[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
THE ROLE OF THE INTERIOR DEPARTMENT IN THE DEEPWATER HORIZON DISASTER
=======================================================================
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
AND THE
SUBCOMMITTEE ON ENERGY AND ENVIRONMENT
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
JULY 20, 2010
__________
Serial No. 111-145
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
JAN SCHAKOWSKY, Illinois SUE WILKINS MYRICK, North Carolina
HILDA L. SOLIS, California JOHN SULLIVAN, Oklahoma
CHARLES A. GONZALEZ, Texas TIM MURPHY, Pennsylvania
JAY INSLEE, Washington MICHAEL C. BURGESS, Texas
TAMMY BALDWIN, Wisconsin MARSHA BLACKBURN, Tennessee
MIKE ROSS, Arkansas PHIL GINGREY, Georgia
ANTHONY D. WEINER, New York STEVE SCALISE, Louisiana
JIM MATHESON, Utah PARKER GRIFFITH, Alabama
G.K. BUTTERFIELD, North Carolina ROBERT E. LATTA, Ohio
CHARLIE MELANCON, Louisiana
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 Oversight and Investigations
BART STUPAK, Michigan, Chairman
BRUCE L. BRALEY, Iowa GREG WALDEN, Oregon
Vice Chairman Ranking Member
EDWARD J. MARKEY, Massachusetts ED WHITFIELD, Kentucky
DIANA DeGETTE, Colorado MIKE FERGUSON, New Jersey
MIKE DOYLE, Pennsylvania TIM MURPHY, Pennsylvania
JANICE D. SCHAKOWSKY, Illinois MICHAEL C. BURGESS, Texas
MIKE ROSS, Arkansas
DONNA M. CHRISTENSEN, Virgin
Islands
PETER WELCH, Vermont
GENE GREEN, Texas
BETTY SUTTON, Ohio
JOHN D. DINGELL, Michigan (ex
officio)
------
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
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Page
Hon. Bart Stupak, a Representative in Congress from the State of
Michigan, opening statement.................................... 1
Prepared statement........................................... 4
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, opening statement.............................. 6
Prepared statement........................................... 9
Hon. Edward J. Markey, a Representative in Congress from the
Commonwealth of Massachusetts, opening statement............... 15
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, opening statement.................................... 16
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 17
Prepared statement........................................... 19
Hon. Joe Barton, a Representative in Congress from the State of
Texas, prepared statement...................................... 21
Prepared statement........................................... 23
Hon. John D. Dingell, a Representative in Congress from the State
of Michigan, opening statement................................. 29
Hon. Ed Whitfield, a Representative in Congress from the
Commonwealth of Kentucky, opening statement.................... 30
Hon. Diana DeGette, a Representative in Congress from the State
of Colorado, opening statement................................. 31
Hon. John Shimkus, a Representative in Congress from the State of
Illinois, opening statement.................................... 31
Hon. Jerry McNerney, a Representative in Congress from the State
of California, opening statement............................... 32
Hon. Parker Griffith, a Representative in Congress from the State
of Alabama, opening statement.................................. 32
Hon. Gene Green, a Representative in Congress from the State of
Texas, opening statement....................................... 33
Hon. Robert E. Latta, a Representative in Congress from the State
of Ohio, opening statement..................................... 34
Prepared statement........................................... 36
Hon. Michael F. Doyle, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 38
Hon. Phil Gingrey, a Representative in Congress from the State of
Georgia, opening statement..................................... 39
Hon. Lois Capps, a Representative in Congress from the State of
California, opening statement.................................. 39
Hon. Joseph R. Pitts, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 40
Hon. Charlie Melancon, a Representative in Congress from the
State of Louisiana, opening statement.......................... 41
Hon. John Sullivan, a Representative in Congress from the State
of Oklahoma, opening statement................................. 42
Hon. Jane Harman, a Representative in Congress from the State of
California, opening statement.................................. 43
Hon. Ralph M. Hall, a Representative in Congress from the State
of Texas, opening statement.................................... 43
Hon. G.K. Butterfield, a Representative in Congress from the
State of North Carolina, opening statement..................... 44
Hon. John B. Shadegg, a Representative in Congress from the State
of Arizona, opening statement.................................. 45
Hon. Doris O. Matsui, a Representative in Congress from the State
of California, opening statement............................... 46
Hon. Marsha Blackburn, a Representative in Congress from the
State of Tennessee, opening statement.......................... 46
Hon. Janice D. Schakowsky, a Representative in Congress from the
State of Illinois, opening statement........................... 47
Hon. Steve Scalise, a Representative in Congress from the State
of Louisiana, opening statement................................ 48
Hon. Betty Sutton, a Representative in Congress from the State of
Ohio, opening statement........................................ 49
Witnesses
Gale Norton, Secretary of the Interior, 2001-2006................ 50
Prepared statement........................................... 53
Dick Kempthorne, Secretary of the Interior, 2006-2009............ 60
Prepared statement........................................... 63
Ken Salazar, Secretary of the Interior........................... 125
Prepared statement........................................... 129
Submitted Material
Letter of September 9, 2008, from the United States Department of
the Interior to Secretary Kempthorne........................... 178
Article entitled, ``Ban on deep-water drilling adds insult to
injury,'' by Bobby Jindal, Washington Post, July 17, 2010...... 182
Hearing memorandum, July 16, 2010................................ 184
Report by Congressional Research Service, June 1, 2010........... 188
THE ROLE OF THE INTERIOR DEPARTMENT IN THE DEEPWATER HORIZON DISASTER
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TUESDAY, JULY 20, 2010
House of Representatives,
Subcommittee on Oversight and Investigation,
joint with the
Subcommittee on Energy and Environment,
Committee on Energy and Commerce,
Washington, DC.
The Subcommittees met, pursuant to call, at 10:00 a.m., in
Room 2123 of the Rayburn House Office Building, Hon. Bart
Stupak [Chairman of the Subcommittee on Oversight and
Investigations] presiding.
Members present: Representatives Stupak, Markey, Green,
DeGette, Capps, Doyle, Harman, Schakowsky, Gonzalez, Inslee,
Butterfield, Melancon, Matsui, Christensen, McNerney, Sutton,
Braley, Dingell, Waxman (ex officio), Burgess, Upton, Hall,
Stearns, Whitfield, Shimkus, Shadegg, Pitts, Sullivan,
Blackburn, Gingrey, Scalise, Griffith, Latta, and Barton (ex
officio).
Staff present: Phil Barnett, Staff Director; Bruce Wolpe,
Senior Advisor; Michal Freedhoff, Counsel; Caitlin Haberman,
Special Assistant; Dave Leviss, Chief Oversight Counsel;
Meredith Fuchs, Chief Investigative Counsel; Alison Cassady,
Professional Staff Member; Molly Gaston, Counsel; Scott
Schloegel, Investigator; Ali Neubauer, Special Assistant; Karen
Lightfoot, Communications Director, Senior Policy Advisor;
Elizabeth Letter, Special Assistant; Mary Neumayr, Minority
Counsel; Alan Slobodin, Minority Counsel; Peter Spencer,
Minority Professional Staff; Kevin Kohl Minority Professional
Staff; Garrett Golding, Minority Legislative Assistant; and
Jeanne Neal, Minority Research Analyst.
OPENING STATEMENT OF HON. BART STUPAK, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Stupak. This meeting will come to order. Today we have
a joint hearing titled ``The Role of the Interior Department in
the Deepwater Horizon Disaster''. This is a joint hearing
before the Oversight and Investigation Subcommittee and the
Energy and Environment Subcommittee. I will chair the first
panel, and Chairman Markey will chair the second panel. We will
now hear from members for their opening statements. The
Chairman and the ranking members will be recognized for five
minute openings. All other members will be recognized for two
minute openings. I will begin.
Last week, for the first time in 87 days, we heard some
encouraging news. Finally the flow of oil that has ravaged much
of the Gulf of Mexico is temporarily under control. Despite our
relief that the flow of oil has abated, the consequences of
this spill continue to mount. 11 men lost their lives on the
day the Deepwater Horizon drilling rig exploded. The four
states that border the Gulf of Mexico have suffered terrible
economic and environmental devastation. That is why we are
continuing our investigation. This is the fourth hearing the
Oversight and Investigation Subcommittee has held, and the
eighth hearing overall in the Energy and Commerce Committee.
Our first hearing exposed serious deficiencies involving
the blowout preventer. This supposed failsafe had a dead
battery, a leaking hydraulic system, an emergency switch which
failed to activate, and dangerous modifications. Our second
hearing was a field hearing in New Orleans, where we heard from
the widows of two men who died on the Deepwater Horizon
explosion, as well as shrimpers and other small business owners
who have suffered from the environmental catastrophe that
followed. Our third hearing identified five key well design
decisions relating to casing and cementing that increased the
risk of a blowout. BP made a series of poor judgments before
the blowout. The company took one shortcut after another in
order to save time and money, and when the blowout occurred, BP
was horrifically unprepared to deal with the consequences.
Today the Oversight and Investigation Subcommittee and the
Energy and Environment Subcommittee are jointly holding this
hearing to examine the conduct of the regulators who overseen--
who have overseen oil and gas development in the Gulf of
Mexico. There has been a pervasive failure by the regulators to
take the actions necessary to protect safety and the
environment. These failures to regulate happen at the time as
Federal officials offered oil and gas companies new incentives
to drill deeper and riskier waters in the Gulf of Mexico. The
number of producing deep water wells increased from 65 in 1985
to more than 600 in 2009, but the number of Federal inspectors
working for the Minerals Management Service, MMS, has not kept
pace with the number and complexity of the wells and the
distance inspectors must travel. MMS had 55 inspectors in 1985,
and just 58 some 20 years later. Currently MMS has
approximately 60 inspectors in the Gulf of Mexico to inspect
almost 4,000 facilities. Inspection has not been a priority.
The Department of Interior also backed off when the oil and
gas industry objected to proposals to strengthen government
regulations. Reports prepared for MMS in 2001, 2002 and 2003
recommended two blind-shear rams on blowout preventers and
questioned the reliability of their backup systems. Yet
regulations finalized in 2003 during Secretary Gale Norton's
tenure did not require a second blind-shear ram, backup systems
on BOPs, or even testing of backup systems.
The same rulemaking identified poor cementing practices as
one of the main primary causes of sustained casing pressure on
producing wells. But an oil and gas industry coalition opposed
mandatory requirements, and the Department opted against any
prescriptive cementing requirements. Some helpful changes were
made by Secretary Salazar and the Obama Administration. The
abuse-prone royalty-in-kind program was phased out. New ethical
standards were adopted, and stronger regulations were proposed.
But these changes were more cosmetic than substantive. For the
Deepwater Horizon and the BP well, it remained business as
usual.
I want to thank former Secretaries Norton and Kempthorne
for appearing today. I hope they will address what went wrong
under their tenure and what lessons can be learned. And I want
to thank Secretary Salazar for appearing before the Committee.
He has proposed and begun implementing many significant changes
to the Minerals Management Service, now called the Bureau of
Ocean Energy Management Regulation and Enforcement. I would
like to hear more about what he has planned and how he will
ensure that these changes make a real difference.
I also want to extend my appreciation to Chairman Markey.
Our Subcommittees have worked collaboratively throughout this
investigation, and I thank him and Chairman Waxman for their
leadership in this area, and with respect to the Blowout
Prevention Act that we have reported out of committee last
week.
That concludes my opening statement.
[The prepared statement of Mr. Stupak follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
I next to turn Mr. Burgess, ranking member of the Oversight
and Investigation Subcommittee for his opening statement.
OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF TEXAS
Mr. Burgess. Thank you, Mr. Chairman, and this is a day we
have long awaited for. We finally get an opportunity to talk to
Secretary Salazar about some of the issues that led up to the
events surrounding the loss of the Deepwater Horizon.
You know, early on in the tenure of this, in the month of
May, we had the executives from BP, Transocean and Halliburton
here at the table in front of us, and, just like you, I was
dismayed by all the finger pointing I saw. In fact, it even
rose to the level of the national consciousness, where Jay Leno
referred to it in his opening monologue, and said, wasn't that
a disgrace, all those executives pointing the finger at each
other? And he said, President Obama has had enough of it. He
said, no more finger pointing, and then he promptly went out
and blamed Bush for the whole problem. Well, that is where we
are this morning.
Well, this hearing does come at a critical time. I am
grateful that we are able to refer to the oil discharging in
the Gulf in the past tense. We hope that that stays in the past
tense. We have had encouraging news that it seems under
control. There are serious environmental and economic impacts
to confront in the Gulf. BP caused the spill. Some of the
damage relates directly, though, to the administration's
decision-making in the aftermath of the Deepwater Horizon
explosion.
Most significantly, as we convene this hearing and people
continue to struggle mightily to clean up after the BP spill,
the Department of Interior has made decision upon decision in
recent weeks that we are told may kill upwards of 20,000 jobs
in the Gulf Coast energy industry. Some of this new wave of
economic destruction is already occurring. This is where we are
hitting people when they are down and when they need it the
least. The governor of Louisiana this past Saturday wrote a
powerful op-ed in the ``Washington Post'', and Mr. Chairman, I
would like to submit that for the record. In this editorial the
governor describes what he sees as a determined effort by the
Secretary of the Interior, the current Secretary of the
Interior, to impose a second economic disaster on the people of
Louisiana. This second economic disaster is one of the most
pressing issues before us, but there are other questions
concerning the Department of Interior's decision-making that we
must explore today. And the person most able to answer these
questions and provide us the necessary documents is the current
Secretary of the Interior, Ken Salazar, so I appreciate very
much finally having an opportunity to ask Secretary Salazar
about the Department's role in handling of the Deepwater
Horizon incident.
I understand the majority wishes to use the rearview mirror
as the examining lens to talk about this disaster. Chairman
Markey has explained to me before the recess, this is so we
might understand the totality of the Department's contribution
to the Deepwater Horizon disaster. For this reason we will hear
this morning from two former Secretaries of the agency. Both,
as it happens, are from the Bush Administration, and, in fact,
we are only going to question former Secretaries from the Bush
Administration. We are not going back to question Secretaries
from the Clinton Administration. But we do have with us this
morning, we are grateful for the participation, the voluntary
participation, I might add, of Gale Norton and Dirk Kempthorne.
I look forward to their experience perspective, both as former
Cabinet Secretaries and former State--elected State officials.
But I question whether now, as private citizens, they can
really provide the Committee information as full and complete
as we could otherwise obtain through agency documents through
the current Secretary of the Interior.
Today Secretary Salazar will appear on a second panel. The
fact that a sitting Cabinet member responsible for the critical
decision-making in a time of crisis follows two Interior--past
Interior Secretaries--I don't think he is here. I don't think
he is listening to any of our opening statements, unless he is
tuned in with rapt attention to C-SPAN, but he should be here.
So, Mr. Secretary, Mr. Salazar, if you are watching on C-SPAN,
please come to the Committee Room. We need you here. The
American people need you here. The people of the Gulf Coast of
Louisiana need you here.
Oversight of the Executive Branch means oversight of the
administration in power, not past administrations. Yet the
fruits of the Committee's Executive Branch oversight relating
to Deepwater Horizon, that has been underwhelming, as far as
the deliverables to date. Committee requests for documents from
the Department of Interior have amounted to some 2,000 pages. A
few e-mails, internal memoranda, and other information. I hope
we press for more cooperation, Mr. Chairman. By contrast,
majority, with minority support, has effectively and
aggressively investigated the companies associated with the
disaster, some 120,000 pages of documents, all in the middle of
one of the largest cleanup operations. This is asymmetric
oversight, and it inhibits the Committee's ability to get the
full facts and circumstances behind this disaster. It inhibits
our ability to understand fully current and ongoing actions by
this administration in responding to this oil spill.
The majority tries to trace the Deepwater Horizon back to
the Bush Administration, and has technical regulatory issues in
his hearing memo to imply that the blowup protector and
cementing problems can be traced to that administration. But
the majority knows all available evidence suggests the disaster
resulted from the failure to follow existing regulations and
best industry practices, not that George W. Bush prevented a
second set of shear arms. And, in fact, when we heard from the
two ladies who lost husbands on the Deepwater Horizon, which
you referenced in your opening statement, they said, we don't
need more regulations, but we do need someone to oversee and
insist that the regulations that are already in place are, in
fact, followed.
The fact remains it was under Secretary Salazar that BP's
initial exploration plan was reviewed and approved by the
Minerals Management Service. It was under this administration
that BP's permit to drill the well was granted, and all the
inspections of the operation and procedures were approved
leading up to the explosion. We now observe the Secretary
making decisions to restructure the agency in the middle of an
environmental crisis. So we had a single spinal cord response--
a single spinal cord synapse, when really we should have
cortical centers representing management evaluation.
Mr. Stupak. Finish up.
Mr. Burgess. How have these actions affected the ability of
the Department to conduct its ongoing work and respond fully
and effectively to the crisis? Do they inhibit the Secretary to
ensure safe well drilling operations? We also see the Secretary
appears to ignore----
Mr. Stupak. Mr. Burgess, I am going to have ask you to
finish--please.
Mr. Burgess. --State and local officials. Because of the
time it has taken to get the Secretary of the Interior here,
Mr. Chairman, I beg your indulgence to let me conclude.
Mr. Stupak. Well, Mr. Burgess, we have got a large group
here. We are not going to let everyone go over time limits now.
You are already a minute and a half over. I ask you to finish.
Mr. Burgess. The question we need to answer is what is
going on in the--at the Department of Interior now really based
on sound agency safety analysis, given what we know about
offshore safety experience? Certainly we should try to gather
information on past actions and decisions by the Department
and--that have contributed to the current response problems. I
would like to understand whether the companies--the oil
companies had to rely on faulty government computer models and
what the Secretary plans to do about improving those models.
But we should not focus on the past----
Mr. Stupak. Mr. Burgess, I am going to ask you to stop now.
Mr. Burgess [continuing]. Our most important activities
happening right now by this administration during this crisis.
Thank you, Mr. Chairman. I will----
[The prepared statement of Mr. Burgess follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Stupak. Mr. Burgess, you asked for understanding. I am
going to ask for your understanding. We are going to keep
strict time limits today. We have two committees. We have got a
full panel here. We are going to observe the time limits, OK?
That goes for everybody. Mr. Markey, your opening statement,
please.
OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF MASSACHUSETTS
Mr. Markey. All right. Thank you, Mr. Chairman. I thank you
for your leadership, and Chairman Waxman's leadership upon this
issue. I do believe that President Obama is wise in the
maintenance of his moratorium in ultra-deep waters. If we are
going to drill in ultra-deep waters, we should ensure that it
is ultra-safe, and in the event of an accident, that a response
would be ultra-fast. Right now we are not sure that that is the
case. That is why the President is wise.
Oil is not the result of spontaneous generation. The
conditions for its creation are set millions of years before.
Organisms die and decay. Heat, pressure and time do the rest.
Just as with the slow creation of fossil fuels, the condition
that created the BP disaster in the Gulf were put in motion
many years ago. Increasing pressure from the oil industry to
relax regulations, and the willingness of regulators to take
the heat off companies did the rest. 10 years before BP oil
spill, in January of 2000, a directive issued by the Department
of Interior under the Clinton Administration stated that the
methods used to model spills ``are not adequate to predict the
behavior of spills in deep water'', and that a new model would
be required. Unfortunately, this never happened. The Bush
Administration never followed through.
Nine years and three months before the BP oil spill, just
two weeks after taking office, President Bush created the
Cheney Energy Task Force. The task force met in secret, largely
with representatives of the oil, gas and other energy
industries. A little less than nine years before the spill, on
May 16, 2001, the Cheney Energy Task Force submitted its
report. The report asserts that exploration and production from
the outer continental shelf has an impressive environmental
record. The report further states that existing laws and
regulations were creating delays and uncertainties that can
hinder proper energy exploration and production projects. We
are warned that substantial economic risks remain to investment
in deep water, and that the Interior Department must therefore
be directed to consider economic incentives for environmentally
sound offshore oil and gas development. With the Cheney Task
Force report, the first condition for this disaster, rewriting
the offshore drilling policies to prioritize speed rather than
safety, was set in motion.
Eight years before the spill the Interior Department began
issuing regulations that would extend and ultimately expand the
royalty-free drilling given to oil companies for offshore oil
and gas production. But financial incentives weren't enough, so
the Bush Administration's Interior Department made the choice
to assert that a catastrophic spill could not occur.
Seven years before the spill the Bush Administration
exempted most Gulf of Mexico lease holders from having to
include blowout scenarios in their oil and gas exploration or
production plans. Oil companies were also no longer required to
say how long it would take to drill a relief well, and how a
blowout could be contained by capping the well. BP therefore
included no such information in its plans for the Deepwater
Horizon well.
Three years to the month before this spill, in April of
2007, the environmental impact statement approved by the Bush
Administration for drilling in the Gulf of Mexico said that
since blowouts are ``rare events and of short duration'', the
potential impacts to marine water quality ``are not expected to
be significant.'' The analysis concluded that the most likely
size of a large oil spill would be a total of 4,600 barrels,
and that ``a sub-surface blowout would have a negligible impact
on Gulf of Mexico fish resources or commercial fishing.'' A few
months later in 2007, in the Bush Administration's Interior
Department, it completed another environmental review and
issued ``a finding of no new significant impact.'' No further
environmental review was needed, according to the Bush
Administration.
On April 20, 2010 the regulatory house of cards erected
over an eight year period by the Bush/Cheney Administration
collapsed with the explosion on the BP Deepwater Horizon rig.
Today we will hear from the nation's last three Secretaries of
Interior, who have presided over our nation's leasing of
offshore oil and gas since January 2001. I welcome the
Secretaries, and we look forward to their testimony.
Mr. Stupak. Thank you, Mr. Markey. Mr. Upton, opening
statement, 5 minutes.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Thank you, Mr. Chairman. What happened on the
Deepwater Horizon rig was truly a national tragedy. We all hope
that the recently installed well cap will hold and not an ounce
of oil will leak from that well ever again. Once this happens,
our focus needs to shift to the cleanup and getting folks back
to work. Citizens of the Gulf are facing unprecedented
hardships. They don't need to be further burdened by job
killing policies being pushed by the Congress or the
administration.
Of course, we do want answers. We want all the answers. We
must work to ensure a disaster like this never happens again.
Since that rig exploded, and as millions of gallons of oil
leaked into the Gulf, our economy and our national security
posture has been weakened. A joint investigation of the causes
of the Deepwater Horizon blowout explosion and spill are
currently being conducted by the Coast Guard and MMS. In
addition, President Obama announced a presidential commission
that will investigate and report. The team of engineers tapped
by Secretary Salazar to examine what went wrong on the Horizon
rig recently wrote, ``We believe the blowout was caused by a
complex and highly improbable chain of human errors coupled
with several equipment failures and was preventable. The
petroleum industry will learn from this it can and will do
better. We should not be satisfied until there are no deaths
and no environmental impacts offshore ever. However, we must
understand that, as with any human endeavor, there will always
be risks.'' Secretary Salazar pointed to this team of engineers
to rationalize the moratorium. Not only did the engineers
disagree, so did the courts. The court has overturned the
Salazar drilling moratorium a number of times.
The Gulf accounts for nearly a third of the United States'
oil production. Knee jerk reactions and finger pointing won't
make drilling any safer, and certainly isn't productive for the
citizens of the Gulf. Let us learn from this awful mistake, fix
the problem, clean up the Gulf, and move forward to fix our
ailing economy and create private sector jobs.
I yield back.
Mr. Stupak. Thank you, Mr. Upton. Mr. Chairman--Chairman
Waxman for an opening statement, please.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you very much, Chairman Stupak and
Chairman Markey, for holding this joint Subcommittee hearing. I
think it is an important hearing. During the last three months
since the Deepwater Horizon explosion and blowout this
committee, and its subcommittees, has held seven hearings, and
those hearings have focused on the actions of BP and other oil
and gas companies, and we learned that BP repeatedly made
dangerous choices to save time and money. Transocean's blowout
preventer had a dead battery, a leaking hydraulic system, and
other serious flaws. And we learned that the entire oil
industry was unprepared to deal, and is unprepared to deal,
with a significant blowout.
Today we are going to examine the role of the regulators.
We will learn that the Department of Interior under both
President Bush and President Obama made serious mistakes. The
cop on the beat was off duty for nearly a decade, and this gave
rise to a dangerous culture of permissiveness. Secretary
Salazar has testified before several committees, and we welcome
his appearance today. What makes this hearing unique is that we
will be hearing from two of his predecessors, former Secretary
Gale Norton and former Secretary Dirk Kempthorne, and I welcome
both of them to our committee. This will allow us to examine
the recent history of Federal drilling regulation and look at
it in a broader context.
Mr. Markey pointed out, and he is right, in many ways this
history begins with Vice President Cheney's secretive energy
task force. This was initiated during President Bush's second
week in office, and for weeks it met privately with oil and gas
executives and other industry officials whose identity the
administration steadfastly refused to disclose. Four months
later the vice president released a report describing the new
energy strategy for the administration. The report directed the
Interior Department to ``consider economic incentives for
environmentally sound offshore oil and gas development''. As
recommended in the report, President Bush immediately issued an
executive order to expedite projects that will increase the
production of energy.
Secretary Norton led the implementation of the Bush
strategy for the Department of Interior. She promoted new
incentives and royalty programs to encourage drilling. But she
failed to act on safety warnings about blowout preventers, and
she rejected proposals to strengthen standards for cementing
wells. Those decisions sent a clear message. The priority was
more drilling first, and safety second.
Secretary Norton left amid the scandals involving Jack
Abramoff to work as general counsel for Shell, a major oil
company. Her successor, Secretary Kempthorne, oversaw the lease
sale to BP of the future Macondo well, and Secretary Kempthorne
also oversaw the deeply flawed assessment of potential
environmental impacts associated with this lease sale, an
assessment that did not anticipate the possibility or impacts
of a catastrophic sub-sea blowout. As a result of these
environmental assessments, BP did not have to include an oil
spill response discussion, a site specific oil spill response
plan, or a blowout scenario in its explanation plan. In many
ways Congress was complicit in its oversight. The Energy Policy
Act of 2005 granted royalty relief and subsidies to the
industry, but did not strengthen regulatory requirements.
As a Democrat, I hoped the Obama Administration would do
better, and in some ways there have been reforms. The scandal-
ridden royalty-in-kind program was cancelled. Secretary Salazar
instituted new ethics programs, and in the Department's budget
Secretary Salazar requested more inspectors for offshore
facilities. But there is little evidence that these reforms
changed the laissez-faire approach of MMS in regulating the BP
well. MMS approved the drill plan and changes to the well
design plan that we have questioned during our investigations.
The April 20 blowout was a wakeup call for this
administration, and for Congress. Secretary Salazar's now
reorganized MMS issued a 30 day safety report, developed a plan
to implement the reorganization, and asked the Department IG to
examine culpability and issue suspensions of new high risk
activity until there is evidence that blowout preventers are
safe enough and the oil industry is capable to respond to
another spill.
These actions are long overdue, but they are necessary
steps in the effort to revitalize drilling regulation, and I
welcome this chance to learn more about them.
Chairman Stupak and Markey, thank you for holding the
hearing, and I hope we can learn the extra part of our
investigation as to what the regulators were doing during this
10-year period. Yield back my time.
[The prepared statement of Mr. Waxman follows:]
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Mr. Stupak. Thank you, Mr. Chairman. Mr. Barton for an
opening statement, please.
OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Barton. Excuse me. Thank you both Chairmans, and Full
Committee Chairman Waxman, for this hearing. I welcome our two
former Cabinet Secretaries, who are both friends of mine. We
appreciate you all voluntarily coming today.
Three months ago today an explosion tore through the
Deepwater Horizon drilling ship. It killed 11 men. It has
filled great swaths of the Gulf of Mexico with crude oil. As
the spreading spill has focused the nation's attention on what
we need to do to stop it and prevent it from--in the future,
our job here in this committee has been to conduct a bipartisan
investigation to identify what went wrong and try to figure out
if there is a way that we can help prevent it from the future.
Last Thursday the Full Committee put together some of the
results of the fruits of our investigation to pass out the
Blowout Prevention Act of 2010. This bill passed this committee
48-0 on a bipartisan basis. It will improve safety, it will
protect the environment, and yet it will allow responsible
drilling to go forward in the outer continental shelf. Having
said that, we still have a lot of work to do. As has been
pointed out, right now it appears that the leak has been
stopped, but we certainly haven't stopped the economic and
environmental harm in the Gulf of Mexico. I believe that this
Committee's bipartisan oversight is providing the most powerful
searchlight for getting to the truth so that we can address in
the very near future what additional steps, in addition to the
Blowout Prevention Act that we passed last week, need to be
done to prevent this tragedy from ever happening again. We have
found and spotlighted a number of disturbing BP decisions, in
some cases non-decisions, that were made or not made at
critical moments that, if they had been made differently,
perhaps this accident may not have occurred.
Having said that, we need to remember that the drilling in
the outer continental shelf and Federal waters is a regulated
Federal industry. And today, finally, we are going to begin to
look at the role of the regulator in this case, the Department
of the Interior. We are going to see if perhaps past decisions
and current practices have led to the accident that we all wish
had not occurred. We want to understand why the Department has
allowed BP to do what it did. Was the Department really
watching what was going on at the drilling operation? Keep in
mind that the blowout preventer that failed on April the 20th
passed inspection only two weeks before.
Americans want to understand what the Obama
Administration's response to the oil spill was and is, both in
terms of what it did not do to stop the spread of oil and what
it is doing right now, apparently, to stop energy production.
It was the Obama Administration, not the Bush Administration,
that didn't waive the Jones Act so that some of our foreign
friends could bring in their oil spill equipment. It was the
Obama Administration, not the Bush Administration, that
wouldn't waive certain environmental impact studies so that our
friends in Louisiana and Mississippi and Alabama could put up
some berms that could have prevented the oil from reaching
their beaches. It was the Obama Administration, not the Bush
Administration, that made the decision not to transfer pre-
position equipment in other parts of the country for oil spills
to the Gulf of Mexico to help in this spill. It was Secretary
Salazar, not Secretary Barton or Secretary Kempthorne, that
either made or didn't make those decisions.
What we have right now is a worst case scenario. The folks
that depend on their livelihood for tourism on the beaches of
the Gulf are not having the tourists come because tourists are
afraid that the beaches might be soiled. The people that depend
on their livelihood for fishing and recreation in the Gulf are
not allowed to fish or recreate in the Gulf, and the people who
depend on their livelihoods by drilling and working on these
offshore rigs and the service facilities that service them are
out of work because they are shut down. So we kind of have a
lose-lose-lose situation, Mr. Chairman. We hope in the very
near future that we can put it together in a win-win-win
situation.
The majority has invited former Cabinet Secretaries Norton
and Kempthorne today, and we thank them for voluntarily
appearing, for the transparent purpose, in my opinion, of
attempting to focus blame on the Bush Administration. But as I
have pointed out, the decisions and the non-decisions that are
being made and have not been made are not being made by these
two individuals. They are being made by Secretary Salazar and
President Obama. So I would hope that we will focus most of the
attention in today's hearing on the current Cabinet Secretary
and not the past Cabinet Secretary.
I see my time has expired, Mr. Chairman. I will put the
rest of my statement into the record, but thank you for holding
this hearing.
[The prepared statement of Mr. Barton follows:]
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Mr. Stupak. Thank you, Mr. Barton. Chairman Dingell,
opening statement, please, 5 minutes.
OPENING STATEMENT OF HON. JOHN D. DINGELL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Dingell. Thank you, Mr. Chairman. I would like to
welcome our two witnesses today to the Committee, Secretary
Norton and Secretary Kempthorne. It is a pleasure to see two
old friends here before the Committee. Thank you for being
here.
Chairman Stupak and Chairman Markey, I thank you for
holding this hearing today. It is very important, and I think
it is extremely important that we continue to hear about the
real and serious problems that have come to light as a result
of the disaster in the Gulf. As this Committee has heard
before, I am author of both the National Environmental Policy
Act and the Marine Mammal Protection Act. I view these laws as
my children, and while they have grown up, I find I still need
to defend them from time to time against failures of proper
administration. NEPA is a fairly simple statute. It simply
requires agencies to look before their--before they leap.
Now, as a poor Polish lawyer from Detroit, I just don't see
how an agency can look before it leaps when it grants broad
categorical exclusions. These broad categorical exclusions
require very broad statutory response to a situation within the
agency. In other words, the agency can't simply go out and just
say, well, we are going to give a relief from the statute. It
has to make certain findings and do a large number of things,
which I do not believe could be said were done in the instances
before us. I am pleased that the legislation reported by the
House Resources Committee effectively takes these categorical
exclusions off the table, although I must repeat I do not
believe that it is necessary to do so.
It has become clear that the Minerals Management Services
is a dysfunctional agency. It has been that over a goodly
period of time, and remained so until this administration came
in to commence a change after the disaster in the Gulf. And it
is unfortunate that it took a massive calamity and a tragic
loss of life to bring this about. An Inspector General report
in 2008 implicated a dozen officials of criminal and unethical
behavior. I am pleased that the legislation recently reported
by the Committee on Natural Resources will codify the changes
put in place by Secretary Salazar and does away with the
Mineral Management Service. Time will only tell whether the
changes have been enough, and I hope that they will, but I
would observe that a lot will depend upon administration.
As this Committee knows, BP in particular has a long
history of cutting corners, and the testimony before us showed
that to be the case. I know that you, Mr. Chairman Stupak,
offered an amendment in the markup Blowout Prevention Act
consideration last week to address whether or not permits could
be granted to habitually bad actors. Regrettably, it was not
agreed to. I am pleased that the Natural Resources Committee
has adopted a similar amendment in their legislation by
unanimous consent, and I hope that it will be included when the
legislation reaches the floor.
This is not, and should not, be a partisan issue. I hope
that none of my colleagues, and I hope the Congress, again,
will not treat it in that fashion. This is simply an issue of
where we need to find out what is going on and to commence to
address the corrections that need to be made so that we may go
forward with a sound energy policy, and also with proper
protection for the environment.
I would just like to mention my--to my two good friends,
the Secretaries, that the refuge that you saw when you were--
came up into Michigan to visit with us on the Detroit River now
constitutes something close to 6,000 acres. The Canadians will
shortly be coming in, and your good work is appreciated not
only by this member of the Committee, but, very frankly, by the
citizens in the area, so I hope you feel welcome here this
morning.
Mr. Chairman, I thank you for your courtesy.
Mr. Stupak. Thank you. Mr. Whitfield for an opening
statement. Two minutes, please.
OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF KENTUCKY
Mr. Whitfield. Thank you, Mr. Chairman, and thank you,
Secretary Norton, Secretary Kempthorne, for joining us today. I
want to reiterate my agreement with Mr. Dingell that this
should not be a partisan issue. And yet when I read the
Democratic memorandum to the Democratic members of this
committee, 10 out of 13 pages referred to the Bush
Administration and decisions that the Bush Administration had
made and didn't make. And there was an insinuation that the
Bush Administration was responsible for the BP blowout. I think
we do a disservice to the American people when we try to place
blame on anyone when we don't know the reason for this blowout.
The report is not due for nine more months, and it is being
investigated. And at the end of that investigation, hopefully
we will know and be able to move constructively forward to
solve the problem.
There are many people throughout the United States and the
world today that believe it is unsafe to drill offshore, and--
on the outer continental shelf. And yet we know that the last
major oil spill from a platform occurred in 1969, off the coast
of Santa Barbara. There are 7,000 active leases in the Gulf
today. There are 1.7 million barrels of oil per day being
produced. There are 602 active wells today. So it is not like
it is inherently dangerous, but yet the loss of one life is too
many. And I will also note that in former documents from the
Department of Interior it states--stated that natural cracks in
the sea bed causes more oil seepage, 150 times larger in
volume, than oil spill due to outer continental shelf oil and
gas activities.
So I look forward to the testimony today, and hopefully,
with their testimony and the testimony of experts in the
report, we will know what actually happened at the BP site.
Thank you.
Mr. Stupak. Thank you, Mr. Whitfield. Ms. DeGette, two
minutes, opening statement, please.
OPENING STATEMENT OF HON. DIANA DeGETTE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Ms. DeGette. Thank you very much, Mr. Chairman,for holding
this hearing. The former MMS, which is, as you said, now the
Bureau of Ocean Energy Management Regulation and Enforcement,
has been involved in all of these issues. They regulate and
they oversee drilling activities, and it was their job in this
case to monitor offshore drilling, inspect violations, and to
collect royalty revenue.
One of the things that really dismays me, having been in
Congress now for a while, is how you can take an agency like
this, that has been, frankly, having trouble for many years,
and make it a partisan issue on both sides of the aisle.
Because the truth is the MMS has been dysfunctional for many
years. That is why I want to welcome both of the former
Secretaries who are here today, in particular my friend
Secretary Norton, who I have known for many years in Colorado.
And also, why I look forward to listening to the testimony of
another Coloradoan on our next panel, Mr. Salazar. Because
until we get the full picture, we can't completely revamp this
agency. And until we revamp this agency, we can't guarantee
that we have appropriate regulatory oversight over this--over
drilling. And until we can get appropriate regulatory oversight
over drilling, we can't be sure that we should be having safe
deep water drilling, and that is the way it is.
At this point the administration is trying to revamp the
former MMS. They are eliminating conflicts of interest. They
are eliminating the royalty-in-kind program, and they have
hired Michael Bromwich to oversee this reorganization. Last we
heard from him in the Natural Resources Committee, he was brand
new on the job and didn't have anything new to add. So these
are all positive steps, but until we get the historical view of
what happened with this agency, we won't adequately be able to
make it effective, and we won't be adequately able to perform
our regulatory functions.
Thank you very much, Mr. Chairman.
Mr. Stupak. Thank you, Ms. DeGette. Mr. Shimkus, your
opening statement, please?
OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Shimkus. Thank you, Mr. Chairman, and Secretary Norton,
Secretary Kempthorne, welcome. I wish Secretary Salazar would
be listening to some of these opening statements. Our
colleagues have been real involved with this, as you can
imagine. He should be hearing these. I agree with my colleague,
Dr. Burgess.
Point one is, remember, the President announced expansion
of oil and gas drilling in the OCS a week before the explosion.
Point two, in the military there is a clear sign when a change
of command occurs. The outgoing commander grabs a flag and
hands it over to the incoming commander. And when that occurs,
the mission changes from the outgoing commander to the incoming
commander, and the incoming commander is responsible for all
his unit does or fails to do. I think there is a lesson to be
learned here, that there is going to be a time when this
administration is going to have to accept some responsibility.
Maybe not all, but at least a smidgen, a little bit. They are
going to have to say, yes, this did happen on our watch. Yes,
we didn't really reorganize MMS when we first got in. Yes, it
took the disaster for us to do that. Yes, maybe we were too
slow to deploy assets. I think it would help in a--in, really,
a bipartisan manner that they accept a little bit. In the
military, it happens day one, and as a Commander-in-Chief, you
would think he would learn that.
I will focus on a lot of things today, but in my remaining
time, I just want to highlight three things. I am an avid
Facebook guy, and I mentioned the moratorium, and the--and rigs
being moved, and one of my opponents put on there, I will
believe it when I see it. Well, Diamond Offshore Drilling,
Incorporated announces relocation of deep water ocean
confidence to the Congo. Three deep water drilling rigs to be
moved from sites south of Cameron Parish. Brazil sees silver
lining in BP spill, more rigs. If we don't move carefully on
this, we are going to increase our reliance on imported crude
oil.
Thank you, Mr. Chairman. I yield back my time.
Mr. Stupak. Thank you, Mr. Shimkus. Mr. Inslee for an
opening statement, please. Two minutes.
Mr. Inslee. I will resume my time. Thank you, Mr. Chairman.
Mr. Stupak. OK. Mr. McNerney, opening statement, two
minutes.
OPENING STATEMENT OF HON. JERRY McNERNEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. McNerney. Thank you, Mr. Chairman. I want to thank
Secretary Norton, Secretary Kempthorne, for participating. It
may not be an easy morning for you, and I appreciate that.
The oil spill is clearly a tragedy, and there are no
winners in this situation. But as tempting as it is to use this
hearing as an opportunity for partisan finger pointing, our
duty and responsibility is to identify the causes of the
tragedy and put rules in place to prevent this sort of disaster
from happening again in the future.
I hope we can accomplish this here today, but the obvious
fact is that once a deep water blowout takes place, a massive
spill is inevitable. Of course, once a spill takes place, we
need to have an effective plan to quickly stop the spill and
clean up the contamination. However, the real challenge is to
prevent such occurrences from happening in the first place, and
so it is understandable that we should place our emphasis on
prevention. What went wrong, and how do we avoid these problems
in the future?
So I look forward to working with my colleagues on
achieving this goal, and I hand back the balance of my time.
Mr. Stupak. Thank you, Mr. McNerney. Mr. Griffith for an
opening statement, please.
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. Thank you also to these
witnesses who have come before our subcommittee to discuss the
administration's role in the recovery response of the Deepwater
Horizon drilling disaster that has affected our Gulf States.
It is essential that we continue to investigate why a
disaster of this proportion took place, but more importantly we
need to look into the agency's response to the explosion and
the spill. As the investigation and reviews continue, I think
that Congress must question the administration's response to
the disaster. Bureaucracy is rarely able to facilitate a quick
response. Even the bureaucracy, without leadership, is frozen
in place, and this event has been yet another demonstration of
government slowing in recovery.
It is time to take a good hard look at the Federal
response. It would have been wise for the administration to
have called on all possible resources to help in the initial
aftermath of this disaster, but this was not done. The American
public must gain trust in their government for an appropriate
response in times such as these. This means that the Federal
government has to get the emergency response right. While the
days and weeks tick by after the spill, most of us saw a lack
of urgency in the Federal response.
The one reaction we have seen from the government is the
administration has shut down oil drilling and enforcing a
moratorium in the Gulf. The Gulf of Mexico accounts for 24
percent of our oil production. It affects roughly 170,000 jobs,
the economy and our energy security. As Louisiana Governor
Jindal stated, the moratorium is a second man-made disaster. If
we enact policies that drive drilling out of U.S. waters, we
will cease to be able to ensure that crude oil and gas
production be done in a safe and environmentally friendly
manner. 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.
I am glad that we have witnesses here today to explain the
questionable response of the administration to the spill. As
Congress draws conclusions into how to prevent another spill
from ever happening again, I hope that we can gain insight into
why the administration's response to the spill was seen by the
American public as slow, and at times absent.
Thank you for being here today. We appreciate you
volunteering to be here, and I look forward to your testimony.
And Mr. Chairman, I yield back the balance of my time.
Mr. Stupak. Thank you. Next, Mr. Green for an opening
statement, please.
OPENING STATEMENT OF HON. GENE GREEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Green. Thank you, Mr. Chairman, for holding the
hearing. Again, welcome our former Secretaries, former Senator
and Governor to our panel. And I would like my full statement
be placed in the record. And clearly there are several
decisions made along the way that led to a regulatory
environment where an environmental disaster of this magnitude
could take place, and I look forward to testimony.
However, I want to take the use of my time today to focus
on a separate issue that I will bring up when Secretary Salazar
is present. I remain extremely concerned about what the
offshore drilling moratorium means to the Gulf Coast and our
country's future energy supply. The court--recent court
decision to lift the--moratorium was an important step to
keeping vulnerable oil and gas jobs in the Gulf States and
keeping them--our economies viable. However, with the
administration's new reissued moratorium, these job losses are
back in play.
I would like to ask unanimous consent to place into the
record a letter that Congressman Kevin Brady and I, along with
other members of Congress, sent suggesting a solution to the
deep water ban that would put people back to work, Mr.
Chairman.
Mr. Stupak. Without objection.
[The information was unavailable at the time of printing.]
Mr. Green. It is my strong belief that a moratorium be
allowed to continue the full 6 months or longer would
significantly damage our already weakened economy along the
Coast and cost tens of thousands of jobs, reduce local payrolls
by nearly $2 billion and threaten the survival of many--related
small business, mid-size businesses. Additionally, offshore oil
and gas production support companies throughout the Gulf of
Mexico engaged in shallow water drilling activities continue to
be severely affected by the continued de facto moratorium.
And Mr. Chairman, I would like to ask unanimous consent for
a letter to be placed in the record--Secretary Salazar that
Congressman Boustany and I, plus a number of members of
Congress, sent to Secretary Salazar at the end of May.
Mr. Stupak. Without objection.
[The information was unavailable at the time of printing.]
Mr. Green. We have actually issued one shallow water
drilling permit last week. And--even though the moratorium was
released at the end of May. As a result, 19 jack up rigs,
representing over 35 percent of the available shallow water
drilling rigs in the Gulf of Mexico, are now without work and
idle, putting at risk thousands of jobs in the Gulf of Mexico
and orderly production of domestic resources. And I would like
to--look forward to hearing from the secretary.
Mr. Chairman, I appreciate your patience, and we want to
get to the bottom of what happened, but we also need to have
domestic production of oil and natural gas in our country. So I
yield back my time.
Mr. Stupak. Mr. Latta, opening statement, please, 2
minutes.
OPENING STATEMENT OF HON. ROBERT E. LATTA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Mr. Latta. Thank you, Mr. Chairman, Mr. Burgess. Again,
thank you for holding this subcommittee hearing on the Interior
Department's role in the Deepwater Horizon disaster, and I also
want to thank our witnesses for appearing today.
Last month I had strong words for the BP CEO, Tony Hayward,
when he testified in front of our Oversight and Investigation
Subcommittee, and since then I have reiterated that BP needs to
be held accountable for this disaster of epic proportions.
However, I also have been awaiting the opportunity to hear from
and question Department of Interior officials regarding their
role in the Deepwater Horizon disaster, especially since
President Obama has repeatedly said that he and his
administration are in charge and take responsibility for the
response effort, as the law so requires.
Earlier this month I traveled with some of our colleagues
to the Gulf to tour the Louisiana coast and meet with community
leaders and residents who have been affected by the disastrous
BP oil spill. While I was encouraged by the spirit of the hard
working local residents, it is clear that they are frustrated
by the Federal response and the lack of coordination amongst
government agencies. The trip reinforced my belief that it is
critical we find out what went wrong and how and why it
happened. This includes a through investigation into the
current administration's actions leading up to the incident and
during the response.
Furthermore, I believe the administration's moratorium on
deep water drilling in the Gulf is devastating the region, and
I would like to hear about the Interior's role in making this
decision. The recent report by a nationally known--renown
economist from LSU states that the loss of 8,000 jobs, nearly a
half a billion dollars in wages and over 2.1 billion in
economic activity will be triggered in just the first six
months of this moratorium. The administration would have been
better advised that stopping the flow of oil instead of
focusing on imposing a drilling moratorium, this in spite of a
Federal Judge overturning the first moratorium ban, calling it
arbitrary and capricious.
Mr. Chairman, I look forward to hearing the testimony
today, and I yield back.
[The prepared statement of Mr. Latta follows:]
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Mr. Stupak. Thank you, Mr. Latta. Mr. Doyle, for an opening
statement, please.
OPENING STATEMENT OF HON. MICHAEL F. DOYLE, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Doyle. Thank you, Mr. Chairman, for holding this
hearing on the role of the Interior Department in the Deepwater
Horizon disaster. I am grateful for the excellent work this
committee has done on investigating the causes of the Deepwater
Horizon accident and addressing them through legislation.
You know, if there is any silver lining to this tragedy, I
hope it is a renewed effort to engage in intelligent
regulations of the industries that operate in our waters and
our lands. Like most of you, I am frustrated to learn that
permits were granted for deep water drilling, and Macondo well
specifically, without proper safety requirements or oil spill
response plans that included the ability to cap a leak should
the infallible blowout preventer fail. It is even more
frustrating to learn that required environmental impact
statements were waived so that drilling the Macondo well could
commence more quickly.
Unfortunately, that seemed to set the tone for drilling
operations on the Deepwater Horizon. As this committee's
investigation has proven, BP cut corners every step of the way,
and the least protective measures were taken to speed up
production of the well. It resulted in one of the worst
environmental tragedies we have ever seen and further economic
hardship in communities along the Gulf.
Mr. Chairman, today I am not interested in assigning blame.
I think there is enough to go around. Instead I hope we
recognize what a great opportunity we have with the Secretaries
of the Interior from the last 10 years before us. I look
forward to hearing from Secretary Salazar, and I want to thank
Secretaries Norton and Kempthorne for your willingness to be
here today.
While the recent reforms at the Mineral Management Service
are a good start, there is still much more to do. If we are
going to continue accessing the oil and gas resources in the
Gulf of Mexico, we need smarter and more sufficient regulations
of the industry. This tragedy has proved that blowout preventer
is not a failsafe tool of the last resort. We are working in
this Congress to bring about better research and development
and technologies that can ensure the safety of offshore
drilling. In fact, much of this R&D is being done in my
hometown of Pittsburgh, at the National Energy Technology
Laboratory. I know firsthand that, given the resources of the
scientists and engineers at NETL, we are entirely capable of
producing technologies that bring us into the 21st century of
energy development.
So, Mr. Chairman, I thank you and look forward to the
testimony today.
Mr. Stupak. Thank you, Mr. Doyle. Mr. Gingrey, opening
statement.
OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF GEORGIA
Mr. Gingrey. Mr. Chairman, thank you for calling today's
hearing. Even though recent efforts have hopefully halted major
oil leaks, it is critically important that we get to the bottom
of the cause of the Deepwater Horizon accident that has
severely devastated the Gulf Coast.
As a member of the O&I Subcommittee, I was present at the
hearing in which we hade the opportunity to pose questions to
BP CEO Tony Hayward. At the outset of that hearing I, along
with a number of my Republican colleagues, raised concerns as
to why we were not also hearing from the administration to
discuss its oversight role to help avoid future accidents of
this nature. Mr. Chairman, despite these efforts and the
economic and environmental destruction that has resulted from
the Deepwater Horizon explosion, I am disappointed that it has
taken the Committee three months to the day of the accident to
hear from the Secretary of the Interior. There are several
important questions that the administration needs to answer to
help us find the best way to move forward.
What was the role of Interior leading up to and in the
aftermath of the explosion on April 20? Have the reorganization
efforts of the Minerals Management Service in any way impeded
Interior from being able to properly investigate and respond to
the crisis? In fact, what is the purpose of renaming MMS to the
Bureau of Ocean Energy Management Regulation and Enforcement,
BOOEMRAE? Does that only create confusion for the public,
media, members of Congress, the agency responding to the
crisis? Lastly, what impact will the administration's decision
to impose a six month moratorium have on the Gulf Coast's
ability to create jobs and make us less dependent on foreign
oil?
Mr. Chairman, although I am pleased that we are finally
hearing from the administration on the Deepwater Horizon
disaster, I hope that we do not use this hearing to simply
score political points, as some of my colleagues have said.
Today we have the opportunity to move forward with answers and
ideas for reform. We owe it to the families who lost loved ones
on April the 20th. We owe it to the Gulf Coast region that has
continued to struggle economically as a result of this
disaster, and finally we owe it to our country, as we continue
to compete successfully, hopefully, in an energy dependent
global economy.
And I yield back, Mr. Chairman.
Mr. Stupak. Ms. Capps for an opening statement.
OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mrs. Capps. Thank you, Mr. Chairman, and welcome to our
honorable witnesses. It is painfully clear that BP's oil spill
dwarfs any environmental disaster in our nation's history. The
first steps, of course, are to stop this leak, contain the
spill and attend to its devastating consequences. President
Obama and his administration swiftly responded to the BP
disaster from day one, mobilizing resources to minimize harm to
the health, economy and environment of the Gulf Coast.
The President established an independent commission,
modeled on legislation I introduced with Chairman Markey, to
investigate the cause, the response and the impact of BP's
spill. The President announced tougher safety requirements for
offshore drilling and a strong inspection regime, and he took
appropriate steps to ban new deep water wells and other
exploratory drilling in sensitive areas.
While we need immediate regulatory reform to make existing
offshore oil development safer, we must also be bold and
forward thinking in our response. The legacy of a safer,
cleaner energy policy is the only possible silver lining to be
found in this unthinkable catastrophe, and it is from what many
of us on this side of the aisle had been pushing for years. The
good news is there are lots and lots of ideas and proposals we
can draw from.
Unlike its predecessor, the Obama Administration has made
immediately--immediate investments in efficiency, renewables
and alternatives. The best way to protect the environment is
simply to use less energy. Increases in efficiency and
renewables can also create jobs and provide a boost to our
domestic economy. Most importantly, these advances can be
implemented now, with immediate benefits and results. Finally
freeing ourselves from our costly oil addiction would be a
fitting tribute to the terrible tragedy being borne by the
people of the Gulf.
I applaud the Committee's efforts for continuing to shine
the spotlight on this tragedy and for laying out the steps that
we must take to keep situations from--like this from happening
in the first place.
I yield back.
Mr. Stupak. Thank you, Ms. Capps. Mr. Pitts, your opening
statement, please?
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 the role of the Department of Interior in the
Deepwater Horizon disaster. I would like to welcome Secretary
Kempthorne and Secretary Norton.
The oil spill is indeed a tragedy in the history of our
country. Not only have lives been lost, but massive amounts of
oil have been leaked into the ocean, causing horrific effects,
environmental and economic. It is imperative that we thoroughly
understand what happened aboard Deepwater Horizon before,
during and after the explosion so that it never happens again.
Indeed, it is of the utmost importance that due diligence be
done by those investigating the root causes of the Deepwater
Horizon blowout explosion, and I am anxious to read the reports
that have been commissioned, once they are finished.
I do have several questions for our witnesses today which
focus on the offshore drilling moratorium and the re-
organization of MMS. I would like to know whether the change up
in MMS has helped or hindered MMS's ability to investigate and
respond to the current crisis.
Regarding the moratorium, I was struck by Governor Jindal's
editorial in the ``Washington Post'' this weekend where he
categorized the moratorium as ill-advised and ill-considered.
In addition, he said, ``The moratorium will do nothing to clean
up the Gulf of Mexico, and it already is doing great harm to
many hard working citizens.'' I am interested to hear the
administration's rationale for the original moratorium and
their rationale for continuing to pursue this policy, even
after it has been struck down in the courts. Louisiana and the
coastal States are already facing a horrific disaster, and we
should make sure this moratorium does not worsen the blow.
I look forward to hearing from our witnesses today, and I
yield back.
Mr. Stupak. Thank you, Mr. Pitts. Mr. Melancon, opening
statement, please. Two minutes.
OPENING STATEMENT OF HON. CHARLIE MELANCON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF LOUISIANA
Mr. Melancon. Thank you, Mr. Chairman, for holding this
hearing today. I want to note that it has been 91 days since
this disaster began, and Congress has held many hearings, and
in recent weeks we have also started to move several pieces of
relevant legislation. It was, and remains, important to ensure
that the families of those 11 men have died on this rig have
appropriate recourse and means to move on with their lives. It
is impossible to say that they can ever be made whole again,
and that is why I believe it is important for our work in
Congress to focus on making sure an event like this never
happens again.
I thank the Chairman for holding this hearing today. We had
been drilling in the Gulf of Mexico for decades, and our
coastal States are home to the most sophisticated energy
exploration and production technologies in the world. But this
tragedy has shown us that occasionally our innovation to
produce can outpace our innovation to prevent and to respond to
blowouts or other such accidents in the Gulf or any other
waters.
The Minerals Management Service, MMS, or Bureau of Ocean
Energy Management, as is now called, should play an important
oversight role in the Gulf and other U.S. waters. It is the
Department's responsibility to protect our people and the
environment that we all call home. It has become painfully
apparent that this function was performed inadequately in the
lead-up to the Deepwater Horizon. Those deficiencies in the
Department were deep-seated, and I applaud the Secretary and
current employees of the agency for recognizing these
weaknesses and working hard to correct them. I support the
Secretary's request for an increase in the number of inspectors
available to ensure that safety requirements are adhered to in
the Gulf. These inspectors can work with the leading minds in
offshore production to make certain that we still supply the
country with a safe stable source of domestic energy.
But in closing, I would like to say that while Louisiana
and other states face the ever encroaching tide of oil, I
intend to make sure that another wave of economic devastation
does not deliver a second strike to my state. The current deep
water moratorium and de facto shallow water moratorium have
already led to hundreds, if not thousands, of lost jobs, and
threaten to decimate the rest of the economy along coastal
Louisiana, at least whatever economy there is left after the
oil spill has done its damage.
These moratoriums are ill-advised, and in some cases could
even add more risk to the environment than allowing the
existing wells to be finished according to plan. Abandoning a
well in the middle of the process has its own unique risks, and
I believe that we must ask ourselves, does this moratorium make
us any safer, and what is the real cost to our economy?
I thank you again for holding this hearing, and I look
forward to discussing the issue of the moratorium and the
drilling and cleanup in the Gulf of Mexico, and I yield back
the balance of my time.
Mr. Stupak. Thank you. Mr. Sullivan, opening statement,
please.
OPENING STATEMENT OF HON. JOHN SULLIVAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OKLAHOMA
Mr. Sullivan. Thank you. Chairman Markey and Chairman
Stupak, thank you for holding this hearing today to address the
Department of Interior's actions regarding the Deepwater
Horizon incident. I welcome Secretary Salazar to this hearing,
as well as two previous Department of Interior Secretaries,
Gale Norton and Dirk Kempthorne.
There is no question that the BP oil spill is a tragedy. In
fact, it is the worst environmental disaster in our nation's
history. I believe we must do everything in our power to find
out what caused to explosion and to ensure nothing like this
ever happens again.
Unfortunately, the administration is prematurely acting on
this tragedy from a regulatory angle while the investigation to
the disaster is not complete, which is why I am furious that
the Department of Interior issued a new ill-advised moratorium
on responsible offshore drilling after their previous two
efforts failed in Federal Court. A Federal Judge even called
the Obama Administration's efforts arbitrary and capricious
before throwing out their moratorium.
This new moratorium risks killing between 20,000 and 50,000
jobs, and will increase our reliance on foreign oil at a time
when our nation's economy can least afford it. During this
hearing and the continuing investigation, it is important that
we do not lose sight of the fact that 30 percent of the total
U.S. production of crude oil comes from offshore. If we were to
ban or restrict offshore drilling, we would simply increase our
national dependence on foreign oil, which makes our nation less
secure, and in the short term and long term it increases the
cost of energy.
I am pleased to see Secretary Salazar before us today.
Given the integral role of the Federal oversight in offshore
drilling operations, it is critically important to get his take
on what safety lapses occurred, and if any regulatory
breakdowns happened that may have contributed to this terrible
accident. I am also interested in hearing Secretary Salazar's
justification for the continued moratorium on deep water
drilling and permitting.
I look forward to the hearing and testimony of our
witnesses, and I yield back the balance of my time.
Mr. Stupak. Thank you, Mr. Sullivan. Mr. Gonzalez, opening
statement.
Mr. Gonzalez. Waive opening.
Mr. Stupak. Mrs. Christensen, opening statement.
Mrs. Christensen. Thank you, Mr. Chairman. I too waive my
opening statement. I would just like to welcome Secretary
Norton and Secretary Kempthorne.
Mr. Stupak. Ms. Harman, opening statement.
OPENING STATEMENT OF HON. JANE HARMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Harman. Thank you, Mr. Chairman, and welcome our
witnesses.
When then Senator Kempthorne was in the Senate, he served
on the Senate Intelligence Committee. I served on the House
Intelligence Committee for eight years, and remember well the
times we collaborated on bipartisan sensible policy to
hopefully add to our intelligence capability in the effort to
keep our country safe. I would like to think that if Senator
Kempthorne were back in the Senate, or were to do something
astonishing and become a House member and sit on this panel, he
would want us to work on a bipartisan bicameral basis to solve
this problem. And he is nodding his head, so he would. I
welcome that, and I am delighted to see you again.
This is not about, or should not be about, the blame game,
as many have said on both sides. I don't see it that way. I see
this as a clear disaster, both in environmental and human
terms, but one that we should come together to fix. This
Committee has a long record of fixing tough problems and
crafting regulatory schemes that work. And so, Mr. Chairman, I
welcome the testimony of our witnesses, and I welcome Senator,
Governor, Secretary, private citizen Kempthorne, and our other
former Interior Secretary, to help us solve this problem.
Thank you, Mr. Chairman. I yield back.
Mr. Stupak. Thank you. Mr. Hall for an opening statement,
please.
OPENING STATEMENT OF HON. RALPH M. HALL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Hall. Thank you, Mr. Chairman. I am pleased that we are
having this hearing today. I would also like to thank Honorable
Gale Norton and Honorable Kempthorne. They are--and, of course,
Secretary Ken Salazar.
After three full months we are still trying to figure out
what the precise causes is of what happened on the Deepwater
Horizon on April the 20th. The sun came up on April the 20th,
May the 20th, June the 20th and now it is--today it is exactly,
time-wise, July the 20th. And I know--I have in my area a
friend whose twin brother's boy was one of the 11 that were
lost there, so we felt the loss even down into the Northeast
part of Texas.
But what really kind of unnerves me and gives me really
problems is the President's first statements about this, when
he said, have we come to this? An event that he is using to
trash all energy thrusts. Not trying to redistribute the
wealth, but apparently trying to destroy the wealth if it is
involved in the energy business. Not to give light to the
situation, but to turn off the lights all over our nation. We
need to be producing our own energy through the bill that was
passed several years ago that included not just drilling, but
all of the above as answers to disasters like the Deepwater
Horizon tragedy that we have.
These unanswered questions should serve to advise against
the temptations to overreact to the disaster, especially given
the importance of the offshore oil and gas industry to the Gulf
Coast economy and America's energy dependence goals. I am
troubled by the rush to pass legislation on these. These bills
will not solve the ongoing problems in the Gulf.
I do believe we need to re-evaluate the safety procedures
and drilling procedures we have in place now to fix what went
wrong and make sure it doesn't happen again, but that is what I
am told these investigations are doing as we speak. And only
once we know exactly what happened can we address the problem.
We need to re-learn to prevent overreaction and over-regulating
the oil industry before we know what went wrong.
It makes sense to continue pursuing improvements to safe
and environmentally responsible drilling operations, as well as
effective spill response systems, but to impose a drilling
moratorium is just a knee jerk reaction that will not solve the
problem, will not clean up the spill, and amplifies a lack of
employment in the Gulf region. We should lift the moratorium
immediately and get these folks back to work.
I thank you, Mr. Chairman, yield back my time.
Mr. Stupak. Thank you. Mr. Butterfield, opening statement,
please.
OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NORTH CAROLINA
Mr. Butterfield. Thank you, Mr. Chairman, for convening
this very important hearing, and I certainly thank the two
witnesses for their testimony.
Mr. Chairman, news of the BP well may be improving, and the
American people may be feeling better about this. The fact
remains that the damage is done. While much of our attention
has centered on the environmental impacts, let us not forget
that the explosion killed 11 American citizens. As the facts
continue to come into clear view, it appears that the company's
bottom line--yes, its bottom line, not safety, not concern over
its employees or environmental risk--was the primary concern.
And so strong bipartisan regulations are necessary to ensure
the public's trust, the ocean and everything beneath it, belong
to the American people, not private corporations.
The agreement between the people and these corporations to
permit offshore drilling is meant to guarantee the safety and
security of these irreplaceable resources while furthering
commerce. Unfortunately, the technology of deep sea drilling
has far outpaced the rulemaking and oversight needed to provide
the public with security and certainty. We must use today's
hearing to clarify the policy choices made within the Minerals
Management Service.
Without proper understanding of the guiding principles that
took us to this point, we cannot be expected to write better
policy for the future. This is an enormous tragedy that
necessitates a thorough review, and, yes, overhaul of our
regulatory strategy. Such an overhaul will once again allow the
commerce to thrive, and environmental security to be secured
for the trust of the American people.
Thank you, Mr. Chairman, and I yield back.
Mr. Stupak. Thank you, Mr. Butterfield. Mr. Shadegg for
opening statement.
OPENING STATEMENT OF HON. JOHN B. SHADEGG, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Mr. Shadegg. Thank you, Mr. Chairman. I want to thank you
for holding this important hearing. I want to thank all of our
witnesses for appearing today, and especially Secretary Norton
and Secretary Kempthorne.
It is critical to the nation, and critical both for
environmental reasons and also for energy reasons, that we find
out what went wrong. Some want to blame the lack of regulatory
structure, the lack of laws, the lack of regulations. Others
want to blame the lack of enforcement and concerns in that
area. In fact, there may have been blatant violations of the
law. Indeed, most of the evidence we have heard so far in this
Committee has indicated that BP was a bad actor, that, in the
drilling of this well and its construction and its operation,
it ignored warnings time and time again and cut corners. We
need to find out exactly what happened in this instance, and we
need to make sure that no bad actors can ever engage in that
kind of conduct again. That is essential not only for the
protection of our environment, but also for the protection of
our economy.
I think it is very important to point out that this is a
process that is necessary for the sake of our future. It is
not, and should not be, a blame gaming--or a blame assigning
task. I agree with my colleague Mr. Doyle when he says there is
plenty of blame to go around. That should not be the purpose of
these hearings. We do not need to engage in finger pointing.
What we need to do is to find out what went wrong.
Unfortunately, some want to view this just as a crisis to be
exploited. I believe it is a crisis to be addressed and
resolved and to ensure that it never happens again.
I am deeply concerned about the moratorium that has been
enacted, and I share the comments of many of my colleagues, Mr.
Green, Mr. Melancon, and others on both sides of the aisle who
are concerned about the moratorium which the administration has
imposed. I believe that that moratorium was ill-advised, and I
find it not surprising that it was rejected both by United
States District Court and then by United States Circuit Court
of Appeals. I am disappointed that the administration acted in
enacting that initial moratorium on a report which Secretary
Salazar apparently changed after he received recommendations
from the scientists who wrote it. Indeed I have here a letter,
which I will later put into the record, in which eight of the
15 scientists who work on the report say that it misrepresents
their views.
While a moratorium of some sort may indeed have been
necessary, it seems to me we should have been looking at a
narrow moratorium, one that only looked at bad actors, one that
was not open ended in time, one that was focused on what things
we knew then were wrong. And I look forward to the testimony of
our witnesses so that we can try to discern what action we need
to take to ensure this never happens again.
Mr. Stupak. Thank you, Mr. Shadegg. Ms. Matsui, opening
statement, please.
OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Ms. Matsui. Thank you, Mr. Chairman, for calling today's
hearing. I would like to thank Secretary Salazar and former
Secretaries Kempthorne and Norton for appearing before us as
witnesses today.
I think we can all agree that the BP oil spill reminds us
of the dangers of offshore drilling, as well as the severe
environmental and economic impacts when something goes wrong.
As this unprecedented disaster continues to unfold, it has
raised significant questions about industry practices and
regulatory standards relating to oil and gas drilling. In our
ongoing investigations about the causes of this catastrophe, we
learned that BP ignored important safety precautions and
largely dismissed industry's best practices related to well
design and other infrastructure that could have prevented such
an accident.
We now know that there were issues with MMS and its
oversight of offshore drilling activities. It is for these
reasons that I have been pleased to see the Interior
Department's recent overhaul of Federal regulations relating to
oil drilling and exploration activities. And BP and the
government need to ensure that the well is both properly and
permanently plugged. Moreover, with the cost of the debacle now
approaching $4 billion, not including lives lost, livelihoods
in peril and environmental depredation yet to be measured, we
must make sure that nothing like this ever happens again. And
within that context, Congress must continue to examine the
Interior Department's role now and in the past in regards to
the oversight and management of these critical regulatory
bodies.
Thank you, Mr. Chairman, for calling today's hearing. I
look forward to the testimonies of the witnesses before us, and
I yield back the balance of my time.
Mr. Stupak. Thanks, Ms. Matsui. Ms. Blackburn for opening
statement, please.
OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TENNESSEE
Mrs. Blackburn. Thank you, Mr. Chairman. You know, as we
have another of our hearings on what happened with the
Deepwater Horizon, I think it is so important that we all
remember and express our sympathies to the families that are in
the Gulf region that have been so deeply impacted with this. I
grew up in South Mississippi, and every time I call home, or I
am talking with friends from college, or friends that I grew up
with, or family members, I am again reminded of the very deep
and personal impact, whether it is the loss of life, the loss
of jobs, the loss of faith in the institutions that we have,
the loss of faith in an employer, the frustration with
government agencies, the frustration with the slow response
times.
I--there really is many lessons to be learned, and we need
to be respectful of that process, so I thank you all for being
here with us today as we continue to work through this process.
And as you have heard from my colleagues, this is something we
want to review. Not place blame, but get it right, and make
certain that a steadfast process is in place.
Three questions I am going to have for the Secretary and
for the two former Secretaries, whom we welcome. I want to get
the--your thoughts on the new moratorium. What do you think
this is going to do to save the jobs? How do you think this is
going to help business investment? I see that as a bit
counterintuitive when I am talking to those in the Gulf, so I
want to look at that decision process and the expectations of
that.
Secondly, I want to hear from the Secretary on why this
Department has failed to comply with numerous requests by
members of Congress for documents in response to the spill and
the cleanup operations. And I say this because, due to the
frustration with BP and with government agencies and with the--
this administration, people have come to their member of
Congress and have not received--we have not been able to get
the information that need.
And third, I want to know, from the Secretary, how they
think the new Department of--Bureau of Ocean Energy is going to
police waste, fraud and abuse of Federal funds and actually
conduct regulatory oversight.
Mr. Chairman, I thank you. I yield back.
Mr. Stupak. Thank you. Ms. Schakowsky, opening statement,
please.
OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Ms. Schakowsky. Thank you very much, Mr. Chairman, and I
will be brief.
In the face of this unprecedented disaster, every branch of
government must be part of the solution, cleaning up the mess,
ending the flow, compensating adequately the people, and, of
course, preventing this from happening again. And, of course,
we have to understand what happened, and that is the focus of
this hearing. And I appreciate so much the witnesses that are
here today so we can look at the Department of Interior.
But I have to say, I haven't heard much about the
responsibility of this Congress and this Committee. After all,
we all did hear about the Inspector General's report September
8, 2008 about the staff at the--at MMS and the gifts and the
gratuities, et cetera. We knew about that, and hindsight, of
course, is 20/20, but the failures at BP were knowable as well.
We had hearings about the refinery fire. And we also could have
known that between 1985 to today the number of inspectors at
MMS has risen only from 55 people in 1985 to 60 today, while
the number of wells has increased from 65 to 602. So clearly we
are going to have to have more inspectors, our Committee's
going to have to be more involved on an ongoing basis in
oversight, and we are going to have to have the proper systems
and the proper resources in place to get the job done. So this
is clearly part of that investigation, but we have to see
ourselves as an integral part of that--of the solution as well.
And I thank you, Mr. Chairman, for making sure that that is the
case.
I yield back.
Mr. Stupak. Thank you. Mr. Scalise, opening statement. Two
minutes please.
OPENING STATEMENT OF HON. STEVE SCALISE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF LOUISIANA
Mr. Scalise. Thank you, Mr. Chairman. No other state has
been more affected by the BP disaster than my home state of
Louisiana, and we battle the effects of the oil each and every
day. But make no mistake. The effect of this disaster is
reaching far beyond the Louisiana state line. The offshore jobs
being lost right now are American jobs. In the marshlands where
the oil continues to infiltrate, those are America's wetlands
and our first line of defense against hurricanes and gulf
storms.
We know that MMS, the federal regulator responsible for
reviewing and approving offshore operations, just weeks before
the explosion certified that the rig and the blowout preventer
met the safety and environmental requirements and allowed the
Deepwater Horizon to continue operating.
I have said for months now if the blowout preventer was
intended to be the last line of defense, then President Obama's
regulating agency was established as the first line of defense,
and we should fully understand the role that they played in
this disaster. As the people of Louisiana continue to fight the
oil each day, President Obama and his administration are taking
what is already a human and environmental tragedy and turning
it into an economic tragedy by continuing to pursue a reckless
and harmful moratorium on offshore drilling.
This drilling ban will result in the loss of over 40,000
high-paying Louisiana jobs and will leave America more
dependent on Middle Eastern oil. Some suggest we have to choose
between safety and jobs. This is a false choice. We can and
must preserve the jobs while demanding safe energy exploration.
The two can and should peacefully coexist.
Make no mistake. This ban has nothing to do with ensuring
safety. Instead, it exploits this disaster in an effort to
pursue a political agenda. As a matter of fact, a majority of
the experts hand-picked by this administration to do an initial
30-day offshore safety report opposed this moratorium and have
said that six-month drilling moratorium will actually reduce
long-term safety.
While some might claim that a pause on drilling is a
reasonable step to take, make no mistake. There is no such
thing as hitting some magical pause button on offshore drilling
by issuing a reckless moratorium. If this happens, you will
reduce safety in the gulf because the most technologically
advanced and safest rigs will leave first. And the most
experienced crews that work on these rigs who have decades of
industry experience will be the first to leave, seeking work
elsewhere. And since our country's demand for oil has not
dropped, more oil will be imported on tankers, which account
for 70 percent of all oil spills.
In conclusion, instead of exploiting this disaster, the
President must work with us to fight the oil, improve the
safety of offshore drilling and put a halt to further
consideration of a moratorium that will reduce safety, kill
jobs, and leave us more dependent on foreign oil. Thank you,
and I yield back.
Mr. Stupak. Ms. Sutton, opening statement please.
OPENING STATEMENT OF HON. BETTY SUTTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Ms. Sutton. Thank you, Chairman Stupak and Chairman Markey,
for holding this hearing. The explosion on Deepwater Horizon
resulted in the deaths of 11 workers and injured many
additional workers. And since that time, we have witnessed the
worst environmental disaster in our nation's history.
Recent news reports state that BP had the Deepwater Horizon
rigs failed blowout preventer was modified in China, and other
shortcuts were taken to maximize profits at the expense of
safety.
And the costs have been great. BP set aside $20 billion for
compensation, and the federal government has billed BP hundreds
of millions of dollars for cleanup costs. And according to the
administration, approximately 40,000 personnel are involved in
the cleanup and the protection of the shoreline and the
wildlife.
Over 6,400 vessels are assisting with the cleanup, and
while the cleanup continues, approximately 84,000 square miles
of federal waters in the Gulf of Mexico remain closed.
Hardworking Americans are out of work and applying for
compensation at BP. And three months later, a cap on the oil
well is finally in place. Although leaks and seepage have been
detected.
The costs have been great indeed and have highlighted the
costly need to ensure that offshore drilling operations are
safe. We cannot afford an additional oil spill disaster.
Significant steps have been taken, including dividing the
Mineral Management Service into three separate organizations to
prevent conflicts of interest going forward.
But as we have witnessed over the last three months, the
costs of the status quo have been far too great, and we must
take appropriate action to make sure that this type of tragedy
and its aftermath do not happen again. So thank you for being
here.
Mr. Stupak. Thank you, Ms. Sutton. Our last opening
statement, Mr. Braley of Iowa please.
Mr. Braley. Thank you, Mr. Chairman. I will waive my
opening.
Mr. Stupak. OK, that concludes the opening statement by all
members of our Oversight Investigation Subcommittee and the
Energy and Environment Subcommittee. We have our first panel of
witnesses before us. We thank them for being here. We have the
Honorable Gail Norton, who was the Secretary of Interior from
2001 through 2006. And we have the Honorable Dirk Kempthorne,
who was Secretary of the Interior from 2006 to 2009. Thank you
for being here.
Secretary Norton and Secretary Kempthorne, we appreciate
you being here, and you have appeared here voluntarily. And
once again we appreciate that. It is the policy of this
subcommittee to take all testimony under oath. Please be
advised that you have the right under the rules of the House to
be advised by counsel during your testimony. Do either of you
wish to be represented by counsel? Secretary Norton? Secretary
Kempthorne? OK, both indicate no. Let the record reflect the
witnesses replied in the affirmative. You are now under oath.
We begin with 5-minute opening statements. And, Secretary, if
you don't mind, we will start with you. Secretary Norton,
opening statement please.
[Witnesses sworn.]
TESTIMONY OF THE HONORABLE GALE NORTON, SECRETARY OF THE
INTERIOR, 2001-2006; AND THE HONORABLE DICK KEMPTHORNE,
SECRETARY OF THE INTERIOR, 2006-2009
TESTIMONY OF GALE NORTON
Ms. Norton. Thank you. Mr. Chairman and members of the
committee, I am deeply saddened and appalled by the Deepwater
Horizon disaster. It is vitally important that Americans
determine the causes of the accident and that we take steps to
ensure that offshore production can continue safely. The
explosion and the oil spill have been a tragic disaster with
unprecedented impact on the affected families, communities, and
ecosystems.
It is disturbing to watch the damage unfold, and my
thoughts have been with the people of the gulf region. As I
consider the Deepwater Horizon disaster, I am constantly
reminded of my earliest exposure to accident investigation. My
father who devoted his career to aviation was occasionally
involved in investigating the causes of crashes of small
planes. I learned about the National Transportation Safety
Board and its process for unraveling accident causation, then
feeding that information back to manufacturers and pilots.
As with the devastating aircraft crash, we need to
objectively seek the truth of what happened in the Gulf of
Mexico so we can learn lessons that may prevent future
tragedies. All those affected deserve an objective systematic
analysis of the problems. Emotional and hasty reactions should
not form the basis for long-term policy, whether we are talking
about flying in airplanes or tapping offshore resources.
Getting the balance right between risks and benefits requires
knowledge and professional inquiry.
It has been nine years since I took the helm at the
Department of the Interior. I am not as conversant about
offshore issues as I once was, and I will only mention a few
things in my experience at this point in time.
The importance of domestic energy production was brought
shockingly into focus by the terrorist attacks of September 11,
2001. Until then, it has been risky to rely on unfriendly
nations as the source of so much of our oil supply. But the
attacks transformed that risk into a matter of grave national
security. Offshore petroleum's role as the source for roughly a
third of American production gave it an important focus.
Without question, the most powerful OCS experience for me
was the 2005 hurricane season. Over 4,000 offshore platforms
were operating in the Gulf of Mexico when Hurricanes Rita and
Katrina pummeled the area. Safety and spill prevention measures
were put to a severe test. Amazingly, despite two category-five
hurricanes, the amount of oil spilled from wells and platforms
was small. The shutoff valves located at the sea floor operated
as intended. They prevented oil from leaking into the ocean
floor when the platforms were destroyed.
There was one weakness in that industry's strong hurricane
performance. The hurricanes dislodged 19 mobile drilling rigs
from their moorings. Once cut loose, they drifted for miles,
dragging pipelines behind them and endangering other platforms
with which they might collide.
The amount of oil released was relatively small, and a
significant problem had been revealed. I brought MMS and
industry together to figure out a solution. After my departure
from Interior, MMS completed this process and strengthened its
mooring standards. We found out about the problem, and we
solved it.
There has been a great deal of media attention to the
ethics of the Minerals Management Service. It pains me to see
the vilification of MMS and its employees. I want to speak in
defense of the vast majority of hard-working and professional
men and women in the Minerals Management Service.
As revealed by inspector general reports after I left the
department, a handful of employees blatantly violated conflict
of interest requirements. Their actions were wrong and
unacceptable, but MMS has over 1,700 employees. The very few
misbehaving employees have been blown out of proportion to
create a public image of the MMS as a merry band of rogue
employees seeking favor from industry. The public servants I
encountered were entirely different.
I will never forget a meeting with the MMS employees after
Hurricanes Rita and Katrina. They were in temporary
headquarters because their New Orleans headquarters was no
longer available. They were crammed into a couple of rooms,
makeshift desks, working hard to keep up with all of the
demands that were coming through at that time, approving
pipeline repairs, addressing environmental and safety issues,
expediting all of the requests, trying to regulate with common
sense in incredibly difficult circumstances.
These employees coped with submerged homes, families who
were in limbo and essentially homeless, but they were working
out of dedication, serving their country, serving their gulf
coast communities. These are the people who represent the
Minerals Management Service to me.
Industry and offshore energy supporters were always
conscious of the political reaction and industry setbacks
occasioned by the 1969 Santa Barbara oil spill and reinforced
by the Exxon Valdez. No one wanted to repeat those failures, so
industry had an incentive to maintain strong environmental
protections. That, coupled with regulation, encouraged careful
planning and adequate safety precautions. That formula worked
well.
Three months ago and for the many years proceeding, the
regulatory and response structure was based on a past history
of success. Since 1980, the largest spill from a blowout in
federal waters was only 800 barrels. All of the plans in both
Republican and Democratic administrations were adopted against
this backdrop of safety.
Unfortunately, now the federal government must establish
future policies in the aftermath of a worst-case scenario
beyond anything most people contemplated.
I hope Congress will follow the process that has served us
so well in the aviation field, study what caused the accident
and then adopt new or additional procedures on that basis.
Offshore regulators need to have a good working
relationship with industry to understand what they are
regulating and to avoid imposing one-size-fits-all rules that
ultimately decrease safety. For half a century, the Gulf of
Mexico has produced a third of our nation's oil, a huge
economic benefit to America with an impressive safety record.
The federal government should not throw out a system that
was so successful for so long without understanding where the
problems really are. Thank you.
[The prepared statement of Ms. Norton follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Stupak. Thank you. Secretary Kempthorne, opening
statement please.
TESTIMONY OF DIRK KEMPTHORNE
Mr. Kempthorne. Mr. Chairman, thank you very much to all
members of the committee. I am Dirk Kempthorne, and I have
testified before Congress as a United States senator, as the
governor of Idaho, as a cabinet member. This is my first time
testifying that I have been in the elevated position as a
private citizen.
My responsibilities as secretary ended at the Department of
Interior 449 days ago. Ninety days ago, the BP oil spill
exploded into the nation's consciousness. The accident of BP's
Deepwater Horizon oil rig caused 11 families to bury their
sons, husbands, and fathers. The accident injured 17 workers.
It forced fishermen and others to lose their livelihoods. It
engulfed the Gulf of Mexico with oil slicks that now are close
to beaches and marshes in the bayou.
Out of respect for Congress where I served for six years
and out of respect for these two committees, I accepted your
request that I talk with you about the tragic oil spill. In
light of leaving Interior 18 months ago and without access to
Interior staff or briefing documents, I preface all of my
remarks with the understandable caveat, as I recall. Until now,
I have declined multiple media requests to comment in the
belief America was best served by letting those in charge to
stay focused on job number one of stopping the oil spill.
As you can appreciate, I cannot provide any insight about
the exploration plan and the many dimensions of the application
for the permit to drill which culminated in the Deepwater
Horizon accident because these were evaluated and approved
after I left Interior.
For 40 years prior to this accident, the Interior
Department and the industry it regulated had a remarkable
record of success in safely developing and producing energy
from oil platforms and drilling rigs.
Secretary Norton and I took note of this remarkable safety
record and so did our successor, Secretary Salazar. Before the
BP oil spill, Secretary Salazar on March 31 of 2010 announced
he had revised the 2007/2012 five-year plan. This plan called
for developing oil and gas resources in new areas while
protecting other areas. On the issue of safety, Secretary
Salazar said, and I quote, ``Gulf of Mexico oil and gas
activities provide an important spur to technological
innovation, and industry has proven that it can conduct its
activities safely.'' That statement, Mr. Chairman, is
consistent with my own impressions while serving as the
secretary of the Interior.
By requesting me to attend, you are asking about the record
of the Bush administration on offshore energy development. I
offer these perspectives from my experience as secretary. This
hearing gives me an opportunity to address an issue about the
ethical culture at the Minerals Management Service. Let me
address the issue of ethics head on.
Shortly before leaving office, I was summoned to Congress
to testify on inspector general reports about unethical conduct
within the Minerals Management Service. On September 18, 2008,
I unequivocally told Congress that the conduct disgusted me and
there would be prompt personnel action. Because that action was
underway, I was advised by lawyers at the Department of
Interior that I could not discuss it in detail. Now I can,
including the fact that we fired people.
It should be part of this hearing record that Johnny
Burton, who had been director of MMS during Secretary Norton's
tenure, has publically stated upon hearing about this conduct,
that she personally requested the IG to investigate. It should
also be part of this hearing record that those involved were
fired, retired, demoted, or disciplined to the maximum extent
permissible.
The facts are that all of these actions were taken before I
left office. I would add a statement that Inspector General
Earl Devaney said in a testimony before the House Natural
Resources Committee on September 18, 2008, and I quote, ``I
believe that the environment of MMS today is decidedly
different than that described in our reports.'' And I agree
with the IG that 99.9 percent of DOI employees are ethical,
hard-working, and well-intentioned.
Mr. Chairman, members of the committee, they are part of
your team. There are good people there.
I received another report critical of the MMS Service
Royalty program. Again I took action. The current
administration puts stock in the Don Carey report reviewing
MMS. I would like the record to note that I personally called
former senators Jake Garn, a Republican, and Senator Bob Carey,
a Democrat, and asked them to conduct a bipartisan, independent
and thorough examination of this program with no preconceived
outcomes. They did with other talented experts.
They issued a report that recommended 110 actions to
improve the program, including, as I recall, 20 recommendations
directly from the inspector general's office. We methodically
implemented all of the recommendations that could be done while
we were still in office, which, as I recall, was about 70.
Mr. Chairman, I would ask that the testimony of Inspector
General Earl Devaney and I gave to Congress in September of
2008 be made part of the record as well as the Don Carey
report.
Mr. Stupak. Without objection, it will be.
[The information appears at the conclusion of the hearing.]
Mr. Kempthorne. Also, while I was Secretary of the Interior
not once but twice increased royalty rates companies paid for
energy produced for deepwater offshore leases. In 2007, we
increased the royalty rate from 12.5 percent to 16.67 percent.
In 2008, the royalty rate was again increased to 18.75 percent.
This is a 50 percent increase in royalty rates paid by oil
companies for the right to produce oil and gas from federal
waters.
I can report to you that these increases came as a result
of a conversation I had with President George Bush. He believed
and I agreed that a 12.5 percent royalty rate was too low. I
would also note that not once but twice budgets that I
submitted called for Congress to repeal sections of the 2005
Energy Policy Act that provided additional price incentives for
deepwater oil and gas development.
As secretary, I was required by the Outer Continental Shelf
Lands Act to issue a five-year plan covering the years 2007 to
2012 for offshore oil and gas development. Once we finished
that plan, it was required by law to be submitted to Congress
for a 60-day review. Congress had the power to reject that
plan. Congress did not. In fact, as I recall, I don't think any
legislation was introduced calling for the plan to be rejected.
The plan is here.
This plan was developed after extensive consultation with
members of Congress, state and local official, industry, and
environmental organizations. We received comments from more
than 100,000 interested citizens. 75 percent of the comments
received from the public supported some level of increased
access to the domestic energy resources of the outer
continental shelf.
My five-year plan, Mr. Chairman, was met with both draft
and final environmental impact statements. A relevant fact is
that these EISs, along with environmental assessments and oil
spill response plans, were based on the probability that a
significant oil spill was small. The environmental impact
statement used historical information and models. When the 2007
and 2012 five-year plan was written, there had not been a major
oil spill in 40 years. One very real consequence of the
Deepwater Horizon accident is that these historical assumptions
will be forever changed.
An additional significant development was taking steps to
implement congressional direction and further the work that
Secretary Norton set in motion to development offshore wind,
wave, and ocean current strategies.
Mr. Chairman, I would conclude with two thoughts. One, as
you appropriately deal with this issue, and I appreciate the
tone which has been set by so many of the members of this
committee, that this is an opportunity to bring out issues that
are before us, to find out what worked, what did not work, and
what is the path forward.
But I would encourage all officials working on this to keep
in mind the great resources that you have with the states with
the governors in those gulf coast states, proven leaders who
are pragmatic and want to be partners. They also have solutions
to this.
And second, the consequence of the Deepwater Horizon
accident is that it will forever change the offshore energy
industry. Never again will a cabinet secretary take office and
be told that more oil seeps from the seabed than has been spilt
from drilling operations in U.S. waters. Never again will
decision makers not include planning for events that might be
low probability events but which in the unlikely event they
occurred, would be catastrophic. Thank you, Mr. Chairman.
[The prepared statement of Mr. Kempthorne follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Stupak. Let me thank both secretaries for your
testimony and thank you again for voluntarily appearing.
Caution to members. We have 34 members here, and if we all take
five minutes each, that is going to bring us pretty close to
the three-hour limit. So I am going to be going to push members
to keep your questions within that five-minute range. Otherwise
we will have a runaway committee as opposed to a runaway well.
And we will try to keep some control of it.
Let us begin with Chairman Waxman for questions please.
Mr. Waxman. Thank you very much, Mr. Chairman. I will abide
by your admonition on the time. Secretaries Norton and
Kempthorne, I have some questions about the goals of the Bush
Administration's national energy policy. President Bush and
Vice President Cheney's energy task force suggested several
ways to boost offshore production of oil and gas.
The Cheney task force recommended that the Interior
Department offer new economic incentives to encourage industry
to pursue offshore oil and gas development. These incentives
included a proposal to reduce the royalties private companies
have to pay the American people when they take oil and gas from
public land. The task force also recommended that the Interior
Department identify and reduce impediments to exploration and
production both onshore and offshore.
Secretary Norton, were those components of the Bush energy
plan?
Ms. Norton. To the best of my recollection, Congressman, as
to economic incentives, we employed the economic incentives on
royalty relief that were put in place by----
Mr. Waxman. My question is the general statement of that
energy plan was to provide incentives and to reduce impediments
in order to develop more energy supplies. Wasn't that what the
plan was all about?
Ms. Norton. We were facing a very serious energy crisis at
that point in time.
Mr. Waxman. I am not asking for justification. There is
nothing wrong with that.
Ms. Norton. We were looking to increase the energy
production.
Mr. Waxman. Now, immediately after the task force released
its report, the President issued two executive orders. Now,
this task force that Vice President Cheney chaired was a
subject that I know a lot about because I was trying to just
find out who he met with, and we never even got the list of the
executives from industry that he met with. I don't know what
the secret was all about, but I had to go to the Supreme Court
to try to get that information.
So the task force released its report. Then the President
issued two executive orders intended to increase energy
production. One of these orders required agencies to compile
every rule making and analysis of whether the rule would
adversely affect energy supply.
The other order directed agencies to expedite a review of
energy exploration permit and accelerate the completion of
energy-related projects. Secretary Norton, in August of 2001,
Stephen Guiles, your deputy secretary, wrote a memo to the
Council on Environmental Quality stating that the department
``is fully committed to playing a role in this effort.''
Secretary Norton, during your tenure, did the Department of the
Interior support President Bush's policy of expediting drilling
on the Outer Continental Shelf?
Ms. Norton. We took many actions looking at what could be
done to make sure that the permitting in place and so forth was
done in----
Mr. Waxman. You were trying to----
Ms. Norton. It really was not----
Mr. Waxman [continuing]. Comply with the policy of the
administration, weren't you?
Ms. Norton. There was really not much change as to the OCS.
We worked primarily at on-shore areas and the permitting
process in those areas.
Mr. Waxman. OK, I have a limited time, but the answer is
yes. You were trying to do this within your purview.
Secretary Kempthorne, when you lead the department, isn't
it true that the Bush Administration plan and the resulting
Energy Policy Act of 2005 specifically encouraged deepwater and
ultra deepwater drilling in the Outer Continental Shelf.
Mr. Kempthorne. That was so.
Mr. Waxman. OK, what concerns me is that in the task force
report and the President's executive orders, I have no problems
with those reports in themselves. But I don't see any
consideration for the importance of improving drilling safety
while we encouraged more exploration. Committee staff reviewed
your testimony each of you gave to the Congress when you were
secretary and found no discussion of strengthening safety
standards for blowout preventers, no discussion of best
practices for well design, and no discussion of how we assure
that industry can respond to a large oil spill.
Both of your testimonies talk about the safety record of
offshore drilling, but it seems to me that one of the things we
have learned is that deepwater and ultra deepwater drilling
might involve different risks than shallow water drilling and
it wasn't appropriate to rely on assurances based on shallow
water drilling experiences.
I am not trying to lay the Deepwater Horizon disaster at
the feet of the Bush Administration. In fact, I look forward to
hearing from Secretary Salazar on some of these same questions.
But I am trying to understand how we got here today, how
Congress and the regulators accepted the industry's promises of
safety as we press full steam again into the deepest waters of
the Gulf of Mexico without verifying that industry could
deliver on its promises.
It is as if we said we are going to raise the speed limit
to 100 miles an hour without thinking twice about how to
strengthen seatbelts or improve airbags. The American people
deserve these answers. They deserve an energy policy that
considers the need for better safety rules as industry takes
greater risks to find oil and gas.
Thank you, Mr. Chairman.
Mr. Stupak. Thank you, Mr. Chairman. Mr. Barton for
questions please.
Mr. Barton. Thank you, Mr. Chairman. I am going to try to
hold it to the five minutes just as Chairman Waxman did. I
might point out that if we had followed regular procedure and
had the incumbent Cabinet secretary here first where most of
the questions are, we wouldn't take up as much time with two
prior Cabinet secretaries who have no official standing, but
that is just me kind of saying we ought to use the regular
order instead of this unusual order.
But having said that, we are glad you folks are here. As we
all know, the Jones Act requires U.S. flag ships with U.S.
crews to operate in the Gulf of Mexico, but we do have existing
statutory authority that the President can waive that in times
of emergency. We had a lot of international equipment that was
available to come help us with the oil spill that wasn't
allowed to come because the Obama Administration wouldn't waive
the Jones Act.
Do either of you have a comment on that?
Ms. Norton. While this was not anything that I dealt with
directly, I do know that the situations that occurred with
large oil spills in recent history had been in other countries.
And so other countries have learned from those experiences. And
it makes sense to me to take advantage of the equipment and the
personnel that are available. I do know that President Bush
waived the Jones Act as quickly as possible after Hurricanes
Rita and Katrina so that we could bring in assistance from
other countries.
Mr. Barton. Secretary Kempthorne.
Mr. Kempthorne. Mr. Barton, the magnitude of this
catastrophe would suggest that you should be able to array all
assets made available to you, and I do not believe that was
what occurred.
Mr. Barton. OK, we have also given authority to waive
certain EPA environmental review requirements in times of
emergency. This authority was used in Katrina. Several
governors of the gulf coast, the governor of Louisiana, I
believe the governor of Mississippi, asked for such a waiver.
As of yet, that waiver has not been implemented, and so you had
the ironic situation where the Coast Guard was attempting to
facilitate the creation of berms to prevent known oil from
reaching the beaches, and yet the EPA was refusing to grant a
waiver so that--because of some potential impact that was
unknown at the time.
Do either of you have a comment on why the Obama
Administration wouldn't listen to and work with the affected
governors of the states on this issue?
Ms. Norton. Once again, drawing from the Rita and Katrina
experiences, we tried to do everything we could to move ahead
as quickly as possible with common sense. And I really cannot
comment about all the aspects of the current administration's
decision-making. I am not there. I don't know the details.
Mr. Kempthorne. Mr. Barton, if I may add, I referenced in
my comments that we need to utilize these governors, very
talented people. When I was governor of Idaho and we had
Katrina and Rita, I was in continual telephone communication
with Governor Barber, Governor Blankill, Governor Perry. On a
moment's notice, they would say the needs that they might have,
and I could implement the Idaho National Guard. C130 it would
leave, a variety of things, a convoy that would go because they
would run out of diesel fuel for first line responders.
We moved faster than the federal bureaucracy was moving. We
are still the United States of America, and this working
together with the states, I think, can yield great results. And
so again I just urge the partnership with those that are down
in the gulf coast region.
Mr. Barton. There is one more question I want to ask in the
last one minute. Much is made by some of my friends on the
majority of the fact that when we passed the Energy Policy Act,
we put in some ultra deep language, and when that language was
implemented, the Clinton Administration made the decision not
to require a price trigger for royalties, but we did provide a
volumetric trigger.
Those were put in place when oil per barrel was below $30 a
barrel. I think it was even below $20 a barrel. Obviously now
it is $70 or $80 a barrel. It makes no sense not to have some
sort of a price royalty trigger. But it was the Clinton
Administration that made that decision initially, not the Bush
Administration. Isn't that correct?
Ms. Norton. Yes, Congressman. We found that the Clinton
Administration had omitted price thresholds from some of the
leases that were issued. My administration put in place price
thresholds on all of the leases that went forward.
Mr. Barton. The new leases.
Ms. Norton. On the new leases.
Mr. Barton. OK.
Ms. Norton. There has been a lot of litigation about that,
and I won't go through the history of----
Mr. Barton. Well, in hindsight, you know, we should have
had a price trigger, but a contract is a contract. So we put
them in place for future. But since the Clinton Administration
didn't have them in place at the time when prices were so low,
those contracts have been honored.
With that, Mr. Chairman, I know my time is expired. And I
thank you, and I thank our two witnesses for being here today.
Mr. Stupak. Thank you, Mr. Barton. Secretary Kempthorne,
you were secretary when the lease sale for 206, which included
the BP's McCondill well was let. Is that correct?
Mr. Kempthorne. That is correct.
Mr. Stupak. And I believe you said that it was a big sale
record. $3.7 billion was the lease sale for 206 including $34
million for the block containing the McCondill well. And you
indicated that we had won the championship. We had won the
championship, but one of the things we have been struggling
with is a bad actor policy. For instance, British Petroleum has
760 violations, egregious willful violations in a five-year
period, where the next biggest oil company has only eight.
Was there anything that you could have done as secretary
and said thank you for your bid of $34 million, but we are not
going to let you drill in this area based on your past record?
Is there any authority for you to do that?
Mr. Kempthorne. Mr. Stupak, I don't believe that that is
part of the current matrix.
Mr. Stupak. If it is not, should it be? Should the
secretary be able to say thank you for the bid. Even though we
are the highest bidder and we have to give you this lease, we
are not going to because of your past history?
Mr. Kempthorne. Mr. Chairman, many of us in our daily lives
and decisions we have to make have to do due diligence. If that
could be part of the matrix, I think, is certainly a very fair
question.
I would also, if I may, Mr. Chairman, with regard to
winning the championship, we were there in the big dome of the
New Orleans Saints, and it was an atmosphere of New Orleans
trying to come back. And so it was in that context.
Mr. Stupak. Well, they did win the big championship.
Ms. Norton. Mr. Chairman, if I could just add a quick
comment on----
Mr. Stupak. Sure.
Ms. Norton [continuing]. The substance of your question. I
think it makes sense to have a bad actor set prohibition
against participating. I do think there are some problems with
entering into subjective aspects of the decision making about
who wins the highest bid. I think having a clear high bid and
awarding on that basis is something that provides a lot of
protection against manipulation of the system.
Mr. Stupak. Well, right now the law requires you if it is
the high bid, you have to accept it, right?
Ms. Norton. That is right.
Mr. Stupak. No matter what the history is.
Ms. Norton. Having a separate bad actor provision makes a
lot of sense.
Mr. Stupak. Let me ask you this, Secretary Norton.
Throughout our investigation, we have learned that Deepwater
Horizon explosion was caused by a series of shortcuts that BP
took in the final hours and days before the explosion. The
final step in the disaster was the failure of the blowout
preventer to cut the pipe, stop the blowout, and seal the well.
BP's CEO Tony Hayward called this device a failsafe and
indicated that he and British BP officials were shocked when it
failed. Frankly, I am surprised that anyone would be surprised
given the mounting evidence that BOPs weren't failsafe at all
In 2001, MMS received a report that concluded that all Sub-
C BOP stacks should have two blind shear rams to reduce the
likelihood of a blowout. Blind shear rams are used to--used as
a last resort in emergency to cut through the drill pipe and
close an out-of-control well.
So, Secretary Norton, after receiving this report, did the
Department of Interior require two blind shear rams on Sub C
BOPs?
Ms. Norton. The Department of the Interior looked at the
issue and addressed it with a regulation saying that blind
shear rams must be capable of shearing the drill pipe and that
they have to be sufficient for the----
Mr. Stupak. But you didn't require two as was recommended?
Ms. Norton. We required four types of blowout preventers be
present on each of the wells.
Mr. Stupak. That was above the surface.
Ms. Norton. We have a quintuple.
Mr. Stupak. I am talking about subsurface. The ones that
you required was surface BOPs, which are easily accessible. We
are not dealing with a mile down. I am talking about Sub C, and
the report dealt with Sub C.
Ms. Norton. In order to--our regulation required that there
be a blind shear ram that was sufficient to address the
situation.
Mr. Stupak. But the recommendation was two so we had a
backup redundancy so we could have a failsafe system. And do I
understand you didn't require the two then?
Ms. Norton. Regulations do not require two. That is
something that can be looked at in the future.
Mr. Stupak. Right, you issued a regulation in 2003, and you
didn't make it part of it.
Ms. Norton. The experts in MMS looked at that issue and
determined that what needed to be addressed was having----
Mr. Stupak. That they should be able to do it, but they
recommended two.
Ms. Norton. They set in play----
Mr. Stupak. Let me ask you this though.
Ms. Norton [continuing]. That said they had to be able to
address----
Mr. Stupak. My time is just about up. MMS received another
report that painted, and I quote, ``a grim picture of the
ability of the BOPs to cut pipe when necessary.'' In response,
MMS took one minor step. The agency began requiring each well
operator to provide information showing that the BOP blind
shear ram was capable of shearing the drill pipe, as you said.
But it is unclear to what extent this information was reviewed.
Frank Patent, the New Orleans district drilling engineer
for MMS, testified before the Marine Board of the investigation
on this Deepwater Horizon and said that he was never told to
look for this information when reviewing drilling applications.
So my question is how do you explain Mr. Patent's
testimony? He was the New Orleans drilling engineer, and yet
even he seemed to be unaware of requirement that companies
demonstrate that blowout preventers could even cut the pipe?
Ms. Norton. The regulations are there. They are very clear
about the need to have blowout prevention devices that are
going to function in the circumstances. They have to be
maintained. They have to be checked, and I can't address what
happened several years after my watch and why he may not have
had that information.
Mr. Stupak. But when you did the final regulation, you had
about three reports to your agency and you issued a final rule
in 2003. You just had verification that companies were supposed
to verify that they had ram shear, not two, just one ram shear,
correct?
Ms. Norton. If you look at Secretary Salazar's 30-day
report to the President following the Deepwater Horizon
disaster, they looked at those studies and found that those
studies reinforced the regulation as it was written.
Mr. Stupak. I am looking at the federal register which
would be your rule that you submitted, and it was absent of all
that. You left it to the discretion of the oil companies.
Ms. Norton. We put in place a requirement that they had to
have sufficient blowout prevention devices to maintain control
of the well.
Mr. Stupak. Mr. Burgess, questions?
Mr. Burgess. Thank you, Mr. Chairman. We have heard some
references--and Secretary Kempthorne, I really appreciate you
bringing up the role of the states in the response to what has
happened in the gulf. And it seemed like what should be all
hands on deck all the time isn't exactly what is happening. We
have heard it referenced here a couple of times in the Q and A
period.
We have taken now--I have taken three trips down to the
gulf. Governor Jindal very much publicized recommendation that
he be able to build sand berms to the east of the Chandelier
Islands to protect those areas. Our last trip down there, we
heard about the placement of some rocks, building rock berms in
some of the--near some of the barrier islands, near Grand Isle,
Louisiana because if the oil enters through the cuts in the
barrier island, then getting into that very sensitive area of
the interior will--the recovery period could be quite, quite
prolonged.
So the mayors and the parish commissioners are desperate to
be able to put the rocks in place. They are desperate--BP has
provided the rocks. They are sitting on barges in the
Mississippi. They can't sit there forever. Sooner or later,
they are either going to have to be used or sent back, and it
is this type of tension between the folks on the ground,
secretary of interior, the Environmental Protection Agency.
Do either of you recall--you have dealt with some pretty
big disasters between Rita and Katrina, and, Secretary
Kempthorne, I think you had some big forest fires that went on
during your tenure. Do you ever recall having this type of
tension between the various federal agencies that are
responsible for controlling the disaster, the cleanup
thereafter, and the overseeing the effects on the environment?
Can any of you recall this type of scenario?
Mr. Kempthorne. Congressman Burgess, again it is
catastrophic in its sheer magnitude. Yes, it is going to be
stressful for everybody involved, but I like your adage of all
hands on deck. I think if you can create an atmosphere of
collaboration, of utilizing the resources that you have,
identifying what is the major hurdle that we have currently
facing us? What can we do? What are the assets that could be
deployed? Where might we have flexibility? Where might we be
able to go and utilize some practices that, based on past
practices, we think would have a benefit?
The barrier islands is a project that has been reviewed for
some years because you, in essence, have lost the barrier
islands. There does need to be the restoration of those. I
think the term was to the 1917 topographic area. It is
something that the governor has been fully engaged on. I was
engaged on as secretary of the interior, and, yes, I do think
we should be moving in that direction. And I do think that you
can have waivers so that you can do the pragmatic without
causing long-term adverse consequences.
Mr. Burgess. But this is really troubling, and the problem
is that everybody sits in a room. Someone at some level says
no, and then that's the end of the discussion. And there should
be--I think there is under the whole pollution act, one guy who
sits at the other end of Pennsylvania Avenue who is able to cut
through all that and get this stuff done, who has that
flexibility. And it is the nonengagement of the White House
right now in some of these things that is so frustrating.
Mr. Kempthorne. Congressman Burgess, when I was secretary
of the interior, we had a water crisis down in southeast part
of the country, Alabama, Georgia, and Florida, and it was
escalating. And I was told after a cabinet meeting I was going
to southeast United States. And I said why am I going? Because
the President wants you to step into this and see what we can
do to resolve it. By getting all the principals in one room
with the assets with the authority, you are able to calm and
have a path forward with the proper decisions made.
Mr. Burgess. Seems in this case, we get everybody in the
room, and then someone says no. And then we have got two more
weeks to go to get another answer. Let me just ask a question
to either one of you. How difficult--Secretary Kempthorne, you
referenced that the people were let go from MMS after some of
the difficulties.
How difficult is it to fire someone from a federal agency
like MMS?
Mr. Kempthorne. There is due process. You have to protect
the rights of the individual, of the employee. You can imagine
how difficult it was for me in that particular hearing knowing
that we were issuing letters to employees that they are going
to be dismissed, but there is a 30-day clock that is running to
see if they are going to contest it. And then what due process
do we have?
So it is the law that has been implemented by this body
that we adhere to, and it is proper because you protect the
rights of the individuals.
Mr. Burgess. But let me just ask are these individuals
covered by union contracts?
Mr. Kempthorne. I don't know, sir.
Mr. Burgess. Is MMS part of a federal union, a federal
employees' union?
Ms. Norton. I am not aware that it is, but I really don't
know. There may be some employees, but I am not sure how they
are affected.
Mr. Burgess. Mr. Chairman, I will yield back.
Mr. Stupak. Thank you, Mr. Burgess. Mr. Inslee for seven
minutes for questions.
Mr. Inslee. Thank you. Thank the witnesses for being here.
We are going to ask some questions today. I want to make sure
you understand the purpose of my questions is to try to figure
out how we move forward, not to make you feel uncomfortable.
Although this is an uncomfortable situation.
While the Cheney energy task force was going forward, it
was secret. Many of us tried to obtain information about it. It
was very frustrating that we could not. I think it is
unfortunate now that that secret of the secret task force has
been revealed, which was that the administration, that
administration pursued a policy of a very, very large expansion
of offshore drilling with no, as far as I can tell, commitment
expansion of safety regulations.
So I want to ask you why that is and how that occurred so
we can see that that does not happen in the future. I want to
follow up on some of Mr. Stupak's questions about the blowout
preventer. It is really stunning to me that these blowout
preventers were apparently considered a failsafe device, but
all the information available to the department even then was
that they were repeatedly failing.
The study in December 2002 by West and Gerring, given to
the department. It showed that 50 percent, at best, of them
functioned when tested. And later on, we now know at 2009 that
only 45 percent of them worldwide have been shown to work under
real-world conditions. And yet, as far as I can tell, there
weren't actions taken to improve their performance despite the
department's known information about this.
For instance, in 2003, MMS received a report concluding
that oil and gas companies should ensure that critical backup
systems, such as deadman's switches and remotely controlled
operator vehicles, actually worked. This seems like common
sense. And we know on this particular rig, the deadman's switch
did not work.
So I could ask you, Secretary Norton, after receiving the
report requiring or suggesting that we ensure the performance
of critical backup systems, did the department require testing
of backup systems or ensure that Sub C BOPs had backup systems?
Ms. Norton. First of all, I have not had access to people
in the Minerals Management Service to be able to describe and
discuss what those procedures were exactly. I do know that we
adopted a regulation that was a strong regulation requiring
blowout prevention devices, and that was--some of that was done
over the objection of industry. And we went further than
industry asked to get regulations in place in 2003.
Studies were done at the request of the department, and we
looked at the results of those studies. And as reflected in
Secretary Salazar's report to the President, those studies and
their results were incorporated in the regulations that were
adopted by my department.
Mr. Inslee. Well, let me----
Ms. Norton. If I can----
Mr. Inslee. Go ahead.
Ms. Norton [continuing]. Point out that, you know, based on
what we have seen and what has been reported in the media, it
appears that BP violated all of those regulations that were on
the books throughout the administrations.
Mr. Inslee. Thank you, and let me help you. Our research
has shown that, in fact, you did not issue a regulation
requiring performance standards for critical backup systems.
You did not issue such regulation on deep sea subsurface
blowout preventers, and this may have been one of the reasons
this whole thing happened.
I want to ask you about the cementing failure. One of the
failures in this particular instance was in centralizing the
pipe. You may have heard that essentially BP decided not to use
the recommended number of centralizers, did not do a cement
bond lock, did not use a lockup sleeve to keep the casing in
place if pressure built up.
So I would like to know during your term, Secretary Norton,
were there any specific regulations put in place that would
have required BP to adequately centralize the casing?
Ms. Norton. I have to admit, Congressman, I don't know what
centralizing casing means.
Mr. Inslee. What it means is----
Ms. Norton. However, I can say that our regulation required
that a company used pressure--they had to pressure test the
casing shoe, run a temperature survey, run a cement bond log,
or use a combination of those techniques if there was any
indication of an inadequate cement job.
Mr. Inslee. Well, let me help you out. I know that in June
2000, MMS proposed a new rule regarding cementing that raised
the question whether to require industry best practices be
forward. In other words, MMS suggested or at least considered
at one time requiring prescriptive cementing practice
requirements.
After listening to industry, and as far as we can tell only
industry, the agency apparently did not adopt those
requirements. Are you aware of any independent studies
commissioned by MMS to identify best cementing practices? Or
did the department depend just on industry input in that
decision?
Ms. Norton. I believe that the 2000 reference you are
referring to was only as to producing wells and so would not
have applied to the Deepwater Horizon situation. This is an
issue that certainly needs to be looked at and considered based
on the information that comes from what went wrong in the
Deepwater Horizon situation. Obviously, there has to be a look
at, you know, what regulations are necessary going forward.
My general understanding is that we looked at the studies
that were done and incorporated those requirements to the best
estimate of the Minerals Management Service experts.
Mr. Inslee. Well, this was a consideration of cementing in
the original drilling. That is when you do the cementing, and
we have been told--our research has shown in June it was
suggested only comments were received from the industry, and,
as far as we can tell, you did not take any action regarding
requiring specific practices in cementing. I just ask you just
specifically. Did you require anything that required cement
bond log tests?
Ms. Norton. Congressman, I am not an expert on cement
bonds, and I really would have to get back to you with
additional information because I do not know that level of
detail. And as secretary, we did not look at that level of
detail. We relied on the experts, really the ones who
understand.
Mr. Inslee. Let me ask you a broader question. After the
administration following the secret Cheney energy task force
decided to greatly expand offshore deep water drilling, did you
take actions to, in any significant way, improve the safety of
deep water drilling?
Ms. Norton. We had a very strong safety program that was
recognized internationally, and I personally attended a meeting
of the International Offshore Safety Regulators, the equivalent
of MMS from around the world. And the MMS program was very
highly regarded in my discussions with people.
Mr. Inslee. I must----
Ms. Norton. And I had----
Mr. Inslee [continuing]. Regret to say--I am running out of
time. I am sorry for the time. I would just like to close by
saying we regret that experience did not prove your observation
correct. Thank you.
Mr. Stupak. Mr. Griffith, for questions please, five
minutes.
Mr. Griffith. Thank you, Mr. Chairman. I think sometimes we
get, or at least in my opinion, somewhat off the subject. I
think we know the military axiom that after the first shot is
fired, the battle plan goes to hell.
So we can talk about cement. We can talk about regulations.
We can talk about pressure gauges. We can talk about pounds per
square inch, but the fact of the matter is that after this
disaster occurred, did we recognize it? And after that first
shot was fired or after that first blowout occurred, where was
the leadership for the crisis? It was not to go back to the
book and see who missed a pounds per square inch or who missed
a sentence of a regulation. But as it occurred and as we
watched it occur and unfold, did leadership recognize the
significance of it and provide the leadership to correct it?
That is really what this is all about. There will never be
a document 10 feet high on the regulation of offshore drilling
that will be foolproof and will protect us from this disaster.
The question in my mind is who in the administration, in the
executive branch, had the ability to call EPA, the Coast Guard,
the governors, put them in a room, say to them this is a
national tragedy and a disaster. Fix it. Where was George
Patton during this disaster, or was there a George Patton
there? I would like to hear that answer from either one of you.
Mr. Kempthorne. Congressman Griffith, I appreciate the
analogy. I believe that our examples where that is exactly the
type of process that must occur for results to be achieved. Did
it or did it not? I am not in a position to comment, nor am I
today going to sit here in criticism of my successor who has a
very tough job and an unenviable position with the terrible
thing that has happened.
So again that is why I decline many media opportunities
because I think the team on the field has to have running room.
But I will tell you, Congressman, that that is the formula, and
I have seen it time and time again. I believe unfortunately
that when you have seen comments made that are contradictory of
other comments within the same administration, it would suggest
they are not in that same room. And that is something that I
think is worth noting.
Mr. Griffith. Thank you, and I would like to yield the
balance of my time to the ranking member, Congressman Burgess.
Mr. Burgess. I thank the gentleman for yielding. Mr.
Chairman, I want to make a unanimous consent request. I have a
report from the Department of the Interior dated May 27, 2010,
``Increased Safety Measures for Energy Development on the Outer
Continental Shelf.'' Part three details existing well control
studies, and they talk about the technical assessment and
research program and list almost 25 studies of the funded well
control research from 1990 through 2010. The bottom line reads
``The results of this study confirmed that the regulatory
decision to require operators to submit documentation that
shows the shear rams are capable of shearing the pipe in the
hole under maximum anticipated surface pressures.'' There is no
notation as to the number of shear rams that should be
required. This is Secretary Salazar's report, and again I think
it answers some of the questions that were put to Secretary
Norton during the previous lines of questioning.
And then since I do have a few extra moments, let me just
opine that one of the concerns that I have had with the current
administration is the lack of transparency, that we keep
hearing about the lack of transparency in the -- with the
Cheney energy task force. That certainly preceded my time, but
I hope the chairman will help me when we make requests of the
administration. I would like to know who was around the
President's table when perhaps he was advised by the energy
czar, Carol Browner, when he was advised by Secretary Chu about
what the response should be to control this well. The President
said he had been assured that there were no real dangers in
offshore drilling when he gave his speech earlier in the year.
Who was involved in that?
So I hope the chairman will join with me in an effort to
gain more transparency from the administration when we request
this documentation, and I will yield back the balance of my
time.
Mr. Stupak. Gentleman's time has expired. Mr. McNerney from
California. Questions please, five minutes.
Mr. McNerney. Thank you, Mr. Chairman. Secretary Norton,
Secretary Kempthorne, I certainly appreciate your thoughtful
opening comments, and I appreciate your defense of the
employees of the department. I haven't been here that long, but
my staff and the staff of all the committees, they work very
hard. And they are committed, and they are patriotic. So I
certainly appreciate most employees are very commendable.
Now, I have a question. It is a simple question. Was there
a philosophy during your tenure that there should be less or
minimal oversight of offshore drilling and that the drilling
operators were capable of policing themselves? So it is sort of
an open-ended, philosophical question. You can go first,
Secretary Norton.
Ms. Norton. Congressman, I believe there was an attitude,
and frankly it was not one that we created by something we did,
but it was a longstanding attitude of mutual problem solving,
of really, you know--while MMS certainly had a regulatory and
oversight role and they, in my experience, were diligent about
that, they also wanted to work with the expertise that industry
had.
Industry was at the cutting edge, coming up with new
technologies every day, and you can't just sit back and be
distant from that and still be able to have the proper
regulatory and oversight law.
Mr. McNerney. Well, I mean the sort of thing I am thinking
of is during, partly during your tenure, there was a drastic
reduction in the ratio of inspectors to deep water wells, and
that sort of reflects on, I think, the philosophy that I am
trying to get at here.
Ms. Norton. I would be happy to provide additional
information, but we requested a number of years increases in
resources for the Minerals Management Service in order to keep
pace with rising workloads.
Mr. McNerney. OK, I would like to follow up and ask a
question about the exemption the Department of the Interior
gave leasees during the Gulf of Mexico--or in 2003. Before
2003, leasees had to provide a blowout scenario with their
exploration, development, and production plans. The scenario
was supposed to estimate what might happen in a blowout at the
well site and include the flow rate, overall amount, and the
duration of an oil leak from a potential blowout. In addition,
leasees were supposed to provide information about their
ability to secure rig, drill a relief well, and how long that
drilling might take place. That sounds like a good idea. Do you
agree that that would be a good thing to have?
Ms. Norton. We have looked at that particular issue that
you raised and tried to determine exactly what some of those
documents meant. My best reading of it is that that information
was viewed as having been provided in a different set of
documents with a broader application. And the document you are
referencing is simply saying it did not have to be duplicated
in other documents.
Mr. Kempthorne. Congressman, may I respond to your first
question----
Mr. McNerney. Sure.
Mr. Kempthorne [continuing]. So that I am on record. The
question whether or not there was an effort or philosophy to
have less or minimal oversight.
Mr. McNerney. Correct.
Mr. Kempthorne. And I would say absolutely not. Absolutely
not. Repeatedly, the atmosphere and the philosophy was that we
achieve the highest of environmental standards, that we do
protect the environment. We do know that there is a need for
the well-being of the families so that we have fuels so that
they can have an economy, so that they can have warmth, so that
they can produce food. But that you do not do that at the risk
of jeopardizing the overall environment.
I would also just note that MMS's civil criminal penalties
program pursued from 2001 to 2008 280 cases of noncompliance
with MMS regulations, and the last three years was the highest
area where that was pursued.
Mr. McNerney. OK, I am not sure that the results of those
years, in my mind, line up with what you are saying or align
with what you are saying. It appears in my mind that there is
more reliance on industry to clean itself up and to police
itself. And that is basically what happened with BP. They
weren't given enough oversight, and I was going to follow up
again with Secretary Norton.
Then in 2003, the Department of Interior created an
exemption for the blowout scenario requirement that I mentioned
earlier. And in my mind, that exemplifies that philosophy of
less oversight and more reliance on industry. It appears that
my time is up. So I yield back.
Mr. Stupak. Thank you. Mr. Shimkus for questions, five
minutes.
Mr. Shimkus. Thank you, Mr. Chairman. Again I appreciate
you all coming, and in my opening statement, you know, I talked
about command changes and taking responsibility. First question
is when you were both sitting secretaries, do you remember a
hearing where the previous secretaries going back to the
Clinton Administration were asked to testify on the same day
that you were testifying? Secretary Norton, did that ever
happen?
Ms. Norton. No, that did not.
Mr. Shimkus. Secretary Kempthorne.
Mr. Kempthorne. No, sir.
Mr. Shimkus. Thank you. You know my good friend from
Illinois, Congressman LaHood, Secretary of Transportation now.
And I don't think he has had any testimony coming up here where
he has had Secretary Peters or Secretary Minez. So it is just
interesting that we are doing in this light, but having said
that, what I have been--we know it is a catastrophe. We are
hoping the cap holds. We are doing the cleanup. BP should be
held responsible. I think we are all in, you know, on that
message and focus on helping, you know, the gulf coast states
recover.
And the issue is how do we decrease our reliance on
imported crude oil. And, I think, Secretary Norton, you kind of
talked about the change after September 11, understanding that
we have to really get away, and I am an all-of-the-above energy
guy. Nuclear, solar, wind, coal-to-liquid, OCS expansion.
In fact, I did mention in my opening statement President
Obama talking about a new, green--moving on a carbon bill would
include opening up more OCS. I mean that was a week before this
disaster happened. So do you think--and I rely a lot on my
friend and colleague and roommate, Steve Scalise, on some
information on gulf issues. Is a moratorium an appropriate
response, stopping operating wells that are, you know,
operating in line right now? Is that a proper response? I
understand doing research on the disaster, but a moratorium,
Secretary Norton?
Ms. Norton. In my mind, to go back to my aircraft analogy,
you don't ground all of the airplanes because there was one
problem. You have to look and, as they did, do a complete up-
and-down inspection of the existing rigs and make sure that
that problem doesn't exist. There might be other steps that
should have been taken. Maybe they were, and maybe they
weren't. But the important thing is to address the issues, not
send the drilling rigs overseas where they may not return for
many years and not send the jobs to other countries in order to
resolve the issue.
Mr. Shimkus. Secretary Kempthorne.
Mr. Kempthorne. Yes, Congressman, I believe that the action
was taken which was a safety review immediately after where
they look at, in the deep water, some 30 different drill rigs.
After that review, I think there was only one area of
noncompliance. Everything else was being adhered to with regard
to the regulations that are on the books. That was appropriate.
The gulf coast is being devastated, and all of us are for
safety. But I believe, Congressman, the result, if a moratorium
is put in place, is the only absolute is that you will further
cause disruption to the economy of the gulf coast states when
really they need to have an opportunity for recovery.
Mr. Shimkus. And just let me--and I will end on this. In my
opening statement, I talked about the Diamond Offshore
announced Friday it is an Ocean Endeavor drilling rig was
moving. This was July 9. I have Brazil sees silver lining, more
rigs. Three deep water drilling rigs to be moved from sites
south of Cameron Parish.
If they are in the process of moving, as some are, do they
come back, Secretary Norton?
Ms. Norton. In my experience, those are long-term
contracts, and once they are moved, once you go through the
trouble and expense of moving them away, then they tend to stay
in those locations. And it is going to be very hard for that
industry to be rebuilt.
Mr. Shimkus. Secretary Kempthorne.
Mr. Kempthorne. I agree with that statement, Congressman.
In the big picture, how far are we away from having another
situation that may see us at $4 a gallon gasoline? We are too
reliant upon foreign sources of our energy. We are too reliant,
and so if we now pursue a policy that continues to diminish our
own development here within our own shores on our own land, I
do not think it bodes well for the country.
Mr. Shimkus. Thank you, Mr. Chairman.
Mr. Stupak. Thank you, Mr. Shimkus. Mr. Melancon for
questions. Five minutes, sir.
Mr. Melancon. Thank you, Mr. Chairman. Secretary Kempthorne
and Norton, thank you all for being here today. First, let me
just say that I agree with the analogy of the rank-and-file MMS
employees. I think the morale particularly in Louisiana is very
down. The harsh criticism for people that are trying to do the
right thing. My concern is that they don't want to do anything
for fear of being criticized, and that is going the wrong
direction. So I understand, I think I understand human nature.
During your period, Secretary Norton, do you recall how
many times that you may have had any oversight hearing that you
participated in that dealt with OCS drilling or any of the
rules or regulations or legislation that was going forward? Do
we have a reauthorization in there anywhere?
Ms. Norton. We dealt issues usually as one small part of
the discussion of the overall especially Energy Policy Act of
2005.
Mr. Melancon. Was there anything, any legislation that came
forward that addressed OCS in '01 or '03?
Ms. Norton. Ordinarily what we dealt with and what you
dealt with were questions about where, you know, what areas
should be open for exploration and production as opposed to the
specifics. There were also, of course, issues as to incentives
and whether those should exist or not. That is my main
recollection.
Mr. Melancon. And where I am--what I am trying to
understand, and this goes back to, I guess, the first hearing
that we had here since the Deepwater Horizon incident, and Mr.
Dingell brought up the subject of the waiver of Neepa, waiver
of the Environmental Impact Statement. And my appreciation and
understanding is that somewhere along the line the law or rules
were changed that provided that you had to be able to do the
EIS within 30 days or the department got the option of waiving
the EIS.
Ms. Norton. I think what we see overall, The Outer
Continental Shelf Lands Act creates a structure of five-year
planning, and there are various stages in that process where
extensive environmental analysis is done. And each of the
subsequent steps relies on the blotter analysis and the more
in-depth analysis. It is done on this regularly scheduled
basis.
The categorical exclusion issue that has been discussed is
one that really goes back to procedure in place since the 1980s
and was not changed, as far as I know, within my administration
as to the offshore activities that we have been talking about.
That is the best of my recollection.
Mr. Melancon. Now, because I guess some of the concern that
I have is that, the difficulty I have is understanding how do
you waive the law and who gets that authority? After Katrina, I
couldn't get people to waive rule, much less an idea that might
have been good or bad. And so if there was, you know, a law--
and this is one of the things I have not investigated to a
large extent. NEEPA was there. EIS was required. Would it had
to have been law to change the--give a waiver?
Ms. Norton. If I can understand the key issue here, there
is in NEEPA a provision for what they call categorical
exclusions, and we did put some of those in place for
everything from fuels treatments for forest fire prevention to
some of the energy issues. And when we did that, we did that by
looking in depth at, you know, what the analysis had shown in
the past, how the process worked, and how that particular issue
fit in with our environmental decision making.
And so some of--and we had to go through the Council on
Environmental Quality that has to approve the categorical
exclusions. And so while I know we did that process on some
things, I don't think we changed anything on the offshore
issues.
Mr. Melancon. If I were secretary and I wanted to find out
if somebody--if there were a person in the department that I
could go and ask the question of can you tell me how this
waiver came about, who would I be able to go and ask that,
would have the institutional knowledge or would be able to
maybe answer that question for me?
Ms. Norton. We can get back to you with some answers.
Mr. Melancon. I mean I am not--I am just trying to figure
out how we got to that point, and--because I can't seem to get
anybody to give me a concise answer of how that waiver came
about. And particularly if it is, in fact, so, how several
states got no waivers and you had to go through the EIS--and my
time has run out--and some, to waive it, it couldn't be done in
30 days. But that is, I think, the time, and thank you for
being here and yield back.
Mr. Stupak. Thank you, Mr. Melancon. Mr. Latta for
questions please. Five minutes.
Mr. Latta. Thank you, Mr. Chairman. And again to our
witnesses, thanks very much for appearing before the committee
today. Really appreciate your testimony and your time, and lots
of questions to ask in five minutes. But we are not going to
get to them all.
But, Madame Secretary, I was interested on page four of
your testimony, that if I could just repeat a little bit of it.
You said ``without question the most powerful OCS experience
for me was the 2005 hurricane season. Over 4,000 offshore
platforms were operating in the Gulf of Mexico when Hurricanes
Rita and Katrina pummeled the area. Safety and spill prevention
managers were put to a severe test.'' Going on, you said ``a
number of the mostly older platforms were destroyed by the
storms fury. Amazingly despite the strength of the hurricane,
the amount of oil spilled from the wells and platforms was
quite small. The shutoff valves located at the sea floor
operated as intended. They prevented oil from leaking into the
ocean even when the platforms were severely damaged. The spill
prevention techniques upon which the industry and government
relied on passed the hurricane test.''
And this is kind of where you had to look in that giant
crystal ball. We had testimony recently from--pardon me--from
BP, Mr. Hayward. And listening to the testimony, a lot of us
were looking and thinking, you know, was this a lot of human
error? Because if, you know, again if we are talking about
4,000 rigs that were out there at the time and they were put to
that supreme test, what happened here? If you could just maybe
hypothesize about that.
Ms. Norton. Obviously we really need to have the answers
from the scientific inquiry before any of us can say exactly
what happened. You know based on the reports that I have read,
it certainly looks like there were a number of decisions made
in those last few days and hours that need to be called into
question and may show us that there were violations of the
standards that should have been applied.
Everybody involved with the offshore industry has always
understood that this is a very challenging environment, and it
is one where there have to be very high performance standards.
And the performance that we saw in the hurricanes met those
standards and really gave me a great deal of confidence that we
had systems in place that worked and could work well.
Mr. Latta. Please follow up then. As your experience as
secretary at the department, you said just now that maybe
something was occurring just prior to this accident. How often
would someone from MMS or the Department of Interior be seeing
what was going on on this rig or any changes that would have
occurred that maybe something here on the federal side would
say maybe you shouldn't be doing that?
Ms. Norton. It is my understanding there would be fairly
regular communication. Have to have a helicopter to fly out to
the rig to actually have an inspector there, and that--the
frequency of that depends on a lot of different factors: the
weather, the timing of being able to do monthly visits and so
forth. But there was very frequent communication by telephone
and so forth between people in the MMS and the offshore
platforms as I understand it.
Mr. Latta. Thank you. And, Secretary Kempthorne, first I
want to respect you not wanting to second guess the folks who
have come after you, but some of us were down at the coast
earlier in July, this month. And again we talked to a lot of
those local officials, and, you know, we were just confounded
as to, you know, the lack of getting back and forth from the
local side and back up through the chain of command on the
federal side.
And, you know, I also noticed in your testimony that as you
read it that, you know, you were talking about the governors
down in--always second guessing the folks down there. Now, and
I know you just said you don't want to second guess, but, you
know, from what you have seen, could the local officials on the
ground actually have been right on some of these decisions that
they have seen since they were there but they are being again
overruled by the federal government?
Mr. Kempthorne. I would be surprised if they are not
correct on a number of the issues that they have raised because
they live there. I have a background in local government, state
government, and federal. The perspective I have been able to
pull upon from local and state, it is pragmatic. It is on-the-
ground. It is--you must deal with things hour by hour, and so I
really do think they are a tremendous resource of ideas,
resources that they can bring to bear with sheer manpower and a
variety of innovations. And you want to create that atmosphere
so that they feel that they are a part of a partnership in
solving this problem.
Mr. Latta. Well, I thank you for that, and I thank you
again for both being before us. And I yield back. Thank you.
Mr. Stupak. Mr. Green for questions please.
Mr. Green. Mr. Gonzalez. I will pass, Mr. Chairman.
Mr. Stupak. Mr. Gonzalez, and it is up to you for seven
minutes. You have seven minutes since you waived your opening.
Seven minutes.
Mr. Gonzalez. I appreciate it. Thank you, Mr. Chairman, and
welcome to the witnesses. We really appreciate your presence
here today. Secretary Norton, you have indicated the analogy
that has been used on the floor and elsewhere is if you have
one plane crash you don't suspend all air service and such, but
isn't it the truth that we do have recalls and we take
everything off the road or out of the air if it is a specific
model, for instance, that has maybe a structural defect? So if
we were able to identify, let us say, 747's had a structural
defect, a couple of crashes or just one, the result would be we
would bring them all in and it would be examined and we would
remedy the problem so we would have that particular scenario
play out, would we not?
Ms. Norton. And I think that is consistent with the idea of
having a safety review and checking and inspecting those
aircraft and then getting them back into service as quickly as
possible.
Mr. Gonzalez. But your frame of reference is to existing
regulations that basically have failed that didn't stop this
particular occurrence from happening. Now what I am saying is I
disagree with the Administration on one size fits all
moratorium, and I think we are going to get some specificity
and such, but the question really comes down to the following.
We had all of the major players that are involved in deep water
exploration production here. None of them said--now they all
disagreed with the way BP conducted itself and the way they
were trying to plug the hole and such, but none of them said
that if there was a blow out at that depth that they could
really guarantee that their blow out preventers would have in
fact worked, point one. Point two was none of them, none of
them, said that their plan for containment and clean up was any
different than BP's.
So are we really at a point right now where we can make
these determinations as to the adequacy and sufficiency of what
we have out there that would be applied to these rigs? Now I am
going to agree with you that different points of production,
exploration and such, I think you can have certain rules and
continue the activity out there, but how do you guard against a
similar situation when everybody from the industry pretty well
agrees and maybe my colleagues would disagree with my
representation, but that is the way I remember the testimony.
No one is saying that the blow out preventer if activated, if
property activated, would have remedied the situation, and no
one is disagreeing that the containment policy and plans are
any different from one producer to another.
So a moratorium seems the proper thing to do. As I said,
one size fits all, I don't agree with that. But wouldn't you
agree that is a prudent thing for the Administration to have
done?
Ms. Norton. One concern with a moratorium is--certainly our
experience with offshore is they tend to stay in effect and
once--we certainly have seen that with the history of moratoria
in our country, and things that were put in place for a few
years have extended on and on and on for many years. I think
given the delicate state of our economy right now, I think
given the number of jobs that are at stake, given the
devastation of the economy in the Gulf Coast, we really need--
--
Mr. Gonzalez. Madam Secretary, I understand the economic
consequences, and with the greatest respect and admiration for
my colleagues from Louisiana, I am from Texas. I sort of
understand the economic impact of these things. However, I
think even former Secretary Kempthorne indicated that you need
to move forward, have the economic considerations, but not in
total denial of the realities of what might be in jeopardy.
That is all I am saying, and I think the Administration is
going to fine tune and tweak it. Now this Administration is
never going to satisfy some of those that believe there should
be some sort of ceremony on changing of command and we don't
have a General Patton, but you are not going to see President
Obama parachute onto an oil rig with a mission accomplished
sign. It is not going to happen, and I am grateful that that is
not going to happen because it is meaningless.
Now let me ask you, former Secretary Kempthorne. You seem
to be indicating that this Administration and the Secretary of
Interior is dismissing out of hand any suggestion or
recommendation being made by any of the governors or local
officials. Is that a fact?
Mr. Kempthorne. Congressman, no, I don't believe I used any
of those particular words, and also would reiterate that I did
not come today in any way to be a critic of my successor. He is
in a tough situation. I applauded his nomination. Mr. Salazar
and I are friends. But I do believe, Congressman, you do have
to create an atmosphere so that the local officials and the
state officials do feel that they are part of this, and all I
can do because I am not privy, I am not privy to the
information, the data that Secretary Salazar is receiving, but
I do see as an observer reports and reactions of the media of
local and state officials which would suggest we have not yet
reached that crescendo----
Mr. Gonzalez. But isn't that a product of the frustration
that these officials are feeling because of the magnitude of
what is happening to their economies, what is happening to
their shorelines. I mean I understand the frustration, but I
think you just said something that is very important, and that
is none of us is privy to what is going on in those rooms when
those suggestions and recommendations are being made. Now would
you say that any recommendation or suggestion that is being
made by either a governor or a local official should be
adopted?
Mr. Kempthorne. Not just because they made it but I believe
again based on my experience that often it is backed up with
pragmatism, with actual realities and results, and they should
be very, very carefully considered with a view towards seeing
what is practical and can we, in fact, implement it because
just as you said, Congressman, the devastation in the Gulf
Coast, they are all feeling it, and they would like to be part
of the solution, and I think they do have----
Mr. Gonzalez. Is there any reason for you to believe that
they are not carefully being weighed and analyzed and evaluated
because I think that is an assumption that has been made by
many, which I don't think is true.
Mr. Kempthorne. Congressman, I don't believe I am in a
position to judge that.
Mr. Gonzalez. Well, I appreciate that. Thank you very much
for your testimony today. Yield back, Mr. Chairman.
Mr. Stupak. Thank you, Mr. Gonzalez. We have a pending
motion by Mr. Burgess who wants the May 27, 2010, report, the
30-day safety report, and he read from page 8, to be made part
of the record. The 30-day safety report acknowledges existing
regulations as it must. It notes that these are the minimum
requirements for the safe operation, and it recommends two
blind share rams. This is the point of what we have learned.
Minimum requirements may not be sufficient. That is why I say
when there is no serious enforcement, that is why I am glad
this committee reached a bipartisan agreement on the Blowout
Prevention Act, which would mandate redundancy that the
department failed to put in place way back in 2003. So without
objection, the May 27 report of the Department of Interior is
made part of the record. Ms. Blackburn, questions?
Mrs. Blackburn. Thank you, Mr. Chairman. I thought we were
still on the motion there. I do have a couple of questions.
Before coming to Energy and Commerce, I was on the Government
Oversight and Reform--Government Reform Committee and of course
on Government Oversight and Investigations here. And I have sat
through hearing after hearing. Those in front of us will talk
about how resistant to change the agencies are, and how
difficult change and reform comes, so I would like to hear from
each of you, when you look at Secretary Salazar's desire to
institute some changes, what do you think the institutional
resistance is going to be, how much of it is going to be there.
I would also like for you to address how you think he best
dealt with the ethical problems that are DOI and at MMS, and
how you confront that.
And then the third thing, and, Secretary Norton, I think
that you are going to be in the best place to address this, if
you could just articulate a little bit about how during your
tenure you worked in the aftermath of Katrina with your state
and local officials to get the information going forward with
them. So those are the 3 things that I would love to touch on.
And, Madam Secretary, if you will go first and then Secretary
Kempthorne, if you would answer after her.
Ms. Norton. Thank you, Congresswoman, for that question.
The issue of ethical changes is one that I think Secretary
Kempthorne can go into because he really dealt with that during
his time. It was in my administration that I think people
became aware of that, the leadership of MMS either right before
or right after I left office went to the Inspector General
having heard these rumors and initiated the process that led to
the changes that Secretary Kempthorne brought about. I think we
need to look at what is the end result we want to achieve
because, yes, you certainly want to have employees adhering to
ethical standards, but if you let the idea of having a strong
separation between industry and employees go too far, you cut
off the lines of communication. I think the important issues
right now are capabilities, our skills, our expertise, our
resources that are available for the oversight process, the
regulatory process. I tend to think of this as having been 8
years as an attorney general as a community policing kind of
issue.
We used to have police that would ride around in their cop
cars and have their windows rolled up and enforce the laws as
someone who was imposing and who was us versus them kind of
atmosphere with the community. And we learned that it was much
more effective to have police who were out in the community
working with people who would get tips about what the problems
were, who understood the nuances of that neighborhood and what
its problems were. And so I think you have to have a happy
medium. You have to have very high ethical standards but you
can't go so far that you only hire people who have no
experience and no real understanding and expertise about what
decisions need to be made.
Mrs. Blackburn. Thank you. And then could you speak to
Katrina, the aftermath of Katrina, and how you worked with the
local and state?
Ms. Norton. My primary role in Katrina was dealing with the
offshore energy and so that really was more a state--excuse me,
a purely federal program. But we certainly did have interaction
throughout the administration with the state and local
officials. And I know I was very proud of people in my
department who really even as federal agencies lent their
efforts to lots of local recovery efforts, at emergency
response efforts, at just----
Mrs. Blackburn. Let me interject here again. So you
responded to the requests you got directly and giving the
information needed?
Ms. Norton. Yes, we did.
Mrs. Blackburn. OK.
Ms. Norton. What we tried to do was empower people to make
those decisions and to be cooperative and do that right away.
Mrs. Blackburn. Thank you. Yes, sir.
Mr. Kempthorne. Congresswoman Blackburn, my tenure at the
Department of Interior, I will tell you was a period in my life
that I was very proud to serve with those people, dedicated
public servants. It is a large organization, 73,000 people, but
I will tell you that I was impressed, day in and day out, with
their attitude. Yes, at times they were down in the mouth about
certain things.
I remember, too, at my confirmation hearing there were a
number of issues that were brought forward, some of which that
had been there for years, and I made it a to-do list to try and
go down and resolve some of these issues. On one occasion I
brought in a group of the employees, including those from the
region that was affected. I said you need to tell me about this
issue, because I don't understand it yet. They began by saying,
well, we have been working on it for 15 years, and I said, all
right, I have to stop you because I don't have 15 years. We may
not reach perfection but we will reach a decision, so let us
discuss it. We did, thorough discussion. That afternoon, I said
here is my recommendation. Can you all live by this? We got
through it, and the attitude was hallelujah, we have a decision
and will go forward.
You referenced about the ethics that is there. I will tell
you that I worked closely with Inspector General Bill Devaney
on a continual basis, and that is why I wanted his testimony as
part of this record. I believe that the seeds for what is
bringing about the positive opportunities in MMS were planted
by the actions while still in office that we took concerning
the royalty in kind program, the calling of Senator Kerrey and
Senator Garn and asking them personally if they would head up a
talented group of people to do so. That has been pointed to by
the current Administration that it is good substance. They are
adhering to that. Seventy some suggestions were implemented
before we left.
You asked about change. All of us, all of us, have an
inclination perhaps to be resistant to change, but I have to
say that in the proper atmosphere I was impressed on different
occasions how nimble that the Department of Interior could be
if given a direction and a purpose. The concern I would raise
is simply that in this atmosphere where there have been sharp
comments made regarding MMS, I think it can have a demoralizing
effect on very good people. And as Inspector General Devaney
said, 99.9 percent of people at DOI are good, hard-working,
ethical people. I am afraid that with the sharp criticism even
coming from their own leaders it doesn't create a team
atmosphere and so their concern-- and they may not be making
decisions that they should be making as part of the
responsibility because they are worried about the
repercussions. So I think that there needs to be concern given
toward the atmosphere of leading a department in the right
direction on behalf of the people of the country.
Mrs. Blackburn. Thank you. Yield back.
Mr. Stupak. Mr. Markey for questions, please.
Mr. Markey. Thank you. Mr. Chairman. Secretary Norton, in
your responses to Chairman Waxman, you denied that changes in
OCS drilling policy were undertaken as part of the Interior
Department's efforts to implement the Cheney Energy Task Force
plan. In 2001, in reality the Department of Interior under your
all leadership stopped even considering the possibility of a
worst case oil spill when it was evaluating the potential
environmental impacts of deep water oil and gas production
activities. Secretary Norton, do you agree that it was wrong
for you to ignore the potential for a worst case oil spill for
deep water oil and gas production activities?
Ms. Norton. Congressman, I am sorry, I do not know the
documents to which you are referring. I don't know exactly what
it is that you are referring to in that decision. I apologize.
I don't recall.
Mr. Markey. Well, it is true that you--and I have the
document right here in my hand and I will give it to you so
that you can review it later, but I will just summarize it for
you that you stopped considering the possibility of a worst
case scenario spill in 2001. Your 2001 strategy for post-
release ANEBA compliance in deep water areas of the Gulf of
Mexico did, in fact, change the manner in which the Interior
Department evaluated worst case impacts. Let me read to you
what the Interior Department staff informed our staff about
these changes in 2001. These analyses ``do not include oil
spills as part of the review.'' In other words, environmental
assessments no longer had to include the worst case spill
scenarios that had been used previously by the Clinton
Administration.
Madam Secretary, you chose to replace a real world worst
case analysis with a paper exercise that was not at all
realistic. As the Interior staff had some qualms, my staff,
``The belief at the time was that blowouts were such a low
probability event that the time and effort being expended on
analyzing them for site-specific environmental assessment was
not worth the effort.'' Do you agree, Madam Secretary, that
that decision was a mistake?
Ms. Norton. I think going forward you are going to have to
grapple with the aftermath----
Mr. Markey. Do you agree that the decision that you made at
that time was a mistake?
Ms. Norton. You can't stop all drilling in the future----
Mr. Markey. I am not asking for any stopping--no one here
wants to stop all drilling in the future. No one, so stop
putting the red herrings out here. Did you make a mistake in
2001?
Ms. Norton. I don't know the document you are referring to.
I haven't had the chance to look at it. It seems to me that you
have to have a reasonable analysis and that is both today----
Mr. Markey. Was it reasonable to not do a worst case
scenario analysis for a spill? Yes or no.
Ms. Norton. It was reasonable to take into account what the
history had been. The history was----
Mr. Markey. So you don't any longer----
Ms. Norton. There were very few large spills.
Mr. Markey. OK. Let me go on to the second question.
Ms. Norton. I think we now have seen a very different
change.
Mr. Markey. In 2003, Madam Secretary, the Department of
Interior also under your leadership actually exempted most Gulf
of Mexico lessees from including blowout scenarios in their oil
and gas exploration or production plans. They were also
exempted from a requirement to provide information about how
long it would take to drill a relief well and how a blowout
could be contained by capping the well or by other means. This
policy was reiterated in both 2006 and 2008. As a result, BP
didn't include any of these blowout scenarios or relief well
plans in its plans for the Macondo. In retrospect, do you
think, Madam Secretary, that this exemption was a good idea?
Ms. Norton. My understanding is that under the Outer
Continental Shelf Lands Act there is a process of looking at
things on a broad scale that really ought to focus on----
Mr. Markey. Do you think it was a mistake to create those
exemptions in retrospect?
Ms. Norton. But it is appropriate to deal with those kinds
of issues in an offshore situation by looking at those in the
big scale basis and then for the individual wells, individual
plans of exploration, you focus on those things that apply to
that----
Mr. Markey. Madam Secretary, again----
Ms. Norton. And so you have things on a broad scale basis--
--
Mr. Markey. Madam Secretary, there was a D regulatory
ticking time bomb that was set while you were Secretary that
has now exploded in terms of this blowout preventer and other
devices not having been properly regulated. Do you believe in
retrospect if was a mistake to create those exemptions?
Ms. Norton. I haven't seen anything that would indicate
that there is a cause and effect relationship between the
Deepwater Horizon decisions that were made by BP and what this
analysis is that you are talking about.
Mr. Markey. A climate, Madam Secretary, of complacency was
created by boosterism, which has now led to a catastrophe and
that boosterism, that complacency, was this deregulatory
environment which was created during that 8-year period. It
affected blowout preventers. It affected the spill response
plans that needed to be put in place. It, in fact, dealt with
all aspects of what it is that we are now dealing with as a
consequence of those decisions. Mr. Chairman, thank you.
Mr. Stupak. Mr. Scalise for questions, please, 5 minutes.
Mr. Scalise. Thank you. Mr. Chairman. Starting with the
moratorium that has been discussed a lot. I want to go back to
the 30-day safety report. And the President and Secretary
Salazar had put together a commission and they brought in
experts, scientists, engineers that were recommended that came
together and did a 30-day report. And in it they actually
recommended some safety changes that should be made which I
think were very reasonable recommendations but afterwards when
the moratorium, the 6-month moratorium, was issued it was
alluded that the 30-day commission supported the moratorium.
They had to come out the next day and correct that and make it
clear that they actually were against the moratorium, and they
gave some really good safety reasons.
And I want to ask your opinion on this because it hasn't
really been discussed a lot nationally when you talk about this
moratorium that is going on that potentially has a greater
devastating impact on our state long term than the spill itself
because of the negative impact on jobs, and some people are
trying to make this a choice between jobs and safety. But, in
fact, the scientists that the President himself recommended,
not our scientists, it is the President's scientists, they said
you would reduce safety in four different areas if you have a
moratorium because, number one, your most experienced rigs
would leave first, the rigs that are the newest and the most
technologically superior, your most experienced crew members.
They cannot put some kind of mysterious 6-month pause on their
life. They are not going to just sit idle and collect
unemployment as the President suggested to them. They are going
to have to go do something else to earn a living for their
families so you lose those most experienced crew members.
There are high risks involved with stopping and starting
operations, and then the final point is our country's
dependence on oil hasn't decreased, so as you take maybe 20
percent of the oil supply that the nation consumes away that is
going to have to come from somewhere else and that is going to
be imported by Middle Eastern countries, many of whom don't
like us, but it is going to be imported by tankers, and 70
percent of all the spills come from tankers, so you actually
increase the likelihood of spills and you reduce safety by
getting rid of that experienced work force and those vital and
scarce resources in those rigs.
So with all of that said, I haven't seen a lot of
discussion on the other side about the decrease in safety
associated with this moratorium that the federal judge said
should go forward. I want to get your take on that. Ms. Norton.
Ms. Norton. I think there is some legitimate concern about
losing the most sophisticated of the rigs to other countries
and to making sure that we are not losing all the personnel
that are most experienced to other places, all of those good
jobs. I also think you have raised a very good point with the
tanker safety because you are absolutely right that in our past
experience before we got to the Deepwater Horizon experience,
it had been tankers that were the largest source of oil from
the industry overall as opposed to from the platforms.
Mr. Scalise. Mr. Kempthorne.
Mr. Kempthorne. Yes. Congressman, you raise very valid
points, many of which I happen to agree with. And I think
included in yours is the fact that this it not mutually
exclusive. We can have a safety record and in 40 years we did.
There is a question as to what caused this current tragedy of
90 days ago. Was it the regulations that for 40 years or a
number of years were on the books and we did not see this
catastrophe or was it decisions made, human decisions made, in
the implementation after the application for the drilling
permit was granted. I cannot comment with regard to the safety
group and how a letter may have surfaced where they felt that
they were being misrepresented. I cannot do that, and I think--
--
Mr. Scalise. And that has been entered into the record.
Mr. Kempthorne. Yes, and that will be something that your
next guest will have the opportunity to address, I would
imagine. But again it was appropriate to go and look at the
safety. Had you found that there were a number of problems that
surfaced immediately then you would have consideration of what
else to do but you did not. I think there was only one concern
that was identified.
Mr. Scalise. And I think if you go back and you look a lot
of the rigs that are operating in deeper waters because this
disaster occurred at 35,000 feet. There are people out there in
8,000, 9,000, 10,000 feet that follow a different set of safety
standards and don't have these kind of problems because they
play by the rules and, in fact, we saw, unfortunately, this was
an avoidable tragedy because of the things that weren't
followed. But hopefully we can get into more of that later. But
I also want to touch on another point and that is this chain of
command issue. Clearly, when I talk to leaders on the ground
their biggest frustration is that they are spending more time
battling the federal government than the oil because you don't
have that all hands on deck urgency approach taken by the
federal government that needs to start now. Unfortunately, we
are 3 months in and we still don't have it. But, finally, Mr.
Kempthorne, what were federal revenues for offshore drilling
that would come into the federal treasury in your last year as
secretary?
Mr. Kempthorne. Approximately $23 billion.
Mr. Scalise. Clearly, that would be in jeopardy in a
moratorium.
Mr. Stupak. The gentleman's time.
Mr. Scalise. Thank you. I yield back.
Mr. Stupak. You answered the last one, Mr. Secretary, 23
billion, you said?
Mr. Kempthorne. Yes, sir.
Mr. Stupak. Mr. Braley for questions.
Mr. Braley. Thank you, Mr. Chairman. I would like to begin
by offering the Congressional Research Service report for
Congress titled the 2010 Oil Spill Minerals Management Service
and National Environmental Policy Act dated June 1, 2010.
Mr. Stupak. Yes, we will take a look at it. We will hold it
in abeyance for now. Go ahead.
Mr. Braley. One of the things that this report identifies
is that there are four different stages of the review process
that are supposed to take place on every oil lease in the Outer
Continental Shelf. The first is the development of a 5-year
program, then a plan for a specific lease sale, then approval
of the exploration plan, and then approval of a development and
production plan. Would both of you agree with that?
Ms. Norton. Yes.
Mr. Braley. And these four stages are based on the Outer
Continental Shelf Liability Act. That is your understanding of
the statutory basis for those requirements?
Ms. Norton. The Outer Continental Shelf lands, yes.
Mr. Braley. Yes. You have to say yes so that it is part of
the--yes. And one of the things that the courts interpreting
that act have concluded is that one of the basic premises of
this review process is a tiered environmental review assuming
that the level of scrutiny increases as a lease moves toward
approval of the development and production plan. Would you both
agree with that?
Ms. Norton. Yes.
Mr. Kempthorne. Yes.
Mr. Braley. One of the things that disturbs me about this
report and about the circumstances that led up to this disaster
is that the requirements for blowout scenario differ depending
upon which part of the Gulf is affected. Are you both aware of
that?
Ms. Norton. Yes and no because the flow of currents might
be different. The terrain that is on the shoreline might be
different. But in many ways the impacts are going to be the
same. Whether the Deepwater Horizon was 10 miles one way or the
other would not have the same impact as it would on shore----
Mr. Braley. Madam Secretary, I am not talking about those
issues. I am talking about the regulatory framework itself that
requires blowout prevention scenarios to be part of this review
process. Can you explain to me, for example, when the State of
Florida is the affected state, which is the eastern Gulf, there
is a mandatory requirement for a blowout scenario, and yet when
the State of Texas is the affected state, the western Gulf
region or the central Gulf region which is the part most
devastated by this disaster there is not a mandatory
requirement for a blowout scenario under the regulation?
Ms. Norton. That is something that I have not been able to
trace exactly what the rationale was behind that. I don't have
access to the people within the Minerals Management Service to
ask exactly what the thinking was on that. I think it could
either have been because those things in areas to which you
refer, those are already handled in other documents and through
other analyses that are done routinely.
Mr. Braley. My review of the regulation makes it clear that
there are specific preferences given to individual states, and
can you think of any legitimate reason why the residents of the
central Gulf would have less interest in extensive
environmental review than residents of the State of Florida?
Ms. Norton. There is something called the Coastal Zone
Management Act that has a significant impact on offshore
development, and it does require the federal government to take
into account the plans of the various states as decisions are
being made offshore.
Mr. Braley. Do you agree that the impact of devastation is
the same regardless of where that blowout would occur?
Ms. Norton. It certainly has shown to be a different
devastation here and a terrific impact.
Mr. Braley. Now, Mr. Kempthorne, part of the other
information included on page 13 of this report is an indication
that while MMS regulations require disclosure of a blowout
scenario and exploration plans, MMS provided an exception in a
2008 notice to lessees on this particular lease, which would
have been during your tenure, is that correct?
Mr. Kempthorne. That would be during my tenure.
Mr. Braley. And the exception exempted OCS actions in the
Gulf from blowout scenario requirements under certain
conditions, and those are the exact conditions I am referring
to which did not require a mandatory blowout scenario for the
central Gulf. Were you aware of that?
Mr. Kempthorne. Congressman, there is a longstanding
provision that allows a regional director to limit information
that needs to be submitted.
Ms. Norton. I think why we are both struggling----
Mr. Braley. Excuse me. I only have 2 minutes left. Here is
the problem I am having. BP submitted information to Minerals
Management Service at the earlier stages of this lease
indicating there was a 99 percent chance of a blowout over the
40-year period of the lease, a 99 percent probability, and that
the most likely scenario would be a 10,000 barrel release as
part of that blowout, and BP had also discussed a worst case
scenario response in its initial exploration plan and it
considered a worst case scenario to be a blowout at the
exploratory stage leading to a spill of 3857 barrels of crude
per day.
And even with that information, MMS approved BP's spill
response plan for worst case scenario, and despite all that
information that was in the leasing record BP sought and
received a categorical exclusion from an environmental impact
duty at the later phases of this process. And given what you
admitted to me earlier about the intention being a more strict
scrutiny of the environmental impact as a lease progresses
toward production can either of you explain to me why that
happened?
Ms. Norton. I don't know the specific details you are
citing but the categorical exclusion for those kinds of things
has been part of the Outer Continental Shelf Lands Management
since the 1980s, and so it is the way in which those things
have been handled throughout basically the existence of the
program.
Mr. Braley. This report raised the disturbing scenario that
the approval process of the categorical exclusion eliminating
the need for an environmental impact statement later on in the
development of this lease turned the expected level of scrutiny
on its head so that instead of having a stricter scrutiny of
that environmental impact at the later stages moving towards
development and production a waiver was granted rather than
requiring a more intense level of review, and that makes no
sense.
Ms. Norton. Well, you need to look more into the details of
the specific proposal as you move closer to that specific
proposal. The concept of the Outer Continental Shelf Lands Act
is that you look at those large scale issues on a large scale
basis.
Mr. Braley. And I understand that, and my time is running
out, so let me just close with this. Do you not agree that in
light of what we know now that policy of giving categorical
exclusions which seems to be the opposite of the intended
stricter scrutiny as you get closer to production should be re-
evaluated by MMS?
Ms. Norton. I certainly do think you need to look at these
things going forward and look at your overall process, so I do
think you need to look at how those things need to relate in
the future and especially as you are talking about how
something that is a very catastrophic event but has a very
small probability of actually happening.
Mr. Braley. Well, this had a 99 percent probability of
happening in a 40-year lease.
Ms. Norton. I frankly question that. I think that may not
have been a correct reading.
Mr. Braley. Well, I am reading from the report, and I yield
back.
Mr. Stupak. And, Mr. Braley, would you provide a copy of
that report so the minority can look at it?
Mr. Braley. Absolutely.
Mr. Stupak. So your motion is still pending on whether or
not it will be accepted. Secretaries, can you go 20, 25 more
minutes?
Mr. Kempthorne. You are anxious for your next guest to join
you.
Mr. Stupak. We are anxious to have him too. A few more
questions, if you may. Let us start myself, Mr. Burgess, and
whoever else will go and attempt to cut if off. OK. How is
that? Fair enough? Let me ask this. It seems like we have the
energy task force in 2001 saying let us get our energy going,
and we have a couple executive orders to expand offshore
drilling, get things rolling. It seems like throughout all of
our hearings we developed a technology to drill deeper and in
more sensitive areas, and hopefully we do it in a safe manner,
but we never developed the technology to have a clean up. Is
that fair to say? We are using the same technologies from the
1920's, booms and trying to skim it and burn it off. Fair to
say?
So let me ask this question. In the government models, we
always talk about worst case scenarios, government models, the
last time they were updated was 2004, and they dealt with
surface spills, nothing deep water. In 2005, MMS modeling team
recommended that the spill plans need to be upgraded to deal
with deep water releases. Any reason why that was not done?
Madam Secretary, it was 2005, you were still there. Do you
remember their report recommending doing some deep water
modeling because that is what we based everything upon.
Ms. Norton. Congressman, I do not recollect that report.
Mr. Stupak. I will ask Secretary Salazar the same thing.
Mr. Kempthorne, any idea that we had that request there that
was never done?
Mr. Kempthorne. No, Mr. Chairman, I do not.
Mr. Stupak. OK. Let me ask this. You both mentioned the
history of no spills and internationally, I think, Secretary
Norton, you mentioned we were looked at favorably. I am looking
at a report here, SINTEF. It is dated July 24, 2001, and SINTEF
is actually out of Norway, and they were asked to do a report
from Minerals Management Service. And in there they are talking
about the study of the BOPs, blowout preventers, and what goes
wrong and kicks in the wells. And I thought it was very
interesting of the 83 wells drilled in deep waters ranging from
1,300 feet to 6,500 feet there were a total of on these 83
wells 117 BOP failures and 48 well kicks. This is off 26
different rigs. So if you take a look at that, we have 117 BOP
failures, 48 well kicks. That would be two incidents per well
or 6 incidents per rig, and this report goes on and says an
alternative BOP configuration and a BOP test procedure that
will improve safety availability and save costly rig time has
been proposed. Do you know whatever happened to this report,
Madam Secretary?
Ms. Norton. I don't recall ever seeing it.
Mr. Stupak. OK. And when you did the 2003 rulemaking, you
didn't take this into consideration then because you don't
remember seeing it?
Ms. Norton. I would imagine that someone in the Minerals
Management Service who had responsibility and who had the
technical expertise to evaluate that did so but I as secretary
did not see that.
Mr. Stupak. It was interesting that we hired a Norwegian--
MMS hired a Norwegian company to do it and they relied--you
know, Gulf of Mexico versus Norway because they are up in the
North Sea and they found that we had more kick backs, we had
more problems with pressure, which actually were the issues
that led to the problems with Deepwater Horizon. I will
conclude my questions right there. I will turn to Mr. Burgess
for 5 minutes for questions.
Mr. Burgess. Mr. Chairman, if Secretary Salazar is here, I
am perfectly prepared for him to come and ask to begin the
second panel.
Mr. Stupak. Are you waiving?
Mr. Burgess. If the Secretary is here. Are you ready to
start the second panel?
Mr. Stupak. No. We will be starting at 2:00.
Mr. Burgess. At 2:00. Is the Secretary here?
Mr. Stupak. No.
Mr. Burgess. OK. Has he been----
Mr. Stupak. So have you waived?
Mr. Burgess. No, I am not going to waive. Has he been
watching this on C-SPAN as you said he might be?
Mr. Stupak. That is a good question. You should ask him.
Mr. Burgess. I mean I am offended that we have been here
all day. People have been asking good questions and making
reasonable statements and----
Mr. Stupak. Mr. Burgess, you know darn well that the
Secretary has his staff here and he may very well be watching
it but I haven't had----
Mr. Burgess. The Secretary has so little interest that he
wouldn't even notice that we were winding down and that the
committee had dwindled to a less than critical mass. Let us
do----
Mr. Stupak. Well, if you have no further questions.
Mr. Burgess. I do have some questions.
Mr. Stupak. OK.
Mr. Burgess. Let us visit for just a minute some of the
questions that Mr. Markey was asking and not really allowing
for a response. Secretary Norton, when you became secretary and
you inherited the agency from Secretary Babbitt, were there
specific regulations relating to deep water drilling that had
been proposed by the previous administration?
Ms. Norton. Yes, there were some regulations as to blowout
preventers and cementing and so forth that had been proposed in
2000.
Mr. Burgess. And what was the result of that? Did you
proceed with the implementation of those regulations or did you
shut them off because it was a new administration?
Ms. Norton. They were proposed in the previous
administration in 2000. They were finalized in my
administration. There were very few changes that took place
between the proposed and the final. The one key thing that we
added in to that was a requirement that the companies look at
the deep water technology and how they were using stronger
pipes and needed to have stronger shear rams in order to deal
with those kinds of more hardened pipes. And so we put in place
a new requirement that had not been in the previous proposal
that required industry to do that. We put in place several
requirements in those regulations over the objection of
industry.
Mr. Burgess. So if that is a deregulatory ticking time bomb
that was set in motion that really doesn't compute then, does
it?
Ms. Norton. No.
Mr. Burgess. Was the deregulatory ticking time bomb then
started during the Clinton Administration or is in fact the
deregulatory ticking time bomb simply a straw dog or a red
herring as the chairman put it to you? He said it is just a red
herring that he is throwing out. There is no question. I got a
list here. I referenced earlier some 23 or 25 studies that were
done by the Technology and Assessment Research Program. Someone
has been kind enough to provide me what must be 100 or 150 such
studies--600. I beg your pardon, 600 studies that have been
done. Not every one of these studies will lead to a new
regulation but the studies are done for good reason to address
problems that are out there, but then they become part of the
investigatory process that leads to the rulemaking that
eventually then governs the rules. It would be very difficult
to run any industry--my background is in medicine but if
somebody came and sat down 600 new regulations, oh, wait, we
may do that.
But, nevertheless, it becomes very, very difficult to run
anything with having this level of regulation but at the same
time your agency, both of you, was charged with looking at
these things putting what you thought was out for reasonable
proposed rulemaking and then setting the regulations and
setting the rules, is that not correct?
Ms. Norton. Yes, and there is also behind that a whole set
of industry standards, some of which were adopted by MMS and
some of which remained industry best practices. And that also
took into account--those things were changed much more
frequently than the regulations to take into account advances
in learning from all these various studies.
Mr. Burgess. You know, we had one hearing here where we had
5 or 6 executives from the big oil exploration companies, and
one of the things that really struck me that morning, of
course, 5 to 1 said they wouldn't have done what BP did as far
as the drilling practices. But from the individuals who were
here that actually worked had worked their way up in their
companies and started on the offshore rigs, a lot of
sensitivity to the fact that you sometimes would have to shut
down a well. You sometimes would not be able to bring a well in
because it was simply too dangerous. And one of the executives
even made the comment in response to one of the Democrat's
questions that if you start going too fast you are going to get
someone killed.
It is important to have people who worked in the industry
as part of the process so the fact that it could be done in
some sort of vacuum without taking into account the people who
actually know how to run the business on the face of it is
preposterous. Mr. Chairman, you have been kind. I will yield
back the balance of my time, and we have others who want to
fill the void that Secretary Salazar has left.
Mr. Stupak. It should be noted that you are over your time,
but that is all right. Mr. Markey, questions, please.
Mr. Markey. Thank you, Mr. Chairman, very much. Secretary
Kempthorne, you heard me question Secretary Norton earlier on
the 2003 decision by the Interior Department to exempt Gulf of
Mexico lessees from actually including a blowout scenario in
their oil and gas exploration plans, but this policy was also
continued in both 2006 and 2008 when decisions about the BP
Macondo well were being made on your watch. In retrospect, Mr.
Secretary, wasn't your decision wrong? Shouldn't there have
been, in fact, planning for a blowout scenario?
Mr. Kempthorne. Congressman Markey, I have a great deal of
faith in the professionals there at MMS that deal with this,
the different levels, the regional directors, et cetera. And,
again, based upon what had been a 40-year record----
Mr. Markey. In retrospect, do you believe that decision was
wrong informed by what has happened?
Mr. Kempthorne. Again, based on what had been a 40-year
history, I believe they took the appropriate action----
Mr. Markey. Was the advice they gave you wrong?
Mr. Kempthorne. They gave me the best advice----
Mr. Markey. Was the advice wrong?
Mr. Kempthorne. I will just repeat my answer.
Mr. Markey. You are not willing to say the advice you got
was wrong?
Mr. Kempthorne. Again, based on the 40 years----
Mr. Markey. And I am asking you in retrospect now was the
advice wrong?
Mr. Kempthorne. The advice that I was given based on a 40-
year----
Mr. Markey. The advice you were given with regard to
whether or not there should in fact be a closer inspection of a
potential for a blowout scenario, was it right or wrong, the
advice you got?
Mr. Kempthorne. At the time with the knowledge that they
had----
Mr. Markey. No, today. Today was it--as you look back, are
you willing to say the advice you received was wrong and the
policy should have been changed back in 2006 or 2008?
Mr. Kempthorne. Mr. Markey, I don't think we have that
hindsight.
Mr. Markey. You have the hindsight. We are looking for
wisdom. We are trying to pass legislation. Should that decision
have been made given what you know today?
Mr. Kempthorne. I think it is something that can be
evaluated.
Mr. Markey. I think that honestly that is a completely
unacceptable answer. The American people want to know that the
people who are making the decisions at the time understand that
it was wrong, that a blowout could occur, that a spill could
occur that would be catastrophic, and until you are willing to
say it was a mistake then I think it is going to be very hard
for the American people to accept that we are going to be able
to move forward without the likelihood that we will ever see
this kind of an accident again if there is a Republican
administration that comes back into office again.
Mr. Kempthorne. Well, Mr. Chairman and Mr. Chairman, I
think in the atmosphere that this committee was called, the
fact that we came here voluntarily, that this assignment of
blame is not something that----
Mr. Markey. I am not asking you to blame--I am asking you
if in retrospect you still believe that it was the right
decision or the wrong decision. I am absolutely not asking for
you to say anything other than that. Was the decision wrong?
Mr. Kempthorne. And, Congressman, all I will say is based
upon a record and based upon the expertise of the professionals
at the time that is the reality.
Mr. Markey. I know it is the reality but it would be
helpful if you could say we were wrong, we made a mistake. And
I understand you don't want to do that, but it is obvious that
that was the case. Secretary Kempthorne, the environmental
impact statement for drilling in the Gulf of Mexico that was
prepared by the Interior Department in April of 2007 under your
leadership concluded that since blowouts are rare events and
are of short duration the potential impacts to marine water
quality are not expected to be significant, and the most likely
size of a spill would be a total of 4,600 barrels total. In
retrospect, don't you think that the department's analysis of
the impacts of a blowout were inadequate? Wouldn't you agree
that that conclusion was wrong?
Mr. Kempthorne. Congressman, I would reference back what I
said in my opening comments, and that is that even though we
had a 40-year track record that because of the catastrophe that
happened 90 days ago it has re-evaluated everything. I will
also note that in the current Administration's preliminary
revised program for OCS 2007-2012, it also uses those same
assumptions.
Mr. Markey. Secretary Norton, back in 2004 in terms of
spill response your assumption was in the model you used that
there would only be 1,000 barrels of oil that would be spilled.
It assumes that the spill will happen on the surface of the
ocean and doesn't include any deep water analysis and it
doesn't include the use of dispersants and doesn't even
contemplate a blowout that takes days, let alone months, to
stop. Do you agree now that such a plan was completely
inadequate?
Ms. Norton. That statement was based on information
available at the time. We don't have access to go back to the
people who made those recommendations, did that modeling, did
all of that----
Mr. Markey. In retrospect, were the recommendations wrong?
Ms. Norton. I have no idea of the context in which that was
made. I have no idea what it applied to. I have no idea what
was the decision that you are talking about so I can't say
whether--I don't have any information which----
Mr. Stupak. Point of order. Time has expired. Mr. Gingrey
for questions, please.
Mr. Gingrey. Mr. Chairman, thank you. Secretary Norton and
Secretary Kempthorne, I didn't do this in my opening statement
but I would certainly like to take a brief moment to thank both
of you. You are here today at the request of the subcommittee
to discuss your time at the helm of the Department of Interior
during the Bush Administration. You are here as private
citizens and you are doing it voluntarily, and I am deeply
appreciate of that, and I think most members of the committee
feel the same way. Both of you had interest and experience with
MMS during your tenure. Secretary Norton, you witnessed
firsthand the devastation that was caused by Katrina and Rita
in 2005 and you had the opportunity to see up close and
personal how MMS was able to respond to what could have been an
ecological disaster. And, Secretary Kempthorne, in your
testimony I think you mentioned the issues that arose with some
individuals who were summarily dismissed from their position at
MMS due to unethical conduct, I think was what you said.
Therefore, both of you had very unique experiences with MMS
and that leads me to finally have a question. Based on the
structures that you had in place at MMS during your tenure, I
would like to ask both of you to respond to this, if you will,
had this accident occurred on your watch, this Deepwater
Horizon tragedy, would you have used that as a means to
reorganized MMS like it was done here recently?
Ms. Norton. The new structure doesn't differ that much from
the previous structures because previously the revenue aspects
of it and the regulatory aspects have always been in separate
divisions of MMS. And, no, I don't think I would have used it
as an opportunity or as an occasion for reorganization. That is
something that is within the purview of an existing secretary.
Mr. Gingrey. Certainly. And, Secretary Kempthorne.
Mr. Kempthorne. Congressman, first of all, I want to thank
you for your comments concerning our being here today. It is
the purview of the incumbent secretary to organize as deemed
appropriate. I think you are raising the question of timing and
in that catastrophe when those are your human resources, when
you need everybody pulling together, I think you want to have
as much of an atmosphere that you will work together cohesively
instead of having concerns about who may be singled out next,
and so it is a question of timing and the creation of a proper
atmosphere.
Mr. Gingrey. And I appreciate both former secretaries, Mr.
Chairman, in their response and I certainly feel the same way.
I mean, you know, you go through all this dancing around
changing the--rearranging as the old expression goes the deck
chairs on the Titanic, and you come up with a new name which
sounds like--reminds me of vegetarian vegetables soup that I
remembered as a kid and you got a whole new name but have you
really done anything. And, more importantly than that though is
the distraction of trying to do that when the focus really
needs to be on the clean up and the response and it just
doesn't--I think there is a lot of posturing in my humble
opinion, and I think really your response sort of reinforces my
suspicion in regard to that.
I got a little bit more time left so as a follow-up for
both of you, can you please comment on the nature of how long--
on the nature of how a long-term moratorium on offshore energy
exploration would negatively impact the economy of the Gulf
Coast and based on your experience how it would make us more
dependent on foreign sources of energy. I realize that may have
already been asked but I wasn't here and I would love to hear
your response to that. First you, Secretary Norton, and then
Secretary Kempthorne.
Ms. Norton. One thing I don't think we have said before is
that when companies make decisions for offshore oil wells, a
platform is a multi-billon dollar decision. You need to have
some long-term predictability. There are years of planning that
go into that kind of thing. And so to have all the drilling
rigs be off in other countries because of the moratorium is
going to have repercussions far beyond the 6 months. It is not
that you reach the end of 6 months and then everything goes
right back into gear. There are many, many, many years of delay
of impact of moving jobs away that are potentially involved.
Mr. Stupak. Yes. Secretary Kempthorne has a right to
respond to that question.
Mr. Kempthorne. Mr. Chairman, thank you very much.
Congressman Gingrey, I would preface it by saying I felt it was
an extremely appropriate step to do a safety review. They did
so. And with regard to--as I recall, it is approximately some
30 drill rigs in the deep water. Of those that were reviewed it
was found that perhaps it was only one situation where there
was a noncompliance of some element but the vast majority of
all of the specifics of adherence to the regulations were in
place. It was good to pause. It was good to take a look at
that. But we also need to consider the big picture which is the
energy security of the country. I believe we are too reliant
upon foreign source of energy. I also believe that this
devastation, which has been horrible by every imagination
including the 11 families that grieve and what it has done to
the environment there, but a moratorium will compound the
devastation by the economic devastation that will continue by
the loss of jobs. And the Gulf Coast region needs an
opportunity to recover and not have further devastation.
Mr. Gingrey. Thank you. And, Mr. Chairman, thank you for
your indulgence.
Mr. Stupak. Before we go to Mr. Scalise, Mr. Braley, we
have a matter pending with Mr. Braley. He asked for the 2010
Oil Spill Minerals Management Service and the National
Environment Policy Act June 4 CRS report be entered in the
record. Without objection, that will be done. Also, myself, Mr.
Waxman and Chairman Markey, we all referred to different
studies, the shear ram capability study September, 2004, by
West Engineering, another report by West Engineering,
evaluation of secondary invention methods and well control,
again March, 2003, a mini shear study again by West
Engineering, December, 2002, and the SINTEF report of July 24,
2001. Without objection, those will all be made part of the
record.
Mr. Burgess. Mr. Chairman.
Mr. Stupak. Yes, Mr. Burgess.
Mr. Burgess. Also, I would ask that Governor Jindal's op ed
from the Washington Post from last Saturday be made part of the
record.
Mr. Stupak. Without objection, it will be made part of the
record.
[The information appears at the conclusion of the hearing.]
Mr. Stupak. Mr. Scalise, I think we have about 3 minutes
left if you want to ask questions for 3 minutes.
Mr. Scalise. Thank you, Mr. Chairman. I will ask both of
you, did either of you issue the permit for the Macondo well,
for BP to drill the Macondo well? Ms. Norton.
Ms. Norton. Definitely not.
Mr. Kempthorne. No, sir, we did not.
Mr. Scalise. I am just saying that to point something out.
I mean there are a lot of people in this Administration that
seem to want to run around and blame other people for things.
They issued it. There is no doubt in the time line. It is even
submitted in the committee report. It was issued on May 22,
2009, and neither of you were there. I think what is really
amazing to me is that it seems like every time there is a
problem this Administration wants to try to find somebody else
to blame instead of trying to just roll up their sleeves and do
their job and help solve the problem. And I think we wouldn't
have so many of these issues that we are dealing with,
especially the issues that my local leaders are facing today, 3
months later, if the Administration was just willing to say let
us do our job. Let everybody get in a room, and when there is a
problem whether it is sand berm which took over 3 weeks to
issue--Governor Jindal could have protected 10 miles of our
marsh in the period of time it took to get that permit issued
and still to this day they are waiting to get an answer back on
a rock barrier plan to provide protection to some of these
other real fragile ecosystems where you got pelican nests and
other very vital resources.
And instead of getting everybody in the room the approach
would be sit in that room and nobody leaves until you figure
out a way to get it done, and if this plan on the table is not
the way to do it, and there is no perfect plan right now, but
whoever's plan is better, let us do it, but your answer can't
just be we are denying your plan and everybody leaves and
nothing gets done and more oil gets into marshes that didn't
have oil the day before. And that is the problem we are facing.
So maybe they don't want to own up to the fact that they issued
the permit and they are trying to blame other people, but the
bottom line is we just want to get these problems solved and we
want the attention of this Administration focused on doing
their job under the law. The Oil Pollution Act says it is the
President's job to protect the coast. Unfortunately, he is not
doing that. Our local leaders are trying to do it and they are
being blocked by the federal government. There is no excuse for
that.
Getting back to the moratorium. While there is a moratorium
that even though the federal courts have said is arbitrary and
capricious and the Administration doesn't have the legal
authority to issue a moratorium they are saying that there is
not a shallow water moratorium but, in fact, there are over 40
permits pending for new drilling in shallow waters which
haven't been issued so there is a de facto moratorium on
shallow water drilling. Can you talk about the differences
between shallow and deep water drilling and the consequences of
having the shallow water moratorium, which is causing even more
job losses that even though this Administration says there is
no moratorium they are not allowing any people being laid off.
Ms. Norton. There are often different drilling rigs that
are involved in different areas but whether the moratorium is
in shallow water de facto or in deep water if you are actually
going to have projects moving ahead and actually going to have
the jobs that come from those projects, you need to have
predictability and so there needs to be overall predictability,
a focus on safety but also a focus on solving the real problems
and letting the things that are dependable move ahead.
Mr. Scalise. Mr. Kempthorne.
Mr. Kempthorne. I really can't add anything to that,
Congressman. I appreciate that.
Mr. Scalise. OK. And I know you both touched on it a little
bit, but I want to get back to this concept of a 6-month pause.
When Secretary Salazar says I just want to hold my finger on
the pause button for 6 months and then at the end of 6 months
maybe let it go and start things up again as if magically
everybody just sits around waiting for 6 months and you start
it up again. We are already seeing that some of those deep
water rigs are leaving. Some have already signed contracts to
leave the country and take those good jobs with it and the
energy producing capabilities with it, and many others are
already in negotiations, and at some point soon they are going
to be signing their contracts too. But if you waited for 6
months--I just want to address that because I do think it is
disingenuous for people to go around and say there is just a 6-
month pause and then we will start everything up again.
If you really do want to halt drilling for a long period of
time, that is a policy decision and we can debate that, but I
don't think it is fair to the American people to insinuate that
you can just stop everything for 6 months and then start it
back up again magically and everything will work just fine. If
you could both address this. At what point down the road do you
severely limit the ability for an industry to come back in a
short period of time and, in fact, maybe years?
Ms. Norton. I know from our hurricane experience with Rita
and Katrina that, yes, there was a lot of damage that had to be
repaired but it took far----
Mr. Scalise. I commend you on your work in getting those
issues addressed quickly.
Mr. Stupak. Your time has quickly evaporated, Steve.
Ms. Norton. We just found it took a whole lot longer for
the industry to recover, for the energy production to recover
than we would have expected.
Mr. Stupak. Secretary Kempthorne, did you want to add
something?
Mr. Kempthorne. Very brief, if I may. Businesses need to
have business plans. They need to have predictability as long
as you put this question as to whether or not and when they
might be able to come back. Also, we need to put it into human
terms. The employees that draw their livelihood from the drill
rigs and that entire industry, what do they do for 6 months
during the pause? How do they derive their income for their
families?
Mr. Scalise. Thank you, Mr. Chairman.
Mr. Stupak. Well, that concludes all time for this panel. I
want to once again thank Secretary Kempthorne and Secretary
Norton who voluntarily came here and gave of their time to help
us with this problem, this disaster that our country is facing,
and we thank you for your insight and the answers to all of our
questions. With that, this hearing will be in recess until
2:05. We will take a 10-minute break. We will be right back
with the next panel. We are in recess.
[Recess.]
Mr. Markey [presiding]. We welcome everyone back. Again,
this is a joint subcommittee hearing of the Oversight and
Investigations Subcommittee of the Energy and Commerce
Committee, and the Energy and Environment Subcommittee. We have
been conducting this investigation jointly for 90 days, and we
will continue to do so today. Our sole witness on our second
panel is the Secretary of Interior, Ken Salazar, who was
confirmed as Secretary of Interior on January 20, 2009. Prior
to that service, he served in the United States Senate,
representing the State of Colorado and before that he served
Colorado as its Attorney General. So we welcome you, Mr.
Secretary. It is the policy of this committee to take all
testimony under oath and please be advised that you have the
right under the rules of the House to be advised by counsel
during your testimony. Do you wish to be represented by
counsel?
Secretary Salazar. No.
Mr. Markey. Then would you please rise and raise your right
hand to take the oath?
[Witness sworn.]
Mr. Markey. Let the record reflect that the witness replied
in the affirmative. You are now under oath. So now we will
welcome you again, Mr. Secretary. Whenever you feel
comfortable, we ask you to please begin your testimony.
TESTIMONY OF THE HONORABLE KEN SALAZAR, SECRETARY OF THE
INTERIOR
Secretary Salazar. Thank you very much, Chairman Markey and
Chairman Stupak, and Ranking Members Upton and Burgess for this
opportunity to come and testify in front of this committee
concerning the Deepwater Horizon tragedy and what it has meant
for this country and for this government and for the Department
of Interior. Let me at the outset say that from April 20 until
today, including this morning, we have continued a nonstop and
relentless effort to kill the well to stop the oil from leaking
from the well, and to do everything we can to keep the oil from
coming on shore. It has been a coordinated effort on the part
and at the direction of President Obama that has included the
whole of government and putting every resource that we have and
that the President has directed. We will not rest until we have
this problem fully under control.
The status of the well today, since I thought it might be
of interest to the committee, is that it continues under shut
in having pressure of approximately 6800 psi. There is an
intensive monitoring program which we have directed BP to
implement so that we can monitor seeps and any other kind of
changes as the well integrity test continues. The essence of
the regime that we are under right now is a 24-hour license
that BP is given every 24 hours and based on the review of the
seismic, acoustic, sonar and other information that we are
getting then we make a decision about whether they can move
forward for another 24 hours. The rationale for that intensive
surveillance program is that it is important for us that this
well maintained well integrity so that we don't have a
catastrophe with the well bore essentially blowing out and then
having all the contents of the reservoir blowing out into the
sea.
So we continue to spend a great amount of time. In fact,
this morning as this hearing was going on, that is what I was
working on. I did listen to parts of the testimony, including
parts of the testimony from my predecessor, Secretary
Kempthorne and Secretary Norton. Let me at the outset say that
this is a tragedy because 11 people have been killed, and there
has been environmental devastation in the Gulf of Mexico which
we are dealing with now. And will continue to deal with into
the future. There is a tendency to blame everybody who is
involved and in my point of view there is a shared
responsibility, a collective responsibility, for how we respond
to this issue. I would suggest to all of you that based on your
investigations and based on preliminary investigations from BP
as well as preliminary investigations that I have seen that
indicate that there were corners that were cut by BP as it
moved forward with respect to this well construction.
You are as a committee very aware of what some of those are
and you have reported on some of your findings. I would also
say that prior administrations and this Administration have not
done as much as we could have done relative to making sure that
there was safer production in the Outer Continental Shelf. I
believe that after drilling some 40,000 wells in the Gulf of
Mexico that all of the nation, including the institutions of
government, the Congress, as well as executive branch and
multiple administrations were lolled into a sense of safety.
And what the Deepwater Horizon perhaps drives home more than
anything else is that we need to revisit that basic assumption
with respect to safety.
Let me say that since I came in as Secretary of the
Interior the President and I discussed the reform agenda of the
department and made the reform agenda a high priority of mine
from day one. Specifically with respect to the former Minerals
Management Service we moved forward with an ethics reform
program in the Department of Interior to do away with the sex
and drug scandals that we had seen in Lakewood and other
places, and most of the activity that has been uncovered by the
Inspector General is activity that has either been referred
over to prosecution or appropriate actions have been taken with
respect to the firing, suspensions or other disciplines of
those employees who were involved. I will also say on that note
that most of the employees at the Minerals Management Service
continue to do their work every day. They are working very,
very long hours now as we try to bring, for example, the
Macondo well under control.
We also moved forward with the reform agenda by terminating
the Royalty-in-Kind program because the Royalty-in-Kind program
had become essentially a magnet for the kind of corruption and
ethics lapses that we had seen over the last 8 years, and so
the termination of the Royalty-in-Kind program was a decision
that I made early on to try to bring an end to the prior
corruption. Thirdly, the Outer Continental Shelf and the plans
that are put into place, many of you will recall that on the
last day of the prior administration there was a new plan that
was put forth for the OCS that essentially covered the entire
OCS with respect to future development. We changed the OCS
plan. There were some very extensive set of hearings and we
were dealing with two different sets of plans, one from 2007-
2012, and the new plan that was proposed from 2010-2015, and we
narrowed it down so that we are protecting special places in
the Arctic, the Chukchi and Bristol Bay where we cancelled 5
leases in that area. We took the Pacific off from drilling
activity and proposed that we move forward in a thoughtful way
with respect to areas in the Atlantic as well as with respect
to the Gulf.
Our intention was to stay away at least 125 miles from the
shores of Florida. And, finally, as you, Mr. Chairman, with
your advocacy, we have followed on your direction that we do
everything that we can to stand up renewable energy in the
offshore especially in the Atlantic. We see great hope in that
possibility. We believe that huge amount of electricity can be
generated from wind and that is an effort that is well
underway. Finally, just in terms of how we have moved forward
since April 20 and before. We had been working on moving
forward with additional safety requirements and additional
training for employees. We also raised the bar on industry, the
30-day safety report, which I prepared at the direction of the
President, set forth a number of recommendations with respect
to blowout preventers, venting, casing, and a whole host of
other things that should make drilling more safely.
We have moved forward with a safety notice to lessees which
essentially is a recall of the blowout prevention mechanisms
and requirement responder casing and well design requirements.
That notice to lessees has been sent and we also have sent a
notice to lessees with respect to blowout prevention. We are
moving forward with the reorganization of what was formerly the
Minerals Management Service and created the Bureau of Ocean
Energy Management, Regulation, and Enforcement. That effort is
led by the Assistant Secretary of Land and Minerals, Wilma
Lewis, who was a former United States Attorney and Inspector
General with the Department of Interior, and the agency itself
will be led by Mike Bromwich, who also was an Inspector General
for a very long time in the Department of Justice and who has
been involved in the organization matters within the private
sector.
The reorganization of the new MMS, the new Bureau of Ocean
Energy, essentially will have 3 units. There will be an Office
of Natural Resource Revenue, and that is to separate the
revenue collection function from the other functions related to
leasing the resource. A second unit will be one of Bureau of
Ocean Energy Management unit, which will essentially make the
decisions about where it is that we will be leasing the OCS
resources for development. And the third unit will be one that
will be focused exclusively on safety and environmental
enforcement. This will not come cheap. When one looks at what
has happened in the 1990's and through the first decade of this
century the staffing levels at MMS have essentially remained
static. We have made requests for additional staff in the last
few years. The proposal that we have before the Congress and
before OMB contemplates an additional 445 inspectors to help us
in carrying out this very important duty for the American
people.
I will comment just briefly on the moratorium because I
know many of the members of this committee are interested in
that. It is a moratorium that I have reissued that will stay in
place until November 30 until I am satisfied that we have
received appropriate and adequate answers to 3 essential
questions. First, whether or not drilling can continue in a
safe manner. Second of all, whether or not there is an adequate
strategy to deal with blowout containment, issues like the one
that we are facing, and, thirdly, that there is an adequate oil
spill response capability that is out there. In conclusion, Mr.
Chairman, I am hopeful that working with the members of this
committee and members of the Congress that the legacy of this
crisis will be four fold. First, that we will move forward to
an era of safer production of oil and gas in the Outer
Continental Shelf. Secondly, that we will embrace a Gulf Coast
restoration program which Secretary Mabus and the
Administration are leading in a way that finally restores the
Gulf Coast after a century of degradation. Third, that we can
embrace a conservation agenda for the 21st Century across
America. And, finally, that it will open up the great
possibility to a new energy future that broadens the portfolio
of energy which this country had been so dependent on with
respect to fossil fuels to now include the power of the sun,
the power of the sun, the power of geothermal, and the other
parts of the energy portfolio, which the President has as part
of his comprehensive energy plan.
[The prepared statement of Mr. Salazar follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Markey. Thank you, Mr. Secretary, very much. The chair
will recognize the chairman of the Oversight and Investigations
Subcommittee, the gentleman from Michigan, Mr. Stupak.
Mr. Stupak. Thank you, Mr. Markey. Thank the chairman. Mr.
Secretary, thank you for being here and thank you for all your
work. This has not been an easy issue for any of us and
especially your position as Secretary of Interior. You have
been putting in a lot of hours and long days in working this,
and we thank you for your efforts. Let me ask you this
question. I asked both Secretary Norton and Secretary
Kempthorne this question. The modeling we have for if an oil
spill would work our only models deal with surface spills, not
deep water spills. In 2005 MMS modeling team asked the
secretary that the spill response plans need to be updated to
deal with deep water releases. It has never been done. Were you
aware when you took over that there was never a modeling
program to show what would happen with a deep water spill in
the Gulf of Mexico? Were you aware that nothing has been done?
Secretary Salazar. The answer to that is no, I was not
aware of that.
Mr. Stupak. And my follow-up question then, should we
update the model before we go back to drilling? I know we have
this moratorium on right now but shouldn't we have some idea--
maybe we can learn something from Deepwater Horizon how
catastrophic spills would go in the Gulf. Is that enough
reliance or should we do modeling before we resume exploration
and drilling in the Gulf of Mexico?
Secretary Salazar. Chairman Stupak, I think what we need to
do is make sure that we have adequate plans to response to the
3 key issues that I just spoke about, and at the end of the day
if you think about the containment program that has been
underway since the Macondo well blew out, I think there is
ample evidence that you have seen which I have reviewed every
single day since April 20 and the efforts to close down the
well that tells us that the containment efforts are simply not
enough, and so it is an opportunity to really address all of
the multitude of shortcomings that have become evident since
April 20.
Mr. Stupak. Since our investigation, I have been focusing a
lot on the blowout preventer requirements, and as far back as
1997 MMS cut back on testing requirements for the BOPs by
reducing required testing frequency from every 7 days to every
14 days because testing caused down time on the rigs. But a
series of reports conducted between 2001 and 2004 pointed to
even bigger problems. Over and over again these reports
indicated that in many cases blowout preventers would not be
able to shed drill pipe in an emergency. If the BOP cannot shed
a pipe then it cannot seal the well to control a blowout. A
2001 report concluded that sub-sea blowout preventers should be
equipped with redundant shear rams to increase the chances of
success in an emergency. A 2002 report cited, and I quote, ``a
grim picture of the success when using BOPs in an emergency.''
A 2003 report identified problems with emergency activation
systems and the need for remote undersea vehicles to operate
all BOP functions in an emergency. The warnings from 2001
through 2004 seem to have anticipated the very problems that
have come to pass in the Deepwater Horizon blowout.
Mr. Secretary, my understanding is that MMS established new
rules for blowout preventers with rulemaking in 2003, but they
did not require dual shear rams or other key improvements that
the studies indicated were necessary. Is that correct?
Secretary Salazar. That is correct. Those requirements were
not required.
Mr. Stupak. On the rule that was made by Secretary Norton,
I asked her about that, and I realize it was not your decision,
but in retrospect do you think that the 2003 federal rule based
on these studies should have had the dual rams shearing
capabilities in case of a blowout prevention--in case of a
blowout of a well?
Secretary Salazar. My own view, Chairman Stupak, is that
there has been a lot learned with respect to these blowout
preventers including the need to make sure that you have the
shearing capability, and indeed some of the blowout preventers
that are now being manufactured will require the dual capacity
with the shear rams in case they end up closing in on a place
where you have a pipe that they cannot get through.
Mr. Stupak. Well, let me ask you because your 30-day report
on the Deepwater Horizon contained a number of new
recommendations for BOPs including the dual rams shearing as
you indicated. Can you tell me some of the other
recommendations and actions that the Department of Interior
will be taking to implement safer BOPs?
Secretary Salazar. The recommendations are many, and they
are outlined extensively in that 30-day report as well as in
the notice to lessees that we have issued additional rules that
we will be making. Some of the blowout prevention enhancements
that you will be seeing will deal with the shearing capability
of rams but other improvements that have to be in my mind put
into place as well include assurance that the backup actuation
programs do, in fact, work. And we will be making those
requirements and have made some of those requirements with
respect to the 30-day report.
Mr. Stupak. Well, you talked about the need to hire 445
more inspectors. Will this enhance the certification and
testing of these blowout preventers and other aspects that you
have recommended in your 30-day report?
Secretary Salazar. Absolutely, Chairman Stupak. And let me
say that as much criticism as may be laid in terms of what has
happened in the last 90 or 91 days since April 20, it also has
been a great laboratory of learning. There was a conclusion
that essentially was a conclusion that most people had that you
could not test the blowout prevents sub-sea. We now know that
that is not the case and so there will be additional testing
requirements that will also be imposed with respect to blowout
preventers.
Mr. Stupak. Thank you, Mr. Secretary. Thank you, Mr.
Chairman.
Mr. Markey. The gentleman's time has expired. The chair
recognizes the ranking member of the Energy and Environment
Subcommittee, the gentleman from Michigan, Mr. Upton.
Mr. Upton. Thank you. Welcome, Mr. Salazar. Go blue, right?
Secretary Salazar. Go blue.
Mr. Upton. Michigan Law School, you didn't say that. I
don't know if you have had a chance to look at the bill that
the Full Committee reported out last week, 48 to nothing, H.R.
5626, the Blowout Prevention Act. I know that as a number of us
were trying to seek comments from the Department, I don't know
if there was a clearance problem at OMB, but we really didn't
get any comments from the Administration as it related to the
progress of this bill.
I don't know if you had a chance to look at it, and now
that it has been reported out, I wondered if you might want to
comment on certain provisions that still may be constructive as
we look at this bill before it gets to the House Floor.
Secretary Salazar. Congressman Upton, I first of all agree
that this committee put its focus on one of the very key issues
that needs to be addressed and that is blowout preventers. And
so I appreciate the work from this committee, and the fact that
you had that kind of a bipartisan support for that legislation
shows that it was a well thought-out piece of legislation. We
are currently in the process of reviewing that legislation
along with a host of other pieces of legislation that are
making their way through Congress, and I look forward to
working with all of you because I do think that it is a bill
that we can work with. And so there may be some modifications
or changes that we will request, but we have not yet had the
opportunity to dig into it in detail but we will.
Mr. Upton. You indicated in your testimony that you are
doing in essence a 24-hour license every single day with BP.
What would happen if you actually denied them a 24-hour bill?
Would you all take over? What would happen?
Secretary Salazar. Essentially what would happen is they
would have to go back into a containment mode and that is to
essentially minimize the amount of oil that ultimately gets
spilled out into the Gulf. And so prior to the time that the
shut-in occurred, they were capturing on the average of about
24,000 to 25,000 barrels of oil a day so that there would be a
resumption of some of that oil containment capacity as well as
a program which we required. We ordered BP to develop a program
that put in different scenarios with different oil containment
capacity, leading up to as much as 80,000 barrels a day of
containment capacity.
What would happen as you would transition though from a
shut-in of the well over to a leak containment program is that
during that interim period, there would be some flow of oil out
into the Gulf.
Mr. Upton. Former Secretary Kempthorne who was here earlier
this morning in his testimony voiced the frustration to the
degree that they had sought more money for inspectors, in
essence about $2 million more than what Congress provided. You
indicated just now that you are looking for about 445 more
inspectors. I am just wondering if the ideas fostered within
the Administration to perhaps go about like a user fee on the
industry itself, like we have an escrow account now to pay, I
hope, every dime of--or an escrow account for every dime for
the losses--et cetera, for folks along the Gulf. Should you not
be able to get money from the Appropriations Committee, do you
have the authority, would you seek authority to in fact impose
a user fee to then provide for these additional inspectors that
you are calling for?
Secretary Salazar. We are working closely with OMB and work
closely with the Appropriations Committee relative to the
additional resources that are needed and how we fund them. And
I know everybody here agrees that we need to find ways for
paying for some of these things, and so that is part of the
conversation that is taking place.
The number that I gave to you in terms of 445 inspectors is
what we believe we would need over about a 3-year timeframe to
be able to do an adequate job of inspecting the oil and gas
activities in the outer Continental Shelf. As I think I heard
some of you say this morning, it would be almost impossible,
frankly, for 60 inspectors to be expected to go out and do the
job when we are talking about 4,000 very complicated facilities
that they have to inspect in the Gulf of Mexico.
Mr. Upton. What role do you expect that the President's Oil
Spill Commission will play in the decisions about the
moratorium? Do you expect that commission to offer advice as it
relates to the moratorium and how would you use it?
Secretary Salazar. You know, we will consult with them
relative to whether or not it is time for us to remove our hand
from the pause button, but right now, given the dynamic
situation in the Gulf of Mexico and the issues that I outlined
earlier, from our point of view, it would be irresponsible to
take off, to take our hand off the pause button, as many have
suggested.
And so we will be developing information in the weeks and
months ahead, including information that is developed by the
President's Deep Water Commission. If we are to make an
adjustment with respect to the moratorium, it will be dependent
on, be answering to the three fundamental questions which
relate to drilling safety, oil containment and adequacy of oil
spill response. And if we were to find a way of doing that
before 6 months, then there would be a possibility of doing
something different with the moratorium. But for right now, our
view is that it will take until about November 30 for us to get
that done.
Mr. Markey. The gentleman's time has expired. The Chair
will recognize himself for a round of questions.
Mr. Secretary, in recent days, BP's Kent Wells said that
the company is considering an additional technique known as a
static kill, a bull-heading, now that the well has been capped.
This procedure has been described as similar to the top-kill in
which mud is introduced at the blowout preventer but may
benefit from the current stop-flow and lower than expected
pressure at the well. What can you tell us about this bull-head
kill? What are the risks and the challenges of the procedure
that is now being considered?
Secretary Salazar. The static kill would be a decision
essentially to try to kill the well from the top. Some have
described it in layman's terms as a sandwich kill because
ultimately, everyone has known that ultimately killing this
well is going to require the relief well to kill it from the
bottom. But in the interim, what BP has been talking about is a
possibility of coming in from the top and essentially putting
in mud and then cementing the well from the top. Their view is
that it can be done easier now that you basically have a shut-
in pressure and you don't have a flowing well.
But I think Chairman Markey exemplifies a key role that we
in the United States have been playing with respect to these
kinds of issues. We will not allow BP to move forward with the
static kill option if we think that it is going to create
greater jeopardy and compromise the integrity of the well.
And so there is a science team which is headed by Secretary
Chu and includes the directors of all the national labs as well
as Director Marcia McNutt from the U.S. Geological Survey, and
they are reviewing these plans and assessing the benefits and
risks. And it is on their advice--we will allow the science to
lead us to the appropriate conclusion before we stop BP or we
green light BP on anything.
Mr. Markey. Thank you, Mr. Secretary. If the well is
permanently shut in or killed through a static kill, then a
definitive determination of flow rates may be precluded, and
that would be a success for BP in its continued attempt to
obscure the true flow rate of the well. If, however, we do move
to a collection strategy, then it would be possible at some
point to collect 100 percent of the hydrocarbons from the well
for a period of time. Why is that important? Because BP will be
fined $4,300 per barrel for gross negligence. Each 10,000
barrels that spill out per day for 80 days or so would be the
equivalent of a $3.5 billion fine, 20,000 barrels per day, $7
billion, et cetera. If it was 60,000 barrels per day, then the
fine would be about $18 billion.
So Mr. Secretary, can you tell us what is the likelihood
that we can get as precise a number attached to how much oil
has been spilled out in the Gulf of Mexico because of the
negligence of BP? We know that BP is trying to lower their
liability. They want the maximum amount of ambiguity in terms
of what that number is so that the ultimate settlement will be
lower in terms of what BP has to pay to the American taxpayers
and to the people in the Gulf of Mexico. So can you just give
us some sense of how precise ultimately the goal is for the
Obama Administration to establish how much oil did go into the
Gulf of Mexico?
Secretary Salazar. Chairman Markey, I agree with your
conclusion that it is absolutely imperative that we have the
flow rate determined in a way that is absolute, and we have the
best of scientists in the world that have been involved in
terms of looking at these flow rates.
The current flow rate of the U.S. Government which came
about as a result of very extensive scientific work is between
35,000 and 60,000. There is additional data that has come in
relative to pressure as the well was shut in, and that will
provide an additional opportunity in the days ahead to try to
come up with a definitive number that will give us the rate of
flow at the time of the shut-in. But there are other
complicated questions, Chairman Markey, that our scientists
will have to look at, including whether or not the amount of
flow has changed over time from April 20 until the time of
shut-in. But I can assure you that the premise here that BP be
held accountable for everything that it owes to the United
States of America relative to penalties and other kinds of
assessments against BP is essentially imperative for us,
requires us to make sure that we have accurate flow numbers.
Mr. Markey. Well, again, I would just say that we know that
BP will litigate this issue in terms of how large their fine
is, as Exxon did after the Valdez incident. If it takes 10
years, they will take 10 years. They will take as much time as
they want. I think it is critical for us to establish the most
precise number right now because ultimately the American
taxpayers should be fully compensated for what BP did to
America's ocean.
We thank you, Mr. Secretary, for being here and for your
service to our country.
Let me turn now and recognize the gentleman from Texas, the
Ranking Member of the Full Committee, Mr. Barton.
Mr. Barton. Thank you. I thought you were going to go to
Burgess, but I am ready to go.
Mr. Markey. Mr. Burgess pointed toward you.
Mr. Barton. Oh, he did?
Mr. Markey. Approvingly.
Mr. Barton. All right. He has passed the buck.
Mr. Markey. With recognition.
Mr. Barton. All right. Well, thank you, Dr. Burgess, and
welcome Mr. Secretary.
The blowout preventer that failed on April the 20th was
supposed to be inspected every 2 weeks, and we have been told
that this particular blowout preventer was inspected
approximately I believe 10 days before the accident and passed
the test. Is that correct? And can you share with the committee
any of the results of that particular test?
Secretary Salazar. My recollection, Representative Barton,
is there was an inspection that did occur in early April of the
blowout preventer and that there were multiple tests that were
conducted after that. The inspection would have occurred, and
then following that, there were I think tests on the blowout
preventer April 10th, perhaps April 17th, but other days during
that time of April.
Mr. Barton. So is it correct that this particular blowout
preventer that failed on April the 20th when you had the
accident did pass the inspection earlier?
Secretary Salazar. It did pass the last inspection that was
conducted.
Mr. Barton. When that inspection or any inspection of these
ultra deep oil rigs are conducted, is there an MMS inspector
onsite while the test is being conducted?
Secretary Salazar. The answer to that is no. The answer to
that is that the tests are conducted by the companies when they
are testing the blowout preventer. When the inspections occur,
you don't have the capacity frankly when the inspector is out
there to get down and see and conduct the test itself while you
are on there.
And so you take the information that is provided, and you
review that information as an inspector, and that is what you
base your findings on. And that is part of the change that I
believe needs to be made. It ought not to be a circumstance
where essentially an inspector is taking the word of the
company relative to the adequacy of the blowout preventer.
Mr. Barton. So current practice has been a self-
administered test using approved protocol, and then the results
of that test are forwarded to the appropriate official at MMS,
is that correct?
Secretary Salazar. As I understand it, Chairman Barton, or
Ranking Member Barton----
Mr. Barton. I like Chairman. That is OK.
Secretary Salazar. Ranking Member Barton. My understanding
is that is how the process works.
Mr. Barton. Has your department had a chance to compare the
test results of this particular blowout preventer to what
happened on the accident day and the inspections that have
occurred electronically and visually through the remote
monitors of this blowout preventer? In other words, can you
indicate what the anomaly was in the accident that caused the
blowout preventer not to operate when apparently very soon
before that, it had operated correctly? We have had 90 days as
has been pointed out rightfully so by my friends on the
majority. The failsafe plan was that the blowout preventers
would never fail. Well, the blowout preventer did fail. So I
would think a key component of the investigation would be
compare the test results most recently tested with what
actually happened and see what the anomaly is. Has that been
done and if it has, can you share that information with the
committee?
Secretary Salazar. Congressman Barton, there are many
pieces of evidence that need to be collected, including the
blowout preventer. The blowout preventer is essentially the
black box that has to be taken up from the floor of the sea,
and none of these investigations will be able to be fully
completed until that happens.
The blowout preventer is now necessary in order to keep the
integrity of the well and the well shut-in----
Mr. Barton. I understand that.
Secretary Salazar. So when that blowout preventer comes
out, there will be a very extensive forensics protocol that
will examine all of those issues and determine what went wrong.
But it is a critical aspect of the Marine Board investigation.
It is a critical aspect that everybody involved in any of the
investigations is focused on, and I am sure your committee will
be very interested in those findings as well.
Mr. Barton. My last question, and I know I have just
expired my time, why was the Jones Act not waived so that some
of these international partners could send their equipment to
assist in the skimming and the clean up immediately? Because I
know there was a petition to do that. Why was that not granted?
Secretary Salazar. Congressman Barton, I can only say that
I have worked with the National Incident Commander Thad Allen
and our entire group from day one, and the Jones Act has never
been in the way of getting any vessel on board to deal with the
oil spill response.
Mr. Barton. So the international community that wanted to
send their equipment, the fact that they wanted to send it and
couldn't because of the Jones Act, that is just not true, they
just didn't send it?
Secretary Salazar. It is not true that the Jones Act was
any barrier to bring in any of those vessels----
Mr. Barton. Then why were they not allowed in? I was told
it was because the Jones Act prevented it. If that is not true,
why were they not allowed in?
Secretary Salazar. My understanding, and I can get the
National Incident Commander's verification on this for you, but
the Jones Act has not been at all a reason for any of these
vessels from coming in.
Mr. Barton. OK. You didn't answer my last--you have
answered the first question. You said the Jones Act was not the
reason. What was the reason?
Secretary Salazar. Again, it is the National Incident
Commander Thad Allen that can respond to that. My understanding
is that there are multiple reasons, including some of them are
the distance that they were and a host of other reasons. But we
can get that for you.
Mr. Barton. Will you state that the reason is not because
somebody in the Obama Administration said they couldn't, they
were turned down?
Secretary Salazar. I will----
Mr. Barton. Can you declaratively state that they were
turned down?
Secretary Salazar. Congressman Barton what I will say this,
is that no stone has been left unturned in terms of any offer
of help that could be used, OK? And that certainly has been the
direction that the President has given to us and that the
National Incident Commander have been working on from day one.
Mr. Barton. I thank the Chair's discretion.
Mr. Stupak. Chairman Waxman for questions, please.
Mr. Waxman. Thank you, Mr. Chairman. Secretary Salazar,
good to see you. Our committee investigation revealed that BP
made a series of risky decisions. When they were drilling the
Macondo well, they used a single string of casing that provided
only one cement barrier preventing flow of dangerous gases to
the well head. They did not use enough centralizers during the
cementing process. They failed to fully circulate drilling
fluids. They failed to install a key casing lock-down sleeve.
And they failed to conduct a cement bond log test to determine
if the cement job had failed. Many of these decisions did not
conform to industry best practices, but BP went ahead with them
anyway.
Secretary Salazar, why was BP able to design such a risky
well? Can you describe for us the regulations on well design
and cementing and why they failed here?
Secretary Salazar. Chairman Waxman, the issues you have
raised with respect to cementing, centralizing, drilling fluid,
and the rest of the issues that you raised are I know very much
a subject of what this committee has looked at. They are very
much the subject of which the Marine Board is looking at right
now. And we will have some answers with respect to what
happened on each of those apparent deficiencies.
In terms of the regulations of the Department, there are
regulations of the Department with respect to each of those
issues that you raise. Part of the investigation will determine
whether or not those regulations were followed or whether they
were simply broken. But that is part of what the investigation
will look at, and with respect to MMS employees that were
involved in the oversight of the regulations and the
inspections, I have also asked the Inspector General to take a
look at what exactly it was that the MMS employees were
involved in the Deepwater Horizon knew or didn't know.
So we are looking at all those issues, and they are all
part of the ongoing investigation.
Mr. Waxman. As I understand it, current regulations are
performance-based. They essentially tell operators to make sure
the design is safe but require no specifics on how to do so. In
the wake of the BP disaster, you called at least for new
regulations regarding the well design and cementing. Can you
describe your recommendations and how you intend to implement
them?
Secretary Salazar. The regulations are first in terms of
drilling safety and cementing and casing. Chairman Waxman, many
of them are spelled out in the 30-day report that we submitted
to the President, and those regulations in many ways are then
reflected in the legislation which this committee acted on.
We are implementing those recommendations through notice to
lessees, two of them that have already gone out to cover a
number of those recommendations and are in the process of
moving forward with additional regulations, including a new set
of rule-making. In addition to that, the new Director of the
Bureau of Ocean Energy is hosting a number of public outreach
meetings to make determinations as to whether or not additional
changes are needed.
So it is a dynamic situation, but we are not waiting around
until November 30 or January 1 in terms of making changes that
need to be made. There are many changes that are being made as
we speak.
Mr. Waxman. A number of the recommendations that I believe
was the commission that you set up proposed were embodied in
legislation that was passed by this committee called the
Blowout Prevention Act of 2010. The legislation would not let
BP or any other company take the same shortcuts that were taken
on the Macondo well. This legislation requires multiple
barriers to prevent gas flows in the well. It requires
circulation of the fluids and adequate centralization of the
casing. It would mandate the use of a lockdown sleeve. It would
require cement bond log testing of key cement jobs. It would
also require third-party certification that the well design is
safe, making the regulator's job easier. I believe this
proposal that came out of our committee will help you in your
effort to improve safety of deep water drilling. The
requirements in this legislation will go a long way toward
preventing blowouts and making sure that regulators have the
tools they need to keep well operators from taking dangerous
shortcuts.
That was the intent of our legislation. It was based on
some of the recommendations your people had proposed, and it
would not prevent you from revising those regulations and
updating them as you saw necessary. But the emphasis, the shift
in emphasis, would be that there would be things that would be
required to be done before the drilling permit would be agreed
to, not just simply that that company is going to say that they
will live up to a performance standard and then when they
failed, then we are looking after the fact as we now are
dealing in the BP case.
We want to work with you. We want to make sure this never
happens again. And we hope when we pass this legislation and
you are finished with your job, we can assure the American
people of safety in the drilling of these wells.
I yield back my time.
Secretary Salazar. I agree with you very much, Chairman
Waxman. And let me say, I appreciate the leadership of this
committee and focusing in on what was supposed to be the
failsafe. That failsafe essentially was what lulled the
American public, this Congress, multiple executive branches and
secretaries and presidents to say that this was safe. And so
your focus on that particular issue is one that I very much
appreciate, and we are reviewing your bill and I expect that we
will work things out with your staff relative maybe to some
technical issues. But the thrust of it is absolutely correct.
Mr. Waxman. Thank you very much.
Mr. Stupak. Mr. Burgess for questions.
Mr. Burgess. Thank you, Mr. Chairman. Mr. Secretary,
welcome to our committee. Who is going to be responsible for--
fast forward when the well is shut in, the blowout protector
will be removed by someone and examined by someone. Can you
tell us the process you intend to follow? Who will be charged
with removal and who will be charged with the forensics on the
blowout protector? And this is essentially a crime scene, as I
understand it. Is that not correct?
Secretary Salazar. Yes, interestingly, Congressman Burgess,
we have put together an effort which I have asked Deputy
Secretary Dave Hayes to work with the Department of Justice and
the National Incident Commander Thad Allen to assure that the
appropriate protocols are followed because this is Exhibit A,
if you will, in a whole host of matters that will unfold before
the country in the year ahead. It is the black box, and so we
need to make sure that the right protocols are followed, and
those are being developed.
Mr. Burgess. Well, there is a lot of course to determine
who is at fault and was there negligence. But then of course,
from our perspective, we wrote a law that you just referenced
dealing with preventing the problem from ever happening again.
But we don't know what happened that caused the problem that we
are dealing with now.
So obviously it needs to proceed on two tracks, but they
are both extremely important. One is important from settling
criminal issues and liability issues in regards to this
accident and one is important to settling the issues as to how
we do proceed in the future with this type of activity. Now
you----
Secretary Salazar. I agree with you, and if we could we
would be doing the forensics on it right now. The problem and
reality is that----
Mr. Burgess. You can't move it.
Secretary Salazar [continuing]. It is needed to keep the
well in control for right now.
Mr. Burgess. Sure.
Secretary Salazar. But as soon as it is over, I guarantee
you, the protocol will take over. The United States is in
charge. The United States will be in charge of the blowout
preventer and will be in charge of the forensics and the
evidence.
Mr. Burgess. Will BP be the one that removes it from the
ocean floor?
Secretary Salazar. That will be part of the protocol, and
it will probably be with oversight from the United States
Government. But that will be part of the protocol that we are
working on.
Mr. Burgess. Let me just ask you this very briefly. You
referenced to an answer to a question I think of Mr. Stupak, or
maybe it was Mr. Markey's, that Secretary Chu was having some
input into monitoring the condition of the well as it currently
exists as to whether or not the pressures are acceptable,
neither too high nor too low. I know Dr. Chu is a brilliant
man, but does he have experience with well design?
Secretary Salazar. What I will say is he is a Nobel
laureate and my extensive work with him in the last 90 days, he
is probably the most brilliant man on the planet. And having
him in a position----
Mr. Burgess. With all respect, the President is a Nobel
laureate, but I don't know that he would be the best person for
that job.
Secretary Salazar. But if I may, what Secretary Chu has
done with my assistance and my working with him is we have
assembled the best team. You would be proud of them,
Congressman, of scientists from around the country, from the
Federal Department of Energy labs, Sandia Labs, Tom Hunter,
Marcia McNutt from the United States Geological Survey. And
they have collective petroleum----
Mr. Burgess. But they don't design wells, with all due
respect. All I am concerned about here is you referenced the
fact that BP may want to do something different from what the
Department of Interior wants. At some point, if there is a
divergence of opinion, does BP lose any of their liability if
the Department wants them to go in a direction that they are
uncomfortable in going or if they said, we really just want to
go ahead and shut this thing in with whatever you called it,
the bull hammer approach now. Who ultimately gets to make those
decisions and then what release of liability is there for the
party of the first part, BP, if the wrong decision is made?
Secretary Salazar. The United States is in charge. The
United States working through the National Incident Commander
will give the approvals and authority on the way forward. Those
decisions, Representative Burgess, will be guided by the best
of what the science community tells us, and we have the best of
the science world involved in this issue.
Mr. Burgess. I wish we could all be so sure. We don't even
know about the presence of--down there or the ultimate of the
potential for collapse of the well head. I mean, that has been
a concern since it was raised in this committee some six weeks
ago. So I wish I could share your certitude about that.
I have got a number of questions related to the moratorium.
I hope we will have the opportunity to submit questions in
writing because I think this is important. But have you done a
risk analysis on the likelihood of other wells failing in the
Gulf?
Secretary Salazar. The moratorium decision which we issued
in a 20-plus page document laid out the factors related to my
decision. My decision essentially was based around three key
factors which there is tremendous evidence in the record to
support and tremendous evidence which I know this committee has
seen uphold before its very eyes. And those issues relate to
drilling safety, oil containment and oil spill response. Today,
if there was another oil spill response requirement in the Gulf
of Mexico or somewhere else, we would not have the capacity to
respond to it because all of the resources essentially are
focused in on dealing with the blowout at the Macondo well.
Mr. Burgess. Before I am gaveled down, would you supply
that risk analysis for the committee for the record?
Secretary Salazar. We will supply you a copy of my decision
which essentially includes reference to a very extensive
record.
Mr. Burgess. Actually, the paper supporting the decision
would be what the committee would benefit from.
Secretary Salazar. We will work with your staff to figure
out exactly what it is that you want, but we do--the decision
that was made last week and communicated last week was a very
well-thought-out decision which----
Mr. Burgess. But based upon some set of facts, and if the
set of facts could be----
Mr. Stupak. The gentleman's time----
Mr. Burgess. --provided to the committee, that is what we
would appreciate.
Mr. Stupak. Mr. Dingell for questions, please.
Mr. Dingell. Mr. Chairman, thank you. Mr. Secretary, a
pleasure to se you before the committee. Thank you for being
here.
Mr. Secretary, I am troubled. Where in the statute does
NEPA allow for categorical exclusions? What is the citation in
the statute which permits that?
Secretary Salazar. Congressman Dingell, I think you get to
the broader question with respect to the environmental review
of oil and gas leasing in the outer Continental Shelf.
Mr. Dingell. No, Mr. Secretary, this is a very specific
question. I say this with the great affection and respect. But
NEPA says that every single action which has a significant
impact upon the human environment shall be accompanied by an
environment impact statement. Nowhere in that statute--and by
the way, Scoop Jackson and I wrote this in the late '60s and
early '70s. Nowhere in the statute is there authority given for
a categorical exclusion. Is it the interpretation of your
agency that there is a categorical exclusion in this or is it
the interpretation of the Council on Environmental Quality that
such be so?
Secretary Salazar. It is founded in law and it has to do
with this. Chairman Dingell, if you, with all due respect,
there was an environmental impact statement that was conducted
with respect to the 2007 to 2012 plan. There was another
environmental impact statement with respect to this
particular----
Mr. Dingell. Here is the way it worked, Mr. Secretary, and
let us refresh our collective recollections. There was
essentially a generic environmental impact statement issued for
the entire block in which the lease existed as opposed to a
specific lease, and I am trying to figure out what transpired
here. I hear talk that there is some kind of a device for a
categorical exclusion. I want to make sure that your department
is not misinterpreting the statute or that the statute has not
been improperly amended at any time since Scoop Jackson and I
got it into law.
Secretary Salazar. Let me say that the fix here is what the
President and I have proposed to the Congress and that is there
is a requirement in the law under--an expiration plan to be
approved within 30-days of its submission. And so what we have
asked is that that timeframe be extended from 30 days to 90
days in order to be able to do the appropriate environmental
review. So that is one of the areas that we hope to work with
the Congress on to make sure that the way in which categorical
exclusions have been used in the past is not the way they are
used in the future.
Mr. Dingell. I think, Mr. Secretary, in the interest of
time, I would like to submit this and ask that you respond for
the purpose of the record. Have there been any categorical
exclusions, and if so how many granted where oil and gas
companies got licenses to drill? If so, how many? I will permit
that to be inserted into the record. So would you submit that
for us, please?
Now, Mr. Secretary, tell us about this cement bond log. No
such test was performed on the Macondo well, is that correct?
Secretary Salazar. Chairman Dingell, the answers to those
questions are still a part of the investigation.
Mr. Dingell. OK.
Secretary Salazar. Your committee has found that----
Mr. Dingell. Would you submit that, please, Mr. Secretary,
for the record?
Secretary Salazar. But Chairman Dingell----
Mr. Dingell. But I would like you to tell me if Interior
does not insist that such a test is performed, then how is the
department to know that that is, rather that the law has been
complied with and that in fact the lease is being safely and
properly executed by the oil company?
Secretary Salazar. Chairman Dingell, we have conducted and
are conducting a comprehensive review of the whole regulatory
regime relative to the drilling----
Mr. Dingell. Mr. Secretary----
Secretary Salazar [continuing]. On the Continental Shelf.
Mr. Dingell [continuing]. With respect and affection again,
I will submit this for the record and ask you to respond.
Now, Mr. Secretary, it is my understanding the lessees are
required to submit a blowout scenario. In 2003, all leases in
the Gulf were exempted from this requirement unless they fell
into four specific categories. In 2006, this was expanded to
five. Is this correct?
Secretary Salazar. It is correct that that is the way it
was, as I understand it----
Mr. Dingell. OK.
Secretary Salazar [continuing]. Chairman Dingell, but it is
also correct that those are some of the changes that we have
already made as we have moved forward with the 30-day----
Mr. Dingell. I don't want to you to feel uncomfortable----
Secretary Salazar [continuing]. Report to the President of
the implementation----
Mr. Dingell [continuing]. About this, Mr. Secretary.
Secretary Salazar [continuing]. Of the regulations.
Mr. Dingell. I just want to gather the facts. Now, did the
Macondo well require a blowout scenario or was it exempted from
the blowout scenario?
Secretary Salazar. The Macondo well had a requirement with
respect to a blowout preventer under the regulations.
Mr. Dingell. Again, I would like to submit that in a
written inquiry. I thank you, Mr. Secretary.
I ask, Mr. Chairman, that the record remain open for both
my letter and the response of the Secretary, if you please.
Mr. Stupak. As Chairman Dingell knows and other members
know, the record would stay open for 10 days for additional
questions. So we will make sure that is done.
Mr. Dingell. Thank you, Mr. Chairman, and thank you, Mr.
Secretary. It is a pleasure to have you before the committee.
Mr. Stupak. Thank you, Mr. Dingell. Mr. Shimkus for
questions, please.
Mr. Shimkus. Thank you, Mr. Chairman, and I, too, would
like to submit for the record for you, Mr. Secretary, if you
would supply the committee's staff with all risk analysis of
another blowout that was used in determining the first
moratorium and then obviously the second. There has got to be
some risk analysis that was conducted, and we would like for
you to submit that for the record.
First of all, I want to thank you for being here, and I
appreciate your candor to say, hey, there is enough blame to go
around for all of us. I think the deep-sea modeling issue is
just another one that a lot of us let slip by, things that we
could have done. And so I think that is important that we look
at the problem, try to resolve the problem, make BP pay and
move forward.
This is historical in my 14 years having a sitting
Secretary and two previous Secretaries in one day, and as I
noted earlier, I have not seen that ever done. I have not seen
a Secretary of Energy brought before and then the previous
Secretaries of Energy brought on the same day. So it is what it
is. So we welcome you here.
First of all, for electricity generation in this country,
are we independent? Are we as a Nation for the most part
independent on our energy needs for electricity generation? I
can help you. I know you are not in the energy--the answer is
yes. So when we talk about energy needs of this country, I like
to break it up into electricity generation and liquid fuels for
transportation needs and the like.
You made a comment in your opening statement about the huge
amounts of energy that will be able to be recovered by wind in
the Atlantic coast. Can you define huge for me? This has got to
be electricity generation because we don't make transportation
fuel out of wind. I am just trying to figure out what huge is.
Secretary Salazar. The formal evaluation as I recall from
the National Renewable Energy Lab is that there is about 1,000
megawatts of power available. Now, there is a----
Mr. Shimkus. But that is intermittent, right? You can't
totally rely on that for base-load generation.
Secretary Salazar. Let me, Congressman, answer your
question. There is a connect between how we use electricity and
how we consume oil, and this President has been working for a
long time----
Mr. Shimkus. OK, reclaiming my time. I really am short, and
I want to stay true to the 5 minutes.
Secretary Salazar. Let me make my point. I want to make my
point.
Mr. Shimkus. Let me just say that----
Secretary Salazar. Chairman, I would just like to make my
point, to answer my----
Mr. Stupak. Would you let him answer and then we will----
Mr. Shimkus. No, I have like three more questions I need to
go to, so I get the point. My point is there is electricity and
liquid fuel. It is my time----
Secretary Salazar. I can answer my question in two words,
electricity and transportation are tied together.
Mr. Shimkus. Maybe in the new world, but it isn't today. I
will tell you what real power is, 1600 megawatts by a coal-
fired power plant being built. That is the equivalent of 624
wind generators. The 624 wind generators would take 30,000
acres of land to place. We just got to keep this--there is not
huge. Huge is nuclear. Huge is coal. Renewable is helpful, but
to sell the story that it is the salvation of our energy need
is really doing a great disservice to this country.
Let me move onto the moratorium. There are 33 rigs idle
right now. If I said that that is 45,000 jobs and equivalent
jobs, would that be close?
Secretary Salazar. There have been different numbers that I
have seen from experts.
Mr. Shimkus. 30,000?
Secretary Salazar. There are thousands of jobs.
Mr. Shimkus. If I said a loss of $330 million in payroll,
would that be close?
Secretary Salazar. I haven't seen the number in dollars.
Mr. Shimkus. Two billion dollars in royalties to the
Federal Treasury is lost. Would that be close?
Secretary Salazar. There is no doubt the moratorium has an
economic impact.
Mr. Shimkus. OK, the last question. I do--but this
moratorium is killing me and it is killing jobs in a place that
needs jobs. When you put your hand on the pause button, is
business planning and decision making pausing? I will give you
an example. In my opening statement, I talked about a release
yesterday. First rig sails away over drilling ban. Diamond
Offshore announced Friday that its Ocean Endeavor drilling rig
will leave the Gulf of Mexico and move to Egyptian waters
immediately, making it the first to abandon the United States
in the wake of BP oil spill and a ban on deep-water drilling.
That is in the time when we need jobs and the economy and
energy is important, we pray that you have some concern about
the jobs of this country and of Louisiana.
Thank you, Mr. Chairman. I yield back.
Secretary Salazar. Congressman, if I may? Mr. Chairman, I
would like to just respond very briefly----
Mr. Stupak. Yes.
Secretary Salazar [continuing]. In this sense. First, we
are aware of the economic impacts of the moratorium. We also
believe that it would be irresponsible to take our hand off the
pause button given the current circumstances. Second of all,
with respect to electricity, we do believe that the future of
it is huge and it is going to be part of the future energy
portfolio of the United States. So I respectfully disagree with
you, Congressman.
Mr. Stupak. Mr. Green for questions.
Mr. Green. Thank you, Mr. Chairman. Thank you, Mr.
Secretary for being here, and I am going to ask my staff--I
talked with you earlier about a letter the Congressman Kevin
Brady and I sent in on June 24 that a number of our colleagues
signed onto outlining hopefully an interim solution to lift the
deep-water drilling ban on a small scale, and like my
colleagues, I represent a very urban district in Houston. It
has refineries, chemical plants. We do everything energy
including--I have constituents who work offshore and
historically families who have worked offshore. So the
moratorium is a very big issue.
The letter we are asking about that several of my
colleagues propose lying low-risk development and appraisal
wells to be drilled while the Department of Interior continues
the assessment on deep-water exploratory wells. These type of
wells offer the reassurance of smaller, minimal risk because of
delineation and sidetrack drilling that accompanies these wells
merely just serves to define the parameters of then-known
reservoir. If your department agreed to this modification--
hopefully it is under consideration for almost the last month.
If it addressed the Administration's call for safe and secure
drilling and protect estimated about 75 percent of those jobs
you heard earlier that would be lost under the moratorium if we
go forward with the full 6 months. And it would also help
prevent future energy supply shortages in 2011 and 2012 because
these wells don't come in immediately, particular deep water.
It takes a long effort to get there.
Now, the new moratorium focuses on drilling configurations
and technology rather than drilling depth, and since the whole
basis of my proposal stems from the specific drilling
configurations and assuming we quickly get the blowout
preventer and rig equipment inspected by Interior and third-
party certifier, would that prevent you from exempting these
wells from the moratorium? And again, these are not actually
production wells, these are actually just delineating the
reservoir and are much less riskier than the Horizon. So I know
you have a copy of the letter now, and we sent it like I said
on June the 24th, but I appreciate you seriously and the
Interior seeing if we can moderate that 6 months where we can
get 75 percent of these folks actually back working. That way
we wouldn't have these rigs sailing off to somewhere else.
And I would just appreciate it if you would just say you
will consider it. That is fine with me, and we will be back in
touch because you have been real great with your time with a
lot of us over the last 2 months trying to work with you and
Interior.
Secretary Salazar. If I may, Congressman, the key issues
that we are looking at that we need to have some satisfaction
with are drilling safety, blowout containment and oil spill
response. And Michael Bromwich, the Director of the Bureau of
Ocean Energy, has already publicized the schedule of meetings
that he is going to have, especially in the Gulf Coast states,
developing additional information. And then maybe the
moratorium could be adjusted based on zones of risk. We already
have said that it is OK to move forward with drilling in the
shallow waters, OK? We have said that there may be a
possibility of doing something that distinguishes between wells
that are being built off production platforms versus wells that
are being drilled as exploration wells. We don't know anything
at all about those formations or insufficient information.
So that is part of the analysis that we currently have
under way, and we would be and will keep you informed as we
move forward with that analysis.
Mr. Green. And that is what our letter asks for, those less
riskier wells where we could get those folks back to work and
delineate the reservoirs. Again, the taxpayers would benefit,
obviously my constituents and people who work there.
My second question is, and you mentioned shallow well
drilling, I appreciated the first production well was actually,
a permit was given last week. And you know, my concern, there
has been a de facto moratorium on shallow well drilling. There
have been reworking and things like that, permits given on
shallow well drilling, but like I said, the first actual
production well was issued last week. And from what I
understand from today's Wall Street Journal, that company
actually started drilling Sunday because there was such a
demand in shallow water.
We have also sent an earlier letter to you at the end of
May from Congressman Boustany and I that we appreciate the
lifting of the shallow water but like I said, the first new
well permit was issued last week. In fact, I was told
yesterday, several of our shallow water producers met with Mr.
Bromwich's staff yesterday, and they are close in agreement on
some of the guidance in NTL06 because that is some of the
concern. We are having--field offices don't know what NTL06 and
they are not issuing those permits, and as soon as possible if
we could get the rules there because these are shallow water
wells. All the equipment is up on top. If you have a question
about the blowout preventer, it is not 5,000 feet below sea
level. And there are a great deal of natural gas that is
produced and jobs created from those shallow water wells.
So I appreciate. Hopefully that one permit that was issued
last week for production will see more issued in the next few
days. So that will show that there is not a de facto moratorium
on shallow well-drilling.
Mr. Chairman, I appreciate your patience.
Mr. Stupak. Thank you, Mr. Green. Mr. Griffith for
questions.
Mr. Griffith. Thank you, Mr. Chairman. I am listening
intently to the testimony, and it is obvious that we all crave
certainty in our lives, and therefore we want to measure and
measure everything.
I think that in my particular case, I am not so much
interested in the technical aspects of the well head of what
have you, but I do know that the capping of the well was low
tech. I do know that this was not a difficult concept of
putting a cap on top of where the oil was coming out of, but I
do know that it took a good long while. And I do know that we
will fool ourselves into some degree of confidence that we are
doing the job when we measure and continue to measure. And I
know we will generate a huge booklet of regulations, but I will
remind all of us that if I step on the bathroom scales and it
looks at 200 pounds, I get off of that bathroom scale and I put
a cotton ball on, the needle doesn't move. Whatever we are
measuring has a finite amount of confidence to it. So what I am
concerned about is that we are going to have a blowout again,
as diligent as we are today and as many of the things that we
would like to measure, but we do know that the thermal dynamics
and the external variables, the internal variables almost make
deep-water drilling a biologic system. And we know that a human
can die with a normal blood work and a normal EKG and a normal
MRI and a normal CT scan, so we are going to have this event
once again in front of us, regardless of our intentions.
And so my concern is from the time that well blew out to
the time we put a cork in the bottle, so to speak, what
happened? And my other question is this. Should that have
happened when your position was empty, should that have
happened in between administrations or in between Secretary of
the Interior, who takes charge? It reminds me of the story of
the nurse that goes down to the nurse's station and says, Mr.
Jones is blue. The nurse takes the chart out and says, what
room is he in, and she duly charts it and then says what do you
think we should do? Let us call his doctor. It looks like he
might need some oxygen. We can't give it to him without an
order. His doctor is not on call. Do you think it is his heart
or is this a lung doctor we should call? Well, by the time we
get there, well, he is not blue anymore, he has got a tag on
his toe, and he is on the way downstairs.
So what we saw here was a cost guard, an EPA, Environmental
Protection Agency. We saw the mayors and governors all weighing
in, and it appeared that there was no central control
immediately of the situation. So after we create the documents,
and this happens again. Who can you point to, and not you but
generic who says this is the guy that takes care of the oil
well problem? This is the guy that takes care of the earthquake
problem. This is the guy that takes care of the tsunami
problem. This is the guy that takes care of the hurricane
problem, because we have done this before in America, whether
it be Katrina, the Colombia accident or what have you. We are
having trouble going from a tremendous amount of knowledge to
executing it in the field, and I think that should be part of
our response and solution. I would like to hear your thought on
that.
Secretary Salazar. Well, Congressman Griffith, Admiral Thad
Allen was appointed as the National Incident Commander. All of
the United States Government goes through him as he coordinates
the overall response. Secretary Chu and I have been focused in
two areas, one is on the source control on the kill of the
well, and I have been focused as well in terms of protecting
the 44 wildlife refuges and national parks and the ecological
resources of the Gulf Coast.
Secretary Napolitano obviously overseeing the Coast Guard
and being under the Presidential directives, the personal role
and charge of the oil spill response.
So the Federal Government from day one has been very----
Mr. Griffith. Well, my question is simply this, can we make
that more efficient? Could we say this is a catastrophe and we
are on it from day one or two or three? In other words, can we
reduce that timeline because capping that well was probably not
a novel light bulb going on in some engineer's brain. It
probably, had they put their----
Mr. Stupak. The gentleman's time is----
Mr. Griffith [continuing]. They may have been able to not
have done it quicker.
Mr. Stupak. If you can answer, Mr. Secretary?
Secretary Salazar. I will say that I think from day one--I
sent my deputy without overnight clothes on April 21st to New
Orleans along with Kendra Barkhoff who was here who began to
monitor the situation, and quickly we were in communication
with Secretary Napolitano and the White House and everybody
else. We have been on it since day one.
I do believe, Congressman Griffith, that when one looks
back as one should in any post-mortem, there will be an
opportunity to see how things might have been improved. That is
just the nature of how these things go. We are dealing with
what is an unprecedented and largest oil spill response in the
history of this country, and the resources that have been spent
have been enormous, and the mobilization of the United States
Government has been at the direction of the President
relentless and with his specific direction that we will not
rest until we get this problem solved.
Mr. Griffith. I appreciate you and your staff--I don't like
the moratorium a bit, but I am sure if I could----
Mr. Stupak. OK, Mr. Griffith, your time is up, please.
Mr. Griffith. Thank you.
Mr. Stupak. Let us go to the next questioner, Ms. Capps,
for questions, please.
Mrs. Capps. Thank you, Mr. Secretary, for being here with
us.
During the previous testimony today by your predecessors,
strong comparisons were made between the Deepwater Horizon oil
spill and Hurricane Katrina. It was striking to me that what
was not mentioned was one very striking difference. The
hurricane which occurred 5 years ago was watched by the entire
country as it approached land and wreaked havoc, you know, for
2 full days and then it was gone. But with the exception of the
initial deadly explosion, the extent of the oil spill was
unknown. It occurred a mile below the surface of this gulf, and
the perpetrator of the blowout, BP, withheld so much
information, videos, and reports for days and weeks.
We in the government, and more importantly, the American
people, were lied to. Precious response time was wasted, let
alone any requirement to have response equipment already in
place and ready to go on day 1. Now it is day 90, and you and
your team have been in full response mode, but you also have
been learning a great deal. I want to let you talk or ask you
to talk, please, and respond for a minute or so, fairly
briefly. I want to follow it up with another similar kind of
question to look where we have come from, but also on your
watch, where we should go from here.
Secretary Salazar. Well, it seems to me and I appreciate
the question, Congresswoman Capps, I think when you look at it
back from a global perspective that we are looking at what the
President has been pushing, and many of you have been
supportive, which is a comprehensive energy program for this
Nation, and in that comprehensive energy many of you are
supportive of the renewable part of the portfolio. Some of you
are more supportive of the oil and gas part of the portfolio,
but we all recognize and the President recognizes that oil and
gas will be part of that portfolio during this transition time.
The question then for all of us as the United States
becomes how can we make sure that oil and gas as it is produced
is being produced in a way that is safe and protects the
environment. And to me, Congresswoman Capps, the central
questions come down to these three.
First, can we assure the American public that drilling can
continue in a safe way? Your prevention bill that you passed is
part of that answer.
Secondly, if you do have a blowout, what are the oil
containment programs in place to be able to deal with a
blowout. They obviously were not in place to deal with this
issue that now is in its 90th day.
And then thirdly, what are the adequate oil spill response
capacities that are needed to be able to deal with an oil spill
response if one should ever occur again. When we have answers
to those questions, it seems to me then we are able to move
forward.
Mrs. Capps. Thank you. I have to say in your position as
Secretary from my perspective as a coastal representative I
very much appreciate your decision to shelve the Bush Plan to
open up much of the California coast to oil and gas leaking--
leasing.
It was referenced, though, today already that the
development of the previous Administration's offshore energy
program plan appeared to be driven more by energy companies
than by public input or the best available science. In contrast
to this kind of closed-door process employed by the previous
Administration, it appears to me that your decisions are being
informed by public input and incorporating the best available
science.
I salute the listening sessions that you held right as soon
as you were sworn into office, long before this event ever
occurred, and I was fortunate to be part of one of them, and I
noticed that Director Bromwich announced yesterday that there
will be additional public hearings coming up in the next few
months to inform the leasing decisions that you will then be
making. This accompanied with some of the science.
So this is what I would like you to spend the rest of the
time on if you would, how do you intend to use this decision,
this gathering of information in your decision-making process?
Secretary Salazar. Congresswoman Capps, the--we will use
the information that we collect from the Bromwich set of
hearings to move forward in consideration of the three central
questions that I outlined previously, all of which related to
the moratorium and to the ultimate goal here, which is to
develop a safe and protective oil and gas production program.
You are correct that when I took office on January the 21st
I had in front of me a new 5-year plan that was to go into
effect in 60 days that essentially opened up all of the waters
of the United States. I decided 60 days was insufficient for
public comment and extended it to 180 days and had the hearings
which you participated in in California, Alaska, and other
places.
And it is our view, it is the President's strong view that
the decisions are best made when they are transparent and when
we are maximizing public input.
Mrs. Capps. Thank you, Mr. Chairman.
Mr. Stupak. Thank you. Mr. Latta for questions, please.
Five minutes.
Mr. Latta. Well, thank you very much, Mr. Chairman, and Mr.
Secretary, thank you for joining us today. Really appreciate
your time here.
I read with interest in your conclusion that you have
talked about a little bit already, but I would like to also
just read. It says, ``Much of my time as Secretary of the
Interior has been spent working to reform old practices of the
MMS and advance the President's vision of a new energy future
that will help us to move away from spending hundreds of
billions of dollars each year on imported oil. A balanced
program of safe and environmentally-responsible offshore energy
development is a necessary part of the future. Our efforts to
develop a robust OCS renewable energy program are a major part
of the effort to find that balance and help us move our Nation
toward a clean energy future.''
Then you also go on to state that, you know, for now we
have to look at conventional oil and gas.
You know, it is interesting that we are here today because
I am not sure, you probably did see the front page of the
``Wall Street Journal'' today. ``China Tops U.S. in Energy,''
and I would just like to read just a little bit from this.
``China has passed the U.S. to become the world's biggest
energy consumer according to the new data from the
International Energy Agency, a milestone that reflects both
China's decades-long burst of economic growth and its rapidly-
expanding clout as an investorial giant. China's ascent marks a
new age,'' it says here, ``in the history of energy.''
Then it goes on--I think it is also interesting a little
bit farther in the article it says, ``China overtook it,''
meaning the United States, it says here a little earlier that
the Untied States was the largest energy user since the early
1900s in the world. ``China overtook it at break-neck pace.
China's total of the energy consumption was just half that of
the U.S. 10 years ago, but in many of those years since China
has--China saw annual double-digit growth rates. It has been
expected to pass the U.S. about 5 years from now but took that
to position today.''
The reason I read that is because I represent the largest
manufacturing district in the State of Ohio, and I also
represent the largest ag district in the State of Ohio. My
district, if we are going to survive and according to the
National Manufacturers, I, 2 years ago, represented the ninth
largest manufacturing district in the Nation, and because of
where we are with the economy, we are 20th now.
But, you know, my main concern is what Mr. Shimkus brought
up. We have to have base-load capacity in this country, and I
am all for an all-invoked strategy, and that all-invoked
strategy has always been we need nuclear gas, oil, clean coal,
wind, solar, ethanol, biodiesel, hydrogen, and right down the
line.
But for the factories in my district to operate, we have
got to have power that turns on immediately, or we are not
going to have people working, and the biggest problem in our
area, we are just talking about one thing, jobs, jobs, jobs,
and when folks look around and they ask me, how come the jobs
are leaving the United States, well, and then I am looking at
this article and I can point to one more thing that is killing
is that, you know, the energy needs in this country might be--
are being shipped someplace else means they are going to be--
their manufacturing is topping ours. The Chinese want to be,
you know, atop us in manufacturing. In 10 years if they are
able to do in energy, they might do to us in manufacturing.
This is getting scary.
And it is also, it is kind of odd right on top of this
there is another story in the ``Journal'' today. It says,
``Personal Journal, How to Tame your Nightmares.'' Well, this
is my nightmare right here, and you know, I am really concerned
that as we--as the Administration goes forward and that we
get--30 percent of our U.S. oil comes from the Gulf, that as
you said in your statement on page 10 here that, you know,
you--that you will continue to look at this conventional oil
and gas playing a significant role in our economy and not
selling it short because we have got to have it to survive as a
manufacturing country.
And I will leave the rest of my time for an answer. Thank
you.
Secretary Salazar. Thank you, Congressman Latta. As I have
said in previous testimony, we--the President from day 1 has
said we need to have a comprehensive energy plan, and our view
is part of the reason the United States will fall into second
place is if we are not able to get a comprehensive energy plan
adopted for the United States of America, and hopefully there
is still time in this Congress to be able to do that because
once the right signals are sent to the market, essentially what
you are going to have is a different kind of headline than the
one that you were showing me from the ``Wall Street Journal.''
And that is that we as a United States are not playing for
second place. We are playing for first place as the President
has said, but in order to do that we need to have the long-
range policies in place to bring up as many of you support
nuclear, as many of you support clean coal, as many of you
support wind and solar and geothermal, but we need to have a
framework that isn't the start and stop of energy policy which
we in this country have now had for the last 30 years.
Mr. Latta. Well, thank you very much, Mr. Chairman. I yield
back.
Mr. Stupak. Thanks, Mr. Latta.
Mr. Melancon, questions, please.
Mr. Melancon. Thank you, Mr. Chairman. I appreciate it.
Secretary Salazar, I would like to kind of follow up on
something that Mr. Dingell was inquiring about. It is my
understanding that there is a requirement of a 30-day EIS
completion for these deepwater well, and if it can't be
completed in 30 days, then, in fact, they can waive--the
department, MMS, can waive that requirement. Is that----
Secretary Salazar. The issue on the categorical exclusions
is that you cannot do, frankly, an environmental impact
statement in the 30 days, and so what has happened is that
categorical exclusions have been given in the past under
Republican and Democratic Administrations with respect to
exploration plans as happened here in the----
Mr. Melancon. Do you have or does your staff know when that
categorical exemption was put into effect either by law, or was
it put in effect by rule within the Department?
Secretary Salazar. I can get that information for you,
Congressman Melancon. I don't have that at the top of my head
right now.
Mr. Melancon. Is this same waiver applicable in all of the
Gulf Coast States, or is it only applicable in certain States?
Secretary Salazar. My understanding, Congressman, is that
there have been several hundred of them that actually had been
given and probably it would not be done on a jurisdictional
basis off any one of the States. And so the reality is that the
categorical exclusions are driven in large part because under
the current law relating to OXA there is a 30-day requirement
to approve an expiration plan once it is filed with the
Department. And so that is not sufficient time to do the right
kind of environmental review and is--it is the reason why in
the President's submission of a legislative package to Congress
he said that requirement of the law should be changed to 90
days.
Mr. Melancon. If you would and if you would just--this
could be responded to, the reason I asked that question is I
have been told, and I don't know that this is valid or not,
that Louisiana, Texas--I mean, Louisiana, Mississippi, and
Alabama, the 30-day requirement with the waiver, if it can't be
done in 30 days, was applicable, but the other two Gulf States
they had to do the IS regardless. Don't know that for a fact,
but if your Department can verify.
Secretary Salazar. We will check on that and get back to
you on that.
Mr. Melancon. We have had as you know and you and I have
gone back and forth, and I appreciate your efforts to stay in
contact with me. You have been better than me at returning
calls back to you, but the moratorium is more concern and I
guess the concern I have got is, one, is the Commission that
was set up, they have any charge whatsoever about making
recommendations as to whether the Administration stays with the
moratorium, or if they have some findings, or are they charged
with looking for findings to bring back to the Administration
and to you to say this moratorium maybe isn't good, the
economic hardship or impact would be worse than trying to find
some method or way of doing the rolling inspections as we have
talked about in the past.
Secretary Salazar. Congressman, the President's Deepwater
Horizon Commission has as its mission to get to the bottom of
the story as to what happened with respect to the blot at the
Macondo Well and the Deepwater Horizon, and they will undertake
that effort as they have already started. We will be informed
by their proceedings and information as they develop and
recommendations that they make. So we will be in contact with
them as we develop our own information and move forward with
our process on addressing the issue of the moratorium.
Mr. Melancon. Can you give me, if it is possible, what was
the thought processing, I mean, was it just strictly the
concern with another blowout as opposed to a moratorium, or was
there any discussions about finding something as I have
described that would work for inspections and safety that was
somewhere between drill, baby, drill and shutting it completely
down?
Was there any discussion there, or did it just go straight
to we have got to shut this down and try and find out--make
sure that we don't have another blowout and let us not worry
about the economy? What transpired in those conversations? Do
you recall?
Secretary Salazar. Congressman, those issues were, in fact,
looked at and considered, and they are part of the record and
part of our decision on the moratorium. I will say this, that
as I am here in front of this committee today, we are still in
a very dynamic and a very dangerous situation. We are not out
of the woods even though this well has been temporarily shut in
because until we get to the ultimate kill of the well, the
situation is still a very dangerous one. And it is our view and
I have worked on this from April 20 forward, that until we have
the answers to the fundamental questions that I outlined to the
committee earlier on, that it would be imprudent for us and
irresponsible to move forward and lift the moratorium.
Now, as information develops and as we move forward with
our review and as Director Bromwich holds his hearings, too,
which I think are scheduled for Louisiana, that we will have an
additional set of information that might allow us to adjust the
moratorium at some point, but right now looking at the
timeframe, our view is that November 30 is a reasonable
timeframe when we can expect to be able to make some decisions
on the moratorium.
Mr. Melancon. Thank you, Mr. Secretary.
Thank you, Mr. Chairman.
Mr. Stupak. Thank you, Mr. Melancon.
Mr. Shadegg for questions, please.
Mr. Shadegg. Thank you, Mr. Chairman, and Mr. Secretary, I
want to commend you as did my colleague, Mr. Shimkus. I
listened very carefully to your opening statement, and it is
not often that in this town anybody comes forward and
acknowledges, look, we could have done things better. In your
opening statement you said that past Administrations and this
Administration had not done as much as they could have done to
ensure the safety of this industry or to ensure the safety and
ecological protection necessary for this kind of activity, and
I appreciate the candor of that statement.
You also went on to say, and I appreciated it, that with 40
years of drilling history and there being no incidents, I
believe your words were, this Administration and prior
Administrations had been lulled into a sense of complacency,
and I think that is a fair assessment. I don't know how much of
this hearing you have been able to watch, but in the appearance
of your two predecessors during the early hours of this
hearing, that was not the kind of testimony that was going on.
Rather there was a blame game being played very aggressively by
some members of the committee trying to assign blame and trying
to point fingers. I don't really think that solves the problem.
I think it is more important to look at what went wrong but
more important to live our lives looking forward at what we can
do correctly in the future.
In that regard, I believe the report that you received on
May 27 contained language to the effect that the industry had
had over 50,000 wells in the U.S. outer-continental shelf, of
which more than 2,000 were in waters 1,000 feet deep or more,
700 were in waters 5,000 deep, that we had been using sub-sea
below preventers since the mid 1960s and that the only major
prior event from offshore drilling had been 41 years ago, and
that, in fact, had been from the--in the Santa Barbara Channel,
and it had been from a shallow water platform where the blowout
preventer was on the surface.
I assume that is what you were referring to when you were
talking about the history of this industry led us to using the
procedures we were using prior to this incident. Is that
correct?
Secretary Salazar. Congressman, what I would say is that 41
years of a relatively good record essentially led the United
States Congress and many Administrations to essentially assume
that there was safety with respect to this kind of drilling.
Mr. Shadegg. Mr. Kempthorne said just about, and he also
noted that we would never do it again because we have learned
from this incident.
Secretary Salazar. But the fact is that that assumption was
made, and we do have an ongoing disaster in the Gulf of Mexico,
and I think from our point of view would be imprudent for us to
simply move on as if nothing had happened.
Mr. Shadegg. I couldn't agree----
Secretary Salazar. At the end of the day where you were is
where the President and I have been from day 1 on this. We have
a problem, and we have to fix it, and we have to fix it right.
Mr. Shadegg. I couldn't agree more. My time is short, so I
want to get to all these questions.
Mr. Waxman in his questioning talked about several issues.
He mentioned that there are regulations on--you mentioned in
response to his question that there are regulations on casing
and cementing and mud and all of those issues and that a part
of your study now is to find out were those regulations filed,
followed, or were they broken, and that is a part of the
forensic activity.
Wouldn't you agree that it would be prudent before this
Congress enacts permanent legislation, at least legislation
specifying details in that nature as opposed to granting new
regulatory authority, that we get the answers to those
questions before we enact legislation?
Secretary Salazar. I think we have already learned a great
deal from this ongoing disaster in the Gulf that provides a
basis for which to act. Now, that does not mean that as we go
forward and the President's Deepwater Horizon----
Mr. Shadegg. We don't--by your own testimony we don't know
the answer to those details. Correct? We don't know exactly
what went wrong here. You said earlier we can't get to those
things because we are too busy trying to cap the wells, stop
the flow. We haven't been able to do the forensics yet.
Correct?
Secretary Salazar. We know a lot. We don't know everything
yet.
Mr. Shadegg. Great. You said in response to Mr. Shimkus's
question that huge was 1,000 megawatts. Then he cut you off.
Did you really mean huge means 1,000 megawatts, or is that huge
compared to what we thought wind could do prior to this?
Secretary Salazar. It was 1,000 gigawatts.
Mr. Shadegg. Oh. You said megawatts, and that is quite a
bit of difference. OK.
Secretary Salazar. If I said that, I apologize. I meant to
say the National Renewable Energy Labs calculation of the
potential for offshore wind is at about 1,000 megawatts, but
the states along the Atlantic----
Mr. Shadegg. I don't want to be rude. I want to get into
this last question, and my time is extremely short. Gigawatts
is very different than megawatts. You may have--you just
misspoke, and it just stunned some of us back here.
You are aware of the e-mail that was sent by the eight
scientists who disagreed with your characterization of their
report and were quite angry that it had been changed after they
signed off on it and before they submitted it. The original
report said that the moratorium should last for a sufficient--
and I am quoting here. ``For a sufficient length of time to
perform additional,'' and then they talk about blowout
preventer testing, pressure testing, and water barrier testing.
It then is changed by your Department to say a 6-month period.
Is it routine for the Department to change reports after
the fact, and I note that today, and I am going to run out of
time here, I note that today you said----
Mr. Stupak. You are out of time.
Mr. Shadegg. I am out of time? I note that today that you
said that the recurrent moratorium will remain in effect until
November 30 or until those three questions you posed are
answered. I am a little confused as to what the line of the--
the length of the current moratorium is, and I would concur
with some of the members here who hope that you will release
that moratorium as soon as it is safe to do and that you would
focus on bad actors as opposed to punishing anybody that is out
there doing a good job.
Secretary Salazar. If I may, Mr. Chairman.
Mr. Stupak. Yes.
Secretary Salazar. Just responding to the two questions.
In terms of the engineering reports, the fact is that the
report to the President was my report, and I appreciated the
input from the engineers and any others who were involved in
helping us write the report, but the decision on the moratorium
essentially was my decision as Secretary of the Interior. It
wasn't the decision of engineers or anybody else.
I think I have covered it.
Mr. Shadegg. Thank you.
Mr. Stupak. Mr. Gonzalez for questions, please.
Mr. Gonzalez. Thank you, Mr. Chairman. Welcome, Mr.
Secretary.
On the moratorium, I share some of the same concerns as
others, and when we have the other witnesses, Mr. Secretary, I
also expressed that I wasn't in total agreement with what--the
policies that have instituted this place, and I think Mr. Green
probably articulated many of my own concerns.
Until we find out, and I think Mr. Shadegg has a good
point, until we find out what went wrong at Deepwater Horizon,
how are you going to proceed with remedying that situation if
we really don't know? Now, some people say it may have just
been a deviation from what is accepted industry standards, and
I don't know all of the terms, all--we are not going to be
experts in this, but the casings and the cement and so on, in
capping the well.
And let us just for the sake of argument say that is what
we find out. We find out whoever was responsible for that
didn't do that particular process correctly, and according to
everybody else in the industry they would have never done it in
the manner in which it was done. That is the assumption that
they are making when we have had them here as witnesses.
How does that play into what you are going to do with the
moratorium, because this could be an open-ended question for 4
months, 5 months, 6 months. I mean, I am not sure when we
finally arrive at answers.
Secretary Salazar. Let me say there are many questions, and
one of them has to do with drilling safety, but there are many
others that are obvious such as the oil spill response plans
and the capability.
I think it is fair to say that the oil spill response plans
that have been in place are inadequate, and so how we deal with
that issue is something that we can start working right away,
and waiting until we have the reports from the Commissions and
the other investigations isn't the way that we want to do
business.
We want to move forward as quickly as we can for respective
blowout containment measures, which is another set of issues,
what you probably have here at the Macondo Well is the greatest
laboratory in the history of the world relative to what you do
on containment, because it has been a learning process. Many
failures but many lessons that have been learned, and so
creating this kind of containment capacity in the Gulf of
Mexico may be one of those outcomes that we want to latch onto
and not wait around for another 6 months before we start
developing that kind of an effort.
So I think for those of you who are concerned about the
moratorium and its length, you should be supportive of the kind
of effort that we are undertaking to try to move forward to
create the goal of safety and protection for the environment
with respect to oil and gas drilling.
Mr. Gonzalez. And I think we all share the same goals. We
just believe one on expediency, of course, being thorough, and
the fact that you can treat different wells that are in
different phases or stages of development differently so that
there is not so much catch up when you finally lift it in part
or in whole.
Now, you had a Federal District Court basically join you.
Is that correct?
Secretary Salazar. That is correct.
Mr. Gonzalez. And then you issued a new moratorium that
would be--obviously have something different for the Court to
consider the next go round. Is that correct?
Secretary Salazar. It is a new decision with significant
additional information and we believe a very good record. We
believe the first one was a very good decision as well and is
legally defensible. Much happened between the first decision
and the second decision in terms of additional information.
Mr. Gonzalez. So you were responsive to some of the Judge's
concerns?
Secretary Salazar. Yes.
Mr. Gonzalez. Thank you. I have got about a minute, but I
want to give you a chance to respond to what was stated earlier
by former Secretary Kempthorne. He made a general statement
that in his opinion and what he read, even though he has not
been privy to any meetings by any of the stakeholders or
participants, that he sensed, one, this Administration didn't
make use of all assets that were available. Number two, that he
did not see that the Administration was truly engaged and maybe
there was non-engagement, and thirdly, that he didn't see the
Administration creating an environment which was conducive to
cooperation among all of the different individuals at the local
and state level.
Twenty-seven seconds if you can give me the
Administration's response.
Secretary Salazar. Thank you, Congressman Gonzalez. Let
me--I have great respect for Secretary Kempthorne, but let me
say that I very much disagree with those conclusions. Within
days after this disaster started unfolding, I was actually in a
meeting in Louisiana with Secretary Napolitano, Director
Browner, and others with Secretary Gates on the phone,
authorizing these States to move forward with the National
Guard and yet very few of the States has really brought up the
National Guard to the level that they could have brought it up.
But that was done within days of the onset of this
disaster. I will tell you knowing and working with my
colleagues on this Cabinet and the White House every day,
including sometimes at eleven o'clock at night like we were
last night and sometimes at 2:00 in the morning, that we have
not rested, and we have been relentless in terms of our effort
to deal with this problem, and we are confident that we are
going to deal with this problem, and we are going to have some
fixes here that are good for the United States of America.
Mr. Gonzalez. Thank you very much, Mr. Secretary.
Mr. Markey [presiding]. The gentleman's time has expired.
The Chair recognizes the gentleman from Louisiana, Mr.
Scalise.
Mr. Scalise. Thank you, Mr. Chairman.
Mr. Secretary, on the Commission that the President put
together that is currently conducting hearings, I know I
testified before them last Monday along with Senator Landrieu,
and one of the points we were bringing up was about the
moratorium, and pretty quickly into that conversation, this was
our first day meeting, they said that they were not tasked with
addressing the moratorium, and Senator Landrieu had presented
some letter that you had written where you had indicated that
their recommendations on the moratorium were going to be one of
the factors that you did consider.
So I am trying to find out what is the--is there a gap?
Were they not aware that this was a role they were supposed to
play? Is that a role that they are supposed to play?
Secretary Salazar. Our position--the moratorium is my
decision as Secretary of Interior. We will be informed relative
to the central issues of that moratorium based on the findings
from multiple investigations, including----
Mr. Scalise. Will that Commission be part of that decision-
making process when you----
Secretary Salazar. We will consult with them.
Mr. Scalise. So----
Secretary Salazar. We will consult with them.
Mr. Scalise [continuing]. They will in essence be tasked as
part of their task with addressing the moratorium or at least
making recommendations to you?
Secretary Salazar. Congressman Scalise, their mission is to
get to the bottom of what happened with the Macondo Well in the
Deepwater Horizon and make sure that there is no stone left
unturned.
Mr. Scalise. Right, but would the moratorium be part of
that----
Secretary Salazar. No.
Mr. Scalise [continuing]. Broad issue?
Secretary Salazar. No, it won't. My decision and my
authority as Secretary of Interior is to move forward with the
OCS plan and production in the outer-continental shelf and
the----
Mr. Scalise. So they will not be making any recommendations
to you on the moratorium, or you will not be seeking
recommendations from them on the moratorium?
Secretary Salazar. We will be working with the Commission
and certainly with Chairman Reilly and Graham. We have the
greatest respect for them and certainly we will seek out their
thoughts and their ideas and whatever information the
Commission----
Mr. Scalise. OK. The reason I am asking is this is
important back home to people that are trying to figure out
which way to proceed in trying to put the facts on the table
and get people that are making decisions to incorporate all of
the facts. And so many people went and testified before that
Commission with the understanding they would be addressing or
at least in some way be working with you or talking with you
about moratorium decisions, and if they are not, then please
say so so that people aren't wasting their time back home, but
if they are, then that is important to know, too, but I don't
see why----
Secretary Salazar. Congressman Scalise, let me just give
you where I think the best thing for your constituents and for
you as well to communicate with, and that is Director Bromwich
is holding hearings on these very issues, the three issues that
I have outlined before in my testimony, and it will be very
useful to hear the points of view of people with expertise on
drilling safety, on oil blowout containment strategies, as well
as----
Mr. Scalise. So will Director Bromwich be advising you in
any way on the moratorium as well?
Secretary Salazar. Yes indeed.
Mr. Scalise. OK. Now, getting specifically to some of the
details of the moratorium, the 30-day commission that you had
put together right after the explosion of the Deepwater
Horizon, they did come back with some safety recommendations,
and then this confusion about the moratorium came about when I
think initially you had said that they recommended the
moratorium, they came back and said that is not what they said.
In fact, the members of the Safety Commission, a majority of
them opposed to moratorium and laid out some I think important
specific points about why the moratorium that you issued would
decrease safety in the Gulf, and I want to ask you if you have
seen their recommendations about that and what your thoughts
are because when I spoke to some of those--and these are people
that you picked, scientists, engineers, experts in the field.
They said four basic things. One is a 6-month pause, as it
has been described, by the end of the 6 months your most
experienced, your most newest and most technologically advanced
rigs will go. They will be the first to leave and the last to
return, and in some cases it would be years because they
operate on 3 to 5-year contracts.
Also, the crew base, the most experienced crew members,
people who have worked 10, 15, 20 years in the industry, they
are not going to sit idle for 6 months while their families
still have needs. They are going to go on and do something
else, so you lose them, and then in the interim if you are
going to be stopping operations, there is a higher level of
risk with stopping a production so that you are bringing in a
fact of risk there, and the country's demand for oil hasn't
reduced, so you would then--we will be importing more oil and
70 percent of the spills come from importing oil in tankers.
And so with those factors laid out first, do you--have you
seen those safety concerns that they expressed about your
moratorium, and do you disagree with them?
Secretary Salazar. Congressman Scalise, let me say that I
very much appreciate the work of the engineers that gave us
input on the safety recommendations that went into the 30-day
report. At the end of the day that was my report, but I
understood as well that the engineers disagreed with my policy
decision, not theirs, on the 30-day moratorium.
I specifically asked them to come into my office, and they
did come into the Secretary of Interior's office and gave me a
complete briefing on their point of view before I issued my new
decision. And so their point of view was thoughtfully
considered, and I look forward to working with them and with
others as we move forward on the issue.
I would say this for you, Congressman Scalise, because I
know how you care so much about the Gulf and the oil industry
there, and that is that if you look at the President's position
and my position with respect to the Gulf of Mexico and drilling
there, we have said that oil and gas is part of our energy
portfolio.
So we would ask this Congress to join with us as we move
forward to address this issues relating to drilling safety, oil
spill response, and blowout containment because the sooner that
we can address those issues the easier it is going to be for us
to move our hand off the pause button.
Mr. Engel [presiding]. The gentleman's time has expired.
Mr. Scalise. Thank you. I yield back.
Mr. Engel. I yield myself 5 minutes.
Mr. Secretary, welcome back to the Hill. I want you to know
that we are taking good care of your brother, so you have
nothing to worry about.
Secretary Salazar. Thank you.
Mr. Engel. You have a very difficult job obviously, but I
believe you are the right man for the job, and I think that we
are all with you on every move you make, because this is
something that nobody could have expected.
I have sat through all the hearings that we have had in
this committee, and one of the hearings we had the chief
executives from all the other major oil companies, not BP but
Chevron, ExxonMobil, ConocoPhillips, and Shell, and it seems
that we have made great progress in the methods of drilling,
you know, getting the oil out but very little progress in a
response plan and preventing a disaster.
The other oil executives were all quick to say that what
happened with BP wouldn't have happened with them, with their
company because they built things differently, the plans were
different. But yet it seemed to me that everyone else had
exactly the same plan for a response, so I am wondering if you
could tell us your thoughts on this. I mean, it certainly
seemed that BP cut corners in order to save money.
Could this happen again, and what would happen if a second
major blowout occurred while unified command and oil spill
response equipment and personnel were busy battling the
Deepwater Horizon spill?
Secretary Salazar. Mr. Chairman, I very much appreciate
your statement, and let me just say we very much agree with
you. In fact, if you take a look at the three central
questions, perhaps the two that are most obvious for me today
right now is the oil spill response capacity representations
that were made with respect to skimming, for example, that
really has not borne out to be true. The issue of oil blowout
containment programs. We have now every day from almost the
very beginning I have a U.S. lead call with BP every morning.
We go through the strategy that they are unfolding relative to
the next containment program. I watched the effort fail, some
partially succeed, and now hopefully moving to ultimate
success.
So in the context of that dynamic it has seemed to us that
it would be imprudent to move forward with a lifting of the
moratorium until we get some answers to those basic questions.
Mr. Engel. I couldn't agree with you more.
Let me ask you this. The Associated Press recently reported
that there are 27,000 abandoned wells in the Gulf of Mexico on
federal lease lands. Now, I believe and correct me if I am
wrong, that abandoned wells sometimes leak.
So what tools do we have and what additional tools would
you need to keep these abandoned wells safe?
Secretary Salazar. I have asked Michael Bromwich to
development some recommendations on how you deal with these
abandoned wells, and in some ways it is very reminiscent of a
problem that some members of the committee are familiar with
with respect to abandoned mines. Once they are abandoned, no
one owns them, and there is not a lot that sometimes can be
done for a very long time.
So I would hope that as part of our overall Gulf Coast
Restoration Plan and dealing with oil and gas production that
that is an issue that can be addressed perhaps both
legislatively as well as dealing with the resource issues that
would be required in order to deal with the abandoned wells.
Mr. Engel. Thank you. I am going to yield back the balance
of my time because I know the time is late, and you have to go,
and we have a couple of members who still need to--yes.
Mr. Sullivan, 5 minutes.
Mr. Sullivan. Well, thank you, Mr. Chairman.
Mr. Secretary, thank you for being here today, and I just
wanted to ask as Secretary did you prior to the Deepwater
Horizon incident consider improving rules and regulations
regarding MMS, inspections of offshore exploration and
production operations, prior to the Deepwell Horizon--Deepwater
Horizon blowout?
Secretary Salazar. Yes, Congressman Sullivan, the answer to
that is yes, there were several efforts, including notice to
leasees to increase the safety of drilling in the outer-
continental shelf. Their efforts included in our budgets
increase the number of inspectors, and so it is an effort that
was ongoing in September of last year. We asked the National
Academy of Engineering, an arm of the National Academy of
Science, to provide recommendations to us on safety issues. We
had proposed a rule I believe in June of 2009, that would have
dealt with other issues out in the outer-continental shelf. So
it was an ongoing effort that we had in terms of our reform
program.
Mr. Sullivan. And, you know, you have probably heard this
analogy a lot, but when we have a commercial airline tragedy,
we do not stop all airline travel for like 6 months. We work to
find out the route cause in making air travel safer rather than
grinding the airline industry to a halt. Why are we shutting
down an industry for 6 months here, particularly given
companies have drilled tens of thousands of offshore wells in
the Gulf over the past 60 years without a prior accident of
this nature?
Secretary Salazar. The answer, Congressman Sullivan, is
that if we were to have another tragedy like the one that we
see on the well, there is frankly insufficient resources to be
able to respond to that kind of an oil spill response.
In addition, we frankly yet do not know how exactly it is
that we are finally going to get the killing of the Macondo
Well, and we will not rest until we have that well killed. And
so in this kind of a dynamic circumstances, I have explained to
the committee it seems to us to have the pause button in place
until we can get the answers to some very fundamental,
important questions relating to safety and relating to
protection of the environment.
Mr. Sullivan. And, Mr. Secretary, on the Commission that
has been set up by the President to investigate the situation,
it has some former governors and Administrator of EPA. I guess
former governor, Bob Graham, U.S. Senator Graham, former
Administrator of the Environmental Protection Agency, William
Reilly, Francis, and I may get his name wrong, Beinecke. Is
that how you say it? President of the Natural Resource Defense
Council. It is a non-profit corporation. Donald Boesch,
President of the University of Maryland, Center for
Environmental Science, Terry Garcia is Vice-President for
Mission Programs for the National Geographic Society, Cherry
Murray is Dean of Harvard School of Engineering, and Francis, I
think it is Ulmer, Chancellor of the University of Alaska.
When the President put this together, why do you think--or
does anyone here have experience in drilling wells and work in
the oil and gas industry at all?
Secretary Salazar. I do not know the members of the
Commission, Congressman Sullivan, other than the two chairs,
and I think maybe two or three other members of the Commission,
but I do know that in selecting the members they were selected
because they were the kinds of elder statesmen that would do a
great job in reporting out the cause of what happened here and
making recommendations.
They also have understood they are in their staff that they
are putting in the subject matter expertise that will
ultimately be needed for them to do their job. So I am
confident that at the end of the day the mission that has been
given to the Commission, which is to leave no stone unturned as
we find out what exactly happened with this particular blowout,
that they will be able to achieve that mission.
Mr. Sullivan. And I think you are right. They are elder
statesmen. I think they are going to do a good job in that
regard. I believe there is a lot of intelligence on this
committee, too, but I just--I would like to see, and it is too
late now, but I don't know why they didn't include someone that
is from the industry that could actually, you know, use real-
life experiences to help with this is all I am trying to get at
I guess.
Secretary Salazar. Well, I think former EPA Administrator
Bill Reilly is also on the--was on the Board, maybe he still is
on the Board of ConocoPhillips. I also understand that they
have hired and are hiring additional people with subject matter
expertise as staff members to the Commission.
Mr. Sullivan. Thank you, sir. Thank you for being here.
Mr. Engel. Mr. Gingrey.
Mr. Gingrey. Mr. Chairman, thank you, and Mr. Secretary, I
apologize for coming in late, and I may indeed ask you a
question that has already been asked, so forgive me if I do
that.
In my opening statement I commented a little bit about the
changing of management services to--and I am not going to try
to remember what the new name is, but my concern was that at a
time when we needed to have all our resources, all hands on
deck, if you will, to try to stop the leak and to effect the
cleanup ASAP that here we were, you were, indeed, charged
maybe, maybe it was the Secretary, responsibility to do that as
soon as possible, but if you can tell us what exactly, what was
the emergency in regard to reorganization of MMS, and what
exactly have we done? You know, I don't want to sit here and
suggest to you that it is rearranging the deck chairs on the
Titanic, but, you know, naturally people are a little bit
concerned.
So my question is simply this. What did you do, and what
does this do, and how does it make it more effective and more
fail-safe and correct some of the existing problems that you
recognized after this disaster occurred?
Secretary Salazar. Thank you very much, Congressman
Gingrey. Let me answer in a number of--with a number of
different points.
First, my view has been as I testified in September of last
year before Representative Rahall's committee that it is
important that an organization like MMS have an organic statute
because it has existed by executive order since 1981, and it
has some critical functions including the safe production of
our oil and gas for our Nation as well as generating on average
about $13 billion a year. An agency that has that kind of
importance for the American people should have a legislative
construct.
Number two, with respect to my reorganization of the
agency, what we have done is we have taken the people who are
involved in the revenue collection and moved them to another
unit of the department. They essentially are about 700 people
who are mostly located in the Lakewood Office where we had
terminated the Royalty-in-Kind Program earlier this year
because of the sex and drug scandals. We think there needs to
be distance from the revenue collector from those who are
actually leasing out the resource of the American taxpayer. So
that is one unit that, if you will, the revenue collector.
Then there are two other units. One unit will actually be
the bureau that will actually decide how and where to lease so
they will go through the creation of the 5-year plan for the
OSC, the leasing plans, the lease sales, the exploratory plans,
and the issuance of the APDs.
And then a third unit that essentially will be the
inspection and enforcement unit, making sure that the laws, the
regulations both with respect to the environment and safety are
being complied to.
Mr. Gingrey. Mr. Secretary, that particular unit, will that
be beefed up manpower wise?
Secretary Salazar. Our proposal is to beef it up
significantly. There is a--it is part of the supplemental
legislation that is pending before Congress to begin the first
chapter of beefing that up, and we hope to have a budget
amendment that could increase the number of inspectors and
others that are needed to work within the new agency by as many
as 450 personnel.
It seems, Congressman Gingrey, as I said earlier on that it
is a fool's errand, if you will, to have 4,000 production
facilities in the Gulf of Mexico alone and to only have 60
people that are assigned to go out and do the inspections. So
the robustness of this agency I think is a necessity for us as
a country to move forward with safe oil and gas production in
the outer-continental shelf.
Mr. Gingrey. Mr. Secretary, I hope that we will need those
400 more and not--even more if we continue the moratorium. So I
got to get that plug into you as well. As soon as we can stop
this, I think, ill-advised moratorium and hire those 450
additional people and get that drilling going again in a safe
and effective manner, I think that is what we would like to
see, at least from this side of the aisle, and I hope you would
agree with us, and thank you so much for being here and
testifying and responding to my questions.
Mr. Chairman, I yield back.
Mr. Engel. Thank you. Ms. Bono Mack.
Ms. Bono Mack. Thank you, Mr. Chairman.
Mr. Secretary, great to see you again. I think last time I
saw you we were working together on a trails issue. It is good
to see you. Welcome back to the Hill.
As you probably know, my district is very abundant in
renewable fuels, and as you probably know I support renewable
fuels, but I also support being very honest with my
constituents that in order to transition our economy towards
future fuels, we have to do it in a realistic way. In your
words to my colleague, Congressman Latta, you said it is a
mistake to start and stop energy policy, but you are doing that
very thing with this moratorium in my opinion.
I think it is a mistake to do what you said we shouldn't be
doing, and I understand what you are talking about, but I just
want to weigh in and echo my colleague's sentiment about the
moratorium being a mistake. Even though I believe in future
fuels and moving us forward, we have to give certainty to
people who are drilling today in the Gulf, so I want it to be
on the record my displeasure with the moratorium.
With that being said, I think what is really missing from
the debate so far is the absolute lack of coordination between
all the agencies. I live in a district as you know also that
sits on top of the San Andreas Fault, and every day we worry
about the big one hitting us, and I think that my constituents
have gotten to the point where they don't believe government is
going to be there for them, and I don't believe that they think
they are going to be well coordinated and provide a good
response to a disaster, and I think this is a perfect example
of that.
Can you tell me as we go forward with habitat restoration
and all that has to be done what you are doing to make sure the
agencies under your purview, whether it is National Park
Service, whether it is Fish and Wildlife, BLM, whomever it is,
how are they going to be better coordinated, and more
importantly I think to bring the state in. In the emergency
response plans the state is a huge leader in all of those
decisions that would be in response to a disaster, but in this
case they are being ignored, and we are hearing constantly from
the governors that their ideas and their suggestions are being
completely ignored.
Can you respond a little bit to what you would do
differently, how we are going to do this going forward, and
reassure my constituents that we do have our act together
because I don't think that they are going to believe that for a
minute.
Secretary Salazar. I appreciate your questions very much.
Let me just say first on the stop and start comment that I
made, I made it with respect to National Energy Policy, which I
think everybody would agree has not worked through the '70s,
the '80s, the '90s, and even until today.
Ms. Bono Mack. And it doesn't work today, and that is the
point that I am trying to----
Secretary Salazar. That is why we need to have a
comprehensive energy program moving forward, and that is why
the President has been spending so much time on it.
With respect to habitat restoration, just very quickly, we
do believe that the Gulf Coast will be restored to a better
place than it was before April 20, and Secretary Mabus at the
direction of the President is leading the effort. We are
working very closely with him, including multiple meetings that
my staff and I had with Secretary Mabus yesterday.
And then thirdly, with respect to your question on
coordination, what I would say is this is the most Herculean
response effort to an unprecedented disaster that the United
States has ever seen, and I am on the front lines of it working
with the President, working with my colleagues in the White
House, and working with all of the agencies of the United
States Government. And when you look at the resource that has
been amassed to respond to this ongoing problem which is now in
its 90th day, it is something that when you actually realize
what the numbers are and the effort are, it makes me proud of
the fact that the United States Government is operating in the
way that it is.
Ms. Bono Mack. Mr. Secretary, I think this is where we
disagree, and I think my constituents are going to react to
what you just said.
You are very proud of the fact that we have a huge,
bureaucratic, large government response to a disaster, and we
are ignoring people on the local level and the local voices and
people who have ideas. You are saying you are very proud of a
huge bureaucracy and a bureaucratic response to it, and I think
that is the problem.
We have so many bureaucrats and people out there who don't
know what they are doing, and to get to my colleague Sullivan's
question about the panel, the President's panel has nobody who
even knows anything about drilling a well, you know, and I--
hey, I consider myself a warm and fuzzy Republican, and I like
a lot of people who are on that panel, but I think it is short-
sided in the fact that it doesn't have people who have serious
expertise in how to drill a well. It just seems that bringing
expertise in the oil and gas field to that panel would have
been a good thing.
And just since I have 13 seconds left, you still
contradicted yourself. I understand what you are saying about a
national energy policy, but you cannot say that it is OK to
start and stop right now, because that is what you are doing.
It is the exact same thing that you are advocating against.
So I am right on the money at zero, zero, and I appreciate
the opportunity to question the Secretary. Thank you.
Secretary Salazar. If I may, Chairman Markey, just----
Mr. Markey [presiding]. Please.
Secretary Salazar [continuing]. Respond to the
Congresswoman. First, with respect to this effort and reaching
out to the local communities and to the governors, every day my
colleague, Valerie Geradin and a number of other people from
the White House are on a telephone call where the governors
participate. Some days, some days they don't. The President
himself has made a personal outreach to them. I have done the
same thing. I have been to the Gulf Coast, Houston, I think the
last count was ten or 11 times. My Assistant Secretary Tom
Strickland, 17 times.
Ms. Bono Mack. But then how does that explain that there
are still booms sitting unused in warehouses, and there are
boats sitting unused, and skimmers sitting unused? You can say
you can reach out to somebody, but it is not being deployed.
Secretary Salazar. I would be happy to get you a copy of
the daily report which we receive, but this is a huge
mobilization of an effort to deal with a very tragic and a very
unprecedented disaster, and the President has said, leave no
stone unturned, do not rest, and get the job done, and that is
what we are committed to do.
Mr. Markey. We thank the gentlelady.
I will tell you what we can do. I was intending on
concluding the hearing right now, but I can recognize the
gentleman from Texas for 2 minutes.
Mr. Burgess. I thank the Chairman for the recognition.
Secretary Salazar, when President Obama came and spoke to
the country about the problems of the Gulf, he said that he had
expanded offshore drilling, ``under the assurance that it would
be absolutely safe.''
Now, the concept of being absolutely safe, apparently there
was a team that advised the president, Carol Browner, yourself,
and Secretary Chu, so is that factual? Is there a team that
advised the President on the fact that offshore drilling was--
could be assured was absolutely safe, and were you part of that
group?
Secretary Salazar. Our view, Congressman Burgess, is that
we had and still have a thoughtful plan in terms of moving
forward. The Gulf of Mexico was a place where thousands of
wells had been drilled. We felt that there was a place in the
eastern part of the--that would still keep you 125 miles from
Florida, for there was 67 percent of the resource that could be
recovered.
Mr. Burgess. So you and Carol Browner and Dr. Chu did
advise the President that this was absolutely safe?
Secretary Salazar. Let me just say what we--what I did as
Secretary of the Interior is I developed this plan, and I
developed the plan over a very long period of time that
included multiple hearings from New Jersey to Louisiana to
California to Alaska and hundreds of thousands of comments, so
it was my plan and my recommendation that I made to the
President.
Mr. Burgess. So in retrospect now would you say that you
made a mistake, that that was wrong?
Secretary Salazar. I would--no. I would say that the plan
that we put forward was, in fact, a very thoughtful plan. We
canceled five leases of huge sales in Alaska, for example,
because we felt that the oil spill response capability was
insufficient.
Mr. Burgess. But in light of what has happened were you, in
fact, wrong at that assessment?
Secretary Salazar. I think the plan that we put forward at
the end of March was a plan which took a year to develop with
huge input from all of the stakeholders and which I believe is
still a good plan.
Mr. Burgess. OK.
Mr. Markey. The gentleman's time has expired again.
Mr. Chairman, you--Mr. Secretary, we know that you went
above and beyond to be here this afternoon. It is greatly
appreciated by this committee. We have jurisdiction over energy
production generally in the United States of America, and so
our title is the Energy and Commerce Committee. Your service to
our country is greatly appreciated, and we thank you for being
here today.
This hearing is adjourned. Thank you.
[Whereupon, at 4:30 p.m., the Subcommittee was adjourned.]
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