learned that dispersants 
are themselves toxic. We have learned that hurricanes can 
completely disrupt even the overwhelmingly response efforts 
currently underway. We have learned that even the relief wells 
are not certain to work. In fact, when we had the 5 largest oil 
company CEOs in front of the committee a couple of weeks ago, 
they all agreed that when faced with a blowout like this, they 
really had no good solutions.
    Clearly relying on the industry's ability to respond to a 
spill like this in the future would be an enormous mistake. 
Don't you agree that when we need to--what we need to do is to 
take all necessary steps to prevent a blowout from occurring in 
the first place?
    Mr. Hayes. Absolutely, Mr. Chairman.
    Mr. Markey. So what that means is basically the blowout 
preventers must be able to prevent blowouts, the wells must be 
able to be sealed so that oil and gas can't just gush into the 
ocean. The well design and operation must have the best and 
safest technology. Do you agree with that?
    Mr. Hayes. I do.
    Mr. Markey. Mr. Hayes, do you agree that the Department 
should be required to periodically update its regulations to 
ensure that safety requirements keep pace with any expansion of 
drilling and related risks?
    Mr. Hayes. I do, Mr. Chairman.
    Mr. Markey. How do you propose that we would do that, Mr. 
Hayes?
    Mr. Hayes. Well, I think it is the kind of examination that 
we are proceeding with right now where we take a comprehensive 
look at the status of the regulations and update them. One of 
the truths that we have seen from this incident is that the 
technology has advanced more quickly than the regulatory system 
and the regulatory system has to keep up certainly, if not lead 
the technology. So I am not sure exactly what the appropriate 
time frame is, but there certainly has to be vigorous periodic 
updating of regulatory requirements.
    Mr. Markey. Mr. Hayes, your testimony raises the question 
whether the Interior Department already has the legal authority 
to impose some of the requirements in the legislation now 
before us. It is true that current law requires the use of best 
available and safety technology that is economically feasible 
and cost justified. That is a very broad, open-ended standard 
that leaves the Department with a lot of discretion. But from 
the congressional perspective, the critical questions are what 
the Interior Department has done with its broad discretionary 
authority and what the Department may do with it in the future. 
Perhaps not under this administration, perhaps under an 
administration that looks more like the previous 
administration, which took an attitude of complacency towards 
safety.
    Mr. Hayes, isn't it true that not withstanding the 
Department's current legal authority, its safety regulations 
for offshore drilling prior to the Macondo well blowout were 
clearly inadequate?
    Mr. Hayes. I would say, Mr. Chairman, that the combination 
of the regulatory framework and the enforcement structure was 
inadequate. In terms of the regulatory approach, there are 
broad--the current regulations are actually quite 
comprehensive, both in terms of having performance standard, 
which are the approach that many other countries are taking, 
such as Norway, the U.K., et cetera that have had major 
accidents and a blending of prescriptive standards. What has 
been lacking, I think, is strong enforcement of those. But also 
clearly the kind of periodic review that you were referring to 
in your previous question and updating of the regulations. And 
that is underway.
    Mr. Markey. So that authority was not used?
    Mr. Hayes. The authority certainly was not used to the 
extent that the law allows.
    Mr. Markey. Isn't it true, Mr. Hayes, if Congress does not 
establish adequate minimum standards for safety there is a real 
risk that a future administration will again slide into 
complacency because there would be no minimum standard?
    Mr. Hayes. Well, I think some minimum standards certainly 
make sense, Mr. Chairman. And we are in the process of 
implementing the same through our regulatory process.
    Mr. Markey. Thank you, Mr. Hayes. My time has expired. The 
chair recognizes the ranking member, the gentleman from 
Michigan, Mr. Upton.
    Mr. Barton. Mr. Chairman, what is the situation with votes 
on the floor?
    Mr. Markey. The second bells about have already rung? Well, 
I would leave to the discretion of the gentleman. If he would 
like to begin and end his questions in 5 minutes, I think we 
can do that or we can adjourn right now and come back. That is 
the gentleman's wish. The committee will stand in recess until 
the completion of roll call.
    [Recess.]
    Mr. Markey. The Subcommittee on Energy and Environment 
reconvenes. And the chair will recognize the ranking member of 
the committee, the gentleman from Michigan, Mr. Upton.
    Mr. Upton. Thank you, Mr. Chairman. So, Mr. Hayes, I was 
not able to read your testimony before I left last night and 
even though I started early this morning, 6:30, I didn't see it 
so I heard your oral testimony. You did say in the written 
testimony but not in your oral testimony that the 
administration was not prepared to give their support for the 
bill; is that right? So that is as it would be cleared by OMB?
    Mr. Hayes. That is correct, Congressman. That we do not 
have clearance from OMB to have an administration position on 
this bill at this time.
    Mr. Upton. OK. Now, there are a good number of things--
there are a number of things in the bill that I support. I 
support the blowout preventer and the requirements that include 
the independent third-party. And you all have the ability to 
require that now by regulation, right?
    Mr. Hayes. That is correct.
    Mr. Upton. What are the current regulations as it relates 
to the blowout preventer? Are there any regulations along this 
line?
    Mr. Hayes. There are some. There is a general regulation 
and then some specifics in terms of types of for example 
systems that need to be in place in BOPs, for example. But it 
is more of a menu as opposed to much of a prescription. For 
example, there need to be under the regulations some 
redundancies, two types of redundancy, but there is not a 
prescription that it has to be a certain type of blowout 
prevention mechanism like for example acoustic devices can be 
used but aren't prescribed to be used and what we are doing 
right now, Congressman, is essentially filling in what we think 
are gaps in those regulations under the 30-day report that we 
are now implementing.
    Mr. Upton. It talks about, and of course, we had a number 
of hearings here, not only oversight, but as well as this 
subcommittee. And I read the detailed report by the oversight 
subcommittee, which I thought was very good. One of the things 
that came out in our hearing a week or 2 ago was that when we 
had the five CEOs come, that four of them indicated that they 
had the stop-work requirements on their rigs and pointed out 
probably that BP did not take advantage of that. Is the 
Department of Interior looking in the absence of this bill, 
where are we on stop work provisions?
    Mr. Hayes. We are very interested in that point. We think 
it is an essential ingredient of any regulatory system that 
there be an understanding that if there is a risky situation 
that develops, that there is an obligation to take a 
conservative route and shut down. We are looking at that from a 
couple of different perspectives. We are finalizing some safety 
system regulations that have a similar type of effect. But 
quite honestly, we are going to look at what you all have put 
here in this bill and see whether we are--we have a strong 
enough regulation underway to deal with it because we certainly 
agree with the point. So we will examine that further.
    Mr. Upton. I have two questions I want to get to before my 
time expires. Have you all done what we call a side-by-side of 
what the rules and regulations are for offshore drilling in 
this country as compared to what U.K. and other countries 
overseas have done? Pluses and minuses.
    Mr. Hayes. We started that process in connection with a 30-
day report and have a discussion in the 30-day report that 
provides essentially a fairly high level analysis of that.
    Mr. Upton. Could we get a copy of that? Can that be made 
available?
    Mr. Hayes. Certainly, we will be happy to get that to you. 
We want to do more than that. We want to have world class 
standards here and we want to lead the world. But Norway, and 
the U.K. in particular, both had some very serious accidents 
and as a result of that, revamped their regulatory systems. 
And, in fact, our separation of the regulatory side from the 
enforcement side is something that both countries have done and 
did after their accidents. So we want to learn from them. We 
are in that process and we need to continue it.
    Mr. Upton. The last question I have, the staff--we have 
looked at the language that makes the definition of the high 
risk well. Their thoughts are that it would, in fact, the 
definition would capture all offshore oil and gas rigs and 
could potentially capture all onshore oil and gas rigs as well. 
Is that your understanding of the definition?
    Mr. Hayes. We would want to study the definition more. That 
is the kind of thing we need more time to study. There 
certainly is a differentiation among risks in terms of well 
with pressures and temperatures and that sort of thing. But we 
don't have a view on the definition in your bill at this point.
    Mr. Upton. How long might you take to come up with a 
conclusion on that?
    Mr. Hayes. We would be happy to follow up informally at the 
staff level in terms of getting--and are available to do that 
at any time.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the chairman of the full committee, the gentleman 
from California, Mr. Waxman.
    Mr. Waxman. Thank you, Mr. Chairman. On April 30th, the 
President directed the Secretary of Interior to conduct a 
review of the Deepwater Explosion disaster and provide 
recommendations on additional precautions and technologies that 
should be required to improve the safety of offshore oil and 
gas operations. This 30-day report was delivered to the 
President on May 27th. We are working to craft legislation with 
the same goal of improving safety and the 30-day report has 
helped inform our efforts as you know. The report has several 
recommendations related to ensuring the effectiveness of the 
blowout preventer. These devices are supposed to be a fail safe 
way of preventing blowouts from occurring. Mr. Hayes, one of 
the recommendations in the report was that blowout preventers 
should be required to have 2 sets of blind shear ram spaced at 
least 4 feet apart. Why is that important?
    Mr. Hayes. That is important, Congressman, because the 
blind shear rams which are designed to cut through a pipe and 
through the drill pipe in an emergency where you have to just 
get complete closure have the potential to hit the joint 
between the casing strings, and if they hit the joint, they 
won't be able to shear through. If you have them separated by 4 
feet, you are sure to get an area of the pipe that is outside 
of the joint interval.
    Mr. Waxman. We agreed with that provision and we thought we 
needed to make sure at least one set of blind shear rams could 
cut through and seal the pipe. So we included that as a minimum 
requirement in our bill. The 30-day report also includes 
recommendations that embrace the concept of third-party 
certification of blowout preventers. Why does the Department 
think this is a good approach?
    Mr. Hayes. Well, it is an approach, Congressman, that 
actually has been taken in other jurisdictions, Norway, U.K., 
for example, take that approach. We think it helps ensure that 
the industry is not simply self-regulating and/or dependent 
upon government inspectors, that there is an additional 
enforcement mechanism. And interestingly, we are already 
imposing some of that under the notice to lessees--that we sent 
out the safety notice to the lessees that we sent out earlier 
this month. And there is a lot of activity and it seems the 
industry folks recognize the significance of it or so they have 
told us. So we think it is an important step.
    Mr. Waxman. We agreed with all the things you said, and we 
also thought that it will help ensure break out preventers are 
properly designed for the well and that it is properly 
maintained. So we had that requirement that they be certified 
by an independent third-party before drilling begins and every 
6 months after that. Another key issue is well design and 
cementing procedures. The 30-day report emphasizes the need for 
new rules for casing installation and cementing. What do you 
see as the weaknesses of the current regulation of well design 
and cementing?
    Mr. Hayes. Well, on the cementing side, I am not yet a 
petroleum engineer, but there are a variety of question marks 
regarding the type of cement that is used, the time of the 
curing of the cement, the expectation of how far up and down 
the annulus the cement job has to fall. There are views there 
could be weaknesses in all of those aspects. And we are doing 
an emergency rule making to help develop standards in that 
regard. Similar with regard to the well design. There are 
concerns about single string casing for certain types of wells. 
The same type of issues, Congressman, that your bill is 
addressing.
    Mr. Waxman. Well, we took that recommendation and provided 
that there be a third-party certification of an oil company's 
casing designs and cementing procedures in order to maintain 
well control. We also require cement bond log tests to ensure 
the defective cement jobs are detected before it is too late. 
Something we wish BP had done and they could have done and they 
didn't. We appreciate all of your efforts to improve the safety 
of offshore drilling and we look forward to working with you 
and our colleagues to be sure that we do the best we can to 
learn from the experience, prevent it from ever happening again 
and leave enough flexibility so as new technologies are 
designed, you have the flexibility to accommodate those 
concerns. But not just delegate the authority to the companies 
to make the decisions on their own, which could lead to them 
cutting costs and cutting corners at the same time. Thank you. 
I yield back my time.
    Mr. Inslee [presiding]. The chair recognizes Mr. Barton for 
5 minutes.
    Mr. Barton. I thank the distinguished subcommittee chairman 
there. It is good to see you on the chair as opposed to on the 
baseball field last nights. Chairman Markey asked some 
questions about existing authority versus new authority. What 
authority that you don't have do you need statutorily in this 
bill?
    Mr. Hayes. Congressman, we think we have the authority we 
need to develop a more robust regulatory system, but we are 
happy to work with the committee as Chairman Markey suggested 
to help identify minimum standards.
    Mr. Barton. And I think the Republicans are open to giving 
new authority where necessary. I want to clarify. You could to 
use your phrase develop new robust standards without existing 
new statutory authority, is that not true?
    Mr. Hayes. That is true. I will say that another aspect of 
the bill is to increase the penalties for failure to meet the 
regulatory standards. And we have testified elsewhere that we 
are open to increasing those penalties.
    Mr. Barton. Mr. Upton asked some questions about the 
definition of high risk. As currently drafted, it could be 
interpreted to apply to almost any well drilled on shore or 
offshore, is that not true?
    Mr. Hayes. I unfortunately don't--can't comment on that. 
But we understand the importance of having a solid definition 
of high risk. There are differentiations among wells and we 
would be happy to work with the committee----
    Mr. Barton. For example, would the current definition of 
high risk or the lack of definition of high risk in the pending 
draft, could it apply to wells that are on private land or 
State land on shore?
    Mr. Hayes. I cannot comment, Congressman.
    Mr. Barton. You can't comment that it could or it couldn't 
or you just won't comment?
    Mr. Hayes. No, I would be--I need to review that. I am not 
trying to be evasive, Congressman. I need to review the 
language more closely.
    Mr. Barton. Do you agree that before we legitimate we 
should have a definition that is clear and precise and easily 
understood?
    Mr. Hayes. I do.
    Mr. Barton. That is a good answer. That is a good answer. 
Does the Department of Interior have a position on drilling in 
the OCS?
    Mr. Hayes. In terms of a moratorium?
    Mr. Barton. Not to the moratorium yet. Is there an official 
position on generic drilling in the OCS? And if so, what is it?
    Mr. Hayes. We support drilling in the OCS in accordance 
with the Outer Continental Shelf Lands Act, yes.
    Mr. Barton. If that is the position, do you or the 
administration agree that legislation that is passed to deal 
with the oil spill should still make it possible to drill in 
the OCS?
    Mr. Hayes. Well, the predicate, of course, to our statement 
is that the drilling can proceed in a safe and environmentally 
sound manner. And we are open to legislative improvement that 
would help assure that result.
    Mr. Barton. But I think it is clarifying for the 
administration and the committee to understand that everybody 
wants to drill safely, environmentally, protectively. But if 
you set the standards and the regulations so strenuously or 
tightly, it is at least conceivable that you can end up not 
getting any drilling, and that means we would be even more 
dependent on foreign choices of energy.
    So the key for the committee and the administration is to 
tighten up where necessary, clarify where necessary, do 
everything necessary to prevent if possible a recurrence of 
what happened ever again, but still make it possible to 
generate the domestic energy that is beneath the waters of the 
OCS that helps our citizenry on shore. Do you agree with that?
    Mr. Hayes. As a general matter, yes.
    Mr. Barton. Thank you, Mr. Chairman.
    Mr. Inslee. Thank you. I recognize Mr. Dingell for 5 
minutes.
    Mr. Dingell. Thank you, Mr. Chairman. As one of the two 
authors of NEPA, which I cosponsored back with my old friend, 
Scoop Jackson. I am troubled about the fact that here, the 
agency appears to have required a full EIS with regard to the 
overall leasing but not with regard to the particular well. Am 
I correct in that?
    Mr. Hayes. Yes.
    Mr. Dingell. Is that going to be a continuing practice or 
are you going to see to it now that you have environmental 
impact statements issued on each well?
    Mr. Hayes. We are in the midst of a very intense evaluation 
of that issue with the counsel.
    Mr. Dingell. I will tell you that that statute requires you 
to do this whether it is going to be an impact upon the 
environment and I think as you look about you it has had an 
enormous impact on the environment and a political impact on 
everybody concerned. And I want you to know I will make that 
political impact considerably worse if you don't engage in the 
practice of seeing to it that you have environmental impact 
statements following each one of these deep-water wells because 
the consequences are quite frankly horrific. Now, if you did 
not do so, on the Macondo well, will you please submit the 
rationale for the record?
    Mr. Hayes. Certainly.
    Mr. Dingell. And also submit for the record statutory 
authority under which categorical exclusions were granted. Were 
there any statutory bases for the exclusion or not?
    Mr. Hayes. There was a regulatory basis, the counsel on 
environmental quality has a rule that applies here.
    Mr. Dingell. Please submit that.
    Mr. Hayes. We will.
    Mr. Dingell. Now, how many categorical exclusions under 
NEPA were granted for drilling projects in the OCS? You can 
submit that for the record.
    Mr. Hayes. We will.
    Mr. Dingell. That is a substantial number. Now, section 3 
of the discussion draft before us requires redundant sets of 
shear rams on the wells. I happen to think that is a good idea, 
but I have a great apprehension and that is that this may, in 
some way, stall, slow or prevent development of even better and 
newer technology. How are we to address that concern?
    Mr. Hayes. I think you raise a very important point, 
Congressman. We are interested in triggering a complete 
reevaluation of the technology for blowout preventers and 
certainly with today's blowout preventer, a duplication of the 
shear rams makes great sense, but query whether there isn't 
better technology that can be brought to the table and we are 
very open to and expect to be evaluating that.
    And we--to your point, we hope that legislation will not 
inhibit the ability to move with technology and move beyond the 
current approach.
    Mr. Dingell. Any regulations you issue pursuant to that I 
hope will encourage rather than inhibit that process. Now, as I 
see the way you ought to do this, first of all, you need to 
gather full information for the proper decision-making process 
then you need to ensure that the development of the well is 
done safely including safe development. Then I see that you 
need to engage rather specifically here in prevention of 
failures because prevention is a lot easier to do than cleaning 
up some damnable mess that is created. Then I see you have to 
have on hand an adequate and quick response to failure. I note 
here that there was no adequate quick response. And I note that 
there were no cleanup plans, and I note that there does not 
appear to have been constant review of practices and 
developments and new technologies as you went forward. Do you 
agree or disagree with that statement?
    Mr. Hayes. I agree that there is a 3-legged stool. There is 
the safety and prevention aspect of this that we are working 
on. There is the containment issue. If a spill curse that has 
not traditionally gotten enough attention and there is the 
spill cleanup requirement that clearly needs attention.
    Mr. Dingell. In your regulations, are you going to make an 
effort to see to it that the regulations do reflect those 
concerns? And if you will, please, tell us what--in what 
fashion this legislation does not ensure that those steps are 
taken? Because if we want to see to it that if we do this, it 
is done well.
    Mr. Hayes. Well, I do note that your section 2 has 
performance standards in your legislation that deal with all 
three of these issues and that strikes us--strikes me as a very 
appropriate approach. In terms of what we are doing on the 
containment side, it is part of our 30-day report is a 
suggestion that we are following through on on evaluating how 
to be much more prepared for this eventuality which despite 
hopeful thinking that this cannot occur, it obviously can occur 
and we need to be better prepared.
    Mr. Dingell. My time is ending, so I have to get this 
question in. You did not have a quick and adequate response to 
the failure which occurred, and I do not believe that you had 
adequate cleanup plans which placed proper burdens upon the 
company that did the drilling. Are you making steps to change 
that and see to it that proper actions are taken in that 
regard, both with regard to existing leases and coming up 
leases?
    Mr. Hayes. Yes, sir.
    Mr. Dingell. Would you give us a statement as to what you 
are doing there and how it is progressing so that the committee 
can have a look at that, please?
    Mr. Hayes. Yes, sir.
    Mr. Dingell. Thank you, Mr. Chairman.
    Mr. Markey. We would recognize Mr. Scalise for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. Mr. Hayes, are you 
familiar with the 30-day report that was conducted by the 
Department of Interior to come up with recommendations? And 
they would come up with a number of specific safety 
recommendations. Have you looked at those safety 
recommendations and implemented any of those?
    Mr. Hayes. Yes, sir.
    Mr. Scalise. Which ones?
    Mr. Hayes. We implemented five specific safety 
recommendations in the June 8 notice to lessees. I am sorry, it 
was more than five. More like 8 or 10.
    Mr. Scalise. Are you familiar with their concerns about the 
moratorium issued by Secretary Salazar? Specifically, I know a 
majority of that panel that was put together, those scientists, 
those engineers, a majority of them actually said this 
moratorium implemented by the Secretary would reduce safety. 
Are you familiar with those concerns that they expressed?
    Mr. Hayes. There were concerns expressed by some of the 
reviewers.
    Mr. Scalise. A majority of them.
    Mr. Hayes. The question of the proposed--the concept that 
there was a higher risk associated with the drilling moratorium 
was not endorsed by a number of those folks.
    Mr. Scalise. But a majority did say that? A majority 
actually said that this moratorium would decrease safety. Are 
you aware of that first of all? A majority of the panel put 
together by the Secretary.
    Mr. Hayes. We had a number of these folks in the office 
with the Secretary. There was not unanimity on that point by 
the folks who were visiting with us.
    Mr. Scalise. But a majority signed a letter and I don't 
know if you saw the letter, but a majority of the scientific 
panel you put together, the actual experts that you assembled 
said that the moratorium would decrease safety. Are you aware 
of that?
    Mr. Hayes. I am aware of the letter.
    Mr. Scalise. I would hope you all would go back and look at 
that because many of us are concerned that not only does it 
hurt economically to have this moratorium, but it will actually 
reduce safety. And there are very specific reasons that they 
cited for those reductions in safety. And if we are as 
concerned as I am about increasing safety, then the Secretary 
should be very concerned that his own moratorium actually would 
decrease safety on offshore drilling as recommended by his own 
panel that he put together, a majority of those members.
    So I would hope you would go back and look at that. But 
going back to the actual report on safety, but specifically 
about the bill we have before us. Can you tell me in the bill 
which provisions would actually help us cap the well right now? 
Which provisions in the bill right now will help us cap the 
well that is leaking?
    Mr. Hayes. I think this committee is more familiar with the 
bill than we are.
    Mr. Scalise. Have you read the bill?
    Mr. Hayes. Yes, I have read the bill, Congressman.
    Mr. Scalise. Do you know of any sections that would 
increase our likelihood of capping the well?
    Mr. Hayes. Section 2 has a performance standard that 
requires containment.
    Mr. Scalise. That requires containment not related to this 
well, though. Can you tell me, then, in the bill where does it 
actually have any provisions that help us battle the oil and 
keep it off of our coast today which we are battling with every 
day we have been battling with for over 2 months.
    Mr. Hayes. Well, Section 2 says that the oil response plans 
need to be revised. There has to be an assurance that BOP will 
work.
    Mr. Scalise. That is nice down the road but that doesn't 
help us today. I am pointing out, the title of this hearing is 
legislation to respond to the BP oil spill and yet I don't see 
anything in this bill that actually helps us address the 
problems we are dealing with today. Now, I know some members 
are scrambling around to try to defend this administration's 
failures, but if you actually go and talk to the leaders on the 
ground, the people who are battling that oil every day, they 
will tell you that they are spending more time fighting the 
Federal Government's incompetence than they are battling the 
oil. That is inexcusable, yet that is still happening today. We 
are not talking about something that happened in the first 
couple of weeks it has been resolved.
    Just last week, we had two more very clear examples of 
efforts where our leaders were trying to battle the oil and 
they were being blocked not by BP, but by the Federal 
Government. So maybe some people that want to defend the 
administration would be better served to actually go down to 
the Gulf and go meet with those leaders and help us. We want to 
help solve the problems on the ground, and I know this bill has 
got all kind of things, and I would like to ask you about some 
of the specific things that are very undefined that literally 
would allow complete elimination of drilling not just offshore 
but also on shore.
    But we want to be focused on actually solving the problems 
that we are battling with that are holding back our leaders 
today from dealing with this crisis, the worst national 
disaster this--this worst national environmental disaster 
probably in the country's history. And we are spending more 
time fighting the Federal Government. I don't see anything in 
this bill that helps us give our local leaders the tools we 
need to fight the battles today. Now, we also need to be 
focused on fighting battles tomorrow.
    If this hearing is titled Legislation to Respond to the BP 
Oil Spill, you would think we would spend some time focusing on 
that problem that we are battling every day right now, and 
unfortunately, so many times against the Federal Government 
which there is no excuse for. And hopefully in the second round 
we will have had a chance to get into that. I know I am out of 
time, so I yield back.
    Mr. Inslee. The witness, if you would like to respond to 
that at all, you have a reasonable period to do so, Mr. Hayes.
    Mr. Hayes. Thank you, Mr. Chairman. The Federal response 
working with the States is unprecedented in scope. Throughout 
the administration, we are working every hour of every day, 
incredibly intensely to try to deal with this problem. There 
are daily calls to the governors, there is--I have been to the 
Gulf multiple times as has every senior administration official 
in every affected agency. One would not expect this bill to 
have anything to do with the current response. We are 
proceeding with the current response under current authority 
and throwing everything we have at it. And I resent the 
implication that we are not.
    Mr. Scalise. You need to talk to the local leaders then 
because they will tell you exactly what is going wrong that is 
not being addressed to this day.
    Mr. Inslee. Mr. Scalise, thank you for your interruption of 
the witness, but we need to move on.
    Mr. Scalise. He made some statements that were not 
accurate.
    Mr. Inslee. Are you done, Mr. Scalise? We would like to 
proceed with the hearing. Is that OK with you? Thank you very 
much. We appreciate your courtesy so we can get on with this. 
Mr. Green, are you prepared?
    Mr. Green. Thank you, Mr. Chairman. And I think your 
answers to some of the questions earlier from some of the other 
members, department interior feels like they have the authority 
right now under current law to do the best you can in not only 
dealing with what is going on now, but also into the future. Do 
you think the Department of Interior has the ability to provide 
regulations on redundancy, on blowout preventers on inspection 
systems? Is there anything stopping the Department of Interior 
from right now going and investigating every well in the Gulf 
of Mexico? If you have the staff to do it, that is.
    Mr. Hayes. There is nothing stopping us, and we are 
redoubling and tripling our efforts along those lines, 
Congressman.
    Mr. Green. And I understand the nature of this bill is to 
give additional authority and something we can look at and so--
I know the draft we have is still a working in progress and it 
is going to take a lot of work and I appreciate any suggestions 
from interior because I have been working on legislation for a 
while on a separate issue and we submit it to agencies for 
their response and it is really helpful. So if you would--I 
also want to comment, and I don't expect you to respond to it, 
but--because I know the Department of Interior should be the 
lead agency in dealing with offshore development. And whether 
it is in consultation with the EPA or in consultation with any 
other agency, the Department of Interior should be the agency. 
And if we can beef it up on any way reasonable, I want to help 
and I think anyone who represents areas along the Gulf Coast 
want to do that because that is our jobs and our tax base.
    And one of the issues I have--and I don't know if you have 
the information. We have been working with both the Department 
of Interior and the new subagency I guess and in the 6-month 
moratorium did not cover shallow wells. And I know we have been 
meeting on a weekly basis with conference calls with both 
industry and Members of Congress. And I was just told--and I 
was going to see--have there been any--since a shallow well is 
500 feet or less, up until last week, there were no permits 
issued. I understand in the last week there have been.
    If you don't have it, if you could get it back to the 
committee on what is happening. Because my fear is that not 
only are we having a 6-month moratorium on deep-water wells, 
but a de facto moratorium on shallow wells where we do produce 
a lot of our natural gas. Do you have any personal information 
about any permits of issue since Horizon for shallow water 
drilling permits?
    Mr. Hayes. I know there is--I don't have the exact 
information, but I know that there are a number of permits now 
that are mature and that we are looking to process. We had a 
notice to lessees about 10 days ago requiring some additional 
information from folks on blowout scenarios and that 
information has been coming in and ones that information is in, 
the APD decisions can be made, and so we talked about this with 
a group of industry folks at the Department just a couple of 
days ago. We expect more shallow water drilling, APDs to be 
granted in the near future. There is no moratorium on shallow 
water and we want to move it through. But we were requiring 
that operators meet the new safety requirements that are laid 
out in the 30-day report. That has been broadly supported by 
industry and we had folks in, as I say, a couple of days ago to 
confirm that and then there was this important gap in terms of 
the expiration plans of having a description of the blowout 
scenarios, and that is being built now and that will database 
the combination of those two things will enable those permits 
to continue to be granted.
    Mr. Green. My next question would be I know the bill talks 
about a high risk well. And with the thousands of wells that 
have been drilled without any problems, I would hope that--do 
you have a suggestion on what a high risk well would be? 
Obviously from what happened in Horizon, it would be a deep-
water well, 5,000 feet or more. But again, shallow water wells 
or land side wells seem like they have a pretty good safety 
record. Is that the experience with the Department of Interior?
    Mr. Hayes. The historic record in terms of blowouts has 
been generally good. But obviously, the implications of an 
uncontrolled blowout are horrendous as we are seeing now. We 
are happy to work with the committee to help define relative 
risk among wells. There certainly are some criteria that could 
be utilized and we have a lot of expertise in the agency that 
might be useful as you proceed.
    Mr. Green. Mr. Chairman, just one more.
    I know in Texas and Oklahoma there are lots of wells that 
are called stripper wells. They are very low-producing wells, 
maybe 10 or 12 barrels a day. And, of course, when it is $150 a 
barrel, it is really great, but there are times at $8 and $10 
it wasn't hardly worth the electricity to produce it. I would 
surely hope that there would be some reasonableness in those 
type of wells that produce a great deal for our country would 
not be considered high-risk.
    So, Mr. Chairman, thank you for your patience.
    Mr. Markey. Thank you.
    The chair recognizes the gentleman from Alabama, Mr. 
Griffith.
    Mr. Griffith. Thank you, Mr. Chairman.
    I want to talk about third-party verification. Where we 
mention that we have lifted the moratorium on shallow water, 
that is dependent on that third-party verification of the 
safety requirements.
    What is the approximate cost for a third-party 
verification? Do we have a number that would be applicable to 
the cost for this independent contractor to do a verification?
    Mr. Hayes. I am not sure.
    Steve, do you know?
    Mr. Black. I don't know the cost.
    Mr. Griffith. If you could find that, we would appreciate 
having that.
    The second thing is, is this independent contractor immune 
from any liability should something happen after the 
certification is given? Is there a liability to this 
independent contractor? And I would appreciate knowing that, as 
well. And are they bonded? And what are the limits of their 
liability after they verify?
    The second thing is, how many of these independent 
contractors are out there? And if we are going to require an 
independent contractor to verify the safety to allow drilling 
to go forward, the number of those, the cost to the industry, 
their liability, are they bonded, that is an important concept.
    Because, in fact, if there are not enough independent 
contractors that are willing to verify, that are willing to 
inspect, sign their signature, put their company at risk, then, 
in fact, that moratorium is still in place if there are not 
enough out there. So I would appreciate knowing that, as well.
    Mr. Black. Congressman, I will attempt to answer that now, 
to the extent I can, and we would be happy to follow up with 
additional information.
    As you point out, the first safety NTL does require certain 
third-party verification. The Minerals Management Agency, now 
the Bureau of Offshore Energy, has provided clarification with 
respect to each of the points you raise, has made clear that 
the third party must have adequate bonding or insurance and 
must have the requisite engineering experience to review 
whatever it is that is being verified.
    So far, the industry has not expressed any concern or 
problem finding those third-party validators. They are 
contractors, consultants that do this on a routine basis. So 
they are available, and, to my knowledge at least, this has not 
been a problem so far.
    Mr. Griffith. So it wouldn't be an impediment to the 
moratorium? It would be something that would be--we are ready 
to take that on, we have plenty of independent contractors, and 
the cost is not prohibitive. Or we will check into that.
    Mr. Black. Yes, sir.
    Mr. Griffith. The other thing that I persistently hear is 
that Norway and the United Kingdom, that have had similar 
problems, have developed techniques for removing oil from water 
that are far superior to the ones that we might be using in the 
gulf.
    Is there any truth to that? And are we making an effort to 
get their equipment into the gulf that they say is superior to 
ours, or BP's, that are being used now? Is that a rumor? Is 
there any factual information about that?
    Mr. Black. Mr. Griffith, I am not aware of the technology 
that you are referring to. I know, obviously, Kevin Costner has 
offered some solutions along those lines. I am not an expert or 
a petroleum engineer on that, and so I don't have an answer to 
your question.
    Mr. Griffith. So the rumor continues. OK, I hear you.
    The other thing is that it sounds like to me, from the 
questions that have been asked and some proposals that have 
been made, that it would be in our best interest, as far as the 
United States is concerned and its energy resources, that we 
have a greater amount of information before we finalize a bill. 
Would that be fair? Would you be more comfortable with more 
information and more investigation since it is an ongoing 
investigation?
    And you have mentioned that you have the regulatory 
authority to do pretty much what you want to do now without a 
bill. So is there really a hurry for us to do a bill without 
completing the investigation?
    Mr. Hayes. Congressman, we will leave it to the Congress to 
decide what is appropriate. What we are doing is, even before 
we get the final root cause figured out, we are moving to shore 
up safety issues that we think do need some attention.
    Mr. Griffith. OK.
    I yield back, Mr. Chairman.
    Mr. Markey. Great. The gentleman's time has expired.
    The chair recognizes the gentleman from Washington State, 
Mr. Inslee.
    Mr. Inslee. Mr. Hayes, Mr. Scalise took some political 
shots at the administration. I guess that comes with the 
territory. But I want to ask you about the response that is 
going on. Because we all, across the country, want to be as 
vigorous as humanly possible, given the suffering of the folks 
in the gulf right now.
    I am told that, as of the beginning of this week, the Obama 
administration has mobilized over 40,000 people to fight the 
spill. There are 7,200 vessels today that are fighting the 
spill.
    I am told that the administration has also authorized the 
deployment of 17,500 National Guard troops to respond to the 
disaster in four affected States: Louisiana, Mississippi, 
Alabama, and Florida. However, I am told that only the 
Governors of the respective States can actually deploy them. 
And, thus far, although the President has authorized the use of 
17,500 National Guard troops, those Governors have only 
deployed 1,675 troops.
    Is, in fact, that the situation? And, in fact, is it the 
Governors who have the ability to deploy those troops?
    Mr. Hayes. Congressman, that is my understanding. Although, 
I will caveat that the Department of Interior is not the lead 
in terms of that issue.
    Mr. Inslee. So, given the needs, shouldn't these Governors 
deploy these troops that the Federal administration has 
authorized to be used? If, in fact, Mr. Scalise is right, there 
is not an adequate response, why don't the Governors authorize 
the deployment of these troops?
    Mr. Scalise. Would the gentleman yield?
    Mr. Inslee. No. And the reason I won't yield is because you 
didn't respect the witnesses and the time that we had.
    So, Mr. Hayes, go ahead and answer.
    Mr. Scalise. That is not accurate.
    Mr. Hayes. I am not comfortable speaking to the question of 
the potential benefit of the National Guard in terms of the 
Governors' requests. I do know that the administration has been 
supportive of requests to employ the National Guard. As to why 
they are not being utilized, I am not sure.
    I do know, per your general point, that the Governors, the 
parish presidents, the other local folks in Alabama, 
Mississippi, and Florida, and the Federal folks have a massive 
joint response effort under way under the framework law that 
this Congress passed in 1990 to respond to this oil spill. It 
is an enormous challenge because this oil has continued to leak 
into the gulf at a huge rate for now a very long time----
    Mr. Inslee. Well, I appreciate that. And I think it would 
be helpful if we had bipartisan teamwork to try to figure out 
how to force the oil industries to have adequate spill response 
plans so we wouldn't be behind the curve, as we have been in 
this situation, trying to play catch-up.
    And if we had a little more teamwork from the other side of 
the aisle to figure out how to pass a law to prevent this from 
happening, of people trying to make things up as they go along 
because the industry didn't have an adequate spill response 
plan, then maybe we could be in a better position if this were 
to happen again. I hope we have that kind of teamwork.
    I want to ask you about, going forward, to try to prevent 
the next tragedy. My view is that we ought to have the same 
level of assurance to prevent this tragedy as we do in the 
aviation industry. And I think the FAA is a pretty good 
template to look at to try to design a regulatory system to 
prevent that.
    I have been talking to some folks in the FAA, and what they 
tell me they do is they set a standard of performance that you 
have to have. You can't expect, for instance, a loss of control 
of your airplane to happen more than one in a billion instances 
of takeoffs. And the industry then is expected to propose and 
provide an engineering analysis to say that that expectation 
will be met.
    Shouldn't we have something similar in this situation as to 
each and every critical system of offshore drilling? Shouldn't 
we design in this third-party mechanism an expectation in 
something in that regard?
    Mr. Hayes. I think an expectation of a very high standard 
of safety is necessary and appropriate.
    Mr. Inslee. So, in this third-party mechanism, should we 
have an expectation that they set a level of statistical 
performance that the engineers have to show will be met? 
Shouldn't that be something we put in the statute?
    Mr. Hayes. I think potentially we are open to working with 
you on that, Congressman.
    Mr. Inslee. Next question: Should we be using the best 
available technology? And it is probably an amendment I will be 
offering, to require the best available technology to be used. 
Is that something you think would be a good idea?
    Mr. Hayes. Certainly for this deepwater drilling operation, 
yes, Congressman.
    Mr. Inslee. Thank you. I appreciate it.
    I yield back the balance of my time.
    Mr. Markey. Great. The gentleman's time has expired.
    The chair recognizes the gentleman from Illinois, Mr. 
Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman.
    And welcome to the panelists. I am sorry I haven't been 
here, as many of us filter in and out. But let me first yield 
some time to my colleague from Louisiana, Mr. Scalise.
    Mr. Scalise. I thank the gentleman from Illinois for 
yielding.
    And, you know, one of our other members listed off, and we 
hear too often all this, you know, litany of things that are 
being done when they try to defend the failed response on the 
ground by the Federal Government, and we have this deployed and 
that deployed.
    I will just give you an opportunity, Mr. Hayes, to address 
one of the issues that we battled last week with the sand 
barrier plan. This is a plan that the President, just a week 
and a half ago, bragged about in his national address, bragged 
about approving--he only approved 25 percent of the Governor's 
plan to build a sand barrier protection that we had wanted to 
protect the marsh. Of course, we had submitted that plan 3 
weeks prior to the approval when there was no oil in the marsh, 
and now there is.
    But, last week, an agency in your department shut that plan 
down for almost a week. Why these kind of bureaucratic delays?
    Mr. Hayes. Well, that specific situation was because the 
State and its contractor was violating the permit agreement 
that had been provided the basis for it. And we are happy to 
supply record information about this.
    But there was an agreement as to where the sand could be 
taken from. Because if it was taken from the wrong spot, we 
would not have the Chandeleur Islands, and it would take away 
the ability to maintain that island system. There was a----
    Mr. Scalise. That is not accurate. According to our State's 
coastal protection authority, which runs this, they had a 
permit from the Corps of Engineers to go and get that borrowed 
sand. They actually had----
    Mr. Hayes. But not from the location. What the contractor 
requested on a temporary basis, waiting for piping to take sand 
from a location that was not permitted, the Federal Government 
said, ``We will let you do this for 4 or 5 days, no more, 
because, at that point, the integrity of the island system will 
be affected.'' They did that for 4 or 5 days and then asked for 
another 10 days of taking sand from an area that was not 
allowed in the permit.
    At that point, the Fish and Wildlife Service, backed up by 
the Corps of Engineers, said, ``No, you have to agree to the 
permit conditions that you agreed to at the outset of this 
project.'' And that is what happened.
    Mr. Scalise. Well, unfortunately, they had the permit from 
the Corps, it took them over 3 weeks to get the permit. This 
comes in, shuts the project down for almost a week, I think it 
was 5 or 6 days, shut the project down. They had to go back and 
forth and fight with you all.
    And, you know, you can have all your reasons about what you 
are concerned about. They are concerned about protecting the 
coast, from stopping these pelican nests from being destroyed, 
which they are being destroyed. But you can have your 
bureaucrat haggling back and forth.
    Mr. Hayes. It is more than a bureaucratic issue, Mr. 
Congressman.
    Mr. Scalise. Well, then let me ask you this, because we 
just heard all this bragging about all these vessels deployed. 
Just a few weeks ago, the vessels that were supposed to be out 
skimming for oil were sitting idle at the dock, not skimming 
for oil, again, as oil was coming into the marsh. I don't know 
if you have any explanation for that.
    But, I mean, just over and over, we get--and I am sure you 
have reasons why you think you should hold on to and pull back 
permits that were issued or want to change plans, but----
    Mr. Hayes. If I can please----
    Mr. Shadegg. If I could reclaim my time.
    Mr. Scalise. And I will yield to the gentleman from 
Illinois.
    Mr. Shadegg. I did want to give my colleague and friend 
time to rebut.
    I think part of the frustration is, I mean, we are all 
frustrated about this whole mess that we are in. And I think 
the executive branch would have done itself well if they would 
have went to the locals and said, ``Locals, what do you need,'' 
and deployed.
    In fact, I have told my friend from Louisiana, I probably 
would have done it without Federal permits. If the locals said 
these marshes had to be protected, do that. And I think public 
opinion in their States, they would have scored sky-high.
    But that is the emotion involved.
    Let me just put my comments on the record, on the mark, so 
the chairman understands concerns. Two hundred miles means 
everything. Getting a good definition for ``high-risk well,'' 
what is a high-risk well. Is every well a high-risk well? I 
don't think so.
    Onshore and offshore--we have onshore instances. I have 
marginal oil wells. Does that mean they are going to go into my 
cornfield now and deal with--marginal oil wells that produce, 
you know, a barrel a day that people get royalties on.
    And the civil action--if we had the civil action aspect 
that is in this mark, we probably, Mr. Chairman, would not have 
the $20 billion BP settlement, because they would have had to 
hold their money to be prepared to fight these lawsuits.
    So I put that on the record, Mr. Chairman. We look forward 
to working with you, and I yield back my time.
    Mr. Markey. We thank the gentleman very much.
    Just for the record, the citizen suit provision exists 
under existing law. So it is not anything that we are adding; 
it is existing law.
    The chair recognizes the gentlelady from California.
    Mrs. Capps. Thank you, Mr. Chairman.
    Mr. Hayes, thank you for being here and for your daily 
efforts to stop the leak, to contain the spill, and to deal 
with the aftermath.
    I just want to make a real quick comment before I turn to 
you to substantiate what my colleague from Washington said 
earlier. And that was that, in the early days of the spill, the 
Defense Department did approve the State of Louisiana's request 
for 6,000 National Guard troops. But according to a CBS News 
report, the Governor of Louisiana has only, to this date, 
deployed 1,053 of the National Guard to fight the spill. And 
the national incident commander, Thad Allen, has said, and this 
is a quote, ``There is nothing standing in the Governor's way 
from using more National Guard troops.''
    Now, Mr. Hayes, one of the main functions of our government 
is to make sure that activities that pose a high risk to the 
health and safety of Americans and to our environment comply 
with basic requirements. If a company is building a skyscraper, 
there is an engineering and construction requirement in place 
to protect the people who work in that building and who walk on 
the streets below. We don't let an airplane fly without meeting 
numerous safety and security regulations. So it is no surprise 
that drilling for oil and gas off our shores carries with it 
the responsibility to meet some basic requirements.
    The Blowout Prevention Act starts with a basic commonsense 
requirement. To get a Federal permit to drill a high-risk well, 
an oil company has to demonstrate three things. And the first 
one is that they have to show that its blowout preventer and 
well control equipment will actually prevent a blowout from 
occurring.
    Mr. Hayes, would you agree that companies drilling in U.S. 
waters should have effective blowout preventers that are going 
to work when they are needed?
    Mr. Hayes. Absolutely.
    Mrs. Capps. And do you want to explain or do you want to 
say a sentence about that?
    Mr. Hayes. Well, I think that we are seeing the horrific 
result of not having adequate oversight and regulatory 
requirements in place with the BP oil spill. And we must not 
let that happen again.
    I fully endorse your proposition that there are some 
activities that folks look to and expect the government to 
address. And this is the type of activity that, without 
oversight, one cannot count on self-regulation to deal with 
such a dangerous situation in an acceptable way.
    Mrs. Capps. So, for the government to require a 
demonstration that the equipment works, that is number one?
    Mr. Hayes. Yes. Yes. Yes. Demonstration of design, 
appropriate design, and then appropriate operation and 
continued inspection and testing throughout the life of the 
equipment.
    Mrs. Capps. Second, the company needs an oil spill response 
plan that demonstrates the capacity to promptly stop a blowout 
if the blowout preventer fails. In other words, what is the 
back-up mechanism.
    This clearly hasn't happened in the gulf. BP just wasn't 
prepared to stop a runaway well. And when the BOP didn't 
function, they had no backup plan. The last 2 months has been a 
series of improvised--I mean, we have all watched it daily--
long-shot responses, I mean, just ranging to the absurd.
    Rex Tillerson, the CEO of ExxonMobil, admitted to a 
congressional panel that the oil industry is not well-equipped 
to deal with a blowout.
    So, Mr. Hayes, would you agree that companies drilling in 
U.S. waters have a basic obligation to be ready to stop a 
blowout if the blowout preventer fails, that this is the second 
level of a requirement that should be in place for all 
industries?
    Mr. Hayes. I absolutely agree. And as someone who lives 
this day-in and day-out and is tracking and engaged in the 
continued efforts of containment, I agree with an exclamation 
point.
    Mrs. Capps. OK. We will note the exclamation point.
    The third requirement for getting a permit to drill is that 
the company must be able--and this is part of the legislation 
that is before us--that the company must be able to show it has 
the capacity to begin drilling a relief well within 15 days of 
a blowout and to complete a relief well within 90 days.
    Three months is a long time to have a well spewing oil into 
the sea. If an oil company is not able to demonstrate that it 
has the capacity to drill a relief well in that time frame, I 
don't see how they can claim that their operations are safe.
    I would like to have you comment on this. What do you think 
about this, Mr. Hayes? Do you think it makes sense to require a 
company seeking to drill an offshore well to show that it can 
drill a relief well in a timely manner? And this would be that 
third backup as a last resort.
    Mr. Hayes. I think, certainly, in a timely manner there 
needs to be that capability. And it is, of course, what we are 
relying on right now for the BP oil spill.
    Mrs. Capps. We really have no guarantee, do we, that this 
well that is being dug is actually even going to function?
    Mr. Hayes. There is no guarantee. I will say the best minds 
in the world are working on this to make sure this relief well 
does, in fact, plug the well.
    Mrs. Capps. Thank you, Mr. Chairman.
    Mr. Markey. Great. I thank the gentlelady.
    There are roll-calls which apparently are going to go off 
at approximately 12:45. So I think we might be able to get all 
three remaining Members in and their questions.
    The chair recognizes the gentleman from Texas, Mr. Burgess.
    Mr. Burgess. Thank you, Mr. Chairman.
    And, Secretary Hayes, thank you for being here with us.
    Let me just clarify when you were answering the gentlelady 
from California's questions, her first requirement to you was 
that the blowout preventers work. Is that not a requirement 
today?
    Mr. Hayes. It is.
    Mr. Burgess. So you are not just asking that someone put 
down a sham blowout protector that we never expect to work, is 
that correct?
    Mr. Hayes. No, that is right. I mean, there is a 
performance standard in the regulations today for blowout 
preventers, but we think the regulations can be improved and 
enforcement can be improved.
    Mr. Burgess. Let me ask you a question. This whole bill 
that we have before us is the Blowout Prevention Act. And the 
one piece of information, of course, that this committee and no 
committee can get right now is the detailed description of what 
went wrong with the blowout protector that is down 5,000 feet 
below the ocean surface. I recommended to the chairman that we 
subpoena the blowout protector, and he said it wouldn't fit in 
the room.
    So we are going to make recommendations--or we are actually 
going to legislate to prevent something from happening to a 
blowout preventer, which we don't know what happened, and so we 
can't possibly know how to prevent the preventer from misfiring 
in the future. I mean, that is a very difficult task.
    Do you have any particular insight from your position 
within the Department that would allow you to help us craft 
that legislation without knowing what is wrong with the one 
that is down there?
    Mr. Hayes. Well, you certainly have a good point, 
Congressman, in that we don't know exactly what happened with 
this particular blowout preventer. We do know, though, however, 
as part of our follow-up from this incident, that there are 
some weaknesses in the regulatory structure, some of which are 
addressed in your bill.
    Mr. Burgess. And there is no question, through the multiple 
hearings we have had--and unfortunately we don't get many 
chances to talk to the regulators, but through the multiple 
hearings we have had, there was a mistake made with just the 
human direction on the platform and not calling a cessation of 
activities when they realized that this well was very 
dangerous. And, certainly, that could have even happened 
several hours before the final scenes played out. There is a 
problem with the blowout protector, which we don't know what it 
is.
    Now, when they went down to do the infamous kill shot, they 
had to stop. And we have not really gotten good information on 
why they had to stop, but you keep hearing things about thief 
channels and cracked casings. And, of course, there were 
problems, we believe, with the cementing that occurred on the 
well, such that if you actually were successful with a kill 
shot, you might blow a blowout preventer. Is that correct?
    Mr. Hayes. The concern--yes, in terms of the concern was 
that there may not be well integrity down below the surface so 
that----
    Mr. Burgess. Let me ask you this. If we had a functioning 
blowout protector on that day that fired and stopped the flow 
of oil at the wellhead, would we still have had the problems 
beneath the surface, potentially, that could have led to a much 
more serious problem?
    Mr. Hayes. That is a very important open question that----
    Mr. Burgess. Well, then let me ask you this. We are writing 
legislation to alter the way you do things, and we don't even 
know if the legislation we are writing might create a greater 
problem than we have to deal with today--that is, an open 
crater on the bottom of the sea floor discharging oil until the 
reservoir is depleted.
    Mr. Hayes. Well, I would just say that part of the 
legislation and part of what we are doing also deals with well 
design. And to the extent there may have been a loss of 
integrity below the surface, it may well have been due to a 
poor well design.
    Mr. Burgess. Now, let me ask you a question about that, 
because the interruption of the cement bond log that was to be 
carried out, they were there, the people who do that sort of 
work were there at the rig. Why did they leave?
    Mr. Hayes. I don't know, sir.
    Mr. Burgess. Did they leave because of concerns for their 
safety?
    Mr. Hayes. I truly don't know. I do know that that and 
every other fact around it are part of the ongoing 
investigation.
    Mr. Burgess. You know, there are so many things that have 
come up as a result of the questions today. I do hope we have 
other opportunities to visit, and I do hope we have a chance to 
have the Secretary here.
    You worked in a previous administration?
    Mr. Hayes. I did.
    Mr. Burgess. And what was your capacity in the previous 
administration?
    Mr. Hayes. For the last year and a half of the Clinton 
administration, I was the Deputy Secretary.
    Mr. Burgess. So this sort of activity would have come under 
your purview at that time?
    Mr. Hayes. Yes.
    Mr. Burgess. Was there any point where you felt you did not 
have the tools you needed to manage what you were asked to 
manage? Was there any point at which you said, boy, I wish I 
had ``this'' so that a Deepwater Horizon-type accident wouldn't 
occur?
    Mr. Hayes. I think, back then, much like I think all of us, 
we were--I certainly was unaware that there was a potential 
serious issue here. I will note that deepwater drilling really 
just started in the late 1990s and that the----
    Mr. Burgess. Under your watch.
    Mr. Hayes. Yes, yes. With the encouragement of the Congress 
and incentives, deepwater drilling began, really, in the late 
1990s and then accelerated as the technology accelerated 
through the last decade.
    Mr. Markey. The gentleman's time has expired.
    I am told that the roll-calls are going off in the next 3 
to 8 minutes. So I think we can recognize the two Members.
    And I recognize the gentleman from Utah, Mr. Matheson.
    Mr. Matheson. Thank you, Chairman Markey.
    Mr. Hayes, we are here today talking about this proposed 
legislation to look at enhancing or changing our existing set 
of rules and regulations to better prevent something like this 
from happening in the future.
    One question that I seem to anecdotally get different 
answers to is, if we look at our existing set of rules and 
regulations, are there other countries in the world that have 
sets of rules or regulations that are different from the ones 
of the United States that, perhaps, are stronger? Are you 
familiar with other countries' deepwater well regulations?
    Mr. Hayes. Generally speaking, yes, I am familiar with 
them. And I think it is hard to compare systems one against the 
other.
    Ironically, some of the systems that folks look at for 
guidance and potential emulation, like the UK and Norway, tend 
to not have as much prescriptive requirements in them. They 
tend to be performance-standard-based, but with systems in 
place to ensure those performance standards will be met.
    I think we can learn from each other. And we need to both 
have better performance standards but also prescriptive 
standards, where appropriate.
    Mr. Matheson. To the extent there are different standards, 
do you think that they are stronger than what we have in this 
country? Weaker? Or is it apples and oranges?
    Mr. Hayes. Well, personally, the sense I have is that, for 
example, the UK and Norway have put in place, perhaps, better 
systems at this point than we have. And that is unacceptable. 
We need to be leading the world here, in terms of safety.
    Mr. Matheson. This is very interesting. I was in a Science 
Committee hearing some time this month, maybe late May, but I 
think it was this month, and someone from MMS didn't think 
there was any difference with others around the world. But I 
had heard there was, so that is why I wanted to get this 
question from you.
    And it seems to me that it would be prudent for us to take 
a look at these other systems that are used around the world. 
If we are talking about changing what we do in this country, I 
think we ought to consider that. I think this committee ought 
to look at that.
    And so, again, I am all for doing something to make our 
regulations better. I said that in my opening statement. But I 
am concerned about--we are talking about marking this up 
tomorrow, and there may be a lot of good ideas out there from 
around the world that have not necessarily been considered. And 
I would just offer that for everyone's consideration.
    Mr. Hayes, just a couple of specific things about the 
proposed legislation. The legislation does not specify a 
specific regulator, but instead refers to an appropriate 
Federal regulator.
    Do you believe that the Department of the Interior would be 
best suited to oversee the implementation of the requirements 
of this bill? Or what other agencies would you foresee being 
involved?
    Mr. Hayes. I think the Department of the Interior is the 
appropriate agency, in that we have a workforce of about 1,700 
people with substantial expertise in this area.
    Mr. Matheson. OK.
    You have heard a lot of discussion from others about the 
concern about how this applies onshore, offshore. Have you been 
able to evaluate the legislation to determine, as it is 
written, what the impact would be on onshore oil and gas 
development? Or the process the Department of the Interior 
undertakes to permit onshore----
    Mr. Hayes. Right. I think they are really separate animals, 
if I can, Congressman. This legislation is focused on offshore 
well development. And we certainly look at--I will say, at the 
Department of the Interior, there are different--as you know, 
FLPMA applies to onshore, and the Outer Continental Shelf Land 
Act applies to offshore. So there are certainly commonalities 
in terms of technology and that sort of thing, but we are 
focused on the offshore.
    Mr. Matheson. As you should be----
    Mr. Hayes. Yes.
    Mr. Matheson [continuing]. And as I think we should be.
    But my concern is, as an unintended consequence, this 
legislation is going to affect onshore in ways that we haven't 
thought through, because we are all thinking offshore right 
now.
    Mr. Hayes. Sure.
    Mr. Matheson. And I would submit that we ought to consider 
what those implications would be.
    Mr. Shadegg. Would the gentleman yield?
    Mr. Matheson. Yes, I will yield to my friend from Illinois.
    Mr. Shadegg. The issue on the onshore issue is it is on 
private property.
    Mr. Hayes. Right.
    Mr. Matheson. One of many issues.
    Mr. Shadegg. Right.
    Mr. Matheson. Public lands, too. But thank you.
    Mr. Chairman, I will yield back and give my colleague from 
Texas some time.
    Mr. Markey. We thank the gentleman.
    The gentleman from Texas, Mr. Gonzalez, is recognized.
    Mr. Gonzalez. Thank you very much, Mr. Chairman.
    Quickly, let's see. And I am not sure if someone already 
asked this, and I apologize if they did, because there are 
Members of Congress that have written to the Department of 
Interior regarding the blanket nature of the moratorium in 
assessing what really is the riskiest ones that are out there 
at a certain stage as opposed to others that should be going 
forward. So when the moratorium is lifted, with all the 
safeguards and procedures, they will not be so handicapped in 
going forward in what they need to do.
    Are you proceeding in that fashion? And can we expect that 
you are going to be making a distinction among different levels 
of operation?
    Mr. Hayes. The Secretary is in the midst of considering the 
moratorium issue, because the court enjoined the moratorium 
that had been entered about a week ago. And so the Secretary is 
looking at all aspects of it, including relative risks 
associated with various types of activities.
    Mr. Gonzalez. Any idea when you may arrive at some 
determination so that we just don't have--and I understand the 
courts are involved, and who knows where all that goes.
    Mr. Hayes. Right. Well, I know that we have appealed, and 
the circuit court has established an aggressive, and 
appropriately aggressive, briefing schedule. But, 
independently, the Secretary is looking at this, and on a very 
time-sensitive basis. We understand the importance of clarity 
on the issue.
    Mr. Gonzalez. And then I believe Mr. Black may give me some 
guidance here. And this is really old information. But this is 
a presentation way back, June 18, 2003, regarding ``Deepwater 
Drilling: Where Are We Headed?'' and regarding the lack of 
proper equipment, testing, anticipation and such, and then 
capping a blowout.
    What is a blowout, exactly? Because they indicate, 
``Blowouts have been occurring regularly throughout the 
petroleum history,'' and then they go into the percentages. 
But, in essence, what we had out there with Deepwater Horizon 
was a blowout? Would that be an accurate description?
    Mr. Black. Yes, sir. Although the investigations are not 
concluded, we know two things: There was a failure to control 
the well, and that happened as a result of a number of things, 
potentially. And then the hydrocarbons from the field below 
that well obviously escaped into the environment. That is the 
blowout. So the blowout preventer is designed to prevent that 
blowout in the event of loss of well control.
    Mr. Gonzalez. So we have had other blowouts in deepwater 
drilling, have we not?
    Mr. Black. Yes, sir.
    Mr. Gonzalez. And they were somehow obviously capped, 
contained, and so on. So something worked in those other 
instances. Would that be accurate?
    Mr. Black. Yes. I mean, we do review in the report the 
history of loss-of-well-control events throughout the world. 
And to varying degrees, those have been controlled, some with a 
relief well, many weeks after the original blowout.
    Mr. Gonzalez. Well, let's get to the blowout preventers, 
because in this presentation it was very interesting. It seems 
that the authors of this report seem to indicate that there was 
no way to really simulate the conditions when it comes to 
deepwater, at those depths and such.
    So we can have blowout preventers, but how do we assure 
that they actually work? How do we simulate real conditions? Is 
that available today?
    Mr. Black. Congressman, that is a very important question. 
And as Mr. Hayes has already testified, one of the things the 
Secretary wants to do and that we suggest through this report 
is reexamine the technologies available for preventing a 
blowout or stopping a blowout if it occurs. Those technologies 
do continue to evolve, and there are a number of companies 
looking at that question.
    But, as you point out, this blowout occurred at great water 
depth, high pressure. And, obviously, our experience in dealing 
with a blowout of this type is very limited.
    Mr. Gonzalez. Way back in 2003--and my fear is that we 
haven't really moved forward since 2003 as to how we prevent, 
how we cap, how we contain. But this is one of the remarks. And 
maybe this is not applicable, but I believe that it is. ``There 
are many dynamic kill simulators on the market.''
    Is that what we are talking about? Dynamic kill simulators?
    Mr. Black. I don't know the answer to that question. And I 
believe you are referring to the MMS study that was contracted 
in 2003. But I would have to go back and double-check.
    Mr. Gonzalez. ``There are many dynamic kill simulators on 
the market.'' Maybe I am misinterpreting this, but I am just 
figuring, how do you simulate something, and that is what they 
are talking about.
    The next sentence is, ``None of them fits our need.'' None 
of them fits our need. That was 2003. So I am hoping that we 
have made some progress. Because what you are telling me is we 
are not even sure we are going to be able to test these blowout 
preventers under real conditions. I mean, do we have the 
technology to even do that?
    So we will never be able to really tell the American public 
that whatever we have in place would avoid a recurrence of what 
we have with Deepwater Horizon, Mr. Hayes?
    Mr. Hayes. There are some--in fact, we are already 
requiring more testing for the BP relief well for the blowout 
prevention mechanism.
    There have never been tests required for the secondary 
systems that come into play once you have a failure. We are now 
requiring those secondary systems to be tested, both on the 
deck and subsea. And it is a very, very important addition to 
the regulatory arsenal that already has identified some 
potential issues and provides a much higher margin of safety.
    So, to your point, I think, in fact, there are some 
inspection, certification, and testing requirements that can 
substantially increase our level of assurance that a blowout 
protector will work. That is not to say we don't also have to 
improve in the containment and spill response capability.
    Mr. Gonzalez. Mr. Chairman, I am going to use my last 30 
seconds real quick.
    One of the great concerns out there is the industries 
having multiple regulators. It doesn't matter what industry it 
is, by the way. We are talking about that in the financial 
world. But there is a reason for that.
    And I am not sure, and I have to look at it very carefully, 
as to--we know that most of the responsibility would be with 
Interior. Mr. Hayes, you already indicated in response to Mr. 
Matheson's question that you believe that would be the proper 
place to have the authority. But there also may be, in certain 
instances, my understanding, where the Department of Energy and 
EPA would be in some sort of a default position. And I will be 
talking with the chairman of the subcommittee and others on 
that.
    Any concerns regarding having multiple layers, multiple 
regulators?
    Mr. Hayes. We implement the laws that Congress requires, 
and we will implement whatever you all require. We are 
committed, simply, at the Department of the Interior to upgrade 
and implement better safety standards for this industry. We 
think we have the capability to do it, and we look forward to 
working with you to demonstrate that.
    Mr. Gonzalez. Thank you.
    Thank you, Mr. Chairman.
    Mr. Markey. We thank the gentleman. The gentleman's time 
has expired.
    All time for questioning of this panel has been completed, 
with the thanks of the subcommittee. We thank you, Mr. Hayes 
and Mr. Black.
    We will take a recess for as long as it takes for each 
Member to cast three votes on the House floor, and then we will 
reconvene to hear the testimony from the second panel.
    The subcommittee stands in recess.
    [Recess.]
    Mr. Markey. Ladies and gentlemen, we welcome everyone back. 
We apologize for the delay, but we have two very distinguished 
witnesses that I think will really help the committee to flesh 
out the record.
    And we will begin by recognizing John Martinez, who is 
consulting production engineer of Production Associates. Then 
we will go to Elgie Holstein, who is the senior director for 
strategic planning of the Environmental Defense Fund.
    Mr. Martinez, whenever you are ready, please begin.

 STATEMENTS OF JOHN MARTINEZ, CONSULTING PRODUCTION ENGINEER, 
  PRODUCTION ASSOCIATES; ELGIE HOLSTEIN, SENIOR DIRECTOR FOR 
         STRATEGIC PLANNING, ENVIRONMENTAL DEFENSE FUND

                   STATEMENT OF JOHN MARTINEZ

    Mr. Martinez. Thank you, Mr. Chairman.
    Well, I would like to claim we brought this great weather 
from Texas for you, but I would say we are just enjoying your 
great weather here.
    Likewise, I would like to take a moment to recognize my 
wife, Lupe, and my brother, David, who lives and works here in 
the D.C. Area, sitting in the back as visitors.
    Mr. Gonzalez. What high school did you guys go to?
    Mr. Martinez. I was in San Antonio and went to Harlandale 
High School on the south side.
    Mr. Gonzalez. Beautiful.
    Mr. Martinez. And Lupe, my wife, is also from San Antonio. 
She went to Tech High School, now called Fox Tech High School, 
in San Antonio. So, long-term residents in Houston, though.
    Mr. Markey. Well, thank you for bringing your expertise to 
this.
    Mr. Martinez. Yes, exactly.
    Mr. Chairman, members of the committee, I am John Martinez, 
independent consultant and advisor to the major international 
and national oil and gas companies. I am honored to be before 
your committee to testify in support of your proposed bill to 
protect health and safety and the environment by applying the 
oil and gas industry's best practices and technology to well 
control and drilling/completion of high-risk oil and gas wells.
    Just as the Piper Alpha platform accident in our sea led to 
numerous industry improvements in piping design and safety 
devices at platforms, this unfortunate Gulf of Mexico blowout 
can lead us to improve the blowout preventers and the drilling/
casing/cementing designs used in wells.
    I have been working for 42 years in oil and gas operations 
technology, 11 of those as an employee of a major international 
operator, the remaining 31 years as an independent consultant, 
serving as an advisor, project engineer, teacher, mentor of 
young engineers and operators for the large, integrated oil and 
gas companies and for the national companies in various 
countries.
    With the expertise gained over these years, I have 
dedicated efforts to writing standards and recommended 
practices within my industry's production technology with the 
American Petroleum Institute and the International Standards 
Organization.
    Drilling and completing a complex high-risk well requires a 
project plan for the wellbore design, well control safety 
systems, casing and associated cementing programs, and the 
contractor rig and personnel needed to implement the project. 
We use industry-developed best practices based on shared 
experiences, but the current blowout in the Gulf of Mexico also 
indicates the need for additional and mandatory checks of the 
plan at various times prior to and during the drilling of the 
well.
    I support a more thorough functioning and pressure test 
program of blowout preventers, the safety devices used in well 
controls that are enabled when the drilling mud is compromised 
and is not able to control the well. I also support redundant 
shear rams that can completely shut in a blowout preventer when 
loss of well control is imminent, and the control systems to 
independently activate these shear rams.
    I favor independent, third-party certification of blowout 
preventer function and pressure testing, as well as other 
certifications proposed in this bill. I expect that many 
experienced drilling and production people, recently retired 
and living in these oil field communities, not only are 
available but also would see this as their duty to serve, not 
as a full-time job, necessarily, as these periodic assignments 
to witness and certify tests or drilling plans would permit 
these individuals to continue to serve the oil industry while 
also contributing further to the benefit of the general public.
    I am a production specialist in wellbore construction, 
completions, fluid flow, and artificial lift. Based on my 
knowledge and experience with the blowout well, I suggest it 
will be difficult to control when the relief wells intersect 
its wellbore due to the very high rate of gas, oil, and water 
flowing from the reservoir zone.
    I offer this observation relative to designing a wellbore 
that is at lower risk of loss of control to a blowout. That is, 
because it is difficult, we want to make sure that the designs 
and the barriers we put in will lead us from having that 
problem in the first place.
    Section 4 of the proposed bill addresses well design, 
cementing, casing, and prevention of ignition explosion. The 
first section, or the first part of that section, well design 
requires three barriers, which could consist of: one, cement; 
two, casing; and three, the casing liner hanger or a casing 
hanger at the surface.
    The cement will qualify as a barrier if it completely fills 
the casing-borehole annulus and extends up into the casing-
casing annulus above. In addition to increasing safety, the 
cement will reduce external casing corrosion. When we use this 
approach, the wellhead valves at the surface must be designed 
to accommodate thermal expansion of liquids that might be 
trapped in the casing-casing annulus.
    Cementing and casing calls for regulations that require 
adequate cement volume and cement bond logs. My prior sentence 
defines ``adequate'' as requiring cement fill into the borehole 
annulus and into the casing-casing annulus above. Also, this 
section above, which is 4.a.1.D, should include a requirement 
for centralizer design that promotes fill of the casing-
borehole annulus. Cement bond logs or newer technology should 
be required in the production liner or production casing to 
ensure fill of the casing-borehole annulus.
    Prevention of ignition and explosion should mention a 
diverter just below the rig floor that should be connected to a 
flare or vent line designed to handle the capacity of gas that 
could flow from an uncontrolled well, thus minimizing the risk 
of explosion.
    In summary, the industry, of which I have long been a part, 
has largely been self-regulating on design and safety issues. 
By reaching consensus among operators and regulators, this 
approach, for the most part, has served us well.
    But the more recent deepwater, high-risk wells have a 
complexity and cost to rival that of NASA in relation to space 
travel. Like NASA, we as an industry must ensure safety and 
quality and not settle for or take shortcuts in an attempt to 
save some millions of dollars, which could cost lives and 
billions of dollars in damage instead.
    We need to have a quality design in the wellbore that will 
result in----
    Mr. Markey. If you could summarize, please, Mr. Martinez. I 
apologize.
    Mr. Martinez. Yes--improved safety, as well as lessen 
casing corrosion that is associated with remedial maintenance 
costs. We also need to follow proven safety procedures for well 
control that can prevent a blowout.
    Good design, maintenance of all the equipment, certified 
testing can greatly reduce our risk of an accident, as well as 
the total cost of wells and development projects.
    Thank you for the privilege to testify before you.
    [The prepared statement of Mr. Martinez follows:]
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    Mr. Markey. Thank you, Mr. Martinez, very much.
    Our second witness for this panel is Elgie Holstein, senior 
director of Federal strategy at the Environmental Defense Fund.
    Mr. Holstein has had a distinguished career in energy and 
natural resources, serving as chief of staff at the United 
States Department of Energy, Assistant Secretary for National 
Oceanic and Atmospheric Administration, and associate director 
for Natural Resources, Energy, and Science at the White House 
Office of Management and Budget.
    Mr. Holstein currently coordinates the Environmental 
Defense Fund's response to the gulf oil spill.
    We welcome you, sir. And we welcome you back, as a former 
staffer here, well-remembered and respected from a time so long 
ago that only I remember it.
    Mr. Holstein. Very long ago.
    Mr. Markey. What year did you start as a staffer on our 
committee?
    Mr. Holstein. Oh, my goodness, 1975.
    Mr. Markey. 1975. So welcome back.
    Mr. Holstein. Thank you very much.

                  STATEMENT OF ELGIE HOLSTEIN

    Mr. Holstein. Mr. Chairman, I will summarize my testimony. 
I appreciate the opportunity to appear before you and the other 
members of the subcommittee.
    It is sobering, however, to think that, while we are 
sitting at this subcommittee hearing today, as much as a half a 
million gallons of oil are spewing into the Gulf of Mexico.
    This disaster, the exact causes of which are still not 
fully understood, is emblematic of the fact that our 
government's system for regulating offshore drilling simply did 
not keep pace with the growing complexity of deepwater frontier 
drilling. As Chairman Waxman said at the beginning of the 
hearing, we have had a culture of complacency on the part of 
both government and industry.
    In the long term, of course, we do need to move the country 
and accelerate our movement in the direction of a clean-energy 
future, one that will create jobs we can't export and one that 
will reduce the likelihood of these kinds of disasters. 
Nonetheless, we understand that oil will continue to play--as 
will gas--will continue to play a part in our Nation's energy 
mix for some time to come.
    So the work of this subcommittee comes at a critical time. 
The oil and gas industry must rebuild public trust and 
confidence in their ability to produce the public's resources 
without causing catastrophic harm to the environment and to the 
economy. And the government, for its part, must demonstrate its 
willingness to be a tough cop on the beat and that it has the 
expertise necessary to protect the public interest.
    So the legislation begins an essential effort to govern the 
development of future high-risk wells. In my testimony, I 
present a number of principles, and I am not going to go 
through all of them, but just identify three or four of them 
very briefly, principles that I believe should represent the 
underpinnings of any legislation in this arena and that are, I 
am happy to say, largely reflected in the excellent legislation 
that is before the subcommittee today.
    The first principle would be that technology and regulation 
must evolve, because the industry is evolving. Just a few years 
ago, as Deputy Secretary Hayes was explaining, wells at this 
depth were largely unheard of, and they are rapidly becoming 
commonplace. We need a system for ensuring the safety of these 
wells and the workers who work on them that evolves with the 
industry.
    Second, safety systems must be redundant and integrated 
into all key systems and processes. Defense in depth is a 
critical way to ensure robust defense against future blowouts. 
And this is a principle enshrined in most major complex 
industrial environments.
    Third, safety must come before oil company budgets. And I 
would simply direct you to this morning's front page of The 
Wall Street Journal that describes in some detail this conflict 
between oil company budgets on the one hand and the need to 
ensure safety on drilling platforms on the other. And lastly, I 
would mention the principle that oil spill cap containment and 
response equipment must be available in sufficient quantity in 
order to deal with the consequences of the low probability but 
still high consequence events such as we are experiencing now. 
And this equipment must be prepositioned. I think it is an 
insult to the American people and dismaying to the extreme that 
we have to rely on other countries to help bring in some of the 
equipment necessary to contain this spill. I will conclude with 
just 2 or 3 additional recommendations in which I would like to 
place some emphasis, Mr. Chairman.
    One, an issue that was raised very, very briefly, but I 
think very importantly raised by Mr. Inslee this morning, and 
that is communication systems must be designed so that 
emergency equipment can be triggered remotely. And I would 
expand on that principle just a bit by suggesting that modern 
communications should make it possible for wells to be 
monitored as necessary by inspectors and regulators off the 
premise, off the site of the well.
    Secondly, I would recommend that technology deployment 
which is critical for blowout prevention and is a centerpiece 
of this legislation become part of the Department of Energy's 
assignment. The Department of Energy has a very robust fossil 
energy department. I think it would be a good thing to do to 
assign to them a cost shared industry and government program 
for developing jointly the R&D necessary to accomplish the 
objectives of the legislation.
    And finally, Mr. Chairman, with respect to the stop-work 
requirements of Section 5, I think it would be helpful to make 
clear that the government inspectors would be authorized to 
issue stop-work orders should they find a basis for concern 
that there is imminent danger and risks to the workers on board 
the drilling platforms or to the integrity of the well itself. 
And with that, Mr. Chairman, I will welcome any questions you 
may have.
    [The prepared statement of Mr. Holstein follows:]
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    Mr. Markey. Thank you, Mr. Holstein, very much. Mr. 
Martinez, a recent press article indicated that blowout 
preventers on Alaska's north slope have been used a staggering 
12 times in the first half of 2010 and 10 of those incidents 
were BP wells. It seems to me that blowout preventers are sort 
of like air bag, you want them to be there in the event of an 
accident, but you don't want to have to use them every day. 
Would you agree with that.
    Mr. Martinez. I agree. That is correct.
    Mr. Markey. But up on the north slope they seem to be used 
every 2 weeks. One thing we have learned in our investigation 
into the BP spill is that the blowout preventer is the last 
thing that went wrong in the Gulf of Mexico. The problems with 
the cement job, the drill mud circulation, the choice of casing 
BP used to line the well bore are likely reasons the blowout 
began in the first place. Would you agree that mandatory 
standards for all of these very important well design elements 
are necessary to ensure the safety of offshore drilling 
operations?
    Mr. Martinez. I think that is a step in the right 
direction, yes.
    Mr. Markey. Thank you. Mr. Martinez, blowout preventers and 
well design and cementing procedures are used for all offshore 
drilling, are they not?
    Mr. Martinez. They are.
    Mr. Markey. This applies to the drilling phase of both 
exploratory and production wells; is that correct?
    Mr. Martinez. That is correct.
    Mr. Markey. It applies to both shallow water and deep water 
drilling; is that correct?
    Mr. Martinez. Correct.
    Mr. Markey. Mr. Holstein, in our first panel, a number of 
members asked whether the Interior Department's existing 
authority it adequate. What is your response to that?
    Mr. Holstein. Mr. Chairman, I think that for several 
reasons it is important for Congress to legislate and not defer 
to the Department of Interior to simply go about a process of 
trying to update its regulations. And I say this first because 
the scope, the scale of the current disaster in the Gulf I 
think really cries out for additional congressional statements 
of purpose and direction to Federal agencies.
    The current focus on this disaster and on high-risk 
drilling won't continue indefinitely and the culture of 
complacency could easily return absent the kind of framework 
that the legislation you have before us would put in place. In 
particular, the third party assessments for example, the 
inspectors and importantly, the advisory committee approach 
that would bring to the government the very best expertise 
available worldwide in this industry. But I would also add that 
another important reason for the legislation would be the 
opportunity for continuous improvement. And Federal agencies 
are particularly not good at that just as a regulation writing 
bureaucratic approach. I think one of the important elements of 
this bill, easy to overlook, but very clear, nonetheless, is 
the fact that it does lay the groundwork for a continuous 
improvement in the technology and the quality and also the 
quality of the government's oversight. Those are important 
things and they should be in the legislation.
    Mr. Markey. Thank you, Mr. Holstein. My time has expired. 
The chair recognizes the ranking member, the gentleman from 
Michigan.
    Mr. Upton. Thank you, Mr. Chairman. Mr. Martinez, how would 
you define a high-risk well?
    Mr. Martinez. Well, that is a very difficult decision to 
make because we can have high-risk wells on land because of 
pressure and temperature constraints or possibilities. We could 
have in shallow water, as we are going to more and more subsea 
development to reduce platform costs. So that is a difficult 
one to define because it has more to do with pressures, 
potential flow rates, temperatures and location, not just 
arbitrarily some generic class.
    Mr. Upton. Is it easier to define a low-risk well?
    Mr. Martinez. No, no easier.
    Mr. Upton. That is one of the concerns that we have. Let me 
just read you a couple of things that the staff prepared as 
relates to Section 3. Section 3 proposes that regulations later 
be proposed will require the use of blowout preventers in all 
high risk well drilling operations, will set forth safety 
standards for such blowout preventers. The prescriptive 
requirement for two sets of blind shear rams will require the 
loss of test rams on subsea stacks and will result in the 
potential loss of managed pressure drilling system capability 
on tension leg surface stacks. The requirements proposed in 
this section for independent redundant hydraulic inactivation 
systems for each blind shear ram and casing shear ram would 
seem achievable, but it would require a second bank of 
accumulator bottles being deployed on the sea floor and a 
foundation pile.
    Time to design, manufacture and determine a deployment 
method could take a year or 2 if possible on some of the rigs. 
Would you agree with that time frame?
    Mr. Martinez. You would really have to talk to the 
manufacturer, such at Cameron, the manufacturer of this 
particular BOP and others who are going to be much more 
familiar with the various details of design. It is possible to 
have all these pieces of equipment, but we, as users of the 
equipment, we always take into consultation the manufacturers 
whenever we are developing some new piece of equipment because 
we are going to manufacture it for us. So it is really both 
from the users perspective and what we are trying to accomplish 
in terms of safety. But likewise, including the manufacturers 
in the process of developing acceptable equipment, but that is 
safe is our objective here.
    Mr. Upton. Mr. Holstein, would you agree with that?
    Mr. Holstein. I would, Mr. Upton, although I will defer a 
great deal to Mr. Martinez's expertise here as a person with 
actual oil field operating experience.
    Mr. Upton. So in other words, as we think about this, it 
wouldn't necessarily be practical for all the offshore rigs 
that are out there and then you have got to make--you have to 
differentiate between what might be a high risk and low risk as 
to whether these regs would apply to that; is that right?
    Mr. Martinez. I think you are going to have to come up with 
that definition of what is high risk and where it will apply. 
And the reason is that you want to the define it so that the 
manufacturers and the oil companies and the contractors such as 
Transocean all have the same bases for starting. And then 
jointly as we always work our problems, we can, in turn, with 
the manufacturers develop equipment that is indeed going to 
serve the purpose. We are always trying to make our equipment 
serve the purpose, match the fit, the risk, et cetera. And we 
don't want to put into place equipment that is vastly 
overpriced and over capacity for the given wells. So we do need 
to define those things and then proceed forward.
    Mr. Holstein. I think, Mr. Upton, in response to your 
question, I would simply summarize my agreement with Mr. 
Martinez by saying that while deep water and the pressures that 
it typically entails and the operational challenges it imposes 
are certainly likely candidates for consideration as being high 
risk, but they are not the only circumstances in which one 
could imagine the geographic location or the particular well 
conditions of the kind of that Mr. Martinez has described that 
might well call for an extraordinary level of caution and care 
in the drilling of any wells.
    Mr. Upton. Thank you.
    Mr. Markey. The gentleman's time has expired. The chair 
recognizes the chairman of the full committee, the gentleman 
from California, Mr. Waxman.
    Mr. Waxman. Thank you, Mr. Chairman. I want to thank both 
of our witnesses for being here today. My understanding, Mr. 
Martinez, if I can start with you, is that you have over 40 
years of experience in the industry that at various times in 
the last several weeks, my staff has sought your expert views 
and you bring a real insider's perspective to the problems we 
are trying to solve. Let me ask you a very general question to 
start with. The regulatory structure that has grown up around 
well drilling in the last several decades has relied heavily on 
voluntary industry standards and best practices. Do you believe 
that we need to establish a regulatory system that goes beyond 
this voluntary industry approach?
    Mr. Martinez. I think that we need to by regulation, be it 
mandatory or by legislation, be it mandatory, that we require 
certain testing to go on and certain design that we approve of 
as experts in the field. And likewise, by being mandatory, then 
the operating companies as well as the manufacturers and the 
contractors all have an incentive to develop these equipment to 
meet the performances we are requiring. When it is voluntary in 
many cases, you will have some who will not adhere to the 
volunteer regulations or self-regulating best practices. When 
it is mandatory, obviously you have to.
    Mr. Waxman. Let me ask you some specific questions. We 
identified numerous shortcomings with the blowout preventer. To 
fix these problems we have a series of new requirement, for 
example we focus on redundancy in shear rams and in the 
activation systems for these rams. We also addressed the 
design, testing and maintenance of blowout preventers. Do you 
think these new requirements are appropriate and will they--
will they reduce the risk of blowouts? One, I think they will, 
if indeed we adhere to the redundancy both in the equipment, as 
well as in the activation systems. It is critically important 
here, as well as working with the manufacturers to ensure that 
we can develop any new equipment as well as the activation 
systems necessary.
    So it is really a combination of us from the operator's 
side along with the contractor personnel like Transocean or 
others working with the manufacturers to ensure we can do those 
things.
    Mr. Waxman. We also have well designs, a minimum of three 
barriers to prevent the flow of dangerous gases. We have new 
requirements for safe cementing and we require regulators to 
establish new standards for diversion of dangerous gases and 
explosion prevention. Can you tell us if you think these new 
provisions will reduce the risk of blowouts and are there 
provisions where you think we need to be more specific or more 
stringent?
    Mr. Martinez. I have advocated in my testimony perhaps a 
bit more stringent standard, which is sufficient volume of 
cement in the bore hole casing annulus to totally fill that 
space and thus not prevent any possibility of leakage of any 
kind of hydrocarbon or saltwater or anything else back on the 
backside. For both safety purposes as well as for me, a person 
that works in the production industry, casing corrosion issues 
which are likewise as important.
    So I do advocate a more stringent standard. And actually, I 
am advocating in testimony that we adhere to this more 
stringent regulation whether internal or by legislation are 
passed.
    Mr. Waxman. Finally, we establish a new independent expert 
advisory committee to provide the best and most up to date 
advice the Federal regulators in order to prevent blowouts and 
to ensure safe drilling. People with your level of expertise 
are likely to serve on this advisory committee. Can you tell us 
about the role you think that this independent panel can play?
    Mr. Martinez. Well, we all have good experience. We need to 
have a number of personnel involved because we all have 
different experiences in different parts of the world. And so 
the combination of folks like myself, regulators, manufacturer, 
if they can come to some consensus relative to what are good 
practices that can be incorporated into regulation and 
legislation.
    Mr. Waxman. Thank you very much for your help. I appreciate 
it.
    Mr. Markey. I thank the chairman. The chair recognizes the 
gentleman from Texas, Mr. Burgess.
    Mr. Burgess. Thank you, Mr. Chairman. Mr. Martinez. Two 
weeks ago we had before this subcommittee CEOs from, I think it 
was five major oil companies and BP. BP was the only one that 
did the well, the way the Deep Water Explosion was done. Every 
other CEO who was there on the panel said we wouldn't have 
drilled the well that way, we wouldn't have used those 
procedures. So what was it about the oversight in your opinion, 
what was it about the oversight of the drilling of that well 
that allowed BP to proceed in a manner that the other five 
gentlemen felt was unsafe?
    Mr. Martinez. Well, from what I have read of documents 
provided to me and newspaper reports, I would say part of the 
failing is that there wasn't this independent third party 
advisory person or panel to review some of these----
    Mr. Burgess. Correct. But there was a regulatory agency 
that was presumably excerpting oversight over these activity; 
is that right?
    Mr. Martinez. I believe that is correct, but----
    Mr. Burgess. Was there anything preventing them from asking 
for the same best practices that the other five companies 
adhere to?
    Mr. Martinez. That is the reason I am advocating that we 
have some of these improved standards and make them mandatory 
because it is totally up to the operating company whether they 
are going to follow best practices or not.
    Mr. Burgess. What was it about MMS or the agency previously 
known as MMS--I don't know what it is known as now--but what 
was it about that agency that allowed them to approve a well of 
a design where every other--maybe it was just--they were--the 
benefit of 20/20 hindsight to say, no, we wouldn't have done it 
that way. But I have got to believe--I mean, we heard from one 
of the CEOs--I asked the gentlemen who were arrayed in front of 
us had anyone ever worked on a deep-water well. Well, it turns 
out deep-water wells weren't drilled when they were of the age 
where they could have worked. But one had worked on offshore 
rigs. It wasn't deep water, but he had worked on an offshore 
rig.
    I asked the CEOs in front of us if any of them had ever 
shut in a well, because of it--feeling that they were not going 
to be able to control it. That same individual raised his hand. 
And later on in response to another question he said look, you 
go too fast on these things, you are going to get someone 
killed. I think that was the voice of experience speaking. What 
I am saying is that it is not always wrong to rely upon the 
expertise of the industry.
    I just wish somebody had been comparing the practices 
between the various companies and saying look, this long string 
design with very few centralizers and not paying attention to 
the cement bonding this is a problem. And of course, the 
blowout preventer that ultimately failed aisle still not 
certain if the blowout preventer failure didn't prevent a 
bigger problem. You heard me ask the other question to the 
Secretary about the thief channels and cracked casings and 
things that were talked about when the top kill was stopped. 
Had the blowout preventer worked, at least in my mind, it is 
possible if those conditions existed deeper down in the well 
bore, there might have been a very serious problem had the 
blowout preventer actually worked.
    Mr. Martinez. Correct. Well, Congressman, what I would say 
is that in large measure, that is the difference between 
regulations that exist right now that allowed BP to design the 
well, the way they did and with the practices that they did.
    Mr. Burgess. How are we going to ensure that our regulatory 
agency actually functions. Of course we won't call them in here 
and take testimony from them so that makes it very, very 
difficult. This could go on forever. Mr. Holstein, I wanted to 
get a couple of questions into you if I could. And you are here 
as a representative of the environmental defense fund; is that 
correct?
    Mr. Holstein. Yes, sir.
    Mr. Burgess. Under what conditions does the Environmental 
Defense Fund support offshore exploration and drilling?
    Mr. Holstein. As I mentioned in my testimony, we understand 
that offshore drilling and oil and gas production in general 
are going to be part of America's energy mix for sometime to 
come. And subject to the appropriate safety and environmental 
protections of the kind discussed here in the subcommittee 
today, we continue to support domestic production, though we 
certainly empathize with the need to develop renewable and 
alternative energy technologies so that we can move to a 
cleaner energy future and more efficient one.
    Mr. Burgess. You heard the Assistant Secretary's testimony 
that in the previous administration, he felt he had all the 
tools that he needed and presumably earlier this year before 
this accident happened he felt he had all the tools that he 
needed. Would Environmental Defense Fund's position have been 
the same prior to the accident, not knowing what we know now?
    Mr. Holstein. Well, I think it is safe to say we know quite 
a bit more now about not only the failings of the agency----
    Mr. Burgess. That is the point. Let me just ask you this 
before I run out of time. You have talked about shipping jobs 
overseas. Solar panels and wind mills can be shipped overseas 
as we have seen with some of the money we put forward in the 
stimulus that went to China through the Department of Energy. 
But the oil is our oil. The natural gas is our gas. Those are 
jobs that really cannot be shipped overseas; is that correct?
    Mr. Holstein. I don't think this is a contest between 
different types of energy sources and America. I think----
    Mr. Burgess. You referenced clean energy.
    Mr. Holstein. I think we recognize that oil and gas, as a 
representative of an environmental group, I am here being as 
constructive as possible in saying that if we are to have oil 
and gas as part of our energy mix, we need to do it 
responsibly. And the problem that we have today, not before the 
spill, but today the problem that we face is that this industry 
and this government must reestablish public trust and 
confidence in the ability of the industry to carry out these 
activities safely and in the ability of the government to be a 
tough cop on the beat.
    Mr. Burgess. On that we agree. The problem is that the cop 
on the beat for the last 18 months really has been asleep at 
the switch. I yield back, Mr. Chairman.
    Mr. Markey. I thank the gentleman. The chair recognizes by 
unanimous consent the chairman of the Oversight and 
Investigation Subcommittee who is leading the investigation 
into the blowout disaster, the gentleman from Michigan, Mr. 
Stupak.
    Mr. Stupak. Thank you, Mr. Chairman. Thank you for allowing 
me to sit, as you always sit on the Oversight investigations. 
Together we are trying to get to the bottom of this. One of the 
things that Mr. Burgess just said about the last 18 months, the 
cop on the beat was sort of asleep at the switch here. But, Mr. 
Martinez, I guess I will take issue with what Mr. Burgess said 
because the design that BP put out on this well, there was no 
authority for MMS to say, no, you can't do that. The design is 
still up to them and how they did it. There was nothing that 
said you can't do it, right?
    Mr. Martinez. That is correct.
    Mr. Stupak. So they weren't asleep at the switch. If I am 
the driller and I want to try a new design, unless I can prove 
there would be horrendous circumstances, I can go ahead and do 
it as a driller; isn't that correct?
    Mr. Martinez. That is correct.
    Mr. Stupak. Let me ask you this: We focus a lot on deep-
water drilling and rightfully so because of what has happened 
in the Gulf and tragically people died. Is there something we 
are missing in this legislation? We are talking about high-risk 
wells. Is there something else we should be doing in this 
legislation? How about the shallow wells? There is hundreds of 
them in the Gulf. How about on-land drilling? Is there 
something else we should be doing in this? Our focus has been 
deep water in all of this. Are we missing something here?
    Mr. Martinez. You need to make sure that you incorporate 
pressures that we could potentially be drilling into, 
temperatures, the location. Because what may be shallow water 
for a platform well could be still a risky situation when it is 
a subsea well. And we are going that direction in technology 
because is cheaper for us; and as a result, this so-called high 
risk is not just a matter of being deep water high risk. It 
could be a number of situations that are high risk. So that has 
to be evaluated. And that is why it is a little tough to give 
just an easy answer of what is high risk.
    Mr. Stupak. Let me ask you this: You had 40 years of 
experience and we have called upon you, our committee, to help 
us out every now and then to get your advice. One of the 
questions that members constantly ask is we have developed 
technology to go deeper and deeper and go into these high-risk 
areas. Where has the technology been to be developed in case 
there is a spill? It seems to us it has been lax. Shouldn't we 
have an independent advisory panel? Is that part of their 
responsibility? Should we have a separate panel just to do 
that, to look at that?
    Mr. Martinez. I think that when you have some of these 
advisory panels with a little bit of teeth in whatever you 
judge them or give them the ability to do that can advise both 
on offshore containment, as well as the drilling, as well as 
completion, we do need to use our expertise. We have lots. 
Obviously we were not prepared in this particular case. But we 
still need these advisory panels to help us go in the right 
direction and not just reinvent wheels.
    Mr. Stupak. What about technology on a spill? We haven't 
really developed that. It seems like we are doing the same 
stuff. Boom, burning it off, the same things we did back in the 
1920s and 1930s.
    Mr. Martinez. I am not an expert on that, but I would agree 
that it appears that we are doing the same thing.
    Mr. Holstein. Mr. Stupak, we need absolutely to improve the 
quality and the functionality of the containment and cleanup 
systems that we have. Once this oil reaches the marshes, for 
example, there is really very little that you can do after that 
point. The damage is horrible and it is done. But I think there 
is no more stark demonstration of the challenges we face that 
is implicit in your question than the report that was issued by 
State Department yesterday that indicated that 30 foreign 
countries have offered their assistance to the United States.
    We have accepted some of that assistance. For example, boom 
equipment and skimmers have come from Mexico, Norway, Brazil, 
Canada and Japan. That tells me anyway that we are not ready to 
respond even with the substandard equipment that we have now 
that does a fairly poor job of capturing the oil if the seas 
are rough or the winds are high. We need to get working on 
that, and one of my recommendations in my testimony is that 
this would be an appropriate area for the Department of Energy 
to work in a cost shared research and development with industry 
to vastly improve and maybe the Department of Transportation 
and interior, whomever. But this could be a government and 
industry joint research effort.
    Mr. Stupak. Let me ask you both this question if I may. It 
appears that BP, whoever, no matter what their track record is 
on drilling, whether they have safety violations or 
environmental problems, BP, and from where I sit as chairman of 
Oversight for the last 5 years, we have been constantly doing 
investigations. But if I am BP and I want to lease land in the 
outer continental shelf to drill on, so long as I pay my lease, 
there is nothing the government can do that can prevent me from 
doing that, right?
    Mr. Martinez. Providing that they are adhering to 
regulations at MMS or the successor has in operation.
    Mr. Stupak. The Secretary or MMS, no one has the right to 
say you are a bad actor, and we are not going to allow you to 
drill in our country until you clean up your act, is there?
    Mr. Martinez. Not to my knowledge.
    Mr. Stupak. Do you know of anything, Mr. Holstein?
    Mr. Holstein. If they have a bad track record, no. And for 
that reason, I have suggested in my testimony, in addition to 
the legislation, that the inspector's program, the on sight 
inspection program, be modified a bit to ensure that the 
problematic companies receive more attention. This would be 
more efficient, it would be fairer and it would also--it would 
be less costly. And it would be an important incentive for the 
oil industry and operators to do the right thing even when as 
the Wall Street Journal outlines today companies find 
themselves under cost and budget versus calendar or time line 
pressures.
    Mr. Stupak. My opinion is, if they are a bad actor of the 
last 5 years, why are they even drilling? Why are we even 
allowing them to drill in our country, so you don't have to 
worry about inspectors trying to get a stop order?
    Mr. Holstein. It is a reasonable point.
    Mr. Stupak. Thank you, Madam Chair.
    Mrs. Capps [presiding]. Thank you. The gentleman yields 
back. We are expecting votes shortly, and I am the last person 
to ask questions. So maybe just brief answer. I have a question 
to ask each of you that doesn't have to be long. Mr. Martinez, 
because you have already been on the witness stand for a while, 
Mr. Martinez, your testimony highlights the difficulty of 
successfully using a relief well to kill a well under blowout 
conditions a topic of expertise for yourself. You point to this 
as a reason we need to redouble our efforts to ensure that 
blowouts are prevented in the first place. Of course, we are 
all eagerly looking towards the success of the relief wells in 
finally stopping this disastrous spill in the Gulf. But many 
are kind of holding their breath about the difficulties we may 
encounter in killing the well. Can you just talk about that for 
a couple of minutes?
    Mr. Martinez. Well, Congresswoman, I am a specialist in the 
fluid flow and reservoir delivery that occurs from wells. And 
the more capable they are, the higher the flow rates, 
particularly of gas. It is more difficult to circulate that mud 
into position to replace these lighter hydrocarbon densities 
with a heavy hydrocarbon heavy density mud and kill the well. 
That is the process that we are going to undergo. It means that 
we have to have high capability of pumping and thus replace 
that column of flow density material with high density 
material. So it is difficult. It is one in which that is our 
standard approach when we can't shut in the BOPs and we can't 
control the flow at the surface. But it is not--I don't want to 
mislead you and make you think it is just an easy thing to do.
    Mrs. Capps. Thank you. Thank you very much. Mr. Holstein, 
let me lead up to the question for you. I believe the 
appropriate Federal regulators should be required to assess the 
response and spill capability for various spill scenarios in 
the environmental review process. Unfortunately, most cleanup 
efforts as we are painfully discovering, are only 10 to 15 
percent effective. Requiring an analysis is critical to ensure 
that the public and decision makers are not misled into 
believing that spills can be effectively cleaned up.
    The British Petroleum Act says a company needs an oil spill 
response plan. Do you agree that these impacts must be 
addressed up front and not after a spill occurs? In other 
words, are we correct in requiring this ahead of time so that 
not only those methods that will avoid exacerbating spill 
impacts are allowed?
    Mr. Holstein. We would emphatically agree with that. And we 
believe that the capability to accomplish those objectives is 
readily available in the form of better modeling and better 
expertise of the kind that this legislation contemplates. I 
would point out that we have in our organization's possession 
copies of internal memorandum that make clear just--and the 
subcommittee, particularly in oversight investigations, has 
developed additional evidence that shows the gross inadequacy 
of the probability--risk probability determinations and the 
response capabilities or necessities, requirements that would 
be required if the unthinkable were to happen. And that set in 
motion, then, a train of errors then by other parts of the 
Federal Government.
    For example, the Fish and Wildlife Service simply accepting 
the risk calculations and the projections of impacts that were 
being developed by MMS. That is not the way it should work. 
Doing the work up front, as you suggest, and requiring that, as 
Mr. Dingell I think was getting at in his questioning, would be 
a valuable addition, I think, to the process. And give both the 
lessee and the government the confidence that a set--that there 
is an agreed upon set of assumptions going forward.
    Mrs. Capps. Thank you very much. And I believe that the 
questions have been asked and they have been answered well. So 
the hearing now comes to a conclusion. Thank you very much both 
of you.
    [Whereupon, at 2:28 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
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