[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]




 
                        BOEMRE/U.S. COAST GUARD
                       JOINT INVESTIGATION TEAM
                         REPORT: PARTS 1 AND 2

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

                           OVERSIGHT HEARINGS

                               before the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                 October 13, 2011 and November 2, 2011

                               __________

                           Serial No. 112-70

                               __________

       Printed for the use of the Committee on Natural Resources





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                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
             EDWARD J. MARKEY, MA, Ranking Democrat Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      John P. Sarbanes, MD
Scott R. Tipton, CO                  Betty Sutton, OH
Paul A. Gosar, AZ                    Niki Tsongas, MA
Raul R. Labrador, ID                 Pedro R. Pierluisi, PR
Kristi L. Noem, SD                   John Garamendi, CA
Steve Southerland II, FL             Colleen W. Hanabusa, HI
Bill Flores, TX                      Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Charles J. ``Chuck'' Fleischmann, 
    TN
Jon Runyan, NJ
Bill Johnson, OH

                       Todd Young, Chief of Staff
                      Lisa Pittman, Chief Counsel
                Jeffrey Duncan, Democrat Staff Director
                 David Watkins, Democrat Chief Counsel
                                 ------                                



















                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, October 13, 2011.......................     1

Statement of Members:
    Hastings, Hon. Doc, a Representative in Congress from the 
      State of Washington........................................     1
        Prepared statement of....................................     2
    Markey, Hon. Edward J., a Representative in Congress from the 
      Commonwealth of Massachusetts..............................     3
        Prepared statement of....................................     5

Statement of Witnesses:
    Ambrose, Bill, Managing Director, North America Division, 
      Transocean Offshore Deepwater Drilling Incorporated........    70
        Prepared statement of....................................    71
    Bement, James, Vice President, Sperry Drilling, Halliburton..    72
        Prepared statement of....................................    74
        Response to questions submitted for the record...........    75
    Bromwich, Hon. Michael R., Director, Bureau of Safety and 
      Environmental Enforcement, U.S. Department of the Interior.    20
        Prepared statement of....................................    22
    Dempsey, Raymond C., Jr., Vice President, BP America.........    61
        Prepared statement of....................................    63
        Response to questions submitted for the record...........    66
    Dykes, James David, Co-Chair, USCG/BOEMRE Joint Investigation 
      into the Deepwater Horizon/Macondo Well Blowout, Former 
      BOEMRE Staff...............................................    10
        Prepared statement of....................................    11
    Nguyen, Captain Hung, Co-Chair, Deepwater Horizon, U.S. Coast 
      Guard/Bureau of Ocean Energy Management, Regulation and 
      Enforcement................................................     7
        Prepared statement of....................................     9
    Salerno, Admiral Brian M., Deputy Commandant for Operations, 
      U.S. Coast Guard...........................................    17
        Prepared statement of....................................    18

Additional materials supplied:
    Mason, Joseph R., Louisiana State University, Statement 
      submitted for the record...................................    86
    Ogrydziak, Randall S., CRD, USCG, Supervisor, Liquefied Gas 
      Carrier National Center of Expertise, Email submitted for 
      the record by The Honorable Dan Boren......................    88
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Wednesday, November 2, 2011......................    91

Statement of Members:
    Hastings, Hon. Doc, a Representative in Congress from the 
      State of Washington........................................    91
    Markey, Hon. Edward J., a Representative in Congress from the 
      Commonwealth of Massachusetts..............................    91




      OVERSIGHT HEARING ENTITLED ``BOEMRE/U.S. COAST GUARD JOINT 
                  INVESTIGATION TEAM REPORT'': PART 1

                              ----------                              


                       Thursday, October 13, 2011

                     U.S. House of Representatives

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Committee met, pursuant to call, at 10:05 a.m., in Room 
1324, Longworth House Office Building, The Honorable Doc 
Hastings [Chairman of the Committee] presiding.
    Present: Representatives Hastings, Duncan of Tennessee, 
Bishop, Fleming, Thompson, Duncan of South Carolina, Gosar, 
Southerland, Flores, Harris, Landry, Markey, Holt, Grijalva, 
Boren, and Sarbanes.
    Also present: Jackson Lee.
    Mr. Hastings. The Committee will come to order. The 
Chairman notes the presence of a quorum, which under Rule 3[e] 
is two, and so we exceed that.
    The Committee on Natural Resources is meeting today to hear 
testimony on an oversight hearing on BOEMRE/U.S. Coast Guard 
Joint Investigative Team Report. Under Rule 4[f] opening 
statements are limited to the Chairman and the Ranking Member. 
However, I ask unanimous consent that any Member that wishes to 
have a statement in the record have it to the Committee before 
the end of business today, and without objection, so ordered.
    I will now recognize myself for five minutes.

    STATEMENT OF THE HON. DOC HASTINGS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF WASHINGTON

    The Chairman. First of all, I want to thank all of the 
witnesses for being here today. Although I was greatly 
frustrated by the events that led to the delay and the repeated 
scheduling of this hearing, I am pleased that today we will 
hear testimony from the investigative Co-Chairs who conducted 
and oversaw extensive interviews, depositions and document 
review. This Committee will also hear from the three companies 
named in the report.
    The primary purpose for originally scheduling this hearing 
was to hear directly from the actual front line investigators 
about their official workings and findings. As the Committee 
responsible for overseeing the agencies and laws responsible 
for offshore energy production, it is our duty to get the full 
facts regarding the Deepwater Horizon explosion and oil spill 
and the findings of the report.
    At our very first hearing this year this Committee heard 
testimony from the Co-Chairs of the President's own commission 
that he selected and he appointed, and it is only logical that 
we give the same attention to this official report. I have said 
from day one that we need all the facts and information 
regarding this spill before rushing to judge or to legislate. 
This report is an important piece of the puzzle that gives us 
deeper insight and greater clarity as to what caused the 
explosion that tragically took 11 lives and led to an oil spill 
that caused widespread impacts throughout the Gulf.
    The JIT investigation is unique and important in many ways. 
While there have been several investigations and reports 
issued, this is the only investigative team that had subpoena 
power. This is the only investigative team comprised of 
technical engineers and experts, and this is the only 
investigative team that actually examined the blowout 
preventer. Members of this investigative team were on the 
ground from day one and had the necessary tools to complete a 
thorough and comprehensive investigation. They had access to 
information that others didn't and it is important for this 
Committee to hear directly from them on their report and their 
conclusions.
    In short, this report finds that the disaster was the 
direct result of multiple human errors and technical failures. 
While the report makes a number of recommendations, it is 
interesting to note that it includes no specific recommendation 
for congressional action.
    I have repeatedly stated that the top priority of this 
Committee is to make offshore drilling the safest in the world. 
Over the past 18 months there have been significant changes and 
reforms to improve offshore drilling and response. It is 
important that Congress, the Administration and the industry 
continue to respond appropriately. I stress that reforms must 
be done thoroughly and done right. We have no other choice when 
the stakes are this high. Offshore drilling must be done 
safely, but we cannot afford to make it impossible through 
overregulation.
    Yesterday this Committee heard from people and businesses 
in the Gulf who continue to suffer one year after the Obama 
Administration lifted the official moratorium in the Gulf of 
Mexico. Their livelihoods are linked to U.S. energy production, 
and for that matter so is our nation's. Our national economy, 
American jobs and our national security are all dependent on 
the safe and reliable U.S. energy production. We must move 
forward with offshore energy production in a safe, timely and 
efficient manner.
    So I look forward to hearing today from our witnesses and 
learning more about the months of on-the-ground work from the 
JIT investigators. America owes both of you and your teams our 
appreciation for your service to our nation.
    [The prepared statement of Mr. Hastings follows:]

          Statement of The Honorable Doc Hastings, Chairman, 
                     Committee on Natural Resources

    In May 2010, shortly after the tragic Deepwater Horizon explosion 
and oil spill, the Obama Administration placed a moratorium on all 
deepwater drilling in the Gulf of Mexico. This official moratorium 
lasted for nearly six months and was lifted on October 12, 2010--
exactly one year ago today.
    This official moratorium, unfortunately, was followed by a de facto 
moratorium that still did not allow businesses and their employees to 
return to work until the first permits were issued in February of this 
year. The Obama Administration's inability, or refusal, to issue 
permits in a timely and efficient manner after the official moratorium 
was lifted resulted in lost jobs and significant economic pain.
    Since the moratorium was imposed, this Committee has heard directly 
from businesses and local community groups about the economic impacts. 
Today, one year later, this hearing is an opportunity to follow-up and 
listen to those from the Gulf about what economic conditions are like 
there today.
    While I recognize that some permits indeed are being issued, there 
are facts and data that demonstrate recovery is moving at a pace that 
continues to hamper job creation and the economy.
    First, permitting activity in the Gulf has dramatically declined 
under the Obama Administration and has operated at lows that equate to 
hurricane-induced slowdowns.
    Additionally, permitting activity has not returned to pre-Deepwater 
Horizon levels. The average number of permits issued in the six-months 
prior to the Deepwater Horizon incident was 71 per month. The average 
number for the past six months is 52 per month. That's a 27% decrease, 
which directly affects jobs and the local economy.
    Second, instead of looking at the number of permits issued, we 
should also look at production levels. This chart shows how production 
has declined. The top line is what production in the Gulf was projected 
to be before the spill and the President's moratorium. The bottom line 
represents actual production.
    Third, the time it takes to get approval for permits and 
exploration plans is much longer today. Director Michael Bromwich has 
frequently stated that there is not a backup of offshore drilling 
permits waiting for approval. . .and that this proves there is no de 
facto moratorium. This chart actually helps highlight what Director 
Bromwich is referring to. It shows the number of days it took specific 
explorations plans to be accepted and approved in order to receive a 
permit to drill. As you can see from this chart, these plans are being 
approved in a relatively short time-frame. But that is only part of the 
story.
    This next chart shows how long it actually took companies to get 
their plans approved-sometimes nearly 300 days. The biggest delay in 
the process, as shown here, is getting the Interior Department to 
accept the exploration plan and declare it `deemed submitted.' 
Companies are submitting plans and getting stuck in a back and forth 
limbo with the Interior Department that can drag on for months. This is 
the step the Obama Administration doesn't talk about.
    Keep in mind, companies can't apply for permits until its 
exploration plan has been submitted and approved. That's why it's 
disingenuous to only refer to pending permits and approved permits--as 
the Interior Department likes to do--because the log jams occurs before 
companies even get to that point. It's a slight of hand to make the 
process look much more efficient.
    Fourth, 11 deepwater rigs have left the Gulf of Mexico for foreign 
countries such as Egypt and Brazil. Every time one of these rigs 
leaves, it takes away good-paying American jobs. In addition, 84 
offshore support vessels have also departed the Gulf.
    The livelihood of communities and businesses throughout the Gulf 
depend on safe and responsible offshore energy production. It's been a 
year and a half since the Deepwater Horizon incident, and a year since 
the President's moratorium was officially lifted. It's time to get 
people back to work and get the Gulf's economy growing again.
                                 ______
                                 
    Mr. Hastings. With that, I recognize the distinguished 
Ranking Member.

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

    Mr. Markey. Thank you, Mr. Chairman.
    More than one year has passed since BP's blown out well 
finally stopped spewing oil into the Gulf of Mexico, but 
Congress has not enacted a single legislative reform in 
response to the worst environmental disaster in American 
history. And what has been the reason for this delay?
    The Republican Majority has blocked all legislative action 
because they said they wanted to wait until all the facts were 
in before taking action to respond to the spill. Well, we have 
now heard from the independent BP Spill Commission. We have 
seen the forensic examination of the blowout preventer, and the 
government's Joint Investigation Team has now issued its 
findings and recommendations. The facts are in and it is well 
past time for this Committee and this Congress to enact 
comprehensive legislation to ensure that we prevent a similar 
disaster in the future.
    The government's investigation reached many of the same 
conclusions as the independent BP Spill Commission. The report 
says that this disaster was preventable, not inevitable. It 
says that corners were cut, bad decisions were made and that 
stronger safety standards and more emphasis on worker training 
could have helped prevent this disaster.
    Today we have before us the government investigators who 
looked long and hard into this disaster. We will also hear from 
representatives of the oil companies responsible for the spill. 
While it is good that this Committee is finally hearing from 
some of the companies involved in this disaster, I feel 
compelled to note that the Minority was not notified that these 
additional witnesses would testify until very late on Tuesday, 
less than two days before this hearing. The testimony of the 
oil company representatives was not made available until 
yesterday afternoon. I am worried that the effect of this 
process could be to shield these companies from proper scrutiny 
or hamper the ability of Members and staff to fully review and 
analyze the companies' testimony. It has also prevented 
Democrats from being able to exercise our rights to call 
Minority witnesses.
    For this reason, a majority of the Democratic Members of 
the Committee have signed a letter to you, Mr. Chairman, 
exercising our rights, pursuant to Rule XI of the House, to 
call witnesses to testify at a second day of hearings on this 
subject.
    However, regardless of how we arrived here today there will 
be many questions at this hearing, and after today we should 
have the answers we need to finally move forward with 
comprehensive reform. It is time to hold these companies fully 
accountable for this spill. In fact, late yesterday the 
Interior Department officially issued seven violations of 
Federal regulations against BP and four a piece against 
Halliburton and Transocean.
    Unfortunately, even in a worst-case scenario for BP, these 
violations that resulted in the nearly 5 million barrels of oil 
spilling into the Gulf would cost the company a total of $21 
million, not billion, million.
    Considering what we know about what caused this disaster, 
BP should stand for ``bigger penalties''. BP is on pace to make 
more than $25 billion this year; $21 million represents a 
little over seven hours of profits for this oil giant. That 
fine, obviously, does not even begin to approach the amount 
needed to be a deterrent against a repeat of this tragedy. That 
fine is nothing more than a slap on the wrist.
    The Transocean Company has already announced that it plans 
to appeal the fines, and it seems that once again Transocean is 
trying to transfer blame. We need to ensure that there are 
sufficient financial incentives in place to deter oil companies 
from cutting corners. We need to enact legislation to 
dramatically increase civil penalties for oil companies who 
violate Federal regulation to increase the liability cap for 
companies responsible for a spill.
    As the Democratic spill response bill would do, we need to 
hold these companies responsible for their actions, and we need 
to ensure that the agencies here today are working to implement 
the safety reforms recommended by the Joint Investigation Team. 
After this hearing I hope the Republican Majority will end 
their push to revert to the same speed over safety mentality 
that led to this disaster and join Democrats in pushing for 
real reforms to protect the economy and the environment of the 
Gulf.
    I yield back the balance.
    [The prepared statement of Mr. Markey follows:]

     Statement of The Honorable Edward J. Markey, Ranking Member, 
                     Committee on Natural Resources

    Thank you.
    More than one year has passed since BP's blown out well finally 
stopped spewing oil into the Gulf of Mexico. But Congress has still not 
enacted a single legislative reform in response to the worst 
environmental disaster in American history.
    And what has been the reason for this delay? The Republican 
Majority has blocked all legislative action because they said that they 
wanted to wait until all the facts were in before taking action to 
respond to the spill.
    Well, we have now heard from the independent BP Spill Commission. 
We have seen the forensic examination of the blowout preventer. And the 
government's Joint Investigation Team has now issued its findings and 
recommendations.
    The facts are in. And it is well past time for this Committee and 
this Congress to enact comprehensive legislation to ensure that we 
prevent a similar disaster in the future.
    The government's investigation reached many of the same conclusions 
as the independent BP Spill Commission. The report says that this 
disaster was preventable, not inevitable. It says that corners were 
cut, bad decisions were made, and that stronger safety standards and 
more emphasis on worker training could have helped prevent this 
disaster.
    Today we have before us the government investigators who looked 
long and hard into this disaster. We will also hear from 
representatives of the oil companies responsible for the spill.
    While it is good that this Committee is finally hearing from some 
of the companies involved in this disaster, I feel compelled to note 
that the Minority was not notified that these additional witnesses 
would testify until late on Tuesday, less than two days before this 
hearing. The testimony of the oil company representatives was not made 
available until yesterday afternoon.
    I am worried that the effect of this process could be to shield 
these companies from proper scrutiny or hamper the ability of Members 
and staff to fully review and analyze the companies' testimony. It has 
also prevented Democrats from being able to exercise our rights to call 
Minority witnesses. For this reason, a Majority of the Democratic 
Members of the Committee have signed a letter to you, Mr. Chairman, 
exercising our rights, pursuant to Rule XI of the House, to call 
witnesses to testify at a second day of hearings on this subject.
    However, regardless of how we arrived here today, there will be 
many questions at this hearing. And after today, we should have the 
answers we need to finally move forward with comprehensive reform.
    It is time to hold these companies fully accountable for this 
spill. In fact, late yesterday the Interior Department officially 
issued seven violations of federal regulations against BP, and four 
apiece against Halliburton and Transocean. Unfortunately, even in a 
worst-case scenario for BP, these violations, that resulted in the 
nearly five million barrels of oil spilling into the Gulf, would cost 
the company a total of $21 million.
    Considering what we know about what caused this disaster, BP should 
stand for Bigger Penalties.
    BP is on pace to make more than $25 billion this year. $21 million 
represents a little over 7 hours of profits for this oil giant. That 
fine obviously does not even begin to approach the amount needed to be 
a deterrent against a repeat of this tragedy. That fine is nothing more 
than a slap on the wrist.
    And Transocean has already announced that it plans to appeal the 
fines. It seems that once again Transocean is trying to transfer blame.
    We need to ensure that there are sufficient financial incentives in 
place to deter oil companies from cutting corners. We need to enact 
legislation to dramatically increase civil penalties for oil companies 
who violate federal regulations and increase the liability cap for 
companies responsible for a spill, as the Democratic spill response 
bill would do. We need to hold these companies responsible for their 
actions.
    And we need to ensure that the agencies here today are working to 
implement the safety reforms recommended by the Joint Investigation 
Team. After this hearing, I hope the Republican Majority will end their 
push to revert to the same speed-over-safety mentality that led to this 
disaster, and join Democrats in pushing for real reforms to protect the 
economy and the environment of the Gulf.
                                 ______
                                 
    Mr. Hastings. I thank the gentleman.
    Before I recognize the panel just let me respond. The 
Minority certainly has every right to exercise whatever 
authority they have to have hearings. I respect that. But I do 
want to say, and I alluded to this in my opening statement, I 
too am very, very frustrated with how this all came about, but 
nevertheless it is here, and we are going to have this hearing, 
and I think hopefully we will shed some light on what we are 
looking at, but let me make an observation.
    When the gentleman referred to Minority witnesses, in this 
hearing today there are no Majority or Minority witnesses. As a 
matter of fact, the first panel is made up of Co-Chairs of the 
Joint Investigative Team and then representatives from the 
Department of the Interior, DOE, BOEMRE and then also the Coast 
Guard. And the second panel is simply made up of those that are 
referenced in the report. So in this case, we don't have a 
situation of Majority and Minority witnesses. It simply does 
not exist with this panel.
    Nevertheless, the Ranking Member and the Minority have 
every right to ask for an additional hearing. We will certainly 
take that into consideration.
    Our first panel today----
    Mr. Markey. Will the gentleman yield just briefly?
    Mr. Hastings. Sure, I will yield to the gentleman.
    Mr. Markey. And it is to say that there was no consultative 
process on the second panel whatsoever.
    Mr. Hastings. Well, reclaiming my time on that, I privately 
mentioned to the gentleman on the Floor of the House, if he 
recalls, that it was always my intention to have 
representatives from the companies here. Now I know the 
gentleman has requested CEOs. If I had my way, every time we 
have a hearing here and have a member of the Administration 
here I would like to have the Secretary of the Interior here. 
That obviously doesn't work. In fact, it would be even better 
if we had President Obama here on every one. So we asked for 
representatives of the company. They sent executives. They had 
chosen the ones that could best respond to what we I think need 
to learn through this hearing.
    But I do want to say, and this goes back to my original 
observation, I was very, very frustrated that we had to 
postpone this for three weeks, and by the time we got 
confirmation of having the panels here we made that 
announcement. It is nothing more complicated than that, so this 
isn't ideally how I would have wanted it, but this is the hand 
that we are dealt with, so with that----
    Mr. Markey. If the gentleman would just yield?
    Mr. Hastings. I would be more than happy to yield.
    Mr. Markey. And I thank the gentleman very much.
    I am trying here to divide the question and by that I mean 
that, yes, we do want representatives from the companies to 
testify. The point that we are making here is that we were not 
notified until 4:00 on Tuesday afternoon that at a 10:00 
meeting on Thursday morning that there would be a second panel. 
We had no idea that there was even going to be a second panel, 
much less who was going to be testifying.
    So the issue that we are really raising here is one of the 
consultative process. We are going to disagree obviously on the 
issues, but in terms of the notice that the Minority gets in 
order to prepare for a hearing in order to make in a timely 
fashioned request for a witness or even to have a discussion as 
to whether or not a Minority witness is necessary was not 
provided, so that is the point that we are making even as we 
are just trying to construct something here that makes it 
easier for the Minority to be able to raise their concerns in a 
timely fashion.
    Mr. Hastings. And reclaiming my time, and I appreciate the 
gentleman's response. I just simply want to say that in a 
private conversation that the two of us have had it was always 
my intent to do so. We didn't get confirmation until late that 
the representatives would be here. I thought this was precisely 
the right venue in order to have if you will an investigative 
report followed by representatives of the companies here, but I 
appreciate the gentleman's point, and I understand that. I was 
in his place before. I am disappointed, he said we don't agree 
on everything, I thought that we did agree on everything, but 
at any rate, I thank the gentleman for his remarks.
    Our first panel today, I am very pleased even though we had 
frustrations of putting it together that all of you are here. 
We have Captain Hung Nguyen, Co-Chair of the Joint 
Investigative Team from the U.S. Coast Guard; Mr. David Dykes, 
Co-Chair of the JIT Team, he is a former BOEMRE staffer. We 
have Vice Admiral Brian Salerno, Deputy Commander for 
Operations of the U.S. Coast Guard and of course The Honorable 
Michael Bromwich, Director of the Bureau of Safety and 
Environmental Enforcement.
    For those of you who have not been here, Director Bromwich 
has, so he knows the rules very well and I know that he will 
not exceed his five minutes because he knows how touchy I am on 
that regard, but the way the lights work there. I would like 
you to have your oral remarks confined to five minutes, and 
your full statement will appear in the record. When the green 
light is on, it means you are doing very, very well. When the 
yellow light comes on, it means you have one minute left, and 
when the red light comes on, it means the five minutes are 
over. So I would ask you to try to confine your remarks to that 
time because your full statement will appear in the record.
    So, Captain Nguyen, we will start with you and you are 
recognized for five minutes. Welcome to the panel.

    STATEMENT OF CAPTAIN HUNG NGUYEN, CO-CHAIR OF THE JOINT 
              INVESTIGATION TEAM, U.S. COAST GUARD

    Captain Nguyen. Good morning, Chairman Hastings, Ranking 
Member Markey and distinguished Members of the Committee. I am 
honored to appear before you today to discuss the Coast Guard 
Joint Investigation. Immediately following the loss of the 
Deepwater Horizon, the Department of Homeland Security, DHS, 
and Department of the Interior, DOI, convened a formal joint 
investigation for the purpose of examining the circumstances 
surrounding this incident and to make recommendation to prevent 
recurrence.
    On April 26, 2010, Rear Admiral Kevin Cook, Director of 
Coast Guard Prevention Policy, informed me that I would be 
designated as the Coast Guard Co-Chair for the Joint 
Investigation. In addition to me, there were three other Coast 
Guard members only assigned to the Joint Investigation Team, 
JIT, including Captain Mark Higgins, the Atlantic area Staff 
Judge Advocate, Captain Retired Gerard Whitley, Sector San 
Francisco Senior Investigation Officer and Lieutenant Commander 
Robert Butts, a Training Center Yorktown instructor. Lieutenant 
Commander Jeff Bragg, a headquarter Staff Judge Advocate, 
served as the Coast Guard attorney for the JIT.
    The DHS/DOI convening order identified Mr. David Dykes as 
the Bureau of Ocean Energy Management, Regulations and 
Enforcement, BOEMRE Co-Chair. I thank Mr. Dykes and the other 
JIT BOEMRE members for their cooperation and support.
    The Deepwater Horizon casualty demanded transparency and 
needed to be systematically investigated. Consequently, in 
early May 2010, in collaboration with BOEMRE investigators, we 
developed an initial investigation program which was posted on 
our internet website in June 2010. As new issues of concern 
were identified, the roadmap was updated to include additional 
public hearing sessions and parties in interest. We closely 
followed the roadmap.
    As the hearings progressed and the number of parties in 
interest increased, the number of objections increased 
significantly. It was determined that the addition of members 
with a legal background would assist the Co-Chair with handling 
objections and enable the investigator to focus on technical 
matters subsequent to the hearing sessions. Retired Federal 
Judge Wayne Anderson and Captain Mark Higgins were added to the 
JIT. While the Co-Chairs did preside over the hearing, the 
addition of Judge Anderson and Captain Higgins have moved the 
investigation forward.
    The Coast Guard investigation focused on the factors on 
board the Deepwater Horizon that might have contributed to the 
explosion, fire and subsequent sinking of the vessel. We 
examined the firefighting, evacuation and search and rescue 
efforts.
    By the beginning of January 2011, JIT Coast Guard members 
began to conduct our causal analysis. With no access to the 
damaged sunken vessel, we relied on witness statements, 
testimonies and documentary evidence. Based on the obtained 
information we identified facts and developed our conclusion 
and recommendations. The findings, conclusions and 
recommendations of the Coast Guard Investigative Team are in 
Volume 1 of the final report which was released in April 2011.
    With the exception of the five-year dead weight error in 
conclusion 4L, which does not change the related recommendation 
4-H, JIT Coast Guard members stand by our conclusions and 
recommendations.
    The Coast Guard Marine Investigation Program is a system of 
checks and balances. Our investigators get to exercise their 
judgment and report as they think appropriate. Once the report 
of investigation is complete, it is transmitted to Coast Guard 
headquarters for the final agency action. JIT Coast Guard 
members do not participate in the development of the 
Commandant's final agency memorandum. Again, thank you for the 
opportunity to testify before you today. I am pleased to answer 
your questions.
    [The prepared statement of Captain Nguyen follows:]

 Statement of Captain Hung Nguyen, Co-Chair, Deepwater Horizon, United 
 States Coast Guard/Bureau of Ocean Energy Management, Regulation and 
                              Enforcement

    Good Morning Chairman Hastings, Ranking Member Markey, and 
distinguished members of the Committee. I am honored to appear before 
you today to discuss the Coast Guard's contributions to the Deepwater 
Horizon Joint Investigation Team Report.
    Immediately following the April 20, 2010 distress notification of 
an explosion and fire onboard the Mobile Offshore Drilling Unit 
DEEPWATER HORIZON, a coordinated preliminary marine casualty 
investigation was launched. Investigators from both the U.S. Coast 
Guard (USCG) and the Minerals Management Service (MMS) (predecessor to 
the Bureau of Ocean Energy Management, Regulation and Enforcement 
(BOEMRE)) were dispatched by helicopter and ultimately boarded the 
Offshore Supply Vessel (OSV) DAMON B. BANKSTON, where they initiated 
interviews of the surviving crew and witnesses. The investigators also 
began gathering documentary and physical evidence.
    On April 27, 2010, the Department of Homeland Security (DHS) and 
the Department of the Interior (DOI) determined that a joint 
investigation was the best strategy for determining the events, 
decisions, actions, and consequences of this marine casualty and 
entered into a Statement of Principles and Convening Order. The 
Convening Order stated that a Joint Investigation was to be conducted 
and Co-Chaired by equal representation from both the USCG and MMS. This 
endeavor was classified under 46 U.S.C. 6308 and the governing rules 
for both agencies and was defined as a Coast Guard Marine Board of 
Investigation within the meaning of 46 C.F.R. Sec. 4.09 and a Panel 
Investigation within the meaning of 30 C.F.R. Sec. 250.191.
    The Commandant of the U.S. Coast Guard convenes a Marine Board of 
Investigation when necessary to promote safety at sea or when in the 
public interest. This formal process includes maintaining a record of 
the proceedings and the transcription of witness testimony. The 
Convening Order directed that the public hearing portions of the 
investigation follow the policies and procedures of a Marine Board of 
Investigation. Where the procedures of a Marine Board of Investigation 
differed from those of a Panel Investigation, the Convening Order 
further directed that Marine Board of Investigation procedures govern.
    A Joint Investigation Team (JIT) was then formed and tasked with 
carrying out the investigation. The team used the combined 
investigative powers and authorities afforded to the USCG and MMS. 
Personnel from each agency were assigned to the JIT based on their 
background and experience in order to facilitate the most effective and 
efficient collection of evidence, to conduct public hearings and 
inquiries, and to coordinate forensic testing. Pursuant to 46 U.S.C. 
Sec. 6304, the JIT held subpoena authority that was consistent with 
that of a U.S. district court in civil matters, and could administer 
oaths.
    The agencies operated under the 2009 Memorandum of Agreement (MOA) 
that identifies responsibilities of the MMS and the USCG. The USCG and 
MMS entered this agreement under the authority of 14 U.S.C. Sec. 141--
USCG Cooperation with other Agencies; 43 U.S.C. Sec. Sec. 1347, 
1348(a)--the Outer Continental Shelf Lands Act (OCSLA), as amended; 33 
U.S.C. Sec. 2712(a)(5)(A)--the Oil Pollution Act of 1990 (OPA); 43 
U.S.C. Sec. Sec. 1301-1315--the Submerged Lands Act (SLA), as amended; 
and the Energy Policy Act of 2005, Pub L. 109-58, 119 Stat. 594 
(codified in scattered sections of 7 U.S.C., 15 U.S.C., 16 U.S.C., 26 
U.S.C., and 42 U.S.C.).
    Additionally, the USCG and MMS had formerly signed a Memorandum of 
Understanding (MOU) to delineate inspection responsibilities between 
both agencies. The MOU is further broken down into five MOAs: OCS-01 
Agency Responsibilities, OCS-02 Civil Penalties, OCS-03 Oil Discharge 
Planning, Preparedness and Response, OCS-04 Floating Offshore 
Facilities and OCS-05 Incident Investigations. OCS-01 established 
responsibilities for each agency and clarified overall responsibility 
where jurisdiction overlapped.
    Under the MOAs, BOEMRE, as MMS's successor, is responsible for 
investigating incidents related to systems associated with exploration, 
drilling, completion, work over, production, pipeline and 
decommissioning operations for hydrocarbons and other minerals on the 
Outer Continental Shelf (OCS). The USCG is responsible for 
investigating marine casualties involving deaths, injuries, property/
equipment loss, vessel safety systems, and environmental damage 
resulting from incidents aboard vessels subject to U.S. jurisdiction. 
The MOA assigns responsibility in joint investigations according to 
these responsibilities. Volume I of the JIT report addresses the areas 
of USCG responsibility and Volume II addresses the areas of BOEMRE 
responsibility.
    The joint investigation was conducted under the April 27, 2010, 
Statement of Principles and Convening Order which ensured that the 
investigative process was rigorous, comprehensive, independent and 
transparent. The JIT was composed of four lead members and supporting 
technical staff from each agency. The JIT held seven public hearings 
governed by the policies and procedures for a Marine Board of 
Investigation contained in 46 C.F.R. Sec. 4.09 and the USCG Marine 
Safety Manual, Volume V. The JIT recorded the testimony of more than 80 
witnesses; conducted multiple interviews with more than 25 individuals: 
received, processed, and analyzed hundreds of thousands of pages of 
documents; and maintained custody of hundreds of pieces of physical 
evidence, ranging from small rock samples to the actual blowout 
preventer that had been in place at the Macondo wellhead. Taking into 
consideration their status as the Flag State, the Republic of Marshall 
Islands Maritime Administrator was accorded the rights of a Party in 
Interest in addition to certain procedural rights. The JIT also 
designated Parties in Interest, who were afforded their statutory 
rights specified in 46 U.S.C. Sec. 6303. Those rights are to: (1) be 
represented by counsel; (2) cross-examine witnesses; (3) introduce 
evidence; and, (4) ask the Board to call witnesses on their behalf.
    On April 22, 2011, the USCG members of the JIT submitted Volume I 
of their report of investigation to the Commandant, USCG for their 
comments on the findings, conclusions and action on the JIT's safety 
recommendations. Additionally, Volume I of the report was disseminated 
to the Next of Kin of those lost in the marine casualty, members of 
Congress, all Parties in Interest, and the general public via the 
internet on or before that date.
    As prescribed by Coast Guard policy, Volume I, which is the Coast 
Guard portion of the investigation, was submitted to the Commandant for 
review, endorsement, and determination of Final Action. The Commandant 
took Final Action on Volume I on September 9, 2011. Also on September 
9, 2011, the Commandant and Director Bromwich of BOEMRE signed a joint 
cover memo on the Joint Investigation Team Report of Investigation. 
Volume I, as accepted by the Commandant's Final Action, and Volume II 
together provide a comprehensive assessment of the incident and 
comprise the completed joint report of investigation.
    Thank you for the opportunity to testify today. I look forward to 
your questions.
                                 ______
                                 
    Mr. Hastings. Thank you very much, Captain Nguyen, for your 
testimony. I will now recognize Mr. David Dykes, who was Co-
Chairman of the JIT team. The gentleman is recognized for five 
minutes.

      STATEMENT OF MR. DAVID DYKES, CO-CHAIR OF THE JOINT 
            INVESTIGATION TEAM, FORMER BOEMRE STAFF

    Mr. Dykes. Thank you, Mr. Chairman, Members of the 
Committee. For the record, my name is James David Dykes. For 
the last 17 months I served as Co-Chair for the Joint Marine 
Board of Investigation. My written testimony presented and my 
oral statement given here this morning is from my very best 
recollection of the facts as I know them. In preparing the 
written testimony I had limited access to evidence due to my 
resignation from the Bureau back in September. It came from web 
information and it came from my own recollection of the 
information.
    My written testimony attempts to address the investigation 
as it was conducted, what was discovered during the 
investigation and what the investigation findings showed.
    On the morning of April 21, 2010, Investigator Kirk 
Malstrom, the Houma district manager, Bryan Domangue, and I 
were in Houston when we learned of the Deepwater Horizon 
incident. Upon hearing of the news we immediately began both 
the investigation phase and the response phase in BP's office 
in Houston while other personnel in the MMS office in New 
Orleans were ramping up their operations there.
    The Coast Guard was preparing to dispatch investigators to 
the offshore location to start interviewing surviving crew 
members. We dispatched MMS investigators to Houma, Louisiana, 
to rendezvous with the Coast Guard investigators and to travel 
to the offshore location.
    The investigators intercepted the motor vessel Damon 
Bankston en route to the beach and began conducting interviews 
and collecting statements. Within the first few days MMS was 
coordinating with the Coast Guard on areas that needed to be 
explored. I met with Coast Guard personnel from the Morgan City 
Marine Safety Office and representatives from the Republic of 
Marshall Islands to determine what information was in hand and 
what information needed to be collected. At this time 
preservation orders were issued to both BP and to Transocean.
    The Joint Investigation issued more than 90 subpoenas and 
collected over 400,000 pages of evidence over the course of 
this investigation. These documents encompass everything from 
company safe work practices and drilling program procedures and 
permits to employee performance reviews and master service 
agreements.
    The JIT held seven public hearings and called over 80 
witnesses. Some witnesses refused to testify however, perhaps 
due in part to the announcement of a criminal investigation by 
U.S. Attorney General Eric Holder on June 1, 2010.
    In closing, the findings from the investigation revealed 
that additional barriers are needed to reduce the probability 
of similar events of this magnitude from happening again. 
Recommendations for additional research and regulatory 
provisions as well as rig design revisions along with changes 
to well control and emergency response will add these barriers. 
However, they cannot guarantee that the human element in the 
equation will perform as intended. This specific issue is one 
issue that will haunt the oil and gas industry and every other 
industry where personnel are required to make decisions based 
on raw data.
    This concludes my opening statement. I will be happy to 
answer any questions. Thank you.
    [The prepared statement of Mr. Dykes follows:]

      Statement of James David Dykes, Co-Chair, USCG/BOEMRE Joint 
Investigation Into the Deepwater Horizon/Macondo Well Blowout, Formerly 
     with the U.S. Department of Interior, Bureau of Ocean Energy 
                 Management, Regulation and Enforcement

Opening Oral Summary Statement
    Ladies and Gentlemen of the Committee, my name is James David 
Dykes. For the last 17 months, I served as co-chair for the Joint 
Marine Board of Investigation. My written testimony and my oral 
testimony here today are given from my best recollection of the facts 
as I remember them. In preparing the written testimony, I had very 
limited access to the evidence due to my resignation from federal 
employment back in September of this year. The information presented 
has been gleaned from the final published report, my own recollection, 
and from published information available on the web. My written 
testimony attempts to address the investigation as it was conducted, 
what was discovered during the investigation, and what the findings of 
the investigation show.
    On the morning of April 21, 2010, Investigator Kirk Malstrom, Houma 
District Manager Bryan Domangue and I were in Houston when we learned 
of the Deepwater Horizon incident. Upon hearing of the incident, we 
immediately began both the investigation and MMS response phase in BP's 
Houston office while other MMS personnel were ramping up in our New 
Orleans office. The Coast Guard was preparing to dispatch investigators 
to the offshore location to start interviewing and gathering witness 
statements from the surviving crew members. We dispatched MMS 
investigators to Houma, LA to rendezvous with the Coast Guard 
investigators and travel to the offshore location. The investigators 
intercepted the M/V Damon Bankston enroute to BP's Fourchon, LA dock 
and began conducting interviews and collecting statements
    Within the first few days, MMS was coordinating with the Coast 
Guard on areas that needed to be explored. I met with Coast Guard 
personnel from the Morgan City, LA Marine Safety Office and 
representatives of the Republic of the Marshall Islands to determine 
what information was in hand and what information needed to be 
collected. At this time, preservation orders were issued to both BP and 
Transocean.
    The JIT issued more than 90 subpoenas and collected over 400,000 
pages of evidence over the course of this investigation. These 
documents encompassed everything from company safe work practices and 
drilling program procedures and permits to employee performance reviews 
and master service agreements.
    The JIT held seven public hearings and called over 80 witnesses. 
Some witnesses refused to testify, however, perhaps due in part to the 
announcement of a criminal investigation by U.S. Attorney General Eric 
Holder on June 1, 2010.
    Outside experts were retained to conduct focused studies and 
analyses in areas where the JIT did not possess the necessary 
experience and skill sets.
    In closing, the findings from this investigation revealed that 
additional barriers are needed to reduce the probability of similar 
events of this magnitude from happening again. Recommendations for 
additional research and regulatory revisions as well as rig design 
revisions, along with changes to well control and emergency response 
training will add these additional barriers; however, they cannot 
guarantee that the human element in the equation will perform as 
intended. This specific issue will haunt the oil and gas industry and 
every other industry where personnel are required to make decisions 
based on raw data.
    Thank You.
Personal Background
    At the time of the event, I was Chief of the Office of Safety 
Management for the Minerals Management Service (MMS), Gulf of Mexico 
OCS Region. I have approximately 27 years of combined industry and 
regulatory experience in the oil and gas arena. I started out as a 
roustabout in 1984 working production operations for Diamond Shamrock 
Exploration and Production Co. I was fortunate enough that Diamond 
Shamrock had an education tuition assistance program which allowed me 
to obtain my college degree at Nicholls State University while working 
offshore. Over the next fifteen years and several mergers, 
acquisitions, and downsizes, I worked my way up through the ranks to 
the Safety Manager position with Taylor Energy Company. I joined the 
MMS in 1999, and worked as a safety and environmental management 
specialist, civil penalty reviewing officer, and accident investigator 
before becoming the Chief of the Office in 2007. My career has allowed 
me to obtain a wealth of knowledge in accident investigation techniques 
including root cause and causal factor analysis. I have attended Conger 
& Elsea's ``Mishap Analysis and Prevention System'' safety training as 
well as System Improvements ``TapRooT'' Root-Cause Analysis training. 
For a brief period, I also taught accident investigation and causal 
factor/root cause analyses. During my tenure as an accident 
investigator, I served as the MMS lead investigator in the MMS/USCG 
joint investigation of BP's Thunder Horse facility's ballast control 
failure incident following the passage of Hurricane Dennis in 2005; and 
I also served as the MMS lead investigator in the MMS/USCG joint 
investigation of Chevron's Typhoon facility's mooring failure incident 
following the passage of Hurricane Rita in 2005.
Initial Investigative Actions
    On the morning of April 21, 2010, Investigator Kirk Malstrom, Houma 
District Manager Bryan Domangue and I were in Houston when we learned 
of the Deepwater Horizon incident. We were already in Houston 
conducting a whistleblower investigation into allegations that BP did 
not have proper drawings necessary for the safe operation of its 
Atlantis facility. We immediately began both the investigation and 
agency response phase in BP's Houston office while other agency 
personnel were ramping up in our New Orleans office. The Coast Guard 
had been conducting search and rescue operations since the night before 
and was preparing to dispatch investigators to the offshore location to 
start interviewing and gathering witness statements from the surviving 
crew members. We dispatched MMS investigators, Randy Josey and Glynn 
Breaux, to Houma, LA to rendezvous with the Coast Guard investigators 
and travel to the offshore location. The investigators intercepted the 
M/V Damon Bankston enroute to BP's Fourchon, LA dock and began 
conducting interviews and collecting statements from everyone. 
Approximately 115 statements were collected from both the DWH crew and 
the crew of the Damon Bankston. Attorneys for Transocean later 
complained that we should not have delayed the Damon Bankston in its 
journey to the shorebase and further, that we should not have 
interviewed the witnesses without company legal representation present. 
Those allegations aside, these witness statements were critical to the 
investigation in that they provided the basis for identifying fact 
witnesses because of their location on the rig at the time of the 
events and they also helped to determine the location of those 
crewmembers who did not survive. Additionally, several of these 
statements were the basis for our conclusions regarding timing of 
certain events and the most probable ignition sources of the 
hydrocarbons.
    Within the first few days, the agency was coordinating with the 
Coast Guard on areas that needed to be explored. I met with Coast Guard 
personnel from the Morgan City, LA Marine Safety Office and 
representatives of the Republic of the Marshall Islands to determine 
what information was in hand and what information needed to be 
collected. Preservation orders were issued to BP and to Transocean. 
Facility and equipment tours were scheduled with Cameron (manufacturer 
of the BOP stack) to get personnel up to speed with what we would be 
dealing with. Visits were made to BP's Fourchon, LA dock to begin 
inventorying and cataloging debris and any other evidence as it was 
recovered from the offshore site.
The Convening Order
    The joint investigation was formally established with the signing 
of the Joint Statement of Principles and Convening Order, by USCG 
Commandant Allen, MMS Director Birnbaum, and Secretaries Salazar and 
Napolitano on April 27, 2010. The scope of the Deepwater Horizon 
investigation was to determine the cause of the fire, pollution, and 
sinking of the mobile offshore drilling unit, Deepwater Horizon. The 
convening order identified Captain Hung Nguyen and myself as co-chairs 
of the joint investigation; outlined the process and procedures by 
which the investigation would be conducted; designated the Republic of 
the Marshall Islands (flag state of the vessel) as a ``Party In 
Interest and afforded all rights associated with such status; and 
stated a deadline for the final report. This deadline was nine months 
from the date of the convening order. The fact that the well was still 
flowing uncontrollably rendered witnesses who were devoted to 
containment efforts and some witnesses unavailable for months, and the 
original deadline became impossible to meet. Most of the information as 
to why the blowout preventer (BOP) stack did not seal the well was with 
the BOP stack 5000 feet beneath the surface of the Gulf of Mexico. 
Until the BOP stack could be pulled, certain questions could never be 
answered. On April 29, 2010, Chris Oynes--Associate Director for 
Offshore Energy and Minerals Management, designated the following MMS 
personnel to the JIT:
        Glynn Breaux, Office of Safety Management, GOM OCS Region
        John McCarroll, Lake Jackson District, GOM OCS Region
        Ja son Mathews, Accident Investigation Board, Office of 
        Regulatory Programs
        Kirk Malstrom, Regulations and Standards, Office of Regulatory 
        Programs
    The MMS/BOEMRE members concentrated on the well-related activities. 
These activities included the source and path of the hydrocarbons 
causing the blowout, the practices on the Deepwater Horizon leading to 
the blowout, the cause of the explosion, and the failures of the 
blowout preventer stack.
    The Coast Guard members focused on the fire-fighting, life-saving, 
and evacuation efforts onboard the Deepwater Horizon, the search and 
rescue efforts by the USCG and assisting vessels, the International 
Maritime Organization (IMO) compliance areas, the fire-fighting efforts 
of the assisting vessels, and the stability of the Deepwater Horizon.
Potential Flow Paths
    The investigative team began reviewing all well information that 
the agency had in hand. The team quickly narrowed down the potential 
flow path of hydrocarbons to three possible scenarios;
          The first possibility is that the casing cement shoe 
        at the end of the production casing at 18310 feet failed and 
        allowed the flow from the bottom of the wellbore.
          The second possibility was that the production casing 
        leaked or the casing collapsed at the crossover joint within 
        the wellbore.
          The third possibility was that the production casing 
        moved or ``floated'' inside the wellbore causing the production 
        casing seal assembly to fail.
Hearings
    The JIT issued more than 90 subpoenas and collected over 400,000 
pages of evidence over the course of this investigation. These 
documents encompassed everything from company safe work practices and 
drilling program procedures and permits to employee performance reviews 
and master service agreements.
    The JIT held seven public hearings and called over 80 witnesses. 
Some witnesses refused to testify, however, perhaps due in part to the 
announcement of a criminal investigation by U.S. Attorney General Eric 
Holder on June 1, 2010. The BP drilling engineers responsible for the 
design of the Macondo drilling program and one of the BP Wellsite 
Leaders exercised their Constitutional rights and refused to speak with 
the JIT.
    The JIT held the first hearing the week of May 10, 2010, in New 
Orleans. This hearing solely concentrated on search and rescue efforts, 
fire-fighting responses, and the industry oversight of MMS, U.S. Coast 
Guard, and the Republic of the Marshall Islands.
    The second hearing was held the week of May 24, 2010, in New 
Orleans. The JIT wanted to better understand the prior surveys 
conducted on the DWH by ABS and DNV. The JIT also wanted to get a 
foundation of the events on the rig during the blowout. Based on the 
written witness reports we called most of the rig crew who had the best 
recollection of the incident and surrounding events.
    The third hearing was held the week of July 19, 2010, in New 
Orleans. This hearing focused on reviewing the activities a few hours 
prior to and through the incident by analyzing the Sperry-Sun that had 
been subpoenaed from BP. The JIT wanted to better understand the 
operational and design specifics for the well, including BP's 
procedures for running the Lock-down sleeve, and the down-hole 
equipment and design. We also wanted to know the details and 
involvement of the wells team leader, John Guide.
    The fourth hearing was held the week of August 23, 2010 in Houston. 
This hearing was to find out the circumstances surrounding BP's upper 
management and their interactions/decisions with contracting companies, 
other management teams, and rig personnel. Witnesses also included VIP 
persons who were on the rig and their actions.
    The fifth hearing was held the week of October 4, 2010 in New 
Orleans. This hearing focused on gathering facts about salvage plans, 
bridge activities, DPO alarm systems, rig logistics--flight manifests, 
and supplies--centralizers. We also questioned John Guide again.
    The sixth hearing was held the week of December 6, 2010 in Houston. 
This hearing focused on collecting information regarding international 
safety management systems, BP's AFE budget for the Macondo well, and 
Transocean's command center involvement and response.
    The seventh and final hearing held the week of April 4, 2010, in 
New Orleans. This hearing focused on gathering information and feedback 
related to the recently released BOP stack forensic report completed by 
Det Norske Veritas (DNV).
BOP Stack Recovery and Forensics
    In July 2010, the JIT began a search for a third party expert 
capable of performing a forensic examination of the BOP stack. Because 
the BOP stack was oilfield equipment and not a marine apparatus, the 
JIT determined that BOEMRE, in coordination with the Department of 
Justice (DOJ), would take the lead on identifying experts qualified to 
perform this forensic work. The contracting team prepared a statement 
of work and circulated it for review by JIT members, BOEMRE and Coast 
Guard personnel and counsel, and DOJ representatives from both the 
civil and criminal divisions. BOEMRE also conducted market research 
into potentially qualified forensic examiners.
    On September 2, 2010, Det Norske Veritas (DNV) was contracted to 
undertake a forensic examination of the blowout preventer stack (BOP), 
its components and associated equipment used by the Deepwater Horizon 
drilling operation.
    The objectives of the forensic examination were to determine the 
performance of the BOP system during the well control event, any 
failures that may have occurred, the sequence of events leading to 
failure(s) of the BOP stack and the effects, if any, of a series of 
modifications to the BOP stack that BP and Transocean officials 
implemented.
    The set of activities undertaken by DNV included:
          Establishing a base of operations at the NASA Michoud 
        facilities for receiving and testing the BOP stack and 
        associated equipment;
          Building a temporary enclosure to house the BOP stack 
        to facilitate the forensic examinations;
          Recovery of and assessment of drill pipe, rams, 
        fluids and other material from the BOP stack and recovered 
        drilling riser;
          Function testing of the hydraulic circuits, 
        mechanical components and control systems of the BOP stack;
          Visual examination of evidence and additional 
        analysis using laser profilometry;
          Mechanical and metallurgical testing of pieces of 
        drill pipe;
          Coordination of activities with other stakeholders 
        through the JIT and the Technical Working Group (TWG);
          Review of documents and Remotely Operated Vehicle 
        (ROV) videos;
          Mathematical modeling of the mechanical damage and 
        deformation of drill pipe; and,
          Developing possible failure scenarios.
    The BOP stack consists of the BOP and lower marine riser package 
(LMRP). The stack can be separated into the two individual components 
with each weighing approximately 360,000 pounds. The components, when 
combined, are contained within a framework that is approximately 14 
feet square and stands approximately 60 feet tall and can only be 
transported by a marine vessel. The sheer size of the BOP stack limits 
the availability of facilities that can handle anything of this 
magnitude. After extensive efforts to locate an acceptable facility to 
host the examination that was both secure and accessible to marine 
transport, the JIT, in close consultation with DOJ, determined that the 
NASA Michoud facility in New Orleans was the best option. The Michoud 
facility provided a secure location with marine transport access; 
however, the dockside facility could not handle the weight of the BOP 
and LMRP without additional preparations. Site preparation activities 
included constructing a test pad capable of supporting the 360-ton BOP 
stack, mobilizing a heavy-lift crane to transfer the BOP and LMRP to 
the dock, obtaining environmental containment equipment, and the 
erection of a temporary structure to house the BOP and LMRP. 
Additionally, other accident evidence was already being stored on site 
at Michoud under an ongoing lease between the Coast Guard and NASA.
    Security measures for the BOP stack were developed and implemented 
in close coordination with DOJ and the FBI Evidence Recovery Team (ERT) 
to preserve the integrity of the forensic work and evidence.
    On September 4, 2010, the BOP stack was retrieved from the Macondo 
well by Helix Energy's mobile offshore unit, the Q4000. JIT personnel, 
along with DOJ, FBI -ERT, were on location with DNV personnel to 
oversee the retrieval and the execution of the short-term preservation 
procedures in preparation for transfer to the NASA Michoud facility. 
The BOP and LMRP were then transported by barge to the Michoud 
facility.
    The JIT, in consultation with DOJ and DNV, formed a technical 
working group to provide DNV with technical support and expertise as 
DNV conducted the forensic examination. On November 1, 2010, the JIT 
selected a six-member technical working group which included one expert 
each from Cameron, Transocean, BP, DOJ, CSB, and an expert representing 
the plaintiffs in the multi-district litigation suit. Additionally, a 
controlled access file transfer protocol site was established for the 
purpose of sharing photo, video, and other documentary media that was 
being captured during the forensic examination, with the technical 
working group members.
Contracted Services
    In addition to DNV, the JIT also needed experts to conduct focused 
studies/analyses in areas where the JIT did not possess the necessary 
experience and skill sets. The following outside entities were 
retained:
          Dr. John Smith was contracted to review the Sperry-
        Sun log data and the IADC reports to identify key issues during 
        the last 24 hours on the rig.
          Keystone Engineering was contracted to conduct a 
        casing buoyancy analysis to determine the potential for the 
        casing to ``float'' inside the wellbore.
          Oilfield Testing and Consulting was contracted to 
        conduct the Macondo well cement blend analysis. This work was 
        similar to the cement analysis conducted by Chevron for the 
        National Commission.
Findings and Conclusions
    As stated earlier in this document, the MMS/BOEMRE members of the 
JIT focused on determining the root causes/causal factors in three 
areas:
          How (source and flow-path) and why did the Macondo 
        well blow out?
          What ignited the hydrocarbons once they reached the 
        rig?
          Why did the BOP stack fail to seal the wellbore?
How (source and flow-path) and why did the Macondo well blow out?
    As stated earlier, the JIT identified three possible flow paths for 
the hydrocarbons to travel up the wellbore. Forensic work conducted by 
the Development Driller II under the direction of the JIT and the 
Unified Area Command, determined that the casing did not float and 
there was no failure in the casing string. By the process of 
elimination, the JIT determined that the only possible path was 
directly from the bottom of the well through the casing shoe. The JIT 
concluded contamination or displacement of the shoe track cement, or 
nitrogen breakout or migration, could have caused the shoe track cement 
barrier to fail.
    Next, during the conduct of the negative test, the rig crew 
(including BP, Transocean, and Sperry-Sun personnel) failed to detect 
the influx of hydrocarbons until the hydrocarbons were above the BOP 
stack. Additionally, the crew's collective misinterpretation of the 
negative tests was a critical mistake that would escalate into the 
blowout, fire and eventual sinking of the Deepwater Horizon.
    Once the hydrocarbons reached the rig floor, the rig crew began 
taking necessary steps to attempt to control the flow. Understand that 
the most important part of well control is early kick detection. For 
deepwater operations utilizing a subsea BOP stack, this task becomes 
even more critical. Once hydrocarbons are above the BOP stack, options 
become limited for appropriate well control response actions.
What ignited the hydrocarbons once they reached the rig?
    The JIT concluded that there were two plausible ignition sources at 
the time of the blowout: 1) engine rooms number 3 and/or number 6 
(including the associated switchgear rooms); and/or 2) the mud-gas 
separator located near the rig floor. Witness statements and testimony 
from crewmembers that were in the engine control rooms support the 
conclusion that the ignition sources were in the engine rooms. Witness 
statement and testimony from members of the crew of the M/V Damon 
Bankston and rig crew members on the aft weather deck support the 
conclusion that it was the mud-gas separator.
    Contributing causes of the ignition include the rig's engine air 
intake design, the operating philosophy of a dynamically positioned 
rig, the vagueness in the Transocean Well Control Manual regarding use 
of the mud-gas separator, and the design of the mud-gas separator vent 
system.
Why did the BOP stack fail to seal the wellbore?
    Within moments of the loss of well control, explosions likely 
damaged the Deepwater Horizon's multi-plex cable and hydraulics, 
rendering the crew unable to activate the blind shear rams or the 
emergency disconnect sequence of the BOP stack. These conditions should 
have triggered the automated mode function (also referred to as the 
``deadman'' function), which should have activated the blind shear rams 
in the event of loss of communication between the rig and the BOP 
stack.
    The forensic examination concluded that the drill pipe had become 
trapped in a position between the upper annular BOP component and the 
upper variable bore ram BOP component. The JIT concluded that either 
the hydrocarbons that were blowing out of the well through the drill 
pipe or the weight of the drill pipe had forced the drill pipe into a 
buckled state against the side of the BOP wellbore. This buckling 
caused the drill pipe to move off center outside the cutting area of 
the blind shear rams, thus preventing the complete cutting of the drill 
pipe and sealing of the wellbore.
Summary of Additional Causes, Contributing Causes, and Possible 
        Contributing Causes
    Poor risk management on BP's part was a key contributing cause. BP 
failed to identify, evaluate, and inform all parties involved in the 
operation about the associated risks. BP did not fully analyze the 
cement properties testing results. They did not evaluate the gas flow 
potential. Even though everyone within the BP organization stated that 
they never compromised safety, BP made multiple cost/time saving 
decisions without subjecting those decisions to a formal risk 
assessment. Additionally, Both BP and Transocean personnel failed to 
observe and respond to critical indicators. The rig crew (both BP and 
Transocean) experienced a kick a month earlier and it took over 30 
minutes to identify the kick. The rig crew did not evaluate the 
anomalies encountered during the float collar conversion.
Recommendations
    The JIT made multiple recommendations that encompass regulatory 
changes, research and collaboration with industry to develop best 
practices for well control training. Some of the recommendations have 
already been incorporated; however, BOEMRE will need to evaluate and 
consider the other recommendations for implementation.
    This concludes the written testimony.
                                 ______
                                 
    Mr. Hastings. Thank you very much, Mr. Dykes. And now I 
would like to recognize Vice Admiral Brian Salerno. The 
gentleman will be recognized for five minutes.

          STATEMENT OF VICE ADMIRAL BRIAN M. SALERNO, 
       DEPUTY COMMANDANT FOR OPERATIONS, U.S. COAST GUARD

    Admiral Salerno. Good morning, Chairman Hastings, Ranking 
Member Markey and Distinguished Members of the Committee. I am 
very pleased to have this opportunity to answer any questions 
you may have on the Commandant's action on Volume 1 of the 
Joint Investigation Report and the loss of the mobile offshore 
drilling unit, or MODU, Deepwater Horizon. Specifically I am 
prepared to discuss the steps the Coast Guard has taken to 
improve safety in the offshore oil industry.
    I would first like to express on behalf of Secretary 
Napolitano and the Commandant of the Coast Guard our deepest 
sympathies to the families of the 11 men who lost their lives 
in this tragic accident. The Coast Guard has kept those 
families informed of the investigation's progress and most 
recently provided them with a summary of the actions we are 
taking to improve MODU safety.
    Although the sinking of Deepwater Horizon followed a well 
blowout, the investigation revealed numerous system 
deficiencies and acts of omission on the MODU itself that had 
an adverse impact on the ability to prevent or limit the 
magnitude of the disaster. These deficiencies included poor 
maintenance of electrical equipment that may have ignited the 
explosion earlier than might otherwise have been the case, the 
bypassing of hydrocarbon gas alarms and automatic shutdown 
systems and a lack of training on when and how to shut down 
engines and disconnect the MODU from the well.
    Coast Guard members of the Joint Investigation Team made 65 
recommendations, safety recommendations and administrative 
recommendations to improve safety on board MODUs operating on 
the Outer Continental Shelf. These recommendations can be 
characterized in three broad areas: recommendations related to 
the effectiveness of both domestic and international standards; 
recommendations related to enforcement of those standards; and 
administrative recommendations. The Commandant concurs in whole 
or in part with the vast majority of the proposed safety 
actions.
    Overall, Volume 1 reveals that regulated safety systems 
aboard the MODU enabled 115 of the 126 persons on board to 
survive the explosions and subsequent fire. For example, all 
survivors were able to evacuate the MODU using the installed 
life-saving equipment with the exception of approximately six 
who on their own initiative jumped from the rig into the water.
    Also, even though significantly damaged by the explosion 
and the ensuing fire, the Deepwater Horizon had enough 
structural resiliency to stay afloat for more than 48 hours 
despite being engulfed in a major fire that was being fed from 
an uncontrolled fuel source.
    Nevertheless it is clear from this tragedy that the Coast 
Guard must refine its procedures and improve oversight to 
better fulfill its responsibility to ensure safety, security 
and stewardship on the U.S. Outer Continental Shelf. To 
accomplish this, the Coast Guard will work both domestically 
and internationally to improve standards and oversight for U.S. 
and foreign-flag MODUs.
    We have already taken action based on the lessons learned 
from this casualty. For example, we have initiated a new policy 
on risk-based targeting for foreign-flag MODUs operating on the 
Outer Continental Shelf. Our goal in this policy is to 
prioritize our examination activity according to risk, taking 
into account numerous factors, including the past performance 
of the managing company, the owner, the flag state, and the 
recognized organizations that are delegated authority to act on 
behalf of the flag state. The intention is to enhance safety 
for all vessels operating on the U.S. Outer Continental Shelf.
    We are also updating our domestic regulations which govern 
vessels operating on the Outer Continental Shelf to reflect the 
lessons learned from the Deepwater Horizon and the current 
state of technology. We are also harmonizing Coast Guard area 
contingency planning efforts with the offshore spill response 
plans approved by the Bureau of Safety and Environmental 
Enforcement to ensure consistency and improve overall 
preparedness.
    Finally, the Coast Guard continues to work through the 
International Maritime Organization where, among other 
initiatives, we are leading U.S. efforts in support of a 
mandatory code for recognized organizations. The code will 
improve accountability of recognized organizations acting on 
behalf of flag states and will better ensure that all vessels, 
including MODUs, comply with international standards.
    Thank you, and I look forward to answering your questions.
    [The prepared statement of Admiral Salerno follows:]

 Statement of Admiral Brian Salerno, Deputy Commandant for Operations, 
        BOEMRE/U.S. Coast Guard Joint Investigation Team Report

    Good Morning Chairman Hastings, Ranking Member Markey, and 
distinguished members of the Committee. I am honored to appear before 
you today to discuss the Coast Guard's Final Action on the Coast Guard 
Volume--Volume I--of the Joint Investigation Team report.
INVESTIGATIVE ACTION SUMMARY
    Immediately following the explosion and sinking of the DEEPWATER 
HORIZON Mobile Offshore Drilling Unit (MODU), the Department of 
Homeland Security, through the U.S. Coast Guard, and the Department of 
Interior, originally through the Minerals Management Service (MMS), now 
the Bureau of Ocean Energy Management, Regulation and Enforcement 
(BOEMRE), convened a formal investigation with the purpose of gathering 
evidence and examining the circumstances surrounding the tragic 
incident. The Joint Investigation Team (JIT) was comprised of and co-
chaired by members from the Coast Guard and BOEMRE.
    The Coast Guard members of the JIT examined five aspects of the 
disaster relating to areas under Coast Guard jurisdiction: the 
explosions; the fire; the evacuation; the flooding and sinking of the 
MODU; and the safety systems of the DEEPWATER HORIZON including the 
safety management system implemented by owner-operator, Transocean. The 
investigative findings, conclusions and recommendations of the Coast 
Guard members of the JIT were publicly issued on April 22, 2011, in 
Volume I of the JITs report. In the Final Action Memo (FAM), released 
on September 14, 2011, the Commandant accepted Volume I and commented 
on its findings, conclusion, and recommendations.
SUMMARY OF FINDINGS
    Although the sinking of DEEPWATER HORIZON was triggered by a loss 
of well control, the investigation revealed numerous system 
deficiencies and acts and omissions by Transocean and the DEEPWATER 
HORIZON crew that adversely impacted opportunities to limit the 
magnitude of the disaster. These included poor maintenance of 
electrical equipment that may have ignited the explosion, bypassed 
hydrocarbon gas alarms and automatic shutdown systems, and training 
shortfalls in critical areas such as engine shutdown and emergency well 
disconnect procedures. These and other deficiencies indicate that a 
flawed safety management system and safety culture aboard DEEPWATER 
HORIZON may have contributed to this disaster.
COMMANDANT FINAL AGENCY ACTION PROCESS REGARDING VOLUME I
    To ensure the JIT investigation was conducted in a methodical, 
thorough, and transparent manner, the Coast Guard applied longstanding 
Service processes and principles. This includes the completion of an 
independent investigation by members of a Marine Board of Investigation 
(Board) and submission of a written report containing investigative 
findings, conclusions, and recommendations to the Commandant. Upon 
receipt by the Commandant, the report is further reviewed by technical 
experts who have policy and oversight responsibility for the actions 
and conditions identified by the Board as causal factors in the 
incident. The technical experts provide key policy insight and 
recommendations into the development of the Final Action. This second 
level of independent review by technical and policy experts is critical 
in determining the Commandant's Final Action on all recommendations, 
including potential implementation.
    In the Final Action, the Commandant may address the facts, 
opinions, and conclusions of the report and provide a response to each 
recommendation. When the Commandant concurs with a recommendation, a 
description of the action he intends to take is included in the Final 
Action. If he does not concur with a recommendation, the reason for his 
non-concurrence is also included.
    During the course of the Board's investigation, parties in interest 
(PIIs) are afforded certain statutory rights, including the right to 
counsel, to introduce evidence, and to call and cross-examine 
witnesses. Typically, however, the Board's report and the review 
process are not open to any PIIs or the general public until the 
Commandant's review is finished and the Final Action completed. Once 
the Commandant's Final Action is complete, it is appended to, and 
released simultaneously with, the Board's original report.
    In the case of the DEEPWATER HORIZON incident, the process was 
modified in order to provide increased transparency into the 
investigation of a marine incident that had a direct impact on 
unprecedented numbers of American citizens. The Coast Guard released 
Volume I of the JIT Report in April, before the Commandant's Final 
Action was complete. The Commandant's Final Action was issued in 
September. The comments from the PIIs were carefully considered in 
developing the Commandant's Final Action and a summary of those 
comments and the Coast Guard's response is included as an enclosure to 
the FAM.
FINAL AGENCY ACTIONS ON RECOMMENDATIONS--SUMMARY
    In addition to determining the causal factors of this incident, the 
JIT was empowered to make recommendations to reduce the risk of similar 
incidents in the future. These recommendations can be broadly 
categorized as: recommendations regarding domestic or international 
standards; recommendations regarding oversight to ensure compliance 
with standards; and administrative recommendations. Within these broad 
categories, there were three primary areas addressed in the safety 
recommendations:
    1.  The adequacy of international and domestic safety regimes;
    2.  The adequacy of the Flag State oversight of recognized 
organizations that are delegated authority to act on behalf of the Flag 
State; and
    3.  The adequacy of recognized organizations.
    In the FAM, the Commandant concurs in whole or in part with the 
vast majority of safety recommendations made by the JIT. Some of the 
actions directed by the Commandant will impact domestic regulations and 
inspection or oversight practices, as discussed in the Implementation 
section below; others will potentially impact the ongoing work at the 
International Maritime Organization (IMO) to develop standards for 
MODUs and for the organizations that oversee compliance with the 
standards.
    The Commandant did not concur with nine of the JIT's 
recommendations, and thus did not direct any specific action relating 
to those recommendations. The recommendations with which the Commandant 
did not concur fall into three categories:
    1.  Those that the Commandant determined were not directly 
supported by the facts provided in the report;
    2.  Those that the JIT related to problems with the standards, but 
the Commandant determined to be compliance or oversight issues; and,
    3.  Those that the Commandant determined were adequately addressed 
by action directed in response to other recommendations in the report.
    Volume I of the investigation revealed that, with certain 
identified exceptions, the Coast Guard-regulated safety systems aboard 
the MODU were generally effective despite the extreme nature of the 
event. Of the 126 persons on board, 115 survived the explosions and 
subsequent fire. Most of the survivors were able to evacuate the MODU 
using the installed lifesaving equipment. A few of the survivors jumped 
from the rig into the water and were rescued. Even though significantly 
damaged by the explosions and the ensuing fire, the DEEPWATER HORIZON 
was able to stay afloat for more than 48 hours.
    While the Coast Guard-regulated safety systems generally performed 
well under extreme conditions, the Commandant determined that 
additional action can be taken to protect the sea and those who work on 
it.
IMPLEMENTATION OF ACTIONS DIRECTED BY THE COMMANDANT
    The Coast Guard has already taken action to enhance safety and 
stewardship on the U.S. Outer Continental Shelf (OCS). Earlier this 
year, the Coast Guard published a policy for risk-based targeting of 
foreign flagged MODUs. The policy allows field commanders to target 
limited resources to highest risk operations and ensure a uniform, high 
level of safety for all vessels operating on the U.S. OCS. In addition, 
Coast Guard regulations for construction, equipment and operation of 
vessels on the OCS are being updated to reflect the current and 
emerging state of technology, and to address lessons learned from 
DEEPWATER HORIZON.
    Internationally, the Coast Guard has engaged the IMO through its 
Flag State Implementation Sub-Committee with regard to the provisions 
of the proposed new Code for Recognized Organizations. The Coast Guard 
anticipates that the new Code will be ready for adoption in 2012, will 
be mandatory, and will include more specific and detailed requirements 
and guidelines for Recognized Organizations covering their management 
and organization, resources, certification processes, performance 
measurement, analysis and improvement, and quality management system 
certification. The U.S. delegation at IMO, led by the Coast Guard, will 
work to ensure the results of this investigation are considered in 
IMO's development of the Code.
    On Oct. 1, 2011, the Department of the Interior formally 
established two new, independent bureaus--the Bureau of Safety and 
Environmental Enforcement (BSEE) and the Bureau of Ocean Energy 
Management (BOEM)--to carry out the offshore energy management and 
safety and environmental oversight missions previously under the 
jurisdiction of BOEMRE. The Coast Guard and BSEE are working to 
harmonize offshore spill response plans with the Area Contingency Plans 
to maximize awareness and preparedness to respond to future spills from 
offshore facilities, including enhanced understanding of worst case 
discharge scenarios.
CONCLUSION
    The FAM is the result of long standing Coast Guard procedures with 
minor modifications, designed to accommodate the complexity of this 
investigation, and to ensure the investigation was conducted in a 
methodical, thorough, and transparent manner. The Coast Guard is now 
taking action domestically and through international engagement to 
carry out the actions directed by the Commandant.
    Thank you for the opportunity to testify before you today and I 
will be pleased to answer your questions.
                                 ______
                                 
    Mr. Hastings. Thank you very much, Admiral Salerno. And 
last but certainly not least I would like to welcome back 
Director Bromwich, and you are recognized for five minutes.

STATEMENT OF HON. MICHAEL BROMWICH, DIRECTOR, BUREAU OF SAFETY 
                 AND ENVIRONMENTAL ENFORCEMENT

    Mr. Bromwich. Thank you very much, Mr. Chairman and Members 
of the Committee. I very much appreciate the opportunity to be 
here today to testify about the findings of the BOEMRE/Coast 
Guard Joint Investigation and the causes of the explosion and 
fire on board the Deepwater Horizon and the devastating oil 
spill that followed.
    I want to note that this report validates many of the 
important reforms to offshore regulation oversight that we have 
already implemented, but it further underscores the need for 
government and industry to continue to identify and implement 
practices that will ensure that domestic oil and gas production 
proceeds safely and responsibly.
    The panel identified the causes of the blowout as well as 
various failures that occurred prior to the blowout. It 
concluded that the central cause of the blowout was the failure 
of a cement barrier in the production casing stream, a high 
strength steel pipe set in a well to ensure well integrity and 
to allow future production. The failure of the cement barrier 
allowed hydrocarbons to flow up the well bore through the riser 
and onto the rig. The panel's findings, conclusions and 
recommendations also address a wide range of other technical 
issues.
    The panel found that the loss of life at the Macondo well 
on April 20 and subsequent pollution of the Gulf of Mexico were 
in part the result of poor risk management, last minute changes 
to plans, failure to observe and respond to critical 
indicators, inadequate well control response and insufficient 
emergency response training by companies and individuals. The 
failure of the BOP stack to seal the well allowed the well to 
continue to flow after the blowout.
    The JIT found clear and compelling evidence that BP as well 
as its contractors, Transocean and Halliburton, violated 
BOEMRE's regulations and the consequences were undeniably dire. 
We believe that issuing citations for such regulatory 
violations upholds the principles of accountability, specific 
deterrence and general deterrence and vindicating BOEMRE's 
regulations.
    The panel concluded that stronger and more comprehensive 
Federal regulations might have reduced the likelihood of the 
Macondo blowout. In particular, the panel recommended that 
regulations could be enhanced with respect to cementing 
procedures and testing, BOP configuration and testing, well 
integrity testing and other drilling operations. In addition, 
the panel concluded that the agency's inspections program could 
be improved.
    I can report the regulatory and process changes implicated 
by this report have been formulated and implemented over the 
past 15 months. The report concludes with the panel's 
recommendations which seek to improve the safety of offshore 
drilling operations in a variety of different ways that are 
spelled out in the report. Those recommendations will be 
carefully considered as the basis for future rulemaking.
    The JIT's findings reinforce and build on many of the 
safety and oversight gaps that had already been identified and 
significantly improved upon since the Deepwater Horizon 
tragedy. These include our drilling safety rule and our SEMS 
rule which I have described to you here on previous occasions.
    Our reforms since the Deepwater Horizon tragedy have been 
broad and swift and have made deepwater drilling significantly 
safer, but the JIT report is a sobering reminder that there 
remains more to be done. We must continue to analyze 
information that becomes available and to implement reforms 
necessary to make offshore oil and gas production safer, 
smarter and with stronger protections for workers and the 
environment. The process of making offshore energy development 
both safe and sufficient will never be complete. It must be a 
continuing, ongoing, dynamic enterprise that remains responsive 
to new learning.
    As we evaluate the lessons learned from the JIT report, I 
believe the industry is uniquely poised to assess findings and 
test creative solutions. To that end, I hope that the companies 
will take a hard look at this report as well as other recent 
investigations to understand what went wrong and to think about 
what they can do to go above and beyond existing requirements, 
enhance safety and ultimately help us to identify best 
practices that could be adopted across the industry.
    Thank you very much and I look forward to your questions.
    [The prepared statement of Mr. Bromwich follows:]

   Statement of Michael R. Bromwich, Director, Bureau of Safety and 
  Environmental Enforcement, United States Department of the Interior

    Mr. Chairman and members of the Committee,
    I very much appreciate the opportunity to be here today to testify 
about the findings of the Bureau of Ocean Energy Management, Regulation 
and Enforcement (BOEMRE) and the U.S. Coast Guard's joint investigation 
into the explosions and fire onboard the Deepwater Horizon. As you 
know, the explosions and fire led to multiple deaths, serious injuries, 
and the release of an estimated 4.9 million barrels of oil into the 
Gulf of Mexico. I will summarize the findings, conclusions, and 
recommendations of the BOEMRE panel of investigators (``the Panel'') 
who served on the BOEMRE-USCG Joint Investigation Team (JIT). I want to 
note that this report validates many of the important reforms to 
offshore regulation and oversight that we have already implemented in 
the wake of Deepwater Horizon, but it also underscores the need for 
government and industry to continue to identify, adopt, and implement 
practices that will ensure that domestic oil and gas production 
proceeds safely and responsibly.
Introduction
    At approximately 9:50 p.m. on the evening of April 20, 2010, as the 
crew of the Deepwater Horizon rig was finishing its work on the Macondo 
exploratory well, an undetected influx of hydrocarbons into the well 
(commonly referred to as a ``kick'') escalated to a blowout. 
Hydrocarbons flowed onto the rig floor through a mud gas vent line and 
ignited in two separate explosions. A fire began on the rig and the 
flowing hydrocarbons continued to fuel the fire on the rig, which 
continued to burn until it sank on April 22. Eleven men died on the 
Deepwater Horizon, many more were injured, and over the next 87 days, 
almost five million barrels of oil flowed into the Gulf of Mexico.
    The JIT was formed on April 27, 2010 by a convening order of the 
Departments of the Interior and Homeland Security to investigate the 
causes of the Deepwater Horizon explosion, loss of life, and resulting 
oil spill, and to make recommendations for safe operations of future 
oil and gas activities on the U.S. Outer Continental Shelf (OCS). The 
JIT held seven sessions of public hearings, received testimony from 
more than 80 witnesses and experts, and reviewed a large number of 
documents and exhibits pertaining to all aspects of the investigation. 
Evidence-gathering included the salvage of the blowout preventer (BOP) 
stack and portions of the drill pipe and riser.
    The final report includes two volumes: Volume I includes findings 
on five aspects of the disaster under Coast Guard jurisdiction--and I 
will defer to my colleague, Admiral Salerno, to explain this content. 
My testimony today will focus on Volume II of the report, which details 
the findings of the BOEMRE panel regarding the causes of the Macondo 
well blowout and the resulting explosion and fire aboard the Deepwater 
Horizon. Based on the evidence it collected and analyzed, the Panel 
concluded that BP, Transocean and Halliburton's conduct in connection 
with the Deepwater Horizon disaster violated a number of BOEMRE's 
offshore safety regulations. The Panel has also developed 
recommendations for the continued improvement of the safety of offshore 
operations.
    Before I go on, I'd like to recognize the massive effort by members 
of my staff and the Coast Guard that went into this investigation and 
the issuance of this report. They conducted a thorough investigation, 
and we have published a report that will be a lasting legacy to their 
tireless efforts.
Findings of the BOEMRE Panel
    The Panel identified the causes of the blowout as well as various 
failures that occurred before and on April 20, 2010. It concluded that 
the central cause of the blowout was failure of a cement barrier in the 
production casing string, a high-strength steel pipe set in a well to 
ensure well integrity and to allow future production. The Panel's 
findings, conclusions, and recommendations address a full range of 
issues, including well design; cementing; possible hydrocarbon flow 
paths during the blowout; temporary abandonment of the Macondo well; 
kick detection and rig response; ignition source and explosion; the 
failure of the Deepwater Horizon blowout preventer to arrest the 
blowout; regulatory findings and conclusions; and company practices.
    The loss of life at the Macondo well on April 20, 2010, and the 
subsequent pollution of the Gulf of Mexico through the summer of 2010 
were, in part, the result of poor risk management, last minute changes 
to plans, failure to observe and respond to critical indicators, 
inadequate well control response, and inadequate emergency response 
training by companies and individuals responsible for drilling at the 
Macondo well and for the operation of the Deepwater Horizon.
Well design, cementing, and flow path
    At the time of the blowout, the rig crew was engaged in temporary 
abandonment procedures designed to secure the well after drilling had 
ceased and before the Deepwater Horizon left the site. In the days 
leading up to April 20, BP made a series of decisions that complicated 
cementing operations, added incremental risk, and may have contributed 
to the ultimate failure of the cement job. These decisions included:
          the point at which they decided to stop drilling;
          the decision to only have one cement barrier in the 
        well during temporary abandonment operations;
          the decision to set a lock-down sleeve; and
          the decision to use certain material as ``spacer'' 
        (fluid between the drilling mud and the water).
    BP failed to communicate these decisions and the increasing 
operational risks to Transocean. As a result, BP and Transocean 
personnel onboard the Deepwater Horizon on the evening of April 20, 
2010, did not fully identify and evaluate the risks inherent in the 
operations that were being conducted at Macondo.
    As mentioned above, the Panel found that a central cause of the 
blowout was failure of the cement barrier in the production casing 
string. The failure of the cement barrier allowed hydrocarbons to flow 
up the wellbore, through the riser and onto the rig. This is the 
immediate cause of the blowout. The precise reasons for the failure of 
the production casing cement job are not known. The Panel concluded 
that the failure was likely due to:
          swapping of cement and drilling mud (referred to as 
        ``fluid inversion'') in the shoe track (the section of casing 
        near the bottom of the well);
          contamination of the shoe track cement; or
          pumping the cement past the target location in the 
        well, leaving the shoe track with little or no cement (referred 
        to as ``over displacement'').
Notably, BP and Halliburton failed to perform the production casing 
cement job in accordance with industry-accepted recommendations, as 
defined in the American Petroleum Institute's Recommended Practice 65.
    The cement failure allowed the flow of hydrocarbons through the 
riser and onto the rig. The Panel identified three possible paths by 
which hydrocarbons could have flowed up the well to the rig during the 
initial stage of the blowout: (1) up the production casing annulus 
cement barrier and upward through the annulus and the wellhead seal 
assembly; (2) up the production casing and related components from 
above the top wiper plug located on the float collar at 18,115 feet; or 
(3) up the last 189 feet of the production casing (the shoe track). The 
Panel concluded that the hydrocarbons flowed through the shoe track and 
up through the riser to the rig.
Problems at the Macondo well: temporary abandonment, kick detection, 
        and emergency response
    BP and Transocean encountered a number of problems during drilling 
and temporary abandonment operations at the Macondo well--including 
kicks, stuck pipe, lost returns of drilling fluids, equipment leaks, 
cost overruns, well scheduling and logistical issues, personnel changes 
and conflicts, and last minute procedure changes. These problems led 
rig personnel and others to refer to Macondo as the ``well from hell.''
    Even when faced with anomalous readings, data, and other 
indications, the rig crew failed to detect the flow of hydrocarbons 
until it was too late. On April 20, BP and Transocean personnel onboard 
the Deepwater Horizon missed the opportunity to remedy the cement 
problems when they misinterpreted anomalies encountered during a 
critical test of cement barriers called a negative test. The negative 
test attempts to simulate what will occur at the well after it is 
temporarily abandoned and to show whether barriers, such as the cement 
job, will hold against pressures from the reservoir.
    The rig crew conducted an initial negative test on the production 
casing cement job that showed a pressure differential between the drill 
pipe and the kill line, which is a high pressure pipe leading from the 
BOP stack to the rig pumps. This was a serious anomaly that should have 
alerted the rig crew to potential problems with the cement barrier or 
with the negative test. After some discussion among members of the crew 
and a second negative test on the kill line, the rig crew explained the 
pressure differential away as a ``bladder effect'' (or annular 
compression), a theory that later proved to be unfounded. Around 7:45 
p.m., after observing for 30 minutes that there was no flow from the 
kill line, the rig crew concluded that the negative test was 
successful. As a result, at that point, the rig crew most likely 
concluded that the production casing cement barrier was sound. At this 
point, rig crew members moved forward with temporary abandonment 
procedures, unaware of the failed cement job and the looming influx of 
hydrocarbons.
    However, the cement in the shoe track barrier had in fact failed, 
and hydrocarbons began to flow from the reservoir into the well. 
Despite a number of additional anomalies that should have signaled the 
existence of a kick or well flow, the crew failed to detect that the 
Macondo well was flowing until 9:42 p.m. By then it was too late--the 
well was blowing drilling mud up into the derrick and onto the rig 
floor. If members of the rig crew had detected the hydrocarbon influx 
earlier, they might have been able to take appropriate actions to 
control the well.
Ignition source and the explosion
    A number of additional missteps after the rig crew realized what 
was happening contributed to the explosion, fire, and the loss of life. 
On April 20, 2010, at around 9:40 p.m., powerful pressures from the 
well caused mud to flow up from the well. Drilling mud spilled on the 
rig floor as the well began to blow out. But instead of diverting the 
flow overboard, the crew responded to the situation by diverting the 
flow to the rig's mud gas separator, part of the diverter system to 
which the crew could direct fluids coming up from the well. The mud gas 
separator could not handle the volume of hydrocarbons; it failed and 
discharged a gas plume above the rig floor. The gas quickly ignited, 
causing the first explosion on the rig at 9:49 p.m. Approximately ten 
seconds later, a second larger explosion occurred and the fire onboard 
the rig spread rapidly. Shortly after the second explosion, the rig 
lost power and experienced a total blackout.
    The Panel found evidence that the configuration of the Deepwater 
Horizon general alarm system and the actions of rig crew members on the 
bridge of the rig contributed to a delay in notifying the entire crew 
of the presence of very high gas levels. A critical 12 minutes elapsed 
between the time that the high gas alarms sounded and the general alarm 
sounded. The general alarm was not configured to sound automatically 
when the high gas alarms were triggered. Transocean personnel do not 
appear to have been adequately trained for this type of situation--
which required quick and decisive action. Quicker reactions might have 
saved lives.
Failure of the blowout preventer
    As you know, the failure of the BOP stack to seal the well allowed 
the well to continue to flow after the blowout. The forensic 
examination of the BOP determined that the forces of the blowout caused 
the drill pipe to buckle and move to the side of the wellbore. As a 
result, although it was activated, the blind shear ram could not 
completely shear the drill pipe and seal the well. A gap in the 
wellbore resulted, which allowed continued flow of hydrocarbons through 
the riser to the rig.
    The Deepwater Horizon's BOP stack, a massive, 360-ton device 
installed at the top of the well, was designed to allow the rig crew to 
handle numerous types of well control events. However, on April 20, the 
BOP stack failed to seal the well to contain the flow of hydrocarbons. 
The explosions likely damaged the Deepwater Horizon's multiplex cables 
and hydraulic lines, rendering the crew unable to activate the BOP 
stack. The BOP stack was equipped with an ``automatic mode function,'' 
which upon activation would trigger the blind shear ram (BSR), two 
metal blocks with blades on the inside edges that are designed to cut 
through the drill pipe and seal the well during a well control event.
    The Panel concluded that there were two possible ways in which the 
BSR might have been activated: (1) on April 20, by the automatic mode 
function, immediately following loss of communication with the rig; or 
(2) on April 22, when a remotely operated vehicle triggered the 
``autoshear'' function, which is designed to close the BSR if the lower 
marine riser package disconnects from the rest of the BOP stack. 
Regardless of how the BSR was activated, it did not seal the well.
    A forensic examination of the BOP stack revealed that elastic 
buckling of the drill pipe had forced the drill pipe up against the 
side of the wellbore and outside the cutting surface of the BSR blades. 
After buckling, the off-center drill pipe was not in a position that 
would allow the BSR to completely shear the drill pipe and seal the 
well. The buckling of the drill pipe, which likely occurred at or near 
the time when control of the well was lost, was caused by the force of 
the hydrocarbons blowing out of the well; by the weight of the 5,000 
feet of drill pipe located in the riser above the BOP forcing the drill 
pipe down into the BOP stack; or by a combination of both. As a result 
of the failure of the BSR to completely cut the drill pipe and seal the 
well, hydrocarbons continued to flow after the blowout.
Regulatory findings and conclusions
    The JIT found that BP, as well as its contractors Transocean and 
Halliburton, violated BOEMRE's regulations. BOEMRE has the authority to 
cite all companies conducting activity on the OCS relating to lease 
activities for regulatory violations, including contractors. Here, 
there is clear and compelling evidence that Transocean and Halliburton 
(BP contractors) violated a number of BOEMRE regulations--and those 
violations obviously had dire consequences. We believe the issuance of 
citations for such regulatory violations upholds the principles of 
accountability, specific deterrence, and general deterrence.
    The JIT found ample evidence that the companies committed the 
following violations:
          30 CFR Sec. 250.107--BP failed to protect health, 
        safety, property, and the environment by (1) performing all 
        operations in a safe and workmanlike manner; and (2) 
        maintaining all equipment and work areas in a safe condition;
          30 CFR Sec. 250.300--BP, Transocean, and Halliburton 
        (Sperry Sun) failed to take measures to prevent the 
        unauthorized release of hydrocarbons into the Gulf of Mexico 
        and created conditions that posed unreasonable risk to public 
        health, life, property, aquatic life, wildlife, recreation, 
        navigation, commercial fishing, or other uses of the ocean;
          30 CFR Sec. 250.401--BP, Transocean, and Halliburton 
        (Sperry Sun) failed to take necessary precautions to keep the 
        well under control at all times;
          30 CFR Sec. 250.420(a)(1) and (2)--BP and Halliburton 
        failed to cement the well in a manner that would properly 
        control formation pressures and fluids and prevent the release 
        of fluids from any stratum through the wellbore into offshore 
        waters;
          30 CFR Sec. 250.427(a)--BP failed to use pressure 
        integrity test and related hole-behavior observations, such as 
        pore pressure test results, gas-cut drilling fluid, and well 
        kicks to adjust the drilling fluid program and the setting 
        depth of the next casing string;
          30 CFR Sec. 250.446(a)--BP and Transocean failed to 
        conduct major inspections of all BOP stack components; and
          30 CFR Sec. 250.1721(a)--BP failed to perform the 
        negative test procedures detailed in an application for a 
        permit to modify its plans.
Company practices
    BP, as the designated operator under BOEMRE regulations, was 
ultimately responsible for conducting operations at Macondo in a way 
that ensured the safety and protection of personnel, equipment, natural 
resources, and the environment. Transocean, the owner of the Deepwater 
Horizon, was responsible for conducting safe operations and for 
protecting personnel onboard. Halliburton, as a contractor to BP, was 
responsible for conducting the cement job, and, through its subsidiary 
Sperry Sun, had certain responsibilities for monitoring the well. 
Cameron was responsible for the design of the Deepwater Horizon BOP 
stack.
    Prior to the events of April 20, BP and Transocean experienced a 
number of problems while conducting drilling and temporary abandonment 
operations at Macondo, which reflect shortcomings in company practices 
in areas including worker training, adherence to schedules and budgets, 
and management of personnel changes and conflicts. These problems 
included:
          Recurring well control events and delayed kick 
        detection. At least three different well control events and 
        multiple kicks occurred during operations at Macondo. On March 
        8, it took the rig crew at least 30 minutes to detect a kick in 
        the well. The delay raised concerns among BP personnel about 
        the Deepwater Horizon crew's ability to promptly detect kicks 
        and take appropriate well control actions. Despite these prior 
        problems, BP did not take steps to ensure that the rig crew was 
        better equipped to detect kicks and to handle well control 
        events. As of April 20, Transocean had not completed its 
        investigation into the March 8 incident.
          Scheduling conflicts and cost overruns. At the time 
        of the blowout, operations at Macondo were significantly behind 
        schedule. BP initially planned for the Deepwater Horizon to 
        move to BP's Nile well by March 8, 2010. In large part as a 
        result of this delay, as of April 20, BP's Macondo operations 
        were more than $58 million over budget.
          Personnel changes and conflicts. BP experienced a 
        number of problems involving personnel with responsibility for 
        operations at Macondo. A recent reorganization changed the 
        roles and responsibilities of at least nine individuals with 
        some responsibility for Macondo operations. In addition, the 
        Panel found evidence of conflicts between the BP drilling and 
        completions operations manager and the BP wells team leader, as 
        well as a failure to adequately delineate roles and 
        responsibilities for key decisions.
    At the time of the blowout, both BP and Transocean had extensive 
internal procedures in place regarding safe drilling operations--but 
evidence collected by the Panel shows gaps in compliance with those 
procedures. BP required that its drilling and completions personnel 
follow a ``documented and auditable risk management process.'' The 
Panel found no evidence that the BP Macondo team fully evaluated 
ongoing operational risks, nor did it find evidence that BP 
communicated with the Transocean rig crew about such risks.
    Transocean had a number of documented safety programs in place at 
the time of the blowout. Nonetheless, the Panel found evidence that 
Transocean personnel themselves questioned whether the Deepwater 
Horizon crew was adequately prepared to independently identify hazards 
associated with drilling and other operations. Everyone on board the 
Deepwater Horizon was obligated to follow the Transocean ``stop work'' 
policy that was in place on April 20, which provided that ``[e]ach 
employee has the obligation to interrupt an operation to prevent an 
incident from occurring.'' Despite the fact that the Panel identified a 
number of reasons that the rig crew could have invoked stop work 
authority, no individual on the Deepwater Horizon did so on April 20.
Recommendations
    The Panel found no evidence that Minerals Management Service (MMS) 
regulations in effect on April 20, 2010 were a cause of the blowout. 
Even so, the Panel concluded that stronger and more comprehensive 
federal regulations might have reduced the likelihood of the Macondo 
blowout. In particular, the Panel found that MMS regulations in place 
at the time of the blowout could be enhanced in a number of areas, 
including: cementing procedures and testing; BOP configuration and 
testing; well integrity testing; and other drilling operations. In 
addition, the Panel found that there were a number of ways in which the 
MMS drilling inspections program could be improved. For example, the 
Panel concluded that drilling inspections should evaluate emergency 
disconnect systems and other BOP stack secondary system functions. As 
discussed below, BOEMRE--which replaced MMS in June 2010--has already 
implemented many improvements to safety standards for offshore 
operations.
    The Report concludes with the Panel's recommendations, which seek 
to improve the safety of offshore drilling operations in a variety of 
different ways:
          Well design. Improved well design techniques for 
        wells with high flow potential, including increasing the use of 
        mechanical and cement barriers, will decrease the chances of a 
        blowout.
          Well integrity testing. Better well integrity test 
        practices (e.g., negative test practices) will allow rig crews 
        to identify possible well control problems in a timely manner.
          Kick detection and response. The use of more accurate 
        kick detection devices and other technological improvements 
        will help to ensure that rig crews can detect kicks early and 
        maintain well control. Better training also will allow rig 
        crews to identify situations where hydrocarbons should be 
        diverted overboard.
          Rig engine configuration (air intake locations). 
        Assessment and testing of safety devices, particularly on rigs 
        where air intake locations create possible ignition sources, 
        may decrease the likelihood of explosions and fatalities in the 
        event of a blowout.
          Blowout preventers. Improvements in BOP stack 
        configuration, operation, and testing will allow rig crews to 
        be better able to handle well control events.
          Remotely operated vehicles (ROVs). Standardization of 
        ROV intervention panels and intervention capabilities will 
        allow for improved response during a blowout.
    Based on the investigation, the JIT recommended specific regulatory 
changes, including:
          Making certain specific cementing requirements 
        included in industry recommended practices mandatory--for 
        example, prescribing a minimum hole diameter of 3.0 inches 
        greater than the casing outer diameter; rathole mud density 
        greater than cement; and mud conditioning volume greater than 
        one annular volume.
          Regulations that require at least two barriers (one 
        mechanical and one cement barrier) for a well that is 
        undergoing temporary abandonment procedures.
          Revision of the incident reporting rule at 30 CFR 
        Sec. 250.188 to capture well kick incidents, similar to the 
        March 8, 2010, Macondo well control event. Under current 
        regulations, operators are only required to report ``losses of 
        well control'' and are not required to report ``well control'' 
        events such as kicks. The reporting of these events would allow 
        the Agency to track well control events and kicks and evaluate 
        trends that may indicate problems with a specific operator or 
        contractor.
          Specific requirements for well monitoring and kick 
        detection training.
Regulatory Reform
    The JIT's findings reinforce and build upon many of the safety and 
oversight gaps that had already been identified, and significantly 
improved upon, since the Deepwater Horizon tragedy.
Recent reforms
    In the immediate aftermath of the spill, BOEMRE recognized that 
existing regulations had not kept up with the advancements in 
technology used in deepwater drilling. In response, we quickly issued 
new, rigorous prescriptive regulations that bolstered offshore drilling 
safety. We also ratcheted up our efforts to evaluate and mitigate 
environmental risks. We introduced--for the first time--performance-
based workplace safety standards similar to those used by regulators in 
the North Sea, to make operators responsible for identifying and 
minimizing the risks associated with drilling operations. We did this 
through the development and implementation of two new rules that raised 
standards for the oil and gas industry's operations on the OCS.
    The Drilling Safety rule created tough new standards for well 
design, casing and cementing--and well control procedures and 
equipment, including blowout preventers. This rule requires operators 
to have a professional engineer certify the adequacy of the proposed 
drilling program. In addition, the new Drilling Safety rule requires an 
engineer to certify that the blowout preventer to be used in a drilling 
operation meets new standards for testing, maintenance and performance.
    The second rule was our Workplace Safety rule, which requires 
operators to systematically identify risks and establish barriers to 
those risks in order to reduce the human and organizational errors that 
cause many accidents and oil spills. Under the rule, operators must 
develop a comprehensive Safety and Environmental Management Systems 
(SEMS) program that identifies the potential hazards and risk-reduction 
strategies for all phases of activity, from well design and 
construction through the decommissioning of platforms. Many companies 
had developed such SEMS systems on a voluntary basis in the past, but 
many had not. Because the rule required substantial work by many 
operators, we delayed enforcement of the rule for a year. Starting in 
November, we will begin to enforce compliance. Based on my discussions 
with our own personnel who have been gearing up to ensure compliance 
with the SEMS rule, and my meetings with individual operators, I am 
confident that the vast majority of operators will be ready with their 
SEMS programs by that date.
    Just last week, we proposed a follow-up rule that further advances 
the purposes of the SEMS rule. It addresses additional safety concerns 
not covered by the original rule and applies to all oil and natural gas 
activities and facilities on the OCS. The proposed SEMS II rule 
includes procedures that authorize any employee on a facility to cause 
the stoppage of work--frequently called Stop Work Authority--in the 
face of an activity or event that poses a threat to an individual, to 
property or to the environment. As discussed earlier, the failure of 
the rig crew to stop work on the Deepwater Horizon after encountering 
multiple hazards and warnings was a contributing cause of the Macondo 
blowout. The proposed rule also establishes requirements relating to 
the clear delineation of who possesses ultimate authority on each 
facility for operational safety; establishes guidelines for reporting 
unsafe work conditions that give all employees the right to report a 
possible safety or environmental violation and to request a BOEMRE 
investigation of the facility; and requires third-party, independent 
audits of operators SEMS programs. We look forward to receiving public 
comments on the proposed rule, and our process of finalizing the rule 
will include a close review of the JIT's recommendations on regulatory 
reforms.
    In addition to these important new rules, we have issued Notices to 
Lessees (or NTLs) that provide additional guidance to operators on 
complying with existing regulations. Last summer, we issued NTL-06, 
which outlines the information that must be provided in an operator's 
oil spill response plan, including a well-specific blowout scenario, 
aworst-case discharge scenario, and the assumptions and calculations 
behind these scenarios. Our engineers and geologists then independently 
verify these worst case discharge calculations to ensure that we have 
an accurate picture of the spill potential of each well.
    We also issued NTL-10, a document that outlines additional 
informational requirements, including a mandatory corporate statement 
from the operator that it will conduct drilling operations in 
compliance with all applicable agency regulations, including the new 
Drilling Safety Rule. The NTL also confirms that BOEMRE will be 
conducting well-by-well evaluations of whether the operator has 
demonstrated that it has access to, and can deploy, subsea containment 
resources that would be sufficient to promptly respond to a deepwater 
blowout or other loss of well control.
    Thus, operators must now have a plan--in advance--to shut in a 
deepwater blowout and capture oil flowing from a wild well. They must 
have a plan, they must have access to the equipment, and they must have 
arrangements--contractual or otherwise--that show their ability to make 
use of that equipment. Rather than improvising a containment response 
on the fly--with hits and misses--each operator needs to work through 
its containment plan in advance, and we have to approve its plan.
Moving forward
    Our reforms since the Deepwater Horizon tragedy have been broad and 
swift, and themselves made deepwater drilling significantly safer. 
However, the JIT report is a sobering reminder that there remains more 
to be done. We must continue to analyze information that becomes 
available--including the findings and recommendations of the JIT's 
investigation--and to implement reforms necessary to make offshore oil 
and gas production safer, smarter and with stronger protections for 
workers and the environment. The process of making offshore energy 
development both safe and sufficient to help meet the nation's and 
world's energy demands will never be complete, and so it must be a 
continuing, ongoing, dynamic enterprise that remains responsive to new 
learning.
    In the near future, we expect to make available for public comment 
additional proposals that will further enhance drilling safety and 
environmental protection. In order to ensure that we incorporate the 
very best ideas and best practices of the offshore industry and other 
interested stakeholders in offshore exploration, development and 
production--including the environmental community--we will proceed 
through a notice and comment rulemaking process that will begin with an 
Advance Notice of Proposed Rulemaking (ANPRM). It is our hope and 
expectation that at the end of this process, we will develop consensus 
proposals that will significantly enhance safety and environmental 
protection. While we have been anticipating the ANPRM for the past 
year, we thought that it was important to initiate the process after 
the release of the JIT's report, in order to ensure that commenters 
would be in a position to benefit from their insights.
    As we evaluate the lessons learned from the JIT and move towards a 
sound and sensible rulemaking process, I believe that industry is 
uniquely poised to assess findings and test creative solutions. To that 
end, I hope that companies will take a hard look at this report, as 
well as other recent investigations, both to understand what went 
wrong, and to think about what they can do to go above and beyond 
existing requirements, enhance safety, and ultimately help us to 
identify best practices that could be adopted across industry.
    Thank you and I look forward to your questions.
                                 ______
                                 
    Mr. Hastings. Thank you very much, and I want to thank all 
of you for your statements, and I will start the questioning.
    My first question probably is more of a reaffirmation to 
the Co-Chairs, but I just want to ask both of you, Captain 
Nguyen and Mr. Dykes, do you believe that after 17 months and 
the number of interviews that you have had and the resources, 
do you think that this investigation does in your review 
reflect the most accurate account of what happened at the 
Deepwater Horizon? Captain Nguyen?
    Captain Nguyen. Mr. Chairman, yes, I do. I think the Coast 
Guard investigation is probably the most comprehensive 
investigation reports out there, especially on the marine-
related side, sir.
    Mr. Hastings. OK. Mr. Dykes?
    Mr. Dykes. Mr. Chairman, I agree with Captain Nguyen. Based 
on what we have, it is the most accurate accounting of what 
took place. Now unfortunately we lost 11 individuals in that 
event. Those 11 individuals are key witnesses to what was going 
on on the rig floor at the time of the blowout, and we have to 
put the pieces of the puzzle together without those 11 
testimonies. But from everything that I have seen, we did not 
leave any stone unturned.
    Mr. Hastings. Good. Well, you alluded to that in your 
testimony. I just wanted to reaffirm that, so thank you.
    Director Bromwich, in view of the citations that were 
issued, you have repeatedly asserted that the Department has 
now found new authority under a law to not only just regulate 
the leaseholders but also the contractors to the leaseholders 
as well, so I am not going to comment whether that is 
appropriate or not. My question though is very specific. What 
statutory authority does the Department have to regulate those 
subcontractors to the leaseholders?
    Mr. Bromwich. Thank you very much for the question, Mr. 
Chairman. We have talked about this issue on a number of 
occasions here. It is OCSLA and the other related statutes that 
give the Secretary of the Interior authority to regulate 
offshore operations, and I would revise what you said. We 
didn't find new authority. That authority has always been 
there. It has simply been the history, practice and custom 
within the agency to only go against the operators, and when I 
came on board and I had to review a variety of issues, one of 
the issues I reviewed was whether it made sense in the face of 
egregious violations by nonoperators, that is, contractors.
    Mr. Hastings. I understand that part, but my question is 
specific. You broadly said OCSLA. I just want to know 
specifically, and the reason I say that is pretty basic, and I 
admit I am at an automatic disadvantage. You are a lawyer, I am 
not a lawyer. But we write the laws here and then that is 
carried out by the Executive Branch. I am just simply asking 
very specifically what specific part of the law do you have, 
since you haven't regulated, what specific part do you have 
that is now?
    Mr. Bromwich. I can provide you in writing, Mr. Chairman, 
what the specific sections and subsections are. Clearly, in our 
regulations, which are based on OCSLA, we specifically say that 
we have the authority to hold jointly and severally liable all 
entities, not just operators that deal offshore with respect 
to----
    Mr. Hastings. That is specific in the law?
    Mr. Bromwich. That is specific in our regulations which are 
based on the law, but no one has ever----
    Mr. Hastings. That is where I am going. You are saying the 
regulations. I am talking about the law that gives you 
statutory authority. It is a distinction not without a 
difference. I think it is very, very important. And the reason 
I say that is because we had a discussion with another area of 
Interior on wildlands designation, it has nothing to do with 
you. I asked Director Abbey what statutory authority he had, 
and he says we don't have statutory authority.
    I am just simply asking this question because I don't know 
if this is a pattern of this Administration, but I am asking 
specifically. You refer to regulations. I am talking about 
statutory law.
    Mr. Bromwich. The regulations would be invalid if they were 
not based on a statutory authority.
    Mr. Hastings. OK. That statutory authority in?
    Mr. Bromwich. It is OCSLA, I can give you the specific 
citations. Just so you know, Mr. Chairman, because the agency 
had not historically exercised its regulatory authority over 
contractors, I specifically asked the Solicitor's Office, the 
lawyers for the Department, to make sure that in fact we have 
the authority, and so they researched the issue just to be 
double sure, and they came back to me and told me that we did 
indeed have that authority.
    Mr. Hastings. Right. If you would, and you offered to give 
us a written explanation of specifically which part of that 
statute gives that authority, I would like you to if you would 
just give that to the Committee as soon as possible. How soon 
do you suppose you can get that?
    Mr. Bromwich. I would be happy to do it. I can do it today 
because we have provided that to Senator Vitter in response to 
a letter that he wrote many, many months ago, so it would be a 
very simple matter to do it.
    Mr. Hastings. OK. Well, we have reviewed that, and I would 
simply say that when we reviewed that response to Senator 
Vitter we didn't think that that covered all of it, so if you 
could be more specific than what you did with Senator Vitter, 
that would be very helpful to us.
    Mr. Bromwich. That is fine. We will do that.
    Mr. Hastings. OK. And the timeframe would be the same as 
today.
    Mr. Bromwich. Well, I was going to offer a letter that had 
already been written.
    Mr. Hastings. OK.
    Mr. Bromwich. It would be helpful if I found out from your 
staff which aspects of that that you think are not sufficiently 
detailed because I think they are.
    Mr. Hastings. It is very simple. The statutory authority. 
Again, I am not an attorney. I am at a big disadvantage when I 
am talking to a lawyer on this, but I would think that being a 
lawyer you would say, I know--you know, you would ask your 
people what statutory authority.
    Mr. Bromwich. And that is in the letter. We cite the 
specific statutory authority in that letter.
    Mr. Hastings. All right. We will look forward to that, and 
my time has expired. In fact, I have gone over. So I will 
recognize the distinguished--I guess you are pinch-hitting for 
Mr. Markey, the gentleman from New Jersey, Mr. Holt.
    Mr. Holt. Thank you, Mr. Chairman. I thank the witnesses. I 
thank you for your work in this investigation. Let me begin 
with you, Admiral Salerno.
    The JIT completed the work of Volume 1, the Coast Guard 
part of the investigation, in April. There were 50 specific 
recommendations, 40 of which the Coast Guard Commandant has 
recently concurred with. Is that correct?
    Admiral Salerno. That is correct, sir.
    Mr. Holt. OK. Has the Coast Guard commenced rulemaking on 
any of the recommendations?
    Admiral Salerno. Yes, sir, we have. There is an ongoing 
project to improve our what we call Subchapter N in Title 33, 
C.F.R., which governs offshore activities, and we are 
incorporating the recommendations from this report into that 
ongoing rulemaking process.
    Mr. Holt. So, of these 40 accepted recommendations, how 
many will be in force say by the end of the year? I mean, what 
is the timing on this? We keep hearing really a drum beat from 
this room drill faster, permit faster, move faster, let us do 
more. I guess I would like to see this sense of urgency that 
our colleagues are constantly hitting us with applied to your 
regulatory process.
    Admiral Salerno. Sir, if I could characterize it this way. 
Not all of the recommendations will require regulatory actions. 
Some can be executed as a matter of policy. In fact, we have 
already moved on that. The risk-based targeting is a prime 
example. What we will do in our coastal state authority is we 
will mimic what we already do for ships, in other words, take a 
look at the performance history of the owners, the operators.
    Mr. Holt. Well, have you at least determined how many of 
the 40 required rules have to go through the rulemaking 
process?
    Admiral Salerno. Yes, sir.
    Mr. Holt. Do you have the number?
    Admiral Salerno. I don't have the exact number right now, 
but I can get that for you, but certain things, for example----
    Mr. Holt. If you could get back to the Committee----
    Admiral Salerno. I would be happy to.
    Mr. Holt.--kind of a breakdown of these 40, you know, here 
is a dozen that will be done this month and here are two dozen 
that will have to go through the formal rulemaking, whatever 
that is, and lay those out for us, that would help.
    Admiral Salerno. We can lay that out for you.
    Mr. Holt. Now, on the matter of the country flag, you 
talked about a risk-based targeting that I think might be a 
suitable approach. Right now there are, let us see, well, about 
a third of the vessels operating are U.S.-flagged, about two-
thirds are from other countries. Five from Panama, for example, 
which the Coast Guard has identified as the most at-risk 
country. Are there limitations that can be placed on some of 
these most egregious violators or the weakest enforcers pending 
development of the more complete rules and regulations?
    Admiral Salerno. Yes, sir. What that risk-based methodology 
will do is stimulate----
    Mr. Holt. I am saying while you are putting that in place 
should there be limitations placed on some of these clearly 
more risky flags right away?
    Admiral Salerno. Well, these are risk indicators, sir, so 
what it does is trigger more frequent Coast Guard examinations, 
more in-depth examinations when we are on board. That is 
currently in place. That risk-based methodology is operating 
now and we are building additional information that will 
further refine the risk model.
    You are correct, Panama has been identified as a flag state 
that indicates greater risk than some others, and we are paying 
closer attention to rigs with a Panamanian flag.
    Mr. Landry. Would the gentleman yield?
    Mr. Holt. I have only a few seconds, but I would be happy 
to yield.
    Mr. Landry. I would love to work with the gentleman to make 
sure that all of the MODUs in the Gulf of Mexico are U.S.-
flagged vessels. If we could simply start to roll back some of 
the onerous regulations that fabrication yards are under and 
get to a point where we could increase productivity in those 
fabrication yards, we would not have to worry about having 
foreign-flagged vessels in the Gulf of Mexico, and we could use 
all U.S.-flagged vessels.
    Mr. Holt. I think my time has expired. I look forward to 
pursuing that.
    Mr. Hastings. I thank the gentleman. We seem to have a 
grand agreement here.
    [Laughter.]
    Mr. Hastings. Well, we have a grand agreement to start.
    [Laughter.]
    Mr. Hastings. I recognize the gentleman from Louisiana, Dr. 
Fleming.
    Dr. Fleming. Thank you, Mr. Chairman.
    Do we have a slide to throw up? We had a hearing yesterday 
and I will preface this question. Being from Louisiana we have 
taken three hits on this. The first one was, of course, the 
death of 11 good people, the tragedy for their families. The 
second has been the perception that our beaches and the beaches 
of Florida, Alabama, Mississippi have been harmed to the point 
that vacationers stopped coming and these sort of things, which 
turned out really not to be the case.
    And then third and more importantly at this point in time 
is the permit slowdown that Mr. Bromwich and I and Mr. Landry 
have had many discussions on, and I will just give an example 
of what came out of the hearing because for us it has been what 
is it in the process that seems to create this, and I have 
gotten one graph in front of you.
    I am not throwing it up, but talking about permitting 
activity in the Gulf of Mexico, that prior to the Macondo 
disaster permits were being approved at about a rate, it looks 
like 110 per month, dropped to 60, about half, and it has 
remained there, and then if you look at oil production, it has 
dropped from where it was before, as high as 1.8 million 
barrels a day, and it looks like it is dropping off now to 
below 1.4 million barrels a day.
    So we are seeing the permit activity still well below par, 
production well below par, and this graph here shows you, if 
you look at the red bar, what you see is the difference between 
the reports from the Obama Administration as to how long it 
takes permits to be reviewed and how long it takes for them to 
be approved, and what you see is the ``deemed submitted'' is 
the problem.
    And so what the companies are telling us is people are 
submitting the forms, the paperwork, which by the way we heard 
from a witness yesterday going from an average of 30 to 35 
pages to 100 times that, well over 3,000 pages, that the forms 
are not uniform; that is, one time it can be one way and 
another time another; again the I's are not dotted, the T's are 
not crossed. It ends up on someone's desk someplace. So we are 
looking at in many cases more than 100 days delay just to 
getting the permit application process up and going.
    We also heard that we understand that the final report came 
out just last month, but yet all of this new bureaucracy, the 
reforming of MMS and so forth, all this occurred prior to that 
report.
    So I would ask Mr. Dykes since you are kind of really out 
of the system now and maybe if you are a little bit of an 
objective voice, do you feel that this delay in permitting, do 
you feel that all these regulations----
    Mr. Hastings. Would the gentleman yield?
    Dr. Fleming. Yes.
    Mr. Hastings. I just want to say that their responsibility 
was to investigate. You are really asking him unfortunately to 
make a judgment call, and I don't think that is quite fair to 
the people that were Co-Chairmen of the Investigating 
Committee. I understand what you are asking, but I think in 
this particular case it wouldn't quite be appropriate to ask 
those two.
    Dr. Fleming. OK, I thank the Chairman. I will ask the 
question to maybe Mr. Bromwich. Do you think that all this 
delay and do you think all these new regulations and the 
confusion that is going on in that process, do you feel that 
that is justified in a period of which we didn't even have the 
results of the report?
    Mr. Bromwich. Well, first of all, the data that you have is 
badly flawed. First of all----
    Dr. Fleming. I will interrupt you. Every time we give you 
data you always say that. We would love to have your data.
    Mr. Bromwich. OK, I will give it to you right now.
    Dr. Fleming. OK.
    Mr. Bromwich. The time that it takes to review plans, and 
again this chart conflates plans and permits, two separate 
processes, but the plans which you list as sometimes taking 100 
days, 200 days, so on, it is just not true. We had outside 
consultants take a look at our plan review process for three 
different periods of time, pre-Macondo, Macondo, and about a 
year after that, the most recent period. The facts are that 
currently it takes an average of 34 days from the time a plan 
is originally submitted until it is deemed submitted and 
completed, 34 days. Pre-Macondo the average was 37 days. In 
between when there was undeniably disruption in the process the 
average time was 83. This is based on outside experts looking 
at the raw data in our files, and all 103 plans that were 
submitted during those periods of time.
    Dr. Fleming. Yes. Well, we don't have that. Why is it that 
we don't? We have been calling your department, your offices to 
try to get that data. We can't get it. Of course we have the 
incident with Mr. Landry, who couldn't even get in contact with 
one of your officials, couldn't even get a phone number for 
him.
    So we hear this in the meetings and hearings, but we can't 
ever get this information directly from your department, and I 
can tell you that that certainly doesn't explain why production 
is continuing to go down. We can disagree with your facts even 
though we don't have your facts to compare ours with. We 
publish ours, you don't. But the production is clearly going 
down. Nobody seems to dispute that at all.
    Mr. Bromwich. We do publish ours. I understand after 
hearing from you and many others that it may be confusing. We 
are happy to meet with you and members of your staff and 
further explain what the data means and how to----
    Dr. Fleming. Where is it published today?
    Mr. Bromwich. It is on our website.
    Dr. Fleming. It is on your website.
    Mr. Bromwich. Right.
    Dr. Fleming. Everyone, my staff, Natural Resources staff 
all tell us that there is very little information and certainly 
nothing that clarifies this issue on the website.
    Mr. Bromwich. Well, they may find it confusing, but no one 
can honestly say there is little information. There is a ton.
    Mr. Hastings. The time of the gentleman has expired. I have 
been leaving it on, but I want to make sure everyone has an 
opportunity, but I understand where the gentleman is going and 
we would like that information.
    I recognize the gentleman from Oklahoma, Mr. Boren.
    Mr. Boren. Thank you, Mr. Chairman. I want to thank the 
panelists for being here and the Co-Chairs for all they have 
done, all the work that you have put in, and Director Bromwich, 
we don't always agree, we don't always have the same 
philosophy, but you work well with our staff and have been 
attentive, and your staff has as well, so we do want to thank 
you.
    I have a question, and this goes to Captain Nguyen. This is 
really troubling to me. You know, as you know, one of the tasks 
of the Marine Board was to determine whether there was any 
incompetence, negligence or misconduct on the part of 
government persons in the Deepwater Horizon oil spill, and I 
have an email, and this is an email from I guess his title is 
Lieutenant Commander Michael Odom, and let me just read this 
email. This is to Randall, and I hope I don't butcher this up, 
Ogrydziak. Anyway, his email basically says, ``I made it to 
NOLA last night,'' New Orleans, ``and we are starting prep work 
now for my testimony. Just as an FYI, if you are interested, 
the questions they will be asking are attached. Call me if you 
need anything. Everything is pretty informal and I can't be in 
the hearing room until it is my turn in the barrel, so there 
will be a fair amount of standing around time.''
    That right there is extremely troubling, the fact that a 
government person has already been prepped beforehand with what 
the questions are going to be. And so my question to you is, 
and whether it was Mr. Odom or other government witnesses, is 
it true that you all provided government witnesses with 
information, questions that were going to be asked, in a sense 
coaching, you know, what the responses are going to be? Is that 
true? And if it is, wouldn't you agree that it would be hard to 
make objective determinations from these government witnesses?
    Also, another question, were the non-government folks, 
people from the energy industry, were they provided with 
questions ahead of time as the government witnesses were, and 
how do you think that impacts the validity of your report? I 
would be happy to share any of those emails with the Committee, 
with the Chairman.
    Mr. Hastings. We would like to have those. Thank you.
    Captain Nguyen. Mr. Boren, based on our understanding is 
that in terms of witness prepping, the government prepping, our 
policy is that we can sit down with our witnesses and explain 
to them that these are the areas that we are going to be 
exploring, and it would be some of the questions that we are 
asking. But my understanding is that we did not provide answers 
to those questions, and I understand that practice is 
acceptable. And if my understanding is incorrect, I am sure the 
Coast Guard would provide a clarification.
    Mr. Boren. But the government witnesses were provided with 
the questions beforehand. Why weren't the non-government 
witnesses provided with questions beforehand, the folks from 
the industry?
    Captain Nguyen. Right. My understanding is Coast Guard 
policy is that we can prep our witnesses by explaining to them 
the areas that we are going to go into and the type of 
questions we may ask them. We did not provide answers to them.
    Mr. Boren. So let me interrupt real quick. The questions 
that were going to be asked, you said the areas. If I come up 
with this attachment that shows these are the exact questions, 
would that be against Coast Guard policy?
    Captain Nguyen. What attachment, sir?
    Mr. Boren. If there is an attachment to this email from Mr. 
Odom, who was the last person to inspect.
    Captain Nguyen. Yes, sir.
    Mr. Boren. If there was an attachment that had the specific 
questions, not the areas to be discussed, would that be against 
Coast Guard policy?
    Captain Nguyen. My understanding is that providing 
questions that we would potentially be asked at the hearing is 
according to Coast Guard policy. We do not provide answers to 
the witness, or we do not coach them how to answer the 
questions. Our witnesses would be under oath and they speak to 
the truth, so I do not believe that compromised the integrity 
of the investigation.
    Mr. Boren. OK. I will take the Captain--Mr. Chairman, I 
just think this is kind of a troubling development I wanted to 
share with you.
    Mr. Hastings. Will the gentleman yield?
    Mr. Boren. I would yield, yes.
    Mr. Hastings. Perhaps we could work together and dig into 
this a little bit more and maybe from a document standpoint, 
certainly to get more clarification. I think the last point you 
made as to the specific questions rather than general areas is 
something that needs to be pursued, and I would be more than 
happy to work with you on this.
    Mr. Boren. Thank you, Mr. Chairman. I yield back.
    Mr. Hastings. I recognize the gentleman from Florida, Mr. 
Southerland.
    Mr. Southerland. Thank you, Mr. Chairman.
    I know earlier in the year we were presented with the 
President's Commission, their findings, and today we have 
obviously the JIT report. I am learning everything that I have 
learned, stuff that I have gathered, I see recommendations. 
There were nine, I am sure you read it, nine recommendations 
that the President's Commission made. I am looking at the 
report that was given to us today, company practices and 
regulatory agency recommendations.
    I guess my question to you, Mr. Bromwich, is in none of 
this do I see any reference, and it is kind of along the lines 
of Mr. Boren's questioning, but in none of this do I see any 
recommendations or the pointing out of where the government 
bore any responsibility in not preventing this accident. So, 
therefore, I would like you to tell me where did the government 
fail? One thing that I see in all of the industry that I am 
looking at is the government's presence, and so I ask you where 
did the government fail and where are the recommendations that 
should follow that recommendation of how your department and 
your agency is going to do their best to prevent this from ever 
occurring again?
    Mr. Bromwich. Well, we do do our best at all times to make 
sure that nothing like this happens, and Mr. Dykes worked for a 
number of years in connection with helping us do that. The fact 
is that you can never guarantee that an accident like this 
can't happen, but what you can do is to take regulatory action 
and enforcement actions----
    Mr. Southerland. But----
    Mr. Bromwich. Let me finish, please.
    Mr. Southerland. No, sir.
    Mr. Bromwich.--to reduce the chances that it won't happen 
again.
    Mr. Southerland. My point is, sir----
    Mr. Bromwich. Directly responding to your question, we have 
already put in place new rules, new safeguards that address 
some technical issues that were issued both in the President's 
Commission report and in the JIT report in terms of 
strengthening the requirements while----
    Mr. Southerland. This is simple. Where did the government 
fail? You had written----
    Mr. Bromwich. We didn't have sufficiently strong 
regulations that were both in the prescriptive area and also 
that set some of the performance-based standards that the 
agency historically has not had, but now does have----
    Mr. Southerland. But to this particular organization, this 
particular well, I understand there were infractions, there 
were areas where they had already been cited, correct?
    Mr. Bromwich. Well, they are cited as a result of this 
report. Are you saying that they had previously been cited?
    Mr. Southerland. That is what I am asking you.
    Mr. Bromwich. No, they had not been cited.
    Mr. Southerland. So your belief is that the government did 
everything--everything. It was my understanding that there were 
instances where basically the government has not done its part 
in getting rid of problems that may exist.
    Mr. Bromwich. This was not a governmental failure. This was 
a failure by the companies who drilled the well. Now there are 
things the government can do through strengthening its 
regulations and through increasing its inspections that will 
help to reduce the chances that anything like this will happen 
again. You can never eliminate it. That is why it needs to be a 
partnership where we as the government do our best to improve, 
simplify, modify, adopt new regulations, and industry on its 
own needs to continue to be committed to increasing the safety 
offshore.
    Mr. Southerland. Part of that partnership is recognizing 
what both parties can do to improve the system going forward. I 
am just saying that in all of these reports that we have been 
given and all the thousands of hours, there is no recognition 
in that partnership that you claim you want, there is no 
recognition of what, and you are a big part of this industry, 
obviously through regulatory presence, that there is no 
recognition, in other words, all the fault I have found falls 
squarely on the operators in the Gulf and I just find that it 
is amazing that none of the changes that an administrator would 
see necessary to prevent this from happening again are ever 
presented in any of the papers that we get.
    Mr. Bromwich. Well, they are in the President's Commission 
report, and they are to some extent in our report, and we have 
already acted on those.
    Mr. Southerland. We don't know that. I mean, none of the 
nine recommendations in the President's report deal with your 
agency for changes that are necessary in your agency. I mean, I 
challenge the statement that you just made, but I see I am 
running out of time, so, Mr. Chair, I yield back.
    Mr. Hastings. The time of the gentleman had expired. The 
gentleman from Maryland, Mr. Sarbanes, is recognized.
    Mr. Sarbanes. Thank you, Mr. Chairman, appreciate it. Thank 
you all for your testimony. This report is an important piece 
of the puzzle and we ought to pay great mind to it. I wanted to 
ask you, Director Bromwich, to speak to the importance of 
resources for your agency, particularly as it responds to the 
line of questioning you just got.
    In other words, you alluded to the fact that where 
government might have fallen down on the job was in not being 
able to do as much inspecting as you would need, and I remember 
us having hearings in the early days of this disaster where we 
got statistics about the number of production facilities and 
platforms and others that individual inspectors were 
responsible for, just a very small number of inspectors to 
cover a tremendous number of these facilities, and so I want to 
give you the opportunity to speak to how important it is that 
the resources be there for the capacity of your agency and the 
oversight function that it performs and any proposals that 
relate to how the industry can help to fund that kind of 
inspection and oversight responsibility.
    Mr. Bromwich. Well, thank you very much for the question. 
Obviously resources are critical, and I have spoken here and 
elsewhere many times that over the 28 years of its existence 
this agency has been starved for resources. It had patently 
inadequate level of resources. So, for example, the number of 
inspectors.
    Shortly after Deepwater Horizon we had approximately 58 
inspectors covering just in the Gulf of Mexico more than 3,000 
facilities and rigs. And when you compare it to the resources, 
inspectors compared to facilities in some of the other 
countries with substantial offshore activity, like the U.K., 
like Norway, it is laughable how inadequate our resources are. 
It would be laughable if it weren't so serious.
    So we very much appreciate the President's request for 
additional resources, the Congress's efforts to fund at least 
some of those, but we are nowhere near where we need to be in 
terms of the resources we need. We need to hire scores of 
additional inspectors. We need to bolster our regulatory 
program so we can address the sort of issues that the 
Congressman was talking about but do it in a way that is 
collaborative with industry, that puts in place regulations 
that make sense and that are more performance-based than our 
historically prescriptive regulations.
    So we are trying to get the agency with Congress's help, 
with the President's help, off the starvation diet that it has 
been on for 28 years and has dramatically impeded and impaired 
its ability to do a job that all of us want it to do.
    Mr. Sarbanes. Well, I appreciate that, and I hope that the 
Majority appreciates it as well because in their appropriations 
bill where they peg the budget for BOEMRE was significantly 
under where it needed to be I think to the tune of about $35 
million as against your original request, so I hope those 
resources will be there.
    I also wanted to ask you to just restate what I thought 
were very impressive statistics from a moment ago about how you 
handled the turnaround time for the issuance of these permits, 
and I think you even noted that you got the time down to a 
lesser number of days now than even existed before the 
Deepwater Horizon tragedy, which is a real tribute to the 
agency. It is not something I think the average person 
necessarily appreciates. I wanted to give you a chance to 
review that one more time.
    Mr. Bromwich. Well, I appreciate that, and it is very 
troubling and disappointing to me that what I think are really 
urban legends about the length of time it takes to review plans 
and review permits. It gets circulated and recirculated and 
recirculated again.
    We have made a huge number of efforts to work together with 
the industry in the Gulf to clarify what is required in plan 
submissions, to clarify what is required in permit submissions. 
We have had workshops both on plans and permits which have been 
extraordinarily well attended by industry where we have taken 
every effort possible to answer the questions that operators in 
the Gulf have. They have thanked us for that, for the 
clarification we have provided, and I think that is part of the 
reason that processing time for plans and permits have been 
reduced.
    I heard Mr. Fleming say that some of the plan packages are 
3,600 pages long. I gather that was something that was said in 
a hearing. Well, when we heard that had been said we looked 
back, the longest submission we could find was only a tenth of 
that. So I don't know where these stories come from, but they 
are not true.
    Mr. Sarbanes. Appreciate it. I yield back.
    Mr. Hastings. Time for the gentleman has expired. The Chair 
recognizes the gentleman from Texas, Mr. Flores.
    Mr. Flores. Thank you, Mr. Chairman. I would like to thank 
the panel for appearing today. Director Bromwich, I am not 
going to ask you about planning and permitting today. I hope to 
have you back many more times to do so.
    Mr. Bromwich. Thank you, sir.
    Mr. Flores. In any event, as I understand it, and this is 
going to be directed primarily to Captain Nguyen and Mr. Dykes. 
As I sort of sit back and jumped up to the 50,000 foot level it 
looks to me like this accident occurred because of three 
principal reasons. One is you had serious planning and design 
errors, you had safety systems that didn't function as designed 
or they weren't operating correctly, and then last you had 
human error and response problems.
    This is a philosophical question for you. I think most of 
us believe we can address safety and design through 
regulations, and we can address safety system design and 
operation regulations. Would you each concur with that?
    Mr. Dykes. Yes, I would concur with that, but the critical 
aspect is what you talked about last is the human aspect of it.
    Mr. Flores. I am going to get to that in a minute.
    Captain Nguyen, do you agree with the first? I mean, you 
can address those first two problems I think with regulations 
and regulatory oversight, is that correct?
    Captain Nguyen. Yes, sir. First off, in our regulations we 
have equipment standards and we have operation standards. 
However, we also on the human elements, we also have licensing 
of mariners, so that will take care of some of that in terms of 
training and licensing.
    Mr. Flores. Through training and capabilities?
    Captain Nguyen. Yes, sir.
    Mr. Flores. OK. So that takes us to the philosophical 
question. How do you, and this is not meant to be a ``gotcha'' 
question because I am going to ask the next panel the same 
thing, how do you address the human error problem that we have? 
I mean, you said when a pilot makes serious errors and crashes 
an airplane, how do you address the human error problem? Can 
you do that only through regulations? What else does it take to 
get there?
    Mr. Dykes. Philosophically, from the standpoint to reduce 
the number of human errors you have to reduce the number of 
interactions where you need that individual to make a decision. 
If you can reduce the probability by reducing that number, that 
is the first step. That is where you come in through 
administrative controls or engineering and you remove that 
aspect of the job.
    The second half of that is where you actually cannot 
engineer out or put administrative controls in place to remove 
the individual from the equation and you have to factor him in. 
Key to that is awareness, knowledge, training, education and 
getting that individual all of the information he needs in a 
format that he can understand it, digest it and make a decision 
based on what he knows.
    Mr. Flores. My question would be, do you think the industry 
got the message in that last part? Because if we don't fix this 
part of the equation, we will have not this accident again, but 
we will have another accident of some sort because it is 
impossible to legislate away or regulate away human error. So 
do you think the industry has got the message? Has the industry 
learned from you alls' perspective? Do you think they got the 
message?
    Mr. Dykes. I would hope so. I can't speak for industry from 
that standpoint. From our report standpoint, I hope they got 
the message.
    Mr. Flores. OK. But let me rephrase the question. Do you 
have any evidence that they haven't gotten it, that they 
haven't tried to respond affirmatively to take care of that?
    Mr. Dykes. No, sir, I have no information that would 
indicate that they have not gotten that message.
    Mr. Flores. Captain Nguyen, do you----
    Captain Nguyen. Yes, sir. In your report we are talking 
about safety culture, not only do we know we saw a discrepancy 
on one vessel, we saw discrepancy on multiple vessels in 
multiple locations and in the corporate office. So I don't 
think government regulations can regulate safety culture. That 
has to go down to the individual.
    Mr. Flores. OK.
    Captain Nguyen. And I think that when I went out to visit--
--
    Mr. Flores. I think you answered. I am going to reclaim my 
time because I have two more questions if I can.
    Admiral Salerno, the Coast Guard has jurisdiction of 
foreign-flagged vessels in U.S. waters, right?
    Admiral Salerno. That is correct, sir.
    Mr. Flores. OK. I forgot what my last question was. Sorry 
about that. Oh, there was an allegation, and this is for 
Director Bromwich, that you don't have sufficient legislative 
authority to issue the regulations to address the causes of 
this accident and to keep it from occurring again. Is that 
allegation correct? We heard the Minority side say that at the 
outset of this conversation.
    Mr. Bromwich. We have talked on a number of other occasions 
that certain kinds of legislation, including raising our civil 
fine authority, which would be extraordinarily helpful, and 
this incident certainly underlies that. Speaking with the 
Chairman about the importance and desirability of having 
organic legislation to support new agencies we have enforced. 
But specific safety-related issues, legislative recommendations 
do not flow specifically from this report, that is correct.
    Mr. Flores. That is what I thought. So you have the 
authority to--I mean, regulations you have written--I guess 
what I am trying to say is the allegation is that there is not 
sufficient, that we need more legislation to fix this seems to 
be incorrect.
    Mr. Bromwich. The specific issues that are raised that our 
agency deals with in terms of being able to regulate the 
industry we do think we have the power that we need.
    Mr. Flores. OK, thank you.
    Mr. Hastings. The time of the gentleman has expired and I 
recognize the gentleman from Arizona, Mr. Grijalva.
    Mr. Grijalva. Thank you, Mr. Chairman.
    Vice Admiral Salerno, in the report the U.S. Coast Guard 
identified Transocean and Deepwater Horizon, their crew, as 
partly complicit in the blowout that led to the disastrous oil 
spill. What regulatory changes do you think that would prevent 
this sort of negligence, going back in the human error issue, 
from happening in the future, and how did the U.S. Coast Guard 
ensure that this study was conducted in an objective manner?
    Admiral Salerno. Sir, there are a number of things in work 
here. Some are design related, the systems in place as just was 
discussed. Some are human element. I think one of the most 
significant aspects of this case is the dual command structure 
that was on the rig and the confusion that that created as to 
who had authority in an emergency, and as far as the actual 
conduct of the investigation, I think Mr. Dykes or Captain 
Nguyen can focus on that more directly. I was not part of that 
investigation.
    Mr. Grijalva. Thank you. Director Bromwich, that same 
question, how did your agency assure that the study was 
conducted in an objective manner, and then, if you would 
because we went through this already, sometimes you have to put 
an historical context into the conversation, the agency that 
you have has gone through significant reform and restructure, 
has asked for initially resource support for it to be able to 
do its job in response to what was government lack of oversight 
at the beginning of this process, and also to deal with the 
ethical issues of the kind of cozy industry/regulatory 
relationship that existed, and I think that should be part of 
the context that we talk about. So we could talk about where 
the agency was, where it is now, and I think that is important, 
and the objective manner is the question.
    Mr. Bromwich. Let me talk about where the agency is now 
compared to where it used to be. It obviously not only has a 
different name, we split it into different component parts to 
eliminate some of the mission conflict that existed in the old 
MMS, and we worked extraordinarily hard over the last 15 months 
to get that reorganization right, and that went final, as I 
think you know, on October 1, so that we now have a revenue 
entity that is in a different line of reporting within the 
Department of the Interior, and the most recent split is to 
split the resource manager and the safety and regulatory agency 
into two parts.
    Not only did we do the reorganization and splitting of the 
agency, but we have based on the many reviews, studies and 
investigations of the agency taken a hard look at ourselves and 
some of the weaknesses that have been identified, including the 
alleged coziness with industry over time, and we are in an 
ongoing way looking to reform many of the ways that we do 
business. This is in midstream. That is in the process that 
needs to continue and it needs to continue for a significant 
period of time. It relates to enforcement, it relates to 
investigations, it relates to regulations, it relates to a 
whole raft of things, and you have my commitment that that will 
continue.
    In terms of the investigation, Mr. Dykes can certainly 
speak to that, but the investigation, the designation of 
witnesses, questioning of witnesses and so forth was handled by 
the investigative team and by the investigative team alone. You 
heard Mr. Dykes say that, with the exception of the 11 
witnesses, because of their tragic deaths they were not able to 
interview, in his words, they left no stone unturned and 
gathered all the information that was relevant. I know of no 
reason that that is not accurate.
    Mr. Grijalva. Thank you, and I asked that question to 
preface the thanks of Mr. Dykes, the Co-Chair, and the team for 
the report and study. Very much appreciate it. I believe it is 
objective without question.
    And the last posing question for you, Mr. Director, there 
is an interesting process going on where government is at fault 
for what happened, we can't ask the industry because half of 
them could plead the Fifth in the next panel, but we can ask 
you. The government had a role and there are corrective steps 
being taken to ensure that that role is not a passive role 
anymore, and that is how I see it, and I would ask for your 
response to that.
    Mr. Bromwich. I agree with that. I think largely because of 
the shortage of resources we have been too passive in the past 
and we are looking to change that.
    Mr. Grijalva. Thank you.
    Mr. Hastings. The time of the gentleman has expired. The 
Chair recognizes the gentleman from Maryland, Mr. Harris.
    Mr. Harris. Thank you, Mr. Chairman. I will yield my time 
to the gentleman from Louisiana.
    Mr. Hastings. The gentleman is recognized.
    Mr. Landry. I thank the gentleman from Maryland and the 
people of Louisiana thank you as well.
    Mr. Bromwich, I just want to clear up a couple of things 
that the Chairman addressed in the very beginning, which I have 
some concern on the authority that all believe you have to 
reach and conduct oversight on contractors and subcontractors.
    Mr. Bromwich. I do have a statutory citation for you, Mr. 
Landry, and Mr. Chairman.
    Mr. Landry. OK, great, because I have Senator Vitter's 
letter and the response that you gave Senator Vitter that you 
told the Chairman that would give us that information, and I 
don't see the citation in there. What is the citation you have?
    Mr. Bromwich. It is OCSLA Section 24(b), which is codified 
at 43 U.S.C. Sec. 350, subsection b, which authorizes the 
assessment of civil penalties against any person who fails to 
comply with the terms of a lease, permit, regulation, et 
cetera, and what we have been advised by the Solicitor's Office 
is that ``any person,'' it is not limited to lessees or 
operators, so that is the foundation.
    Mr. Landry. I just want to grab some time. I will stipulate 
that that is in the Code. I know you are a very prolific 
orator--litigator. However, I have in Title 30, part 250, oil 
and gas, C.F.R. 250.146, who is responsible for fulfilling 
leasehold obligations, and I will tell you that when you are 
not the sole lessee, you are the co-lessee, you are jointly and 
severally responsible, et cetera, and within that----
    Mr. Bromwich. That is exactly the regulatory----
    Mr. Landry. But there is nothing in here that defines 
contracts or subcontractors. In fact, when you go back to the 
C.F.R., which I did this morning in my review, the Code 
specifically defines lessees and co-lessees but does not in any 
way define contractors or subcontractors.
    Mr. Bromwich. I did not know this was a definitional issue.
    Mr. Landry. Well, normally if you are going to cover 
enforcement action over those, the Code is specific in defining 
who those people are. I think you would agree to that. I am 
sure you have used that several times as you have litigated 
cases. And also in Senator Vitter's request that he made, he 
asked for the internal legal analysis by the Interior 
Department that justified expansion of your current regulatory 
authority, and I don't see that you have provided us with that.
    You cite the Code. Certainly we will go back and look at 
that particular part, but I think that particular part will 
bring me back to the part that I looked in, and I don't think 
that it gives you that authority, and of course that is under 
the regulations that you promulgated. What the Chairman asked 
for was where you get the authority to issue that type of 
regulation under OCSLA, and of course again----
    Mr. Bromwich. It has the statutory authority----
    Mr. Landry. But that comes from OCSLA.
    Mr. Bromwich. Yes.
    Mr. Landry. OK.
    Mr. Bromwich. OCSLA----
    Mr. Hastings. Would you repeat precisely----
    Mr. Bromwich. OCSLA, Section 24[b], which is codified at 43 
United States Code--Title 43, United States Code Sec. 1350, 
one, three, five, zero, [B].
    Mr. Hastings. B or D?
    Mr. Bromwich. B, B as in boy. OK, thank you. Thank the 
gentleman for yielding.
    Mr. Landry. OK. Mr. Chairman, I would like to yield the 
balance to Mr. Flores. He has a couple of questions.
    Mr. Flores. Thank you to the gentleman from Louisiana. This 
question is for Mr. Dykes. What was the impact of the Attorney 
General's announcement that he was going to pursue a criminal 
investigation in terms of getting to the bottom of this 
investigation?
    Mr. Dykes. I believe they had forced some of the key 
witnesses not to testify, and, for example, Mr. Mark Hagley, 
who was one of the BP engineers testified before the JIT during 
the second hearing. That was the week of March 24, I am sorry, 
May 24, and the announcement of the criminal investigation came 
out June 1. Two or three hearings later we wanted to call Mark 
Hagley back for further interviews and he refused to testify.
    Mr. Flores. OK. Do you think that the report or the follow-
up recommendations or regulatory changes following the 
recommendations, is there any loss of fidelity in those because 
of the fact that Attorney General Holder issued this criminal 
investigation announcement?
    Mr. Dykes. No, sir, I do not.
    Mr. Flores. OK, thank you. I yield back.
    Mr. Hastings. The time has expired. The next gentleman is 
recognized, Mr. Landry.
    Mr. Landry. Real quickly, I also would like to state, Mr. 
Bromwich, we continue to hear about resources being used, but 
yet as I do the math in the increase in BOEMRE's budget has had 
since 2009, 2009 you had $116 million, sometimes it is hard for 
me to count all the zeros, so in 2009, you went from $116 to 
$181 in 2010. From 2010 to 2011, you went to $225, and so just 
real quickly, have you utilized all those resources in being 
able to hire everyone that you could possibly hire today?
    Mr. Bromwich. We have utilized those resources to hire 
people. If we had more resources, we could hire more.
    Mr. Landry. So you have hired everyone that you can 
possibly hire today?
    Mr. Bromwich. We have put out announcements as we got the 
additional funding, and obviously we did not get it until April 
when the continuing resolution passed, we didn't know how much 
money we would get, we immediately put a full court press on to 
hire the categories of people that we most needed, including 
inspectors, drilling engineers and so forth. So, yes, we made 
every effort we possibly can to bring as many people on board 
as we possibly could given the resources that Congress provided 
us.
    Mr. Landry. So you have hired everyone?
    Mr. Bromwich. No. I just said we have hired everyone that 
we had the money to hire. We have not hired everyone that we 
need, not even close.
    Mr. Landry. OK. Mr. Dykes, and of course, Mr. Chairman, 
please let me know if I am out of bounds here, under the 
guidelines and the regulations that MMS had in place at the 
time of the accident, do you believe that they were sufficient 
in order to prevent the accident?
    In other words, and this kind of goes to what Mr. 
Southerland was saying, is that did BOEMRE have the ability 
under the regulations that were currently in place to help 
prevent this type of accident?
    Mr. Dykes. That is more of a philosophical question from 
that standpoint. When we looked at the regulations on the books 
and compared them to the event, we found nothing that directly 
would have prevented any, and it is hard to forecast as you put 
regulations in the book, to forecast what you are trying to 
prevent.
    Mr. Landry. OK. Well, real quickly because here is the 
problem I have. I want you to know that today I got a call from 
one gentleman, a family, before he went to work in 1973 with a 
seventh grade education, a son who went to the eleventh grade, 
one got a GED, and they got laid off as we do in the marine 
offshore business. They have been laid off, of course, it flies 
in the face of what we hear here, that the process is back up 
and rolling, that the Gulf of Mexico is back. The man has not 
looked for a job since 1973, but he got laid off last week. 
That family combined, three members, brought home over half a 
million dollars combined. Good jobs, OK, good jobs. And what I 
am trying to understand as I read through the investigative 
report that the three of you all have that there is human 
error. Was there a systemic problem in the industry based upon 
your findings?
    Mr. Bromwich. The investigation wasn't pointed to look at 
industry as a----
    Mr. Landry. Do you believe there was a systemic problem? I 
mean, you did a lot of investigation. Captain?
    Captain Nguyen. Sir, from the Coast Guard side we only 
investigate this vessel.
    Mr. Landry. OK.
    Captain Nguyen. So we did not investigate the----
    Mr. Landry. Mr. Dykes.
    Mr. Hastings. You are making a judgment call there, 
gentlemen. I understand what you are----
    Mr. Landry. Well, I am trying to understand. They have done 
a lot of work. They looked over a lot of evidence, and of 
course Mr. Dykes has been working for MMS for 17 plus years I 
guess.
    Mr. Bromwich. Twelve years.
    Mr. Landry. Twelve years, and he would have seen a lot. You 
know, I just can't tell you how much I appreciate this witness, 
and I am trying to understand because we have a political 
report that the President wanted us to take legislation action 
on, and yet we have a scientific report that is contrary to the 
political report, and I have people that are interested. I have 
an industry suffering. I have a Director saying that we are 
increasing permitting, and everything is pointing to the fact 
that the problem we have is politics, and that is what I am 
trying to get to the bottom line. That is the only reason for 
the question.
    Mr. Hastings. Would the gentleman yield?
    Mr. Landry. Yes.
    Mr. Hastings. Listen, I think that is probably something 
that this Committee will have to weigh and come to our own 
conclusions. You asked me to kind of say if the question is out 
of line or not and perhaps to the Co-Chairs, but if they have 
an opinion, obviously we would welcome that. But I think I have 
some concerns too.
    Mr. Landry. OK.
    Mr. Hastings. And they will be expressed. But the time of 
the gentleman has expired.
    Mr. Landry. I will withdraw it.
    Mr. Hastings. The time of the gentleman has expired. The 
gentleman from Massachusetts is recognized.
    Mr. Markey. Thank you, Mr. Chairman, very much.
    Director Bromwich, yesterday the Department issued 
violations to BP, Transocean and Halliburton for violating 
Federal regulations in place at the time of the spill. BP was 
cited for seven infractions, Halliburton and Transocean four 
violations. Unfortunately, the monetary penalties associated 
with these violations, which led to the worst environmental 
disaster in American history, would amount to only $21 million 
for BP and $12 million for Halliburton and Transocean.
    Do you think that that is a sufficient financial deterrent 
to oil companies so that we do not have a repeat of the 
disaster or should Congress pass legislation to increase the 
civil penalties for oil companies that violate the law? That is 
a proposal, which I have made along with Mr. Holt and Mr. 
Grijalva, so that the penalties match the actual events that 
despoiled our environment, Mr. Bromwich?
    Mr. Bromwich. No, I don't think the current civil penalty 
authorization is a deterrent. I don't even think it is close, 
Mr. Markey. In an industry where it costs between $500,000 and 
a million dollars a day for a rig, the kinds of figures that 
you are talking about are trivial to these companies. So I 
think there needs to be a very significant increase. I have 
resisted in the past putting a dollar figure on it, but it 
needs to be clearly well into the six figures to be a 
significant deterrent for individual oil companies and to 
provide a general deterrence for the industry as a whole.
    Mr. Markey. So you are saying that you start with $100,000 
per incidence per day.
    Mr. Bromwich. At a minimum.
    Mr. Markey. At a minimum. You think that Congress should 
consider raising them much higher in order to ensure that the 
oil companies pay a price when people die, when businesses are 
crushed, when the environment is destroyed, is that what you 
are saying?
    Mr. Bromwich. Yes.
    Mr. Markey. Director Bromwich, the Federal Government has 
the authority to suspend or debar companies that commit fraud 
or violate Federal law from receiving contracts or entering 
into agreements with the Federal Government. The Department of 
the Interior has the ability to debar companies from non-
procurement programs, including lease sales. Suspension and 
debarment has a different purpose than civil penalties. It is 
not intended to punish but to protect the American people from 
unlawful and unethical companies. Companies can be suspended or 
debarred for violations of statutory or regulatory 
requirements, fraud, criminal or civil judgments against them 
and a lack of business integrity or business honesty. The 
Office of Management and Budget guidance describes the purpose 
of suspension and debarment for non-procurement programs. 
Specifically it states to protect the public interest. The 
Federal Government ensures the integrity of Federal programs by 
conducting business only with responsible persons.
    The first Gulf lease/sale since the BP spill is scheduled 
for December. Should the Department consider suspension or 
debarment of BP from the lease/sale to give us time to assess 
whether BP has made the necessary changes to protect the public 
interest?
    Mr. Bromwich. We are not going to suspend or debar BP from 
that lease sale. We have considered and thought about this 
issue quite a lot, and we don't think it is appropriate in 
these circumstances.
    I do want to remind Mr. Markey that BP has taken on itself 
the obligation to abide by additional voluntary requirements 
over and above what our regulations require. I think that has 
been their approach in dealing with my agency since I have been 
there. Also, given the historical record offshore, Mr. Dykes is 
knowledgeable about, we don't think suspending or debarring 
there is appropriate.
    Mr. Markey. Again, the reason I am raising these issues is 
that it is not just the Gulf of Mexico, it is everywhere. You 
know, when you pass a statute against some crime, it is not 
just to protect the people from where it occurred originally, 
it is to protect everyone else from the same set of events. OK, 
so we are not limiting. We are looking at this in terms of 
everyone anywhere that might have the same people out there 
thinking that they got away with it.
    So I think we should take another look at whether or not BP 
should be allowed to participate. I think that it is still, in 
my mind, an open question that should be dealt with as part of 
this entire process, and Mr. Chairman, I thank you.
    Mr. Hastings. The gentleman's time as expired. The 
gentleman from Pennsylvania, Mr. Thompson.
    Mr. Thompson. Thank you, Chairman, thanks to the panel for 
testifying today. My question is for the Co-Chairs and just a 
clarification regarding a specific piece of equipment, the 
riser disconnect it seems played a key role in the incident. On 
the day of the disaster, that specific day, what agency was 
responsible for the inspection of the riser disconnect with the 
Deepwater Horizon?
    Mr. Dykes. That would fall under the Department of the 
Interior, the Minerals Management Service.
    Mr. Thompson. OK, very good. Was that disconnect properly 
inspected?
    Mr. Dykes. Every information that we have, all of the 
inspection documents indicate that it had been inspected.
    Mr. Thompson. So what happened?
    Mr. Dykes. Well, as the report indicates, we believe the 
second explosion, which occurred on the rig near the rig pool, 
took out all of the mud's control lines to the BOP stack, and 
by this time we believe that the pipe got into compression such 
that as it goes through the sequencing that disconnect will not 
function until you have completed the sequencing of the BOP 
stack closure.
    Mr. Thompson. Thanks for the clarification. I yield back, 
Chairman.
    Mr. Hastings. The gentleman yields back. We have had 
requests from several Members, at least on my side, for a 
second round and I am going to honor that. We will begin the 
second round with Dr. Fleming.
    Dr. Fleming. Thank you, Mr. Chairman. Would you throw that 
slide back up again that I talked about with Director Bromwich 
a moment ago?
    Mr. Bromwich. Mr. Chairman, can I just ask? This is a 
hearing devoted to the accident investigation report. I am 
happy to come back at anytime, as I have many times in the 
past, to talk about plans and permits. I don't think it is fair 
frankly to Mr. Dykes, Captain Nguyen or Admiral Salerno to have 
to go through issues that are exclusively mine.
    Dr. Fleming. Mr. Chair, I just want a clarification, that 
is all I have.
    Mr. Hastings. I am going to allow it. We had that line of 
questioning earlier. We had the hearing before and I know 
sometimes we overlap, but there is an overriding issue 
certainly I have heard, I know you have, Director Bromwich, of 
people on the Gulf Coast and response, so I think it is 
appropriate in this time because it does all tie together, so I 
will recognize the gentleman from Louisiana.
    Dr. Fleming. If you will throw that up and we may come to 
some agreement here after all.
    OK, it is the bar graph that I showed before, and you 
indicated, and I forget the word you used, it was fairly 
strong, it was not true, dishonest, a lie, what is your 
characterization?
    Mr. Bromwich. It is badly flawed and misleading.
    Dr. Fleming. Badly flawed and misleading.
    Mr. Bromwich. Yes.
    Dr. Fleming. All right, it comes from the Gulf Economic 
Survival Team. Do you know where they got that data from?
    Mr. Bromwich. Yes, that is part of--we talked about this 
last time I was here, Congressman. That is from the IHS CERA 
report that was issued over the summer, and as I told you last 
time----
    Dr. Fleming. Let me correct you before you go any further. 
No, sir, it comes from your website. They extracted this from 
your website. Now the reason why there is confusion, and I 
think you used that word, is because it is hard to find. We 
actually had to go through and search. I have three different 
screen shots and if I had this graph, I would show you, but in 
bar graph one, I believe that is Shell, and again it was 
extracted from your data.
    Mr. Bromwich. Are you saying--let me just be clear.
    Dr. Fleming. Yes.
    Mr. Bromwich. Are you saying that that specific bar graph 
appears on our website?
    Dr. Fleming. No, sir, the data, the data.
    Mr. Bromwich. OK. OK. OK.
    Dr. Fleming. Is created from your data, but from this and 
you see the BSEE logo on the first page here. The second bar 
graph, it says--from your website. It says received date 9-20-
2010, and then it says, date deemed submitted March 31, over 
six months later, 2011, and then the green part of the bar 
graph, staff instructs me we would have to go to another part 
of your website. The point is that what they did is simply take 
your data and put it together in a graph.
    Mr. Bromwich. Well, that is not what they did, and I am 
happy to go through this privately with you in detail. That is 
not what they did.
    Dr. Fleming. OK. Well, until I am proven otherwise I am 
going to have to assume that is true, but I have another 
question for you. This outside independent agency or agencies, 
now that is the first we have ever heard of that, who are they?
    Mr. Bromwich. It is McKenzie & Company.
    Dr. Fleming. McKenzie & Company.
    Mr. Bromwich. Yes.
    Dr. Fleming. And you will be able to get that to us within 
a few days?
    Mr. Bromwich. What specifically are you requesting?
    Dr. Fleming. Well, you said that they did an independent 
analysis, an objective analysis, and we haven't seen it. We 
don't know where it is.
    Mr. Bromwich. I just got it last week, Congressman. Let me 
just be clear, and this really addresses your concern too, Mr. 
Chairman, we have been focused very intently on trying to 
improve and make more efficient our plans and permitting 
process because we are very aware of how concerned and upset 
Mr. Fleming is, Mr. Landry is, and many other people. Perfectly 
legitimate. They have had complaints from their constituents. 
People are being laid off. We understand that.
    McKenzie has been helping us with a wide range of issues, 
primarily the reorganization, but they have also been helping 
us with looking at specific issues that are of importance to 
me, and included among the things that they looked at recently 
were the permitting process, which we can improve by making it 
transparent, and the plans process. And so the review that I 
got that I mentioned earlier in response to Mr. Fleming's 
questions I just got last week as a result of a review that 
they just completed in the last 10 days. So it is not as though 
we have been holding out on you. This is something that I 
specifically asked for in light of the concerns that you have 
expressed to me previously, and so that is why you haven't seen 
it yet. I am happy to provide it to you.
    Dr. Fleming. Sure. OK. But I was just simply asking how 
quickly can we get it?
    Mr. Bromwich. It is a one-pager. I can probably give it to 
you this afternoon.
    Dr. Fleming. OK, great. So we will look forward to that. 
But anyway, again to reemphasize, that is where these people 
tell us they got the data, and we can go back and sit in front 
of a computer screen, but again, that is where they are saying 
they are getting the information. The one example we were able 
to find does correlate with what they say is on this graph.
    Now it is our opinion and certainly, and I asked you this 
question before, but I will ask it again almost humorously, you 
don't think EIA is a flim-flam operation. You feel like they 
are basically good and honest with their debt.
    Mr. Bromwich. I have never said they were a flim-flam 
operation.
    Dr. Fleming. No, I asked you that question before and you 
answered no, you did not think----
    Mr. Bromwich. I haven't changed my answer.
    Dr. Fleming. You have not changed your mind?
    Mr. Bromwich. No, I have not changed my answer on that.
    Dr. Fleming. Good. They say that the production levels 
continue to go down. They go down to something around 1.3 
million barrels a day, so something is holding up production, 
and again, all the data that we see says it goes back to the 
permits or the pre-permitting process. You say that that could 
probably be improved by better funding. So can you--because, 
see, again the permit has been increased by a factor of 100.
    Mr. Bromwich. The permit has?
    Dr. Fleming. The permit size. Remember the----
    Mr. Bromwich. No, no, no. First you said it was plans, and 
that is not true. I think somebody identified the----
    Dr. Fleming. The application.
    Mr. Bromwich. Right, file different applications. There is 
a plan application. There is a permit application.
    Dr. Fleming. Right.
    Mr. Bromwich. You were talking before about plan 
applications, and I think you had a witness say yesterday and 
you repeated it this morning that they run as long as 3,600 
pages.
    Dr. Fleming. Right.
    Mr. Bromwich. I had somebody look through the file of all 
plan applications, and they weren't able to find anything even 
remotely close to that long. So I would ask you to ask your 
constituents to actually produce it.
    Dr. Fleming. Sure.
    Mr. Bromwich. I would like to see it.
    Dr. Fleming. Well, let me ask you a two-part question, and 
I will do it real quickly because I am running out of time. 
Would it be fair to say that our perceived slowness of 
permitting could be improved by more resources? I think that is 
the case you are trying to make.
    Mr. Bromwich. Yes. Yes, the answer is yes.
    Dr. Fleming. And if so, do you see there are also other 
parts of the permitting process that could also be streamlined 
even short of increased resources; that is to say, better 
applications, more uniform applications, better training for 
people who are filling them out? Do you feel like there is some 
improvement there that could be had?
    Mr. Bromwich. All of the above, and we have done a lot of 
that already, and I think industry has seen and will continue 
to see the results of those changes that we have implemented. 
We fully shared them with industry and we made it clear we are 
receptive to their suggestions to further streamline and make 
the process more efficient. They can check the status of their 
permits online. That is brand new.
    Dr. Fleming. Right.
    Mr. Bromwich. And I think it is a welcome development for 
them.
    Dr. Fleming. This is the last question, I'm running out 
of----
    Mr. Hastings. The gentleman is really out of time. I think 
we need to respect this so everybody has the time. I understand 
the gentleman wants to pursue, but we have these five-minute 
rules which are sometimes onerous. I recognize that. Maybe 
somebody who finishes earlier can yield time to you. Mr. 
Grijalva, do you have a second round?
    Mr. Grijalva. Thank you, sir. A couple of questions for Mr. 
Dykes.
    Earlier, I think in response to a question regarding the 
announcement of the criminal investigation by the AG, that that 
may have impacted the decision of oil company employees not to 
testify before the Joint Committee Team. But from what I 
understand the criminal investigation was announced on June 1, 
2010, and BP and Transocean employees declined to testify at 
the JIT hearing that was on May 27, 2010, before the 
announcement of criminal investigations, so that announcement 
didn't affect the decision by the oil employees not to testify, 
did it or did it not?
    Mr. Dykes. Those witnesses that refused to testify at the 
May hearing were those that were testing the subpoena authority 
of the Joint Investigation Team. Once we moved the hearing to 
Houston, then some of those witnesses testified, and some 
witnesses exercised their Fifth Amendment right.
    Mr. Grijalva. And just to follow up, do you think that the 
government at this point, the U.S. Attorney, should not look 
into whether there was criminal violations in this whole 
episode that we have been talking about here?
    Mr. Dykes. Sir, that is outside the scope of my knowledge.
    Mr. Grijalva. And I want to go back to a point that I think 
you had in your testimony. You have 27 years experience in the 
oil and gas, both in the industry side and the regulatory side, 
and all the experience that you have, Mr. Dykes, in terms of 
accident investigation, the JIT concluded that the negligence 
on the part of BP, poor risk management, inadequate oversight, 
was ultimately responsible for the blowout. What regulatory 
changes do you think are needed to prevent and mitigate this 
kind of mismanagement in the future?
    Mr. Dykes. Well, the key things in our recommendations, 
once again as I stated earlier to Mr. Flores, is if you can 
remove those decision points from the operators' control and 
put it into the regulatory side of the equation, then you are 
adding those additional barriers in the regulatory process.
    For example is the requirement for the major test 
procedures. One of our recommendations is for industry and the 
agency to work together to establish standardized major tests 
so that you have expected results that you can know what you 
need to know once you have those results.
    Mr. Grijalva. And if I may just to follow up, Mr. Director, 
on another question, talking about the resources and the lack 
of adequate resources for the agency as it moves forward with 
not only these recommendations but other recommendations that 
have been generated in terms of how to prevent and mitigate 
these kind of situations in the future.
    Part of the staffing issue is over not just--we see the 
concentration of the question is on the permitting aspect, how 
to expedite that, how to cut the time. I am sure that the 
resources are needed, as the Co-Chair just indicated, on the 
oversight, coordination, technical side that in the long term 
deals with the prevention question that we are talking about.
    Mr. Bromwich. That is absolutely true. I mean, I more often 
get questions on permitting and plan approval and the resources 
that are allocated to that, but the request for funding that we 
submitted to Congress and the President has submitted to 
Congress broadly allocate recourse increases in lots of 
different places, including importantly increasing oversight 
through adding to the number of inspectors and for many other 
things as well.
    Mr. Grijalva. Is the echo for faster permitting, not enough 
permitting continues, I think there has to be an understanding 
that if that is to be expedited even more from the 34-day 
period, there has to be a corresponding resource allocation to 
assure that the oversight that the agency is responsible and we 
as a Congress are responsible to the American people is also 
present as part of the package. It is a package deal. It is not 
a one-sided deal, and with that I yield back.
    Mr. Hastings. Would the gentleman yield?
    Mr. Grijalva. Gladly.
    Mr. Hastings. Just to follow up with Mr. Dykes to the 
response you gave Mr. Grijalva. Did any government witnesses 
take the Fifth Amendment in your----
    Mr. Dykes. No, sir, no government witnesses took the Fifth 
Amendment.
    Mr. Hastings. OK. The Chair recognizes the gentleman from 
Florida, Mr. Southerland.
    Mr. Southerland. Thank you, Mr. Chair.
    Mr. Bromwich, I just have a question on budget issues, this 
is a simple question. I am looking at some numbers provided for 
me on the budget and I am looking at 2008, $118 million, 2009, 
$116 million, 2010, $181 million, 2011, $225 million, and the 
President's budget request of $358 million. I mean, are those 
ballpark figures close?
    Mr. Bromwich. It sounds about right. I don't have the 
figures with me, Congressman, but that sounds about right.
    Mr. Southerland. I know you don't, and I don't want to be 
unfair to you, but when we are looking at 2008, $118 million, 
to 2011, $225 million, and we are talking about--you know, they 
have been accused by the other side that the agency is being 
starved. I mean, that is almost in a three-year period almost a 
100 percent increase in funding. So, I mean, if a 100 percent 
increase in funding is not enough, what is enough?
    Mr. Bromwich. The starvation comment was mine, and that 
is----
    Mr. Southerland. Well, it has also been laid at us.
    Mr. Bromwich. The historical level of funding for the 
agency, and so if you start from nothing or close to nothing, 
the percentage increases can look quite huge on paper and still 
not get to where you need to be, and that is a statement----
    Mr. Southerland. Well, but I do think in the current 
economic environment, I think to make the claim to the American 
people that a 100 percent increase in your funding is nothing I 
think will fall on deaf ears, especially in my state where we 
have 12 percent unemployment.
    Mr. Bromwich. I didn't say the increase was nothing. I said 
we started with nothing.
    Mr. Southerland. You said you started with nothing.
    Mr. Bromwich. Yes.
    Mr. Southerland. So the $120 million budget that you had in 
2008 was nothing.
    Mr. Bromwich. Compared to what we needed it was nothing.
    Mr. Southerland. All right. I would like to yield the 
balance of my time to the gentleman from Louisiana.
    Mr. Landry. Real quick to follow up with that. Thank you, 
Mr. Southerland. Did all of that increase go into BOEMRE, into 
oil and gas inspectors? I mean, how much of those resources 
actually went to helping get you where you need to get so we 
can get the permit process?
    Mr. Bromwich. So are you talking about the part of the 
increase that went just to admin power to writing?
    Mr. Landry. Right, just----
    Mr. Bromwich. I don't have that percentage for you.
    Mr. Landry. Would you say it is 5, 10, 20, 30----
    Mr. Bromwich. More than that.
    Mr. Landry.--40, 50, 60, 70 percent?
    Mr. Bromwich. I am sorry.
    Mr. Landry. Five, 10, 15, 20?
    Mr. Bromwich. Well, I would have to go back and look at the 
numbers. It is a significant number. It is certainly over 10 
percent.
    Mr. Landry. Significant is not 10 percent. Fifty percent 
would be significant because, again, I think what we all have 
here is we have a concern about where the money is going, OK. I 
don't want to give you more money just to add on top--I would 
bet you could scrub your agency and see where that money has 
gone and say, no, that is not quite as important as making sure 
that men and women who get to drilling in the Gulf of Mexico do 
so safely. You know, I think you can----
    Mr. Bromwich. When we began this process, Congressman 
Landry, I think the shared sense of both the Majority and the 
Minority was where we were the most inefficient was in the 
number of inspectors to review facilities.
    Mr. Landry. OK.
    Mr. Bromwich. And so that was our initial hiring priority. 
That has been replaced over time with a more balanced set of 
priorities which includes continuing to hire additional 
inspectors as well as hiring people who are directly involved 
in the permitting process.
    Mr. Landry. Well, again, I just would like to see where the 
resources are going within that increase. But anyhow, real 
quickly also, I want to let you know I have read the citation 
you gave us. I don't agree with you, but that is OK, I could be 
wrong, I have been wrong before. So since we have a 
disagreement, just to clarify, are we going to be able to get 
the legal analysis from the Solicitor because I think you said 
it came from the Solicitor's Office?
    Mr. Bromwich. The Department of the Interior, like every 
executive branch agency, has policies against turning over--
turning attorney-client communications within those agencies.
    Mr. Landry. But how does that attorney-client conflict? I 
mean, we are a part of government as well. I mean, we are as 
much the client as you all are I guess.
    Mr. Bromwich. No, you are not.
    Mr. Landry. I am not.
    Mr. Bromwich. No. I am the client agency, and the Solicitor 
in the Department of the Interior is our attorneys.
    Mr. Landry. Is all your attorneys, OK, and I guess Congress 
just doesn't have the ability to conduct that kind of 
oversight. We are not privileged. Are you saying it is a 
privileged issue?
    Mr. Bromwich. Yes.
    Mr. Landry. So we don't have the privilege of being able to 
extract from you how you interpret the laws we pass?
    Mr. Bromwich. Well, I have given you the statutory basis, 
Mr. Landry, and so I don't see what there is to gain other than 
intruding on internal agency communication to see if----
    Mr. Landry. We are trying to see if you are usurping your 
power.
    Mr. Bromwich. Well, you are a lawyer. You have looked at 
the statute. We can talk about it.
    Mr. Landry. We disagree with--OK.
    Mr. Hastings. The time of the gentleman has expired. I find 
this interesting as a non-lawyer to hear two lawyers. I guess 
that is what----
    Mr. Bromwich. Not that interesting.
    Mr. Hastings. The Chair recognizes the gentleman from 
Texas, Mr. Flores.
    Mr. Flores. Thank you, Mr. Chairman. Also, I didn't say 
this in my earlier round of questioning, but I think we all 
mourn the loss of the 11 men and the families that lost their 
loved ones. As a person who lost a brother to an oil accident, 
I can fully identify with their pain, and so I come at this 
from a little different angle, and that is because I want the 
industry to operate as safe as it can, and I came from that 
industry and we always tried to do that as much as we could.
    That said, that takes me to the next question, and this has 
to do with sort of an allegation that was lofted out there by 
the Ranking Member about fraud. Are any of you aware of any 
frauds that were committed by any of BP or Halliburton, 
Transocean or anybody else in this accident?
    Mr. Dykes. No, sir, I am not aware of any information and 
we did not uncover anything that indicated fraud on BP's part, 
Halliburton's part, Transocean's part, none whatsoever.
    Mr. Flores. OK. I mean, we definitely have identified many, 
many errors and problems, but I have not heard anything about 
frauds or criminal acts. Did any of you all pick up anything to 
indicate that there is a fraud or a criminal act?
    Mr. Dykes. During the course of our investigation we did 
not uncover anything that would indicate fraud or criminal 
activity from that standpoint.
    Mr. Flores. OK, good. I didn't either, and I just wanted to 
make sure we didn't leave that leaning out there in the air to 
cloud the issues. There were mistakes made. I think everybody 
has admitted that, and so the issue we are trying to address is 
how best to keep those from happening in the future.
    So that takes us to the next point, and that is for 
Director Bromwich. If we raise the fines materially, that is 
what happens on the back end. How does that influence what 
happens on the front end when these mistakes were made?
    I mean, we could raise the price to a billion dollars a 
day, but does that have an impact? I mean, does that change the 
way this would have come out?
    Mr. Bromwich. We have made efforts across the board, 
Congressman, as I think you know, and so the civil fine 
authority that I am requesting be raised is only a part of the 
puzzle. But you are quite right, you need to focus on the front 
end, primarily you need to focus on prevention. That has been 
our main focus since this happened, and that is what explains 
many of the new rules that have been developed which, frankly, 
industry has found hard to comply with at times. We are in a 
better place now than we were a number of months ago, but it 
was precisely because we were focusing on the front end and the 
importance of prevention that those rules were put in place 
very quickly.
    And just a footnote. You asked about whether any crimes 
were committed. There are people looking at that in the Justice 
Department and elsewhere, and I am a criminal lawyer and I know 
that what may not appear to be a crime to a non-lawyer may 
indeed be a crime to somebody who lived with----
    Mr. Flores. But you haven't seen anything at this point?
    Mr. Bromwich. Well, I didn't do the investigation, so I 
would defer to what Mr. Dykes saw in the course of his work.
    Mr. Flores. OK. Well, I mean, you have read the reports 
like I have, and I haven't seen anything to indicate crime or 
fraudulent behavior, criminal fraudulent behavior.
    I agree with you. I mean, the part of the package, the 
other side of the aisle in this hearing has only focused on let 
us go punish BP and beat the crap out of them, and really to me 
we need to look at the holistic approach to make sure that 
nobody ever has to pay a fine again because they do it right in 
the beginning and you don't have the accidents to start with, 
and that way you have 11 more lives today, you would not have 
had the pollution. BP would not have spent $20-plus billion to 
clean the mess up that they made. That is the direction I am 
trying to go is come up with a preemptive response and not the 
sort of punishment response. That is the direction I would like 
to go.
    I would like to yield the rest of my time to the gentleman 
from Louisiana.
    Mr. Landry. Thank you, Mr. Flores.
    Mr. Dykes, are you familiar with SEMS, a safety 
environmental agency?
    Mr. Dykes. Yes, sir, I am.
    Mr. Landry. Did BP have a SEMS in place?
    Mr. Dykes. They had a safety management system in place.
    Mr. Landry. They had a complete functional safety 
environmental management system in place?
    Mr. Dykes. They had it in place.
    Mr. Landry. OK. Was that something that came within the 
scope of your review?
    Mr. Dykes. Yes, it did.
    Mr. Landry. Was there any part of that SEMS that failed 
which caused the accident?
    Mr. Dykes. From the aspect of the program, no, the program 
did not fail. There were certain aspects that we pointed to, 
for example, the risk register that BP had implemented to 
determine the risk dealt with the drilling of the well, the 
crew members, or the engineers anyway, not the crew members of 
the rig, but the engineers in the office did not properly use 
the risk register.
    The management had changed a program that BP had in place. 
They were in transition from a paperwork management change 
process to an electronic management change process. There were 
still some gaps in that management change, but for the most 
part everything was intact.
    Mr. Landry. So there is nothing that would say that if 
every company out there had a functioning SEMS that that would 
again prevent the accident?
    Mr. Dykes. Having a functioning SEMS adds those additional 
barriers that I mentioned in my opening statement, but there is 
no guarantee that it will prevent it, but you are trying to 
reduce the probability as much as possible.
    Mr. Landry. OK.
    Mr. Hastings. The gentleman's time has expired. The Chair 
recognizes the gentleman from Arizona, Mr. Gosar.
    Dr. Gosar. Mr. Chairman, I yield my time to the gentleman 
from Louisiana.
    Mr. Hastings. That is why I broke it up because I thought 
we would have the continuity. The gentleman is recognized.
    Mr. Landry. I want to go a little further. On this SEMS 
issue, I am concerned, and I probably have to go back to 
Director Bromwich, you and I spoke about this fairly often. I 
want you to know that yesterday we heard testimony from a 
gentleman who said it took him five years to implement his SEMS 
program, to get one fully functioning. Now he is a small 
contractor.
    Mr. Bromwich. So he did it voluntarily?
    Mr. Landry. He did it voluntarily. That is right. He came 
here. He actually is not under--well, right now he is not under 
your oversight. I guess that was part of our argument earlier, 
but he is actually on the Coast Guard. The Coast Guard pointed 
this out to him in 2004, and so he determined that he was going 
to implement what took him five years, and so it goes back to 
my biggest concern is that it seems to me that the majors have 
SEMS in place because they have the resources necessary to 
implement these things, and, you know, I will say we graciously 
gave the industry 12 months to implement their SEMS programs 
when we know that the majors all have theirs, so this really 
affects our small operators out there.
    And so I would again ask you to comment as to the type of 
burden you believe we are going to place on our small operators 
and the expense that they are going to incur. Again let me echo 
that none of them said they don't want to implement SEMS, but 
we also heard from a witness who said that it is industry-wide 
going to be a problem in November.
    So really what I am really trying to do in your favor is 
the calls are going to start coming in November, and you are 
going to come back here, and we are going to have to go through 
this all over again. So I am trying to pass on to you what the 
industry is telling me. I know they are not telling you that 
directly, but you issued a permit, not me, and so I think there 
is a fear factor there on that. So I wanted to pass that on. 
Maybe you could tell the Committee again, because we heard from 
investigators that this is not a crucial piece, but that----
    Mr. Bromwich. That is not what I heard him say. He said he 
couldn't guarantee that an accident wouldn't happen, but he did 
say that it would reduce the likelihood and that is the key.
    Mr. Landry. Well, OK. Mr. Dykes, on a scale of one to ten, 
ten being the most crucial thing that we can do in order to 
prevent the accident, where would a SEMS fall?
    Mr. Dykes. Well, you can't look at SEMS as being a single 
component. SEMS is a management tool for managing the 
operations by conducting them in a safe and orderly fashion. It 
identifies multiple aspects that a company should look at in 
putting their operations programs together: hazards analysis, 
operating procedures, safe work practices. As an operating 
company large or small, that company needs to make sure that he 
is covering those bases.
    Mr. Landry. And you know what, you brought up a good point 
because the operators that I am talking about are in fear of 
what is coming, because there are like 13 elements to the SEMS 
plan. For a majority of those elements, their biggest concern 
is on the documentation standpoint, and so maybe I ought to 
rephrase my question.
    If an operator has a majority of the elements complete, 
again on that scale of one to ten, I mean, where does it fall 
in being crucial? Is that something that is as important as 
fixing the bottom of the BOPs, the cementing of wells? I mean, 
is it that crucial?
    Mr. Dykes. Your operating SEMS program should incorporate 
your repair and your BOPs and your cement design. Critical to a 
SEMS program, and let me back up and rephrase that. Critical to 
a safety management system, there are multiple models out there 
that you could use. You could use an ISO model, you can use the 
RP 75, which is the Safety Environmental Management Program, 
you could go back to the original predecessor of that, being 
API RP 750, which is managing operating hazards.
    Critical to that are four basic elements that to me are the 
cornerstone of those documents. That is hazards analysis, that 
is operating procedures, that is mechanical integrity and 
managing the change within that group. Those are four key 
cornerstones to any safety management program.
    Mr. Landry. Thank you.
    Mr. Hastings. The time of the gentleman has expired. The 
gentleman from Pennsylvania, Mr. Thompson.
    Mr. Thompson. Thank you, Chairman.
    Mr. Dykes, going to the Joint Investigation Team report, 
BP's well control manual states that the mud/gas separator 
should be lined up at all times when displacing a keg, but 
given that it is only meant to handle small amounts the 
diverter line is recommended to divert the kick overboard 
rather than on deck when you are working with high flow rates. 
I think we have all seen a video of the spill and surmise that 
this was a high flow rate.
    Can you explain to this Committee why crew on the board of 
the Deepwater Horizon would direct a heavy kick to a device 
that couldn't handle the flow and in doing so direct flammable 
hydrocarbons on board that eventually ignited and let the 
flows----
    Mr. Dykes. Sir, that is a critical question that we can 
only conclude that the crew on the rig floor at the time did 
not realize the magnitude of the volume of hydrocarbons coming 
up the well bore. This well, and I am going to get a little 
technical here, this well had a gas/oil ratio of roughly 3,000 
cubic feet of gas for one barrel of oil. It has a breakout at 
roughly about 1,500 feet in the water column, such that one 
barrel of influx coming up the riser, and once it gets to that 
hyperstatic depth of about 1,500 feet it releases roughly 3,000 
cubic feet of gas.
    So a small influx from the reservoir of 10 barrels 
immediately gives you a large plume of gas on the rig floor as 
it breaks out in that riser.
    I believe that the crew, by the time the gas broke out the 
crew did not realize that they had substantial flow and a 
substantial release until it was too late.
    Mr. Thompson. Do you think that the punishment of a thimble 
full of oil over the side under the Clean Water Act created a 
culture contributing to the disaster?
    Mr. Dykes. A culture? Could you define what you mean by 
culture?
    Mr. Thompson. Cultures influence decisionmaking. You can 
certainly see it in this body, pluming punishments under the 
Clean Water Act, just a thimble full of oil over the side 
versus to the separator as a decision point, did that 
contribute to that?
    Mr. Dykes. I did not find any information that would 
indicate that. The issue with the well control manual is to 
divert that flow once you realize you cannot handle it. The 
indications for the data is that they attempted to do that at 
some point in time. However by the time that decision was made 
the plume was already on the rig floor.
    Mr. Thompson. Is it possible that knowing what all the 
punishments are from the regulators turning in would influence 
the timing of making that decision?
    Mr. Dykes. Well, we can speculate, we can speculate and 
say, yes, it is possible.
    Mr. Thompson. I yield the balance of my time to Mr. Landry.
    Mr. Landry. Thank you. I have a quick question for you, 
Admiral. The ability of the Damon Bankston to meet to respond 
so quickly, how crucial was that in life saving?
    Admiral Salerno. Well, sir, they were right there, and they 
saved the vast majority of the people who evacuated from the 
rig, so they were a very crucial part of that, and we recognize 
the crew for their actions.
    Mr. Landry. So, if they had not been there, that could have 
taken away to save some lives there, I mean, if they were not 
as close as they were?
    Admiral Salerno. It would have certainly taken longer to 
retrieve the survivors from the water and to get them to a 
place of safety, yes.
    Mr. Landry. I yield to Mr. Flores.
    Mr. Flores. Thank you, Mr. Landry.
    I wanted to ask you, do any of you all have any criticisms 
of BP or Halliburton or Transocean cooperativeness or response 
to the investigation? Start with Captain Nguyen.
    Captain Nguyen. No, sir, I don't. There was a lot of 
objections to my questions and other Coast Guard members' 
questions, but I believe that just the PII attorneys were just 
doing their job, so I do not.
    Mr. Flores. OK. Mr. Dykes?
    Mr. Dykes. I agree with Captain Nguyen. I did not see any 
resistance other than the normal objections to the lines of 
some of the questions.
    Mr. Flores. OK. Admiral Salerno?
    Admiral Salerno. Sir, I was not actually part of the 
investigative process, but I am not aware of any.
    Mr. Flores. And I have lost my time.
    Mr. Bromwich. Mr. Flores, I can say that I am not aware of 
any issues relating to BP or Halliburton, but I am aware of an 
issue related to Transocean where I think they relied on 
technical objections to fail to produce certain important 
witnesses, and I responded to that by a letter to their CEO, 
which was not satisfactorily responded to.
    Mr. Flores. Thank you.
    Mr. Hastings. The gentleman's time has expired, and 
remarkably in this second round Mr. Landry has not had an 
opportunity to control his own time in this round, so he is 
recognized for five minutes.
    Mr. Landry. Thank you, Mr. Chairman.
    I am concerned because I fish out of the Gulf of Mexico. We 
are continually going further and further offshore, and the 
distance it takes to respond to particular accidents is a 
concern of mine. Of course, this particular accident we all 
were lucky. The seas were calm. It was at a time where water 
temperatures were warming up.
    Do you feel that, again, the ability of the Damon Bankston 
to respond, because I think the next vehicle closest to them 
was the Mopkian, is that correct?
    Admiral Salerno. I don't have the distance of the closest 
vessel. Obviously, as you know, there were a number of vessels 
operating out there, but I can get that for you.
    Mr. Landry. When we are having drilling operations, don't 
you agree that having those vessels there is a safety blanket 
for those workers?
    Admiral Salerno. Sir, it is basically a time/distance 
problem. Exactly. The closer a vessel is the quicker it can 
respond.
    Mr. Landry. Mr. Dykes?
    Mr. Dykes. No, I agree. The closer the vessel is, when you 
have vessels in near proximity to these facilities, it gives 
somewhat some comfort to those individuals on that rig or that 
platform that should they have to evacuate they have a safe 
harbor to go to. From that standpoint, moving forward I believe 
the next vessel was roughly an hour and a half to two hours 
away to the Deepwater Horizon.
    Mr. Landry. Do you want to----
    Captain Nguyen. Yes, sir, that is one of our 
recommendations is for the Coast Guard to look at requirement 
for standby vessel, and I believe the Commandant final agency 
memorandum agreed with that recommendation, sir.
    Mr. Landry. OK. Thank you. Before I yield to Mr. Flores, 
real quickly, I have already said that the greatest natural 
resource that we have in this country is not what lies beneath 
the waters or the soil but the men and women along the Gulf 
Coast and elsewhere who have such a dangerous trade, and would 
you agree that that is a fair statement, that at the end of the 
day this is all about making sure we give them not only as much 
protection but also provide opportunities that if there is an 
accident, because we have heard, like Mr. Dykes says, that we 
can't guarantee anything 100 percent--that we have a way to get 
those people safely home because it would have been a great day 
if we could have just discussed the environmental tragedy of 
this spill rather than having to add the 11 lives that were 
lost there, wouldn't you all agree with that?
    Captain Nguyen. Yes, sir, I do, and I think you can look at 
the Coast Guard philosophy on life preservers. We can't 
guarantee that nothing is going to happen, but we can give 
people a second chance.
    Mr. Landry. Go ahead, Mr. Dykes.
    Mr. Dykes. No, but that indicates that--talking about 
resources. The personnel that work in the offshore industry are 
the greatest asset and greatest resource. From the voluntary 
civilian operators to the agency indicates that you have 
roughly anywhere between 30,000 and 35,000 people physically 
offshore or the industry. That does not include the service 
companies, the dockside facilities and so forth that support 
that industry.
    Mr. Landry. Congressman Flores has a couple of followups, 
so I will stop right there. I yield the balance to Mr. Flores.
    Mr. Flores. This question is going to sound a little bit 
odd, but bear with me for a minute. Back to the human error, 
the human element parts of the equation that were part of this 
accident. I am a pilot and one of the ways I have avoided 
having any problem in my real aircraft is by flying a 
simulator, and in that simulator you can create all sorts of 
unusual situations so that you learn how to inherently respond 
to those situations.
    Do we do anything like that in the deepwater drilling 
business in terms of the way to control accidents? Are there 
simulators? Is there any sort of simulator training that is 
available to the industry today?
    Mr. Bromwich. My understanding is that there is, 
Congressman. In fact, on some visit I took to some of the 
facilities of some of the major operators I actually saw a well 
control simulator that is used in training. I believe it was by 
Exxon, but I think a number of the other companies have it as 
well. I think they have adjusted and modified and improved 
those kinds of simulators since the accident. I think that is 
the sort of thing that continues to require focus, to continue 
to improve the kind of training that can be provided.
    Mr. Flores. OK, very good. Thank you.
    Mr. Hastings. The time of the gentleman has expired, and 
the second round is over, and I appreciate very much the panel 
for sitting through that second round, and I also appreciate 
sometimes getting off course a little bit, but that happens. We 
are trying to get the information. Before I dismiss the first 
panel though I do want to make a short statement.
    Throughout this hearing I have refrained from commenting on 
the timing of the releases of the incidents of non-compliance 
that were released last night, but the fact is that Director 
Bromwich stated in September that the citations would be 
released the week of our original hearing, which of course was 
three weeks ago before it was postponed when obviously we had 
some problems with witnesses.
    But now these citations were delayed and they were actually 
released last night, which is literally hours before this 
congressional committee held an oversight hearing on this 
investigation report. So I have serious questions about the 
timing of these actions and whether or not they were an effort 
by the Executive Branch to time legal penalties to influence, 
affect or potentially interfere with the official activities of 
the legislative branch.
    I have not asked these questions during this hearing 
because I wanted to stay true to what I thought was the 
original intent and purpose, which is to hear directly from the 
investigators of this report, and further I refrained because I 
don't believe that anything that could be said at this hearing 
was going to provide a satisfactory answer as to whether there 
was an effort or an intent to time these penalties to affect 
these official hearings.
    So I will be sending written questions and requests for 
documents to provide complete answers to the question of the 
timing of this. The fact that citations were to originally 
occur the week of the first hearing and subsequently happened 
just last night before this hearing strikes me as one of 
extreme coincidence, well, perhaps it is, and I intend to find 
out when I ask the request.
    So with that I will dismiss the first panel and thank you 
very, very much for coming. If there are further follow-up 
questions, I would ask each of you to respond in a timely 
manner as you possibly can, so I dismiss the first panel and at 
the same time call the second panel.
    [Pause.]
    Mr. Hastings. I am very pleased to have our next panel. We 
have Mr. Ray Dempsey, Vice President of BP America; Mr. Bill 
Ambrose, Managing Director of North American Division of 
Transocean; Mr. James Bement, did I say that correctly?
    Mr. Bement. Yes, sir.
    Mr. Hastings. Vice President of Sperry Drilling, which is a 
division of Halliburton. You were in the audience and you saw 
what the ground rules are as far as timing. Your full statement 
will appear in the record. When the green light is on you are 
doing very fine. When the yellow light comes on it means you 
have a minute, and when the red light comes on it means your 
time has expired, and I would ask that you be as close to that 
as possible.
    As a programming note, we anticipate votes sometime between 
1:00 and 1:15. If this all wraps up before then, that will be 
fine; otherwise we will have votes and then come back 
immediately after the votes. We can't go any longer than 4:00. 
I don't anticipate that happening, but I just want to give a 
heads-up to everybody. So, with that, Mr. Dempsey, you are 
recognized for five minutes.

                 STATEMENT OF MR. RAY DEMPSEY, 
                   VICE PRESIDENT, BP AMERICA

    Mr. Dempsey. Thank you, Mr. Chairman.
    Chairman Hastings, Members of the Committee, my name is Ray 
Dempsey, and I am Vice President for BP America. I have worked 
for BP for more than 20 years. I have filled a variety of 
management and operational roles in engineering, strategy and 
financial areas. During the response, I oversaw the St. 
Petersburg, Florida, information center where BP worked with 
the Coast Guard and other Federal and state government 
representatives to share information on spill-related efforts.
    The Deepwater Horizon accident was a tragic event that 
profoundly affected us all. From the outset, BP has been 
committed, and remains committed today, to meeting our 
obligations in the Gulf Coast. While we appreciate the 
Committee's attention to the Joint Investigation Report, given 
the ongoing litigation and multiple investigations, BP cannot 
discuss details regarding the findings of the report. That 
said, I will do my best to answer your questions and to convey 
to you the actions BP has taken since the accident.
    The Joint Investigation Team Report, like every official 
report previously released, makes clear that the Deepwater 
Horizon accident was complex. It resulted from a number of 
interrelated causes involving multiple parties, including BP, 
Transocean and Halliburton. That finding is also consistent 
with the report of BP's own investigation commissioned 
immediately after the accident and released publicly more than 
a year ago.
    While we received a communication from DOI last night and 
are in the process of reviewing it, the issuance of notices of 
noncompliance to BP, Transocean and Halliburton makes clear 
that contractors, like operators, are responsible for properly 
conducting their deepwater drilling activities and are 
accountable to the U.S. Government and the American public for 
their conduct.
    We are dedicated to applying the lessons of the accident. 
In September 2010, BP announced the establishment of a new 
centralized Safety and Operational Risk organization or S&OR. 
One of S&OR's key objectives is to provide an independent check 
on safety critical operational decisions by, one, setting clear 
standards; two, providing expert scrutiny of safety and risk 
independent of line managers and advising on examining and 
auditing operations; three, providing deep technical support to 
the line businesses; and four, intervening and escalating, as 
appropriate, where corrective action is needed.
    In addition, BP has implemented on a voluntary basis new 
performance standards as applicable to our deepwater offshore 
drilling operations in the Gulf of Mexico that go beyond 
existing regulatory requirements. These standards address sub-
sea blowout preventers, third party verification of blowout 
preventer testing and maintenance, requirements for laboratory 
testing of certain cement slurries and enhanced measures for 
oil spill response.
    BP has also voluntarily undertaken several additional 
actions to enhance safety. These include establishing a real 
time drilling operation center in our Houston office, 
collaborating with spill response groups to augment and enhance 
industry response technology and capabilities, joining the 
Marine Well Containment Corporation, and making available to it 
BP's relevant containment knowledge and equipment, and working 
with government regulators and others in joint technology 
programs focusing on blowout preventer systems.
    We expect our contractors to do their job safely and in 
full compliance with all applicable government regulations. 
Notwithstanding this expectation, BP is conducting a thorough 
review of the contractors we use in drilling operations as well 
as the measures we use to assure contractor compliance with 
safety and quality standards. From the outset BP took action to 
contain and respond to this accident, restore affected 
environment and pay legitimate claims. We established a $20 
billion trust available to satisfy legitimate individual and 
business claims, state and local government claims, final 
judgments and settlements, state and local costs and natural 
resources damages and related costs. To date, BP has paid more 
than $7 billion in individual business and government claims 
and advances. BP has also committed significant amounts to 
initiatives beyond paying claims received under the Oil 
Pollution Act of 1990. For example, we voluntarily committed a 
billion dollars to refund early restoration projects, more than 
$250 million for tourism and seafood testing and marketing, and 
$500 million to the Gulf of Mexico Resource Initiative for a 
study of the environmental and public health impacts of the 
accident.
    BP deeply regrets the Deepwater Horizon accident, and we 
have dedicated ourselves to meeting our commitments in the Gulf 
Coast and to applying the lessons learned from this accident. I 
look forward to answering your questions.
    [The prepared statement of Mr. Dempsey follows:]

    Statement of Raymond C. Dempsey, Jr., Vice President, BP America

    Chairman Hastings, Ranking Member Markey, members of the Committee, 
my name is Ray Dempsey, and I am Vice President for BP America. I am 
pleased to participate in today's hearing regarding the final report of 
the Bureau of Ocean Energy Management, Regulation and Enforcement 
(BOEMRE) and the U.S. Coast Guard Joint Investigation (Joint 
Investigation Team Report) regarding the April 20, 2010 Deepwater 
Horizon accident and resulting oil spill. The Deepwater Horizon 
accident was a tragic event that profoundly affected us all. From the 
outset BP has been committed--and remains committed today--to meeting 
its obligations in the Gulf Coast.
    My testimony is focused on the important lessons BP has learned 
from this accident--lessons that BP has been sharing with industry 
participants and government officials across the globe in a continuing 
effort to enhance safety throughout the oil and gas industry. As we 
have communicated to this Committee, while we respect and appreciate 
the Committee's attention to the release of the Joint Investigation 
Team Report, we cannot discuss and comment on the report's findings in 
any detail because the facts regarding the causes of the accident are 
the subject of ongoing litigation and investigations regarding the 
accident. As you can appreciate, these legal proceedings will make it 
challenging to respond to questions the Committee may have about the 
Joint Investigation Report or the accident. That said, I appreciate the 
opportunity to share with the Committee what BP has learned from the 
accident and the changes we have made.
    I have worked for BP for more than twenty years. Since joining the 
company in 1990, I have held a variety of management and operational 
roles in engineering, strategy, and financial areas of BP's operations 
in the United States and abroad. On May 6, 2010, while serving as Vice 
President for Strategy and Portfolio for BP's Fuels Value Chain 
Strategic Performance Unit, I joined the St. Petersburg Unified 
Command, which directed spill response efforts for the west coast of 
Florida and worked together with incident command centers throughout 
the Gulf region. As part of my responsibilities, I oversaw the St. 
Petersburg Joint Information Center, where BP worked with the Coast 
Guard and other federal and state government representatives to share 
information on spill-related efforts. I volunteered for this position 
because I wanted to contribute to BP's response efforts and assist in 
addressing the needs of the people of the Gulf Coast region. I assumed 
my current role, in which I continue to be involved in information-
sharing with external stakeholders regarding response issues, in 
October 2010.
    Today I would like to share with you and the Committee some of the 
actions that BP has taken, not only to contain and respond to the 
spill, restore the affected environment, and pay all legitimate claims, 
but also further to improve safety. These initiatives to improve safety 
include organizational changes within BP to facilitate enhanced 
company-wide process safety, operational integrity, and risk management 
programs; the implementation of voluntary performance standards for 
deepwater drilling that go beyond existing regulatory obligations; 
strengthening contractor management; and continuing the implementation 
of the recommendations from BP's investigation report.
A Complex Accident With Multiple Causes Involving Multiple Parties
    Consistent with the findings of every official investigation, the 
Joint Investigation Team Report makes clear that the Deepwater Horizon 
accident was the result of multiple causes, involving multiple parties, 
including BP, Transocean, and Halliburton. This finding is also 
consistent with the report of BP's own non-privileged investigation, 
commissioned immediately after the accident and released publicly more 
than a year ago. BP has consistently acknowledged its role in the 
accident. BP continues to encourage other parties to acknowledge their 
roles in the accident and to step forward to fulfill their obligations 
to Gulf communities.
BP's Response and Restoration Efforts
    From the first day of the Deepwater Horizon accident, BP took 
action to contain and respond to the spill, restore the affected 
environment, and pay legitimate claims. At its peak, the response 
involved nearly 48,000 people, scores of aircraft, and thousands of 
boats. To date, BP has spent approximately $14 billion on response 
efforts. In addition, BP established a $20 billion Trust to enhance 
public confidence in the availability of funds for economic and 
environmental restoration. That Trust was established in 2010 to 
satisfy legitimate individual and business claims resolved by the Gulf 
Coast Claims Facility (GCCF), state and local government claims 
resolved by BP, final judgments and settlements, state and local 
response costs, and natural resource damages (NRD) and related costs. 
As of October 11, 2011, BP has paid more than $7 billion in individual, 
business, and government claims and advances.
    BP has also committed significant amounts to initiatives beyond 
paying claims received under the Oil Pollution Act of 1990. BP 
voluntarily committed $1 billion to fund early restoration projects and 
has committed more than $250 million to support tourism and seafood 
testing and marketing in the Gulf region. BP has committed $500 million 
to the Gulf Research Initiative, a research program to be conducted by 
independent experts from academic institutions to study the 
environmental and public health impacts of the accident. BP has also 
provided $52 million to five public health agencies and $10 million to 
the National Institutes of Health; established a $100 million fund for, 
among others, unemployed rig workers in the Gulf region; and made 
significant financial contributions to social service organizations in 
the Gulf. In total, BP's efforts to date have exceeded $20 billion.
BP's Initiatives To Improve Safety
    In addition to its unprecedented efforts to respond to the spill, 
restore the environment, and pay legitimate claims, BP has worked 
intensively to implement enhanced company-wide process safety, 
operational integrity, and risk management programs. BP has dedicated 
itself to applying the lessons of the Deepwater Horizon accident, and 
is undertaking a range of actions to further strengthen risk 
management, process safety, and contractor oversight throughout the 
company, as well as sharing these lessons learned across the industry 
and the globe.
    I explain below some of these initiatives.
Organizational Initiatives
    In September 2010, BP announced the establishment of a new, 
centralized Safety and Operational Risk (S&OR) organization. S&OR 
drives implementation of mandatory safety-related standards and 
processes and provides checks and balances independent of the business 
line. One of its key objectives is to provide an independent check on 
safety-critical operational decisions. S&OR accomplishes its mandate at 
the BP Group and local business levels by: (1) setting clear 
requirements; (2) providing expert scrutiny of safety and risk--
independent of line managers--and advising on, examining, and auditing 
operations; (3) providing deep technical support to the line 
businesses; and (4) intervening and escalating, as appropriate, where 
corrective action is needed. S&OR has the authority to intervene in 
operational and technical decisions in the company's line businesses.
    BP has also reorganized its upstream business into three separate 
divisions--Exploration, Developments, and Production--each of which is 
led by an Executive Vice President reporting directly to the Chief 
Executive Officer. The new structure for BP's upstream business allows 
increased executive management visibility into each division and 
facilitates consistent implementation of BP's existing Operating 
Management System (OMS)--BP's comprehensive, company-wide management 
system that sets forth guiding principles, mandatory standards, and 
operating procedures--as well as closer connectivity with the S&OR 
organization. In addition, specialized personnel who were previously 
part of a separate, advisory drilling and completions function are 
being integrated into the line operating businesses where they can 
share their knowledge and build capability. Within the Developments 
Division, BP has established a single Global Wells Organization, which 
has responsibility for drilling all BP's wells around the world 
according to high standards. Global Wells' agenda for assuring the 
safety of drilling operations covers seven areas: standards, 
compliance, risk management, capability-building, contractor 
management, redefining performance, and enhancing technology.
Voluntary Performance Standards
    As we have announced, BP has implemented, on a voluntary basis, 
specific new performance standards applicable to our deepwater offshore 
drilling operations in the Gulf of Mexico. These new standards go 
beyond existing regulatory obligations. Specifically, BP has committed 
to four voluntary performance standards for deepwater offshore drilling 
operations conducted on leases for which BP Exploration & Production is 
the designated operator in the Gulf. BP will incorporate these 
voluntary performance standards in any future drilling permit 
application or proposed plan application that BP submits, and upon the 
regulator's approval of that permit or plan those standards will become 
conditions of operation and fully enforceable by the regulator.
    First, BP will use, and will require its contractors involved in 
drilling operations to use, subsea blowout preventers (BOPs) equipped 
with no fewer than two blind shear rams and a casing shear ram on all 
drilling rigs under contract to BP for deepwater service operating in 
dynamic position mode.
    Second, each time a subsea BOP from a moored or dynamically 
positioned drilling rig is brought to the surface and testing and 
maintenance on the BOP are conducted, BP will require that a third 
party verify that the testing and maintenance of the BOP were performed 
in accordance with manufacturer recommendations and API Recommended 
Practice 53.
    Third, BP will require that laboratory testing of cement slurries 
for primary cementing of casing and exposed hydrocarbon bearing zones 
relating to drilling operations of deepwater wells be conducted or 
witnessed by a BP engineer competent to evaluate such laboratory 
testing, or a competent third party independent of the cement provider. 
BP will provide laboratory results to the applicable BOEMRE field 
office.
    Fourth, BP's Oil Spill Response Plan will include information about 
enhanced measures for responding to a spill in open water, near shore 
response or shoreline spill response based on lessons learned from the 
Deepwater Horizon oil spill.
    BP has also voluntarily undertaken six additional actions. First, 
BP has established a real-time drilling operations center in its 
Houston office which will be operational before the company begins 
drilling any new oil or gas wells in the Gulf. Second, BP will work to 
augment and improve industry response capabilities and technology in 
collaboration with groups such as Clean Gulf Associates and the Marine 
Spill Response Corporation. As a member of both organizations, BP will 
actively encourage and support additional investments in technology, 
training and people to continuously improve response capability and 
performance. Third, BP has joined the Marine Well Containment 
Corporation (MWCC) and has made its relevant procedures, expertise and 
available equipment developed during the Deepwater Horizon accident 
available to industry through the MWCC. Fourth, BP will share the 
company's increased remotely operated vehicle (ROV) and simultaneous 
operations (SIMOPS) monitoring capabilities with industry and 
government through an industry workshop. Longer term, BP will 
collaborate with BOEM/BSEE, the USCG, and other agencies and industry 
work groups to share new learning regarding ROVs and SIMOPS. Fifth, BP 
will collaborate with BOEM/BSEE, the Ocean Energy Safety Advisory 
Committee, the Center for Offshore Safety, and others in a joint 
technology development program to provide enhanced functionality, 
intervention, testing and activation of BOP systems, including acoustic 
and subsea communications capabilities. Sixth, BP will increase its 
well control competencies through assessments of its employees and 
agents who have authority to act on BP's behalf in overseeing drilling 
operations on BP-operated facilities and drilling rigs.
Contractor Management and Oversight
    BP expects its contractors to do their jobs safely and in full 
compliance with all applicable government regulations. Notwithstanding 
this expectation, BP is conducting a thorough review of the contractors 
it uses in drilling operations, as well as of the measures it uses to 
assure contractor compliance with safety and quality standards. The 
actions stemming from this review will build on BP's existing programs 
and requirements for selecting and working with contractors, which 
include assessing contractors' safety performance as part of the 
selection process, defining safety requirements in contracts, and 
evaluating contractor performance.
Implementation of the Recommendations from the BP Investigation Report 
        on the Deepwater Horizon--Lessons Learned
    As part of its commitment to safety and learning the lessons of the 
Deepwater Horizon accident, BP conducted its own investigation of that 
accident. On the day that investigation report was published (September 
8, 2010), BP immediately accepted and committed to implement the 
report's twenty-six recommendations. These recommendations include 
measures to strengthen contractor management, as well as assurance on 
blowout preventers, well control, pressure testing for well integrity, 
emergency systems, cement testing, rig audit and verification, 
personnel competence, and leading and lagging performance indicators 
for drilling operations. As the Report noted, ``[f]ull implementation 
of the recommendations w[ill] involve a long-term commitment and a 
prioritized plan.'' Consistent with that guidance, BP developed a 
comprehensive project plan and is making progress in the implementation 
at a pace appropriate to maintain quality and to enable rigorous 
implementation down to the front line of the organization. BP is also 
developing a program of self-verification and auditing by S&OR to 
confirm implementation.
    BP's comprehensive Operating Management System (OMS) provides a 
strong foundation for the company's ongoing initiatives to enhance its 
process safety, risk management, and operational integrity programs. 
OMS is facilitating effective implementation of the Report's 
recommendations and other safety enhancements that BP is making.
Conclusion
    BP deeply regrets the Deepwater Horizon accident, and has dedicated 
itself to meeting its commitments in the Gulf Coast and to applying the 
lessons of this accident. BP is undertaking a broad range of actions to 
further strengthen risk management, process safety, and contractor 
oversight throughout the company, and is committed to doing its part in 
disseminating the lessons of the Deepwater Horizon accident. To that 
end, BP has shared lessons learned with over 20 countries globally, and 
the company is working with governments and industry groups around the 
world to facilitate industry-wide changes that will further promote the 
safety of offshore drilling. We believe that we have the necessary 
systems and capabilities in place to continue to enhance the safety of 
deepwater drilling.
                                 ______
                                 

    Response to questions submitted for the record by Ray Dempsey, 
                    Vice President, BP America Inc.

QUESTION FROM REPRESENTATIVE FLORES:
1.  Mr. Dempsey, during the hearing I asked you what the total 
        anticipated financial outlay of BP will be in response to 
        Macondo incident. This would include the trust fund, response, 
        cleanup, etc. Please provide BP's estimate to the Committee.
    Please see Notes 2 and 37 to BP p.l.c.'s Form 20-F filed on March 
2, 2011, as well as Note 2 to BP p.l.c.'s Form 6-K filed on October 25, 
2011, for information on the Gulf of Mexico oil spill and provisions. 
These documents are available at http://www.sec.gov/Archives/edgar/
data/313807/000095012311021108/u10175e20vf.htm and http://www.sec.gov/
Archives/edgar/data/313807/000119312511280172/d234390d6k.htm, 
respectively.
    In addition, BP also wants to underscore what it has done in the 
Gulf following the Deepwater Horizon accident. From the outset, BP has 
stepped up to meet its commitments in the Gulf of Mexico region. BP is 
meeting its obligations under the Oil Pollution Act of 1990 (OPA) and 
has waived that statute's $75 million liability cap. Thus far, BP has 
paid out more than $7 billion to individuals, businesses, and 
governments in claims and advances and has spent more than $14 billion 
on other response activities in the Gulf. In addition, BP is 
cooperating in a natural resource damages assessment (NRDA) with 
federal and state trustees and, in an unprecedented voluntary agreement 
with those trustees, BP agreed to commit up to $1 billion to fund early 
restoration projects to accelerate Gulf Coast restoration. On December 
14, the Trustees unveiled the first set of early environmental 
restoration projects that are proposed for funding under that landmark 
agreement. The eight proposed projects are located in Alabama, Florida, 
Louisiana and Mississippi. Collectively, the projects will restore and 
enhance wildlife, habitats, and the services provided by those habitats 
and provide additional access for fishing, boating, and related 
recreational uses. More early restoration projects are anticipated in 
the future.
    BP also has made a number of voluntary contributions, including 
committing: $500 million, over 10 years, to the Gulf of Mexico Research 
Initiative (GoMRI) to study the potential impact of the Deepwater 
Horizon accident on the environment and public health; $100 million to 
the Rig Worker Assistance Fund administered by the Baton Rouge Area 
Foundation; $179 million to the Gulf States for tourism programs; $77 
million to the Gulf States for seafood testing and marketing programs; 
$52 million for federal and state mental health programs; and $10 
million to NIH for a long-term response worker health study.
    In June 2010, BP established a $20 billion trust to enhance public 
confidence in the availability of funds for economic and environmental 
restoration. That trust was established to satisfy legitimate 
individual and business claims processed by the Gulf Coast Claims 
Facility (GCCF), state and local government claims processed by BP, 
final judgments and settlements, state and local response costs, and 
natural resource damages and related costs. The $20 billion is neither 
a floor nor a ceiling.
QUESTIONS FROM REPRESENTATIVE MARKEY:
1.  Please detail the capital investments made by BP in oil and gas 
        exploration in each of the last three fiscal years? Of these 
        investments, please detail how much was spent on exploration of 
        new fields?
    The table below details BP p.l.c.'s worldwide capital expenditures 
for exploration and production.


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    The table below details BP p.l.c.'s worldwide exploration and 
appraisal costs on new fields.


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    The chart above includes exploration and appraisal drilling 
expenditures, which are capitalized within intangible assets, and 
geological and geophysical exploration costs, which are charged to 
income as incurred. These costs are based on activities of subsidiaries 
and do not include costs associated with equity-accounted entities.
2.  How much money has BP invested in each of the last three fiscal 
        years on research and development generally? Of these research 
        and development investments, how much was focused on the 
        research and development of safer offshore drilling 
        technologies? How much was focused on technologies related to 
        rig safety and accident prevention? How much was focused on 
        spill response technologies? How much was focused on research 
        regarding renewable and alternative energy sources? Please 
        break down that investment by renewable energy type (e.g., 
        wind, solar, etc.).
    The table below details BP p.l.c.'s worldwide research and 
development expenditure.


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    Currently, exploration and production accounts for roughly 40% 
of BP's Research & Development expenditures; refining and marketing 
accounts for 35% and alternative energy makes up the remaining 25%. The 
share dedicated to alternative energy reflects the growing potential of 
alternative energy in BP's energy portfolio.


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    Safety is embedded in everything that BP does, thus much of 
BP's capital and operating spend incorporates elements of safety.
    Pursuant to the definition of ``Research & Development'' used in 
BP's annual report, exploration & production Research & Development 
contains several programs that focus on safety and reliable offshore 
operations, including drilling. The program on drilling technology is 
focused on measurement by drilling, downhole gas detection and 
resistivity ahead of bit. The total spent in this area over the last 3 
years is approximately $25 million.
    However, this amount does not cover the full extent of Research & 
Development embedded in BP's spend and that of its contractors. By way 
of example, BP's Thunderhorse production facility contains hundreds of 
technology firsts in well completions, subsea and topsides facilities 
that in total cost several billion dollars to develop, manufacture and 
install over a period of 10 years. None of these expenditures was 
accounted for as BP's Research & Development but BP nonetheless paid 
suppliers to develop them. Additionally, BP works with suppliers in the 
design and development of safe drilling equipment. BP's contribution to 
these efforts is not classified as Research & Development.
3.  How much has BP invested in deployment of renewable or alternative 
        energy in each of the last three fiscal years? Please break 
        that down that investment by renewable energy type (e.g. wind, 
        solar, etc.).
    BP supports a comprehensive climate and energy policy that includes 
development of all forms of energy (oil, natural gas, coal, nuclear, 
biofuels, wind, solar, etc.) and encourages efficiency and 
conservation. The chart below details BP p.l.c.'s worldwide alternative 
energy capital expenditure and revenue investment.


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    4.  Does BP support the elimination of the subsidies for oil and 
        gas companies identified in the President's Budget Request for 
        Fiscal Year 2012 in order to reduce the federal budget deficit?
    Determination of tax policy is up to the government, but BP wants 
to participate in the dialogue on the important issues of comprehensive 
tax reform and deficit reduction. BP believes that it is important that 
tax reform be undertaken as a comprehensive effort that results in the 
U.S. tax system's being competitive. In that regard, BP does not 
support proposals that target a single industry to provide revenue for 
deficit reduction.
5.  Does BP believe that the voluntary enhanced drilling standards for 
        offshore drilling that it adopted in July are technologically 
        practicable and economically feasible for the industry as a 
        whole?
    BP is implementing a set of voluntary deepwater oil and gas 
drilling standards in the Gulf of Mexico that go beyond existing 
regulatory obligations and demonstrate the company's commitment to safe 
and reliable operations. BP is not in a position to speak on behalf of 
the industry as a whole. BP has worked hard to share lessons learned 
from the Deepwater Horizon accident broadly--with regulators and with 
industry--in the United States and abroad.
6.  Does BP believe that the voluntary enhanced drilling standards for 
        offshore drilling that it adopted in July are technologically 
        practicable and economically feasible for other major, 
        vertically integrated oil companies such as ExxonMobil, 
        Chevron, ConocoPhillips and Shell?
    BP is not in a position to speak on behalf of those corporations. 
BP has concluded that these voluntary standards and practices should be 
part of BP's operations in the Gulf of Mexico.
7.  What recommendations does BP have for improving the safety of 
        offshore drilling?
    In July 2011, BP Exploration & Production Inc. (BPXP) announced a 
new set of voluntary deepwater oil and gas drilling standards in the 
Gulf of Mexico that demonstrate the company's commitment to safe and 
reliable operations. These performance standards go beyond existing 
regulatory obligations and reflect the company's commitment, following 
the Deepwater Horizon accident and subsequent oil spill, to apply 
lessons learned. BP is already sharing key lessons learned from the 
spill response with regulators and other industry participants around 
the world. Although BP is not in a position to speak on behalf of the 
industry as a whole, BP has concluded that these voluntary standards 
and practices should be part of BP's operations in the Gulf of Mexico.
    The four new BP performance standards are:
          BPXP will use, and will require its contractors 
        involved in drilling operations to use, subsea blowout 
        preventers (BOPs) equipped with no fewer than two blind shear 
        rams and a casing shear ram on all drilling rigs under contract 
        to BPXP for deepwater service operating in dynamic position 
        mode. With respect to moored drilling rigs under contract to 
        BPXP for deepwater drilling service using subsea BOPs, the 
        subsea BOP will be equipped with two shear rams, to include at 
        least one blind shear ram and either an additional blind shear 
        ram or a casing shear ram.
          Each time a subsea BOP from a moored or dynamically 
        positioned drilling rig is brought to the surface and testing 
        and maintenance on the BOP are conducted, BPXP will require 
        that a third party verify that the testing and maintenance of 
        the BOP were performed in accordance with manufacturer 
        recommendations and API RP 53.
          BPXP will require that lab testing of cement slurries 
        for primary cementing of casing and exposed hydrocarbon bearing 
        zones relating to drilling operations of deepwater wells be 
        conducted or witnessed by a BPXP engineer competent to evaluate 
        such lab testing, or a competent third party independent of the 
        cement provider. BPXP will provide lab results to the 
        applicable BSSE field office within a reasonable period of 
        time.
          BPXP's Oil Spill Response Plan (OSRP) includes 
        information about enhanced measures for responding to a spill 
        in open water, near shore response and shoreline spill response 
        based on lessons learned from the Deepwater Horizon oil spill.
QUESTIONS FROM REPRESENTATIVE GRIJALVA:
1.  The report we're talking about found, quote, `BP was ultimately 
        responsible for conducting operations at Macondo in a way that 
        ensured the safety and protection of personnel, equipment, 
        natural resources and the environment.' The report said while 
        it was Halliburton's job to mix and test the cement that failed 
        in the seal, BP had the final word and made a series of 
        decisions that saved money but increased risk and may have 
        contributed to the cement's failure. Yet you say today, because 
        you're being sued, you can't explain any of this to us. I'd 
        like to ask you directly: Why did BP decide to save money 
        rather than lives?
    BP strongly disagrees with the question's characterization of BP's 
actions in connection with the Macondo well. The findings of every 
official investigation report--including the MBI, the Presidential 
Commission, and the NAE/NRC--are consistent with the core conclusion 
that the Deepwater Horizon accident was the result of multiple causes, 
involving multiple parties, including Transocean and Halliburton, as 
well as BP.
2.  The report named a BP employee, Mark Hafle, as specifically failing 
        to investigate anomalies detected during the cementing and said 
        he did not run a test that evaluates the quality of the cement 
        job. Mr. Hafle still works for BP, and refused to testify last 
        year citing his right against self-incrimination. Does this 
        committee need to ask Mr. Hafle to testify?
    BP does not believe it would be appropriate to comment, at this 
time, on the Committee's processes for issuing invitations to testify. 
With respect to Mr. Hafle's testimony before the Joint Investigation 
Team of the Bureau of Ocean Energy Management, Regulation and 
Enforcement and the United States Coast Guard, the Joint Investigation 
Team's report states that ``[a]fter testifying at one hearing, Mark 
Hafle invoked his Fifth Amendment Rights and refused to testify a 
second time.'' See Bureau of Ocean Energy Management, Regulation and 
Enforcement, Report Regarding the Causes of the April 20, 2010 Macondo 
Well Blowout 11 n.9 (2011).
3.  What can you tell us about the safety and compliance role of other 
        BP employees who weren't named in the report? Why was Mr. Hafle 
        the only one identified by name?
    BP cannot speak to the Joint Investigation Team's decisions 
regarding what to include in their report.
                                 ______
                                 
    Mr. Hastings. Thank you very much, Mr. Dempsey. Next we 
will recognize Mr. Bill Ambrose, Managing Director of the North 
America Division of Transocean. Mr. Ambrose, you are recognized 
for five minutes.

STATEMENT OF MR. BILL AMBROSE, MANAGING DIRECTOR, NORTH AMERICA 
                      DIVISION, TRANSOCEAN

    Mr. Ambrose. Chairman Hastings, other Members of the 
Committee, thank you for the opportunity to be here before your 
panel today. My name is Bill Ambrose. I am the Managing 
Director of the North American Division of Transocean Offshore 
Drilling in Deepwater, Incorporated. I also led Transocean's 
internal investigation into the Macondo incident on April 20, 
2010.
    The findings of that investigation were published in June 
2011. I am grateful for the opportunity to highlight some of 
those with the Committee today as the Committee reviews the 
final reports of BOEMRE and the U.S. Coast Guard's Joint 
Investigation Team.
    First and foremost, let me state the last 17 months have 
been a time of great sorrow and reflection for our company. 
Nothing is more important to Transocean than the safety of our 
people and our crew members, and our thoughts and prayers 
continue for the widows, parents and children of the 11 lost.
    This period has been one of intense effort on the part of 
our company and numerous investigative bodies and oversight 
entities, including this Committee, to get to the bottom of 
what caused this tragedy. To that end Transocean formed an 
investigative team comprised of dedicated Transocean personnel 
and numerous independent industry experts. Transocean provided 
the investigative team with the resources necessary to produce 
a thorough investigation of the incident.
    Following the incident Transocean issued Alert 114 to its 
global fleet to ensure BOP's schematics reflect the current 
arrangements of each rig's BOP. Alert 114 also reenforced our 
emergency response preparedness. We have also developed 
standardized procedures for conducting negative tests for 
operators, and in consultation with our customers we have 
enhanced our well integrity guidelines. Further, the company 
has expanded the scope of its internal audit and assessment 
program and updated its well control to reflect lessons 
learned.
    We continue to study the appropriateness and reliability of 
acoustic control systems for BOPs, and we continue to evaluate 
potential equipment and procedures for early kick detection and 
handling of gas in the riser.
    Transocean remains ready and willing to assist your 
committee as this important work moves forward. However, we are 
unable to respond to specific findings and conclusions of the 
U.S. Coast Guard and BOEMRE reports. The Joint Investigation 
Team convening order incorporates for both the Coast Guard and 
BOEMRE the provisions of 46 U.S.C. Sec. 6308[a] which prohibits 
the use of reports of any proceedings other than the 
administrative proceedings initiated by the United States. This 
BOEMRE report acknowledges this limitation on page 10 where it 
states, ``The convening work provide the relevant statutes and 
regulations relating to both the U.S. Coast Guard and BOEMRE, 
govern the JIT, and the JIT public hearing conducted in 
accordance with U.S. Coast Guard rules and procedures relating 
to marine investigation.''
    Last the BOEMRE proceedings are still active in the 
limitation process and therefore I cannot discuss them.
    Again, on behalf of Transocean I am pleased to discuss the 
facts as we know them to further understanding of what occurred 
on the night of April 20, 2010, and what we can do to prevent 
its reoccurrence. Thank you.
    [The prepared statement of Mr. Ambrose follows:]

 Statement of Bill Ambrose, Managing Director, North America Division, 
          Transocean Offshore Deepwater Drilling Incorporated

    Chairman Hastings, Ranking Member Markey, and other members of the 
Committee, thank you for the opportunity to appear before your panel 
today. My name is Bill Ambrose, and I am Managing Director of the North 
America Division at Transocean Offshore Deepwater Drilling 
Incorporated. I also led Transocean's internal investigation into the 
Macondo incident of April 20, 2010. The findings of that investigation 
were published in June 2011, and I am grateful for the opportunity to 
highlight some of those for the Committee today as the Committee 
reviews the final report of the Bureau of Ocean Energy, Management, 
Regulation and Enforcement (BOEMRE) and the U.S. Coast Guard (USCG) 
Joint Investigation Team (JIT).
     First and foremost let me state that the last 17 months have been 
a time of great sorrow and reflection for our Company. Nothing is more 
important to Transocean than the safety of its employees and crew 
members, and our thoughts and prayers continue to be with the widows, 
parents and children of the 11 crew members who died on April 20, 2010.
    This period has also been one of intense effort on the part of our 
Company and numerous investigative and oversight entities, including 
this Committee, to get to the bottom of what caused this tragedy.
    To that end, Transocean formed an internal investigative team 
comprised of dedicated Transocean personnel and numerous independent 
industry experts. Transocean provided the investigation team with the 
resources necessary to produce a thorough investigation of the 
incident.
    Following the incident, Transocean issued Alert Number 114 to its 
global fleet to ensure that BOP schematics reflect the current 
arrangements of each rig's BOP. Alert Number 114 also reinforced our 
emergency response preparedness.
    We have also designed standardized procedures for conducting 
negative pressure tests for operators. In consultation with our 
customers, we have enhanced our well integrity guidelines. Further, the 
Company has expanded the scope of its internal audit and assessment 
program and updated its well control manual to reflect lessons learned.
    We continue to study the appropriateness and reliability of 
acoustic control systems for the BOP, and we continue to evaluate 
potential equipment and procedures for early kick detection and the 
handling of gas in the riser.
    Transocean remains ready and willing to assist your Committee as 
this important work moves forward. However, we are unable to respond to 
specific findings and conclusions of the U.S. Coast Guard and BOEMRE 
reports. The Joint Investigation Team (JIT) Convening Order 
incorporates for both the U.S. Coast Guard and BOEMRE the provisions of 
46 U.S.C. Sec. 6308 (a), which prohibits the use of reports in any 
proceeding other than the administrative proceedings initiated by the 
United States. The BOEMRE report acknowledges this limitation at page 
10:
        The Convening Order provides that relevant statutes and 
        regulations relating to both the USCG and BOEMRE govern the JIT 
        and that the JIT's public hearings be conducted in accordance 
        with the USCG's rules and procedures relating to Marine Boards 
        of Investigations.
    Lastly, the BOEMRE proceedings are still active in the litigation 
process and therefore I cannot discuss them.
    Again, on behalf of Transocean, I am pleased to discuss the facts 
as we know them to further understand what occurred on the night of 
April 20, 2010, and what we can do to prevent its reoccurrence.
                                 ______
                                 
    Mr. Hastings. Thank you, Mr. Ambrose. Next I recognize Mr. 
James Bement, Vice President of Sperry Drilling, which is a 
part of Halliburton. You are recognized for five minutes.

STATEMENT OF MR. JAMES BEMENT, VICE PRESIDENT, SPERRY DRILLING, 
                          HALLIBURTON

    Mr. Bement. Thank you, Chairman Hastings, Ranking Member 
Markey and Members of the Committee. Thank you for the 
invitation to testify today.
    As one of my colleagues made clear in our company's first 
appearance before Congress in May 2010, Halliburton looks 
forward to continuing to work with Congress to understand what 
happened at Macondo and what collectively we can do in the 
future to ensure oil and gas production in the United States is 
undertaken in the safest and most environmentally responsible 
manner possible.
    I want to again express my condolences to the families who 
lost loved ones. We will never forget the deaths, injuries 
suffered by members of our industry, nor the consequences that 
the oil spill had on people living and working the Gulf of 
Mexico region.
    In appearing before you I want to assure you and your 
colleagues that Halliburton has cooperated with the 
investigation into how and why the Deepwater Horizon incident 
happened. From the outset, Halliburton has made senior 
personnel and other employees available to brief Members and 
staff, including Members and staff of this Committee. As Mr. 
Markey may recall, I provided a briefing to him and his 
colleagues on May 4 last year in the initial stages of the 
review of the incident. I also participated in other 
congressional briefings during 2010.
    Our company testified at four separate hearings and 
produced tens of thousands of pages of documents to this 
Committee. We voluntarily provided to the Committee and other 
committees real time logging data preserved by Sperry Drilling 
by the Macondo well so that you and your colleagues could have 
a first-hand view of one of the various data strings available 
to individuals on the rig and on shore. In addition, 
Halliburton has produced hundreds of thousands of pages of 
documents in the multiple investigations that have been 
underway since last year. In fact, six Halliburton employees 
provided testimony to the Joint Investigative Team during its 
hearing.
    At present Halliburton is the subject of more than 400 
class action lawsuits with many thousands of potential 
claimants. As you can appreciate with that many lawsuits 
pending and more potentially in the offing, I will be very 
limited in what I can say today.
    Let me begin with the background of our company. As a 
global leader in oil field services, Halliburton has been 
providing a variety of services to oil and gas exploration 
production industry for over 90 years. Halliburton is the 
largest service and material provider in the oil and gas 
industry. Halliburton provides its own isolation and 
engineering solutions for the life of the oil company.
    Sperry Drilling is a product service by Halliburton and is 
a global supplier of reliable, innovative and highly technical 
drilling and formation evaluation services to the oil and gas 
drilling industry. In fact, Sperry Drilling is the second 
largest company in all these categories and is the largest 
surface data logging company today in the Gulf of Mexico.
    Halliburton safely conducts thousands of successful well 
service operations each year. It is committed to continuously 
improving its performance. Because the company views safety and 
environmental performance as critical to the success, they are 
core elements of our corporate culture. However, it has much to 
offer to help our nation needs, its energy and security needs.
    The construction of the deepwater well is a complex 
operation involving the performance of numerous tasks by many 
parties led by the well owner's representative who has the 
ultimate authority for decisions on how and when various 
activities are conducted. For the Macondo well, Halliburton was 
contracted by the well owner to perform a variety of services 
on the rig. These included cementing, mud logging, directional 
drilling, logging well drilling and measuring well drilling. In 
addition, Halliburton provided select real time drilling and 
rig data acquisition and transmission services to key personnel 
both onboard the Deepwater Horizon and at various onshore 
locations.
    Subsequent to the blowout Halliburton worked at the 
direction of the well owner to provide assistance in the effort 
to bring the well under control. This effort included 
intervention support to help secure the damaged well and 
planning and services associated with drilling the relief well 
operations. I was grateful to have been able to work with 
others in our industry in an enormously challenging but 
ultimately successful effort to bring the well under control.
    Thank you for the opportunity to appear before you today. 
Look forward to your questions.
    [The prepared statement of Mr. Bement follows:]

Statement of James Bement, Vice President, Sperry Drilling, Halliburton

    Chairman Hastings, Ranking Member Markey, and Members of the 
Committee:
    Thank you for the invitation to testify today as the Committee 
meets to review the BOEMRE/Coast Guard Joint Investigation Team Report.
    As one of my colleagues made clear in our company's first 
appearance before Congress last May, Halliburton looks forward to 
continuing to work with Congress to understand what happened in 
drilling the Mississippi Canyon 252 well and what we collectively can 
do in the future to ensure that oil and gas production in the United 
States is undertaken in the safest, most environmentally responsible 
manner possible.
    The April 20th blowout, explosions and fire on the Deepwater 
Horizon rig and the spread of oil in the Gulf of Mexico are tragic 
events for everyone. The deaths and injuries to personnel working in 
our industry cannot be forgotten. At the time, Halliburton extended its 
heartfelt sympathy to the families, friends, and colleagues of the 11 
people who lost their lives and those workers injured in the tragedy. I 
wish to do so again today.
    In appearing before you, I want to assure you and your colleagues 
that Halliburton has and will continue to fully support, and cooperate 
with, the ongoing investigations into how and why the tragic Deepwater 
Horizon incident happened. From the outset, Halliburton has made senior 
personnel available to brief Members and staff, including Members and 
staff of this Committee. Our company testified at four separate 
hearings last year and produced tens of thousands of pages of documents 
to this Committee. In addition, Halliburton has produced hundreds of 
thousands of pages of documents in the multiple ongoing investigations 
that have been underway since last year, including the one that is the 
subject of today's hearing. In fact, six Halliburton employees provided 
testimony to the Joint Investigative Team during its hearings.
    At present, Halliburton is the subject of more than 400 lawsuits. 
As you can appreciate, with that many lawsuits pending and more 
potentially in the offing, I will be very limited in what I can say 
today.
Background on Halliburton
    As a global leader in oilfield services, Halliburton has been 
providing a variety of services to the oil and natural gas exploration 
and production industry for more than 90 years. Halliburton's areas of 
activity are primarily in the upstream oil and gas industry. They 
include providing products and services for clients throughout the life 
cycle of the hydrocarbon reservoir, from locating hydrocarbons and 
managing geological data to directional drilling and formation 
evaluation, well construction and completion, to optimizing production 
through the life of the field. The company is also engaged in 
developing and providing technologies for carbon sequestration, and we 
are a service provider to the geothermal energy industry.
    Halliburton is the largest cementing service and material provider 
in the oil and gas industry. Halliburton provides zonal isolation and 
engineering solutions for the life of a well. Sperry Drilling is a 
product service line of Halliburton and is a global supplier of 
reliable, innovative, and highly technical drilling and formation 
evaluation services to the oil and gas drilling industry. The company 
safely conducts thousands of successful well service operations each 
year and is committed to continuously improve its performance. Because 
the company views safety and environmental performance as critical to 
its success, they are core elements of our corporate culture. 
Halliburton has much to offer to help our nation meet its energy 
security needs.
    For the Mississippi Canyon 252 well, Halliburton was contracted by 
the well owner to perform a variety of services on the rig. These 
included cementing, mud logging, directional drilling, and measurement 
while drilling services. In addition, Halliburton provided selected 
real-time drilling and rig data acquisition and transmission services 
to key personnel both on board the Deepwater Horizon and at various 
onshore locations.
Halliburton's Participation in the Remediation Efforts on Mississippi 
        Canyon 252 Well
    Subsequent to the blowout, Halliburton worked at the direction of 
the well owner to provide assistance in the effort to bring the well 
under control. This effort included intervention support to help secure 
the damaged well and planning and services associated with drilling 
relief well operations. My product service line was responsible for the 
portion of this effort that was undertaken by Sperry Drilling.
    Halliburton deployed survey management experts to assist in 
planning the path of the two relief wells and mobilized its technology 
group to work in collaboration with another industry partner to combine 
our technologies, in an effort to develop an integrated ranging system 
to expedite the intersection of the original well. I was grateful to 
have been able to work with others in our industry in the enormously 
challenging but ultimately successful effort to bring the well under 
control.
Roles and Responsibilities in Drilling Operations
    As a service provider to a well owner, Halliburton is contractually 
bound to comply with the well owner's instructions on all matters 
relating to the performance of all work-related activities in drilling 
an exploratory well. We also are limited by information on down-hole 
conditions provided by the well owner. The construction of a deep water 
well is a complex operation involving the performance of numerous tasks 
by multiple parties led by the well owner's representative, who has the 
ultimate authority for decisions on how and when various activities are 
conducted.
    Halliburton is confident that its work on the Mississippi Canyon 
252 well was completed in accordance with the requirements of the well 
owner's well construction plan.
    Thank you for the opportunity to share our views today.
                                 ______
                                 

 Response to questions submitted for the record by James Bement, Vice 
                President, Sperry Drilling, Halliburton

Questions for the Record from Rep. Edward J. Markey, Ranking Democratic 
        Member
1.  What recommendations does Halliburton have for improving the safety 
        of offshore drilling?
    Response: As Mr. Bement said in his statement, ``Halliburton looks 
forward to continuing to work with Congress to understand what happened 
in drilling the Mississippi Canyon 252 well and what we collectively 
can do in the future to ensure that oil and gas production in the 
United States is undertaken in the safest, most environmentally 
responsible manner possible.'' The company continues to evaluate 
proposed legislation that would achieve this goal, but has not taken a 
formal position on any such legislation.
2.  How much money has Halliburton invested in each of the last three 
        fiscal years on research and development generally? Of these 
        research and development investments, how much was focused on 
        the research and development of safer offshore drilling 
        technologies? How much was focused on technologies related to 
        rig safety and accident prevention?
    Response: Halliburton does not report research and development data 
by fiscal year or in the manner as requested in the question. In the 
annual reports on Form 10-K for 2008, 2009, and 2010, as filed with the 
U.S. Securities and Exchange Commission, the company said the 
following:
From Halliburton's 2008 Annual Report on Form 10-K:
        Research and development costs

        We maintain an active research and development program. The 
        program improves existing products and processes, develops new 
        products and processes, and improves engineering standards and 
        practices that serve the changing needs of our customers. Our 
        expenditures for research and development activities were $326 
        million in 2008, $301 million in 2007, and $254 million in 
        2006, of which over 96% was company-sponsored in each year.

        As our customers award work in this environment of declining 
        commodity prices pricing competition in the international arena 
        has intensified Following is brief discussion of some of our 
        recent and current initiatives:

        --making our research and development efforts more 
        geographically diverse in order to continue to supply our 
        customers with leading-edge services and products and to 
        provide our customers with the ability to more efficiently 
        drill and complete their wells. To that end we opened 
        technology center in India in 2007 and in Singapore in the 
        first quarter of 2008 and research and development laboratory 
        in Norway in the third quarter of 2008.
From Halliburton's 2009 Annual Report on Form 10-K:
        Research and development costs

        We maintain an active research and development program. The 
        program improves existing products and processes develops new 
        products and processes and improves engineering standards arid 
        practices that serve the changing needs of our customers such 
        as those related to high pressure/high temperature 
        environments. Our expenditures for research and development 
        activities were $325 million in 2009, $326 million in 2008, and 
        $301 million in 2007, of which over 96% was company-sponsored 
        in each year.
From Halliburton's 2010 Annual Report on Form 10-K:
        Research and development costs

        We maintain an active research and development program The 
        program improves existing products and processes develops new 
        products and processes and improves engineering standards and 
        practices that serve the changing needs of our customers such 
        as those related to high pressure/high temperature environments 
        Our expenditures for research and development activities were 
        $366 million in 2010, $325 million in 2009, and $326 million in 
        2008 of which over 96% was company-sponsored in each year.
3.  Does Halliburton support the elimination of the subsidies for oil 
        and gas companies identified in the President's Budget Request 
        for Fiscal Year 2012 in order to reduce the federal budget 
        deficit?
    Response: Halliburton is a service company, not an oil and gas 
company. The company has not taken a formal position on proposed 
legislation that would implement the tax proposals set forth in the 
President's Budget Request for Fiscal Year 2012.
                                 ______
                                 
    Mr. Hastings. Thank you. I thank all three of you for your 
opening statement. I now ask unanimous consent that one of our 
colleagues who does not sit on the Committee but asked to be 
allowed to sit on the dais, and that is the gentlelady from 
Houston. Without objection, so ordered. The gentlelady may join 
us.
    We will start the question period, and I will reserve my 
time, but I will recognize the gentleman from Texas, Mr. 
Flores.
    Mr. Flores. Thank you, Mr. Chairman. Thank you, gentleman, 
for appearing here today.
    The question is for Mr. Dempsey of BP. Assuming that the 
trust fund is full funded at $20 billion, when you add that 
cost plus all the other costs, what is the total cost of BP 
from this accident?
    Mr. Dempsey. Congressman Flores, I think I should emphasize 
a couple of points in response to your question. When the $20 
billion trust was established we were clear that it was neither 
a floor nor a ceiling. It wasn't intended to represent any 
total or minimum amount of the costs associated with response 
to the accident. Our spending to date related to the accident 
is more than $20 billion.
    Mr. Flores. OK. But you have obviously estimated some 
future cost as well, so what would that be when you add it to 
the 20 billion? Is that a number you can share with us today?
    Mr. Dempsey. Thank you, Congressman. There is an important 
clarification I should make. The $20 billion trust was 
established to do a few specific things, including the payment 
of claims, individual and business and government claims.
    Mr. Flores. Correct.
    Mr. Dempsey. It was also entered into to provide for 
funding for some of the natural resource damage costs as that 
work is carried out. It was not intended and has not been used 
for payment of the direct response costs, so we have spent on 
the order of some $13 billion now in the response cost. There 
has been spent to this point a payment of claims, about $5.6 to 
$5.7 billion of that to individuals and businesses and about 
$1.3 billion in payment of claims to government entities.
    Mr. Flores. OK. So you spent about $20 billion today. How 
much of the trust fund have you actually--what have you 
actually deposited into the trust fund?
    Mr. Dempsey. There have been deposits, Congressman, into 
the trust fund that exceed the amount that has been spent, 
which I just described as about--actually it is somewhat less 
than $7 billion. I could actually give you----
    Mr. Flores. That is all right. Let us make this simple. Is 
it going to be $30 billion, $35 billion? This isn't a trick 
question. I am just trying to find out. How much are you going 
to spend on the trust fund, response, everything, cleanup, what 
is it going to cost?
    Mr. Dempsey. Congressman, I wish I could anticipate or 
speculate.
    Mr. Flores. We will submit a written question and I will 
ask you to submit that in writing. BP shouldn't have a legal 
problem in responding to the Committee question on that. The 
point I am trying to get to is this has left a mark on BP and I 
am assuming that BP has learned from this, and so that takes me 
to the next question. What are the lessons learned by BP 
because of the $30 some odd billion you spent on this?
    Mr. Dempsey. This is an important question, Congressman. So 
one of our biggest priorities in this and was evident 
immediately following the accident, we were clear in 
acknowledging our role. We established within days of the 
accident our own internal investigation team who proceeded to 
do a thorough investigation as to the causes, we committed to 
make the results of that investigation public. We did that more 
than a year ago, and on the day that that report was published 
it included 26 recommendations. We immediately accepted the 
findings and the recommendations of that report.
    Mr. Flores. OK, good. And then this is for Transocean and 
for Halliburton. In this report, which is the President's 
Commission, one of the allegations that has been made in this 
is that because of the fact that Transocean and Halliburton are 
worldwide oil field contractors, that because of your 
attachment to this accident that there is a systemic issue in 
oil field operations all over the United States and all over 
the world. How would you respond to that allegation in this 
report? Let us go with Transocean first, and try to keep your 
answer to about 30 seconds.
    Mr. Ambrose. I cannot comment specifically for that report. 
From our findings, I don't believe we found any that were 
systemic. If there were something systemic, you would feel that 
there would be more of these types of incidents in the 
industry, and there are not, so we did not find anything 
systemic in the course of our investigation.
    Mr. Flores. OK, thank you.
    Mr. Bement. Congressman, I share the same commitment to----
    Mr. Hastings. Turn on the microphone if you would.
    Mr. Bement. Share the same commitment that my peers do. We 
commit every day to make every job as safe as possible, to 
continuously improve our drilling processes around the world, 
and we have adopted that philosophy as a management company. It 
is core to our culture, and we committed to that on a global 
basis.
    Mr. Flores. The bottom line is you wouldn't agree with any 
sort of systemic allegation of unsafe operation around the 
world in the offshore drilling business, is that correct?
    Mr. Bement. I would again comment we drill thousands of 
wells safely each year very successful to our customer, 
Transocean.
    Mr. Flores. Mr. Ambrose?
    Mr. Ambrose. I would just reiterate we have not found 
anything systemic.
    Mr. Flores. I yield back.
    Mr. Hastings. The time of the gentleman has expired. The 
gentleman from Louisiana is recognized, Mr. Landry.
    Mr. Landry. I would like to expand a bit on that. Mr. 
Ambrose, you are with Transocean, right? And so you work for 
Mr. Dempsey's company, correct? When you work for other majors, 
does your drilling plan mimic BP's? So, if you were drilling 
for another major, would you drill a well the same way you 
would drill for BP?
    Mr. Ambrose. Interesting question. Every well is different. 
Every operator has their own management system. I cannot say 
specifically how different or how similar those are.
    Mr. Landry. I know, and I appreciate that each well is 
different, but wouldn't you agree that not only is each well 
different but each company drills under different drilling 
plans?
    Mr. Ambrose. I would say each company has their own 
management system under which they operate.
    Mr. Landry. And no two are alike.
    Mr. Ambrose. They may have differences between them. We 
have never looked at the differences between those, so I 
couldn't comment on that.
    Mr. Landry. OK. Mr. Bement, do the cement jobs that you do 
for BP, are they identical to the ones you do for other majors?
    Mr. Bement. I would agree with Mr. Ambrose that no two 
wells are alike, but at the end of the day we are not the 
permitting or the operator of the well, and we have an 
important role to successfully bring energy to the U.S. and 
work very close to execute those processes, so each operator, 
we follow those work instructions.
    Mr. Landry. Again, you follow guidelines set by the 
operators because, you know, there was a great Wall Street 
Journal article that appeared not long after that talked about 
the hangars and the way a strong--the liners in the well bores, 
and how one major does it one way and BP does it another, and 
where I am going with this is the fact that if you don't--each 
time you work for a different operator, and if each well is 
different, and so that you are having to adjust the 
application, then how could it be possible for the industry to 
have a systemic problem?
    Mr. Bement. Sounds repetitive, but we do thousands of wells 
a year with a lot of different----
    Mr. Landry. It is impossible for the industry to have a 
systemic problem based on those facts, wouldn't you agree? Come 
on, don't be like the government witnesses. Just say yes or no. 
You don't have to think of the problem. Your opinion, I mean. I 
have a lot of respect for the amount of time you have served in 
the industry. I mean, thinking about those elements, isn't it 
impossible for the industry to have a systemic problem if each 
time they drill a well they do it differently, there are 
different processes, they have to abide by different 
engineering specifications that are laid out by the operators? 
Isn't that correct?
    Mr. Bement. I think it is a culmination of a couple of 
things, Congressman Landry. Number one, we have processes 
procedures. We improve each and every job that we do. Our job 
is to improve each and every job. We do work for the operator 
and we apply those processes accordingly and again thousands of 
wells each year for multiple operators with no safety issues 
and we continue to deliver oil and gas.
    Mr. Landry. Well, you also bring up a good point is that 
you work for the operator, right? You are under the control of 
the operator. The operator is under the control of the 
permittee, who is BOEMRE, but yet you heard today from Director 
Bromwich that he would like to extend or he believes that he 
has the authority to extend his reach to govern--to reach into 
our contract.
    My concern is that doing so is going to muddy the water. We 
have this nice pattern of responsibility of how we go and say, 
OK, we are going to lease a piece of property to the operator. 
The operator says yes. We are going to drill safely. They 
provide the drill plan. They provide the specs. They sub it out 
to you all. Their responsibility of making sure that you follow 
their plans is their responsibility and the responsibility of 
ensuring that their plans are followed is BOEMRE. And so by 
going out and reaching into you guys, then all of a sudden it 
is going to be this cross finger point. Don't you agree?
    Mr. Bement. Yes, sir. The allegations came last night. I 
personally have not even had a chance to review those myself. I 
can tell you we will engage with the administrative process. We 
will also reserve the right for appeal.
    Mr. Hastings. The time of the gentleman has expired. The 
gentleman from Pennsylvania, Mr. Thompson
    Mr. Thompson. Thank you, Chairman. Thank the panel. I want 
to follow up. Mr. Flores had asked Mr. Dempsey about basically 
lessons learned and procedure, you know, identified, BP had 
identified 26 recommendations from your internal investigation. 
I want to turn to Mr. Ambrose and Mr. Bement. What is the most 
significant action or changes your companies have initiated as 
a result of lessons learned from the incident?
    Mr. Ambrose. Thank you for the question.
    I listed in my opening statement, the key ones were that we 
implemented a well integrity use guideline for our operations 
for the drill crews on the rig, and make sure we are very clear 
about what needs to be done prior to entering the next would 
section, the next part of the operation, and you know, at times 
maybe there was an ambiguity about what is required, and we are 
very clear about that now as well as we have established 
negative pressure test guidelines. So, as a minimum as a 
company there is something now that we have, and this is what 
we have to have. We can't go below this. If we don't have this 
information, we can't proceed, and that was something that was 
missing when everyone is left to their own devices to do that. 
These are probably the two biggest things we learned from the 
incident to make sure that we have in place.
    Mr. Thompson. Mr. Bement?
    Mr. Bement. Yes, sir. I think from the BOEMRE report as 
well as the other investigation I think there has been several 
opportunities of best practices that we have reviewed. Again as 
I shared with you in the opening statements, I think we wake up 
every morning trying to be better, safer, more environmentally 
friendly in order to produce oil and gas for our great country.
    So there is a host of things I think we continue to look 
at. Our Halliburton systems, HMS is what we refer to, we 
continue to, in parallel with this effort of continuous 
improvement, we make that very robust. Some little simple 
things that from an industry perspective we have gone to BOEMRE 
with our inside real time capability.
    Has that been a help of the government to facilitate the 
permitting or regulatory requirements that may be coming out? 
You know, we are trying to bring innovation that way. Another 
example is real time data log that will now, in our new latest 
inside version, that will capture real time visual log of the 
comments and activities. That was a large part of the question 
during the investigation, what activities were going on during 
that. So little best practices like that I think have been a 
significant improvement.
    Mr. Thompson. Thank you. My colleague, Dr. Fleming from 
Louisiana, on the last panel looked a lot at permitting and, 
since that time, there appears to be a decrease in permitting. 
I know job loss in the Gulf area. I have to say that being from 
Pennsylvania and having natural gas, I have a lot of folks from 
Louisiana now working in Pennsylvania. We appreciate their 
expertise, but this is all because they have lost their jobs 
down there.
    Mr. Bement, you mentioned that Halliburton is currently the 
subject of more than 400 lawsuits in your testimony. We have 
seen the same thing with some Federal agencies. You know, they 
have difficulty performing their core functions because they 
are constantly being sued. What role does the endless stream of 
litigation play in preventing your company from receiving 
permits? Any insight into that?
    Mr. Bement. I am sorry, can you repeat the question? What I 
assume it would have on permits?
    Mr. Thompson. Yes, in terms of impacting the process to 
where it would be a reflection of this decrease in permits or 
the impact of the permits.
    Mr. Bement. Specific to the Gulf of Mexico, we are ready to 
go to work. I mean, we are quite excited. In fact, as we have 
seen some return to the deepwater, we have a number of our 
employees that were deployed to other deepwater markets around 
the world during the moratorium. We are seeing those employees 
return. We are investing tens of millions of dollars in 
facility expansion in that region as well as tens of millions 
of dollars of new capital support for deepwater. In fact, we 
will hire 11,000 new people in the U.S. in 2012.
    Mr. Thompson. Just curious to all the panelists just real 
quickly. What impact have you seen on the timeliness and 
efficiency of the permitting and the leasing since last 
October?
    Mr. Ambrose. From Transocean's standpoint, that is a 
process that we are on the outside looking in as the operator 
is really driving that process. We provide information to them. 
I can just give you my opinion about it from outside looking 
in. I understand that the process is very onerous. It seems 
that people are starting to get permits for the deepwater 
operations we have. They come close sometimes to when everyone 
needs to be going to work, but they are getting them.
    Mr. Dempsey. BP is getting ready to go back to work in the 
deepwater Gulf of Mexico and making the kinds of enhancements 
in our safety processes and procedures and systems to be able 
to provide the confidence to regulators that we would be ready 
to go. The introduction and adoption of our voluntary standards 
which I referred to in my opening comments and to which 
Director Bromwich made reference in his testimony earlier today 
is an example of the kinds of things that we have done to try 
to enhance our ability to operate safely and to get ready to go 
back to work.
    Mr. Thompson. Thank you. Thank you, Chairman.
    Mr. Hastings. The time of the gentleman has expired. The 
Chair recognizes the gentleman from New Jersey, Mr. Holt.
    Mr. Holt. Thank you, Mr. Chairman. I had to step out of the 
room, so forgive me if I am going over ground that is already 
plowed here, but I think it is important to get this on the 
record. So, Mr. Dempsey, the Interior Department yesterday 
issued seven violations against BP yesterday. Does BP plan to 
appeal?
    Mr. Dempsey. Congressman Holt, as you know, these 
violations were released just yesterday evening, and so we will 
certainly take those very seriously. We will review those. It 
is important to note that it is really the beginning of a 
process. It is not the final determination of violations, so we 
will absolutely participate in the process to determine where 
those end up and we will continue in that as we have and always 
will.
    Mr. Holt. So does BP agree that it failed to protect 
health, safety, property and the environment by failing to 
perform all operations in a safe and workman-like manner?
    Mr. Dempsey. Congressman, what I can say is that BP has, 
from the very start, acknowledged its role in this accident. 
The notices of violation are an important indication that the 
regulator also expects that they will hold accountable 
contractors in their role in accidents like the Deepwater 
Horizon, and so while we have acknowledged our role from the 
start we have also been clear that this has been a very, very 
complicated accident involving multiple parties and a series of 
complex interconnected causes. It certainly included BP as it 
did Transocean and Halliburton.
    Mr. Holt. Thank you. Does BP agree that it ``failed to take 
necessary precautions'' to keep the well under control at all 
times?
    Mr. Dempsey. Congressman, what I have to say to that is 
that we hire contractors to provide work and provide service 
for us in the deepwater drilling industry and in this 
particular case we do that because they bring specialized 
expertise, deep experience. We expect them to perform their 
jobs safely and according to all regulatory requirements.
    Mr. Holt. So it is all a matter of expectations, that is 
what you rely on then?
    Mr. Dempsey. Congressman, we actually rely on the expertise 
and the experience that they bring.
    Mr. Holt. All right. So it is the subcontractors that were 
at fault. Mr. Bement, do you expect to appeal?
    Mr. Bement. As Mr. Dempsey said, these allegations only 
came out late yesterday evening. I personally have not seen 
them. We will go through the process as I mentioned earlier, 
and we will reserve the right to appeal.
    Mr. Holt. Mr. Ambrose, Transocean, I understand, I believe 
you said a brief while ago that you do intend to appeal the 
violations, is that correct?
    Mr. Ambrose. Sir, I have personally not reviewed that 
allegation. I have not been involved in the response.
    Mr. Holt. Would we have a better hearing right now if in 
fact the chief officers of your companies were here, the people 
who actually establish the company policy, who actually are in 
a position to decide what we are going to do? Would you be more 
comfortable if they were sitting where you are sitting so that 
they could actually answer these questions? That is a 
rhetorical question. I don't suppose--well, the gentleman 
does--I would yield to the Chairman of course.
    Mr. Hastings. Well, I would say this at the end of this 
panel, I will say it right now. If you submit a written 
request, I am sure that they will take it to the proper 
authorities to get the answer to that written request, so I 
think that option is certainly open to you, and I thank the 
gentleman for yielding.
    Mr. Holt. Yes, I am not trying to play ``gotcha'' here. 
This is a very serous matter. Many of us maintain that this was 
not a one of a kind accident; this was an accident waiting to 
happen and that other such accidents will occur unless the 
culture is changed. There has been some effort this morning I 
think to ignore or I guess you would say correct the findings 
of these commissions now that spoke of a culture of 
carelessness, a culture of cutting corners, a culture of not 
testing, not monitoring, not following through, and if we are 
going to address that culture we need companies that face up to 
it and not try to shift blame; not try to wiggle out of it.
    I don't know what else to say in the time remaining. I 
yield back my time.
    Mr. Hastings. You actually did not have any time to 
reclaim.
    I understand the gentlelady from Texas would like to ask a 
question, so I ask unanimous consent even though she is not a 
member of the Committee that she be given the opportunity to 
ask questions. Without objection, the gentlelady is recognized 
for five minutes.
    Ms. Jackson Lee. Mr. Hastings, I wish to thank you and Mr. 
Holt for your kind indulgence on something that has impacted my 
region in the early days of the spill. Spent a lot of time in 
the Louisiana region, and I think my issue coming from that 
region and feeling that we do better when we move forward to 
recognize that we can cure what may have happened that caused 
the horrific incident in the first place. I interacted with 
oyster fishermen and others, and I believe they were looking 
for a cure.
    So I want to ask Mr. Dempsey, if I can, because I think as 
I came in I heard you saying that you had secured findings and 
that you were looking them straight in the eye and were dealing 
with those findings. First let me just ask a general question. 
Do you know how many employees BP has in the United States?
    Mr. Dempsey. Congresswoman, BP has more than 23,000 
employees in the United States.
    Ms. Jackson Lee. So you are vested in this country?
    Mr. Dempsey. We are, Congresswoman. BP has been one of the 
largest producers of oil and natural gas in the United States 
for several years, and we believe it is important that we 
continue to support the American desire for energy security.
    Ms. Jackson Lee. And in the same time as your employees 
live along the Gulf, you too want clean air, clean water, your 
employees be protected. Are you moving around by saying we want 
to put employees in jeopardy?
    Mr. Dempsey. Absolutely not, Congresswoman. We agree 
completely. It is indeed our priority.
    Ms. Jackson Lee. Well, can you tell me your response to the 
findings--of you moving forward to address the findings, and 
let me not say this in any kind of get you, but you recognize 
that 11 people died and families are suffering, so are you 
moving forward to address the findings? I think it is important 
that there is a sense that we understand that the company 
understands that they have to be actively engaged, and I sense 
that you were saying you read the findings and you are working 
toward them. Would you expand on that, please?
    Mr. Dempsey. I will, Congresswoman. We have made 
fundamental substantial changes in our organization in the way 
that we conduct this work and in the way that we think about 
the long-term processes that will apply. For our organization, 
I mentioned in my opening comments that we have created an 
organization called Safety & Operation Risk or S&OR. This is 
important because that organization provides for several 
things. It embeds deep expertise in the live businesses. It 
provides an opportunity for intervention whenever they see the 
need to intervene in an activity that is underway.
    We have organized our exploration and production business 
into three separate divisions, and within one of them there is 
a global well, so there is a place now where we have housed the 
expertise, the best practices for drilling in our operations 
around the world in a common way.
    We introduced the voluntary standards, Congresswoman, which 
I have also referred to and which Director Bromwich made some 
mention to. These are providing for an opportunity for several 
things, including a commitment we will only use blowout 
preventers that are equipped with double blind sheer ram 
anywhere where we are operating from a dynamically positioned 
drilling rig.
    We will make changes in terms of third party testing and 
verification of cement. We have made some advancements to the 
oil spill activity based on the learnings we have acquired 
through this Deepwater Horizon accident.
    Ms. Jackson Lee. My time is moving, I have a sense of it. 
You had findings issued last night. Will you look at them as 
well in a way that says let us see how we can get moving 
forward, fixing what we need to fix? I am not asking you to 
make a determination of yes or no, but are you in that kind of 
mode?
    Mr. Dempsey. We are, Congresswoman, and we will review and 
consider these findings in that way.
    Ms. Jackson Lee. I appreciate that. Mr. Ambrose, are you in 
that mode representing Transocean to fix what needs to be 
fixed?
    Mr. Ambrose. Yes. We take what happened very seriously.
    Ms. Jackson Lee. I think that is an important statement 
that needs to be on the record. I can't hold you any longer 
because I need to get Mr. Bement. Are you committed to fixing 
what needs to be fixed?
    Mr. Bement. Yes, ma'am. Wake up every morning trying to 
drill faster, better.
    Ms. Jackson Lee. But you are fixing what needs to be fixed, 
is that correct?
    Mr. Bement. We improve every day.
    Ms. Jackson Lee. Mr. Dempsey, I just want to ask this. Do 
you have any impact on the $20 billion? It is moving very 
slowly. Are you able to at least call or find out because it 
may be separate, but it has your name connected, and I will say 
publicly I don't like the way it is proceeding in terms of 
reimbursement. It is not you that is doing it, but do you have 
any ability in your company to ask a question, to ask the 
gentleman that is handling it why he is moving so slowly?
    Mr. Dempsey. Congresswoman, we do have the opportunity to 
offer our input and our views to Mr. Feinberg and his team who 
lead the GCCF, the Gulf Coast Claims Facility.
    Ms. Jackson Lee. I would appreciate, sir, if you would do 
that oversight and determine why so few dollars have gone out 
at this point, and I do thank the witnesses and I do thank the 
Committee for allowing me just to pose those questions. We are 
looking to go forward, and as I have gleaned from all of you, 
you have to fix the problems and move forward. Let me thank you 
very much for your testimony. I yield back.
    Mr. Hastings. I thank the gentlelady, and I recognize the 
gentleman from New Jersey before I ask my last questions.
    Mr. Holt. And I thank the Chair, and this is more by way of 
a statement than questions, but I would like everyone to hear 
this, and really, despite multiple investigations now that have 
documented the systemic safety problems that existed before the 
Macondo well blowout, despite clear evidence of failures on the 
part of the companies to properly design, properly drill, 
properly cement the well, despite the continued insistence by 
the industry and by others who sit around this dais here that 
all the safety problems have been fixed and we should hurry up 
and open up any and all areas for drilling, what I hear is a 
continued failure on the part of the industry to acknowledge 
its responsibility for the negligence that caused deaths and 
untold environmental damage.
    The companies here have told us that they will--well, 
probably I am reading a little bit into your comments--will 
fight even the minimal fines, $21 million for BP and $12 
million each for Transocean and Halliburton, which I would call 
minimal that are allowed under the law. Transocean has made 
clear that it will continue to fight to withhold spill 
documents from the government safety regulators and continues 
to refuse to comply with Justice Department subpoenas.
    Maybe the Department should debar BP from future lease 
sales and refuse to issue drilling permits for any operator who 
plans to use these companies until the companies step up and 
show that this was not a ``one off'', this was not just a 
single occurrence. This was an accident waiting to happen 
because of a careless culture, and with that I yield back.
    Mr. Hastings. I thank the gentleman, and I would just point 
out I am sorry, I know that he was elsewhere, but if he had 
heard the exchange between Mr. Landry and the panel, you might 
have gotten an indication of the issue of the systemic issue 
that has been floating around, and I would certainly invite you 
to go back and look at that transcript.
    I just have a couple of questions, and this is a question 
to all three of you. Are you all currently conducting 
operations in the Gulf today? And we will start with you, Mr. 
Dempsey. Are you conducting operations in the Gulf today?
    Mr. Dempsey. Yes, Congressman, Mr. Chairman. We are indeed 
conducting operations in the Gulf of Mexico.
    Mr. Hastings. Mr. Ambrose?
    Mr. Ambrose. Yes, we are, sir.
    Mr. Hastings. OK, and Mr. Bement?
    Mr. Bement. Yes, sir, and actively recruiting additional 
personnel for the Gulf of Mexico.
    Mr. Hastings. So there are jobs available.
    Mr. Bement. Absolutely. Yes, sir.
    Mr. Hastings. OK. We will consider this a call for more 
jobs then.
    Again to all three of you, three of your companies received 
permits or in your case, BP, approved exploration plans since 
last April of last year. In other words, have you gotten new 
operations in the Gulf since last April, since April of last 
year?
    Mr. Dempsey. Mr. Chairman, for exploratory drilling we have 
not yet received any approved permits. We have one pending 
application for our Kaskida Well, an exploratory plan, a 
revised exploratory plan that has been submitted. It closed its 
public comment period on the second of October, and the 
regulator is now in its 30-day review period.
    Mr. Hastings. OK. And then as far as subcontractors have 
you gotten work since April of last year, Mr. Ambrose? Well, 
Mr. Bement, since you are ready to go.
    Mr. Bement. Mr. Hastings, yes, sir. We are on the outside 
looking in, working with our customers.
    Mr. Hastings. I understand.
    Mr. Bement. But we are seeing an increase in activity as we 
talk.
    Mr. Hastings. Mr. Ambrose?
    Mr. Ambrose. Yes, sir, we are seeing permits for our 
customers.
    Mr. Hastings. OK. Finally, and this was brought up when 
Transocean's President, Mr. Newman, and Mr. McKay were here a 
year ago, involving the stop work policy. My district is not on 
the coast, but right across from where I live is the most 
contaminated nuclear site in the country, and the contractors 
there allow the workers, whenever they see something wrong, the 
work can stop immediately. Is that true with all three of your 
companies as a matter of company policy, whether somebody tells 
you to or not? Is that a matter of company policy? And we will 
start with you, Mr. Dempsey.
    Mr. Dempsey. Mr. Chairman, it is indeed a policy and a 
practice in our operations around the world that when we see an 
unsafe act any and all of us have the obligation to stop work.
    Mr. Hastings. OK. Mr. Ambrose?
    Mr. Ambrose. Yes, sir, it is. We have a policy of time out 
for safety, and it is implemented worldwide. It is in our 
policies and procedures. It is an obligation. It is not a 
right, it is an obligation. You have to do it. And I think when 
you look at this particular incident they did do it at 9:30. 
They shut the operation down because they saw an anomaly.
    Mr. Hastings. OK. And Mr. Bement.
    Mr. Bement. Yes, sir, stop work is part of our Halliburton 
management system and part of our continuous improvement 
process. It is embedded within the culture of that process.
    Mr. Hastings. OK. I just think that is worth emphasizing 
because there has been a lot of discussion about this and what 
has happened. Clearly when 11 people die and you have the 
environmental damage that happened in the Gulf, it is serious. 
But I just think that point needs to be made.
    So, once again, seeing no other Members on the dais, I will 
adjourn this meeting, but I want to thank all three of you for 
being here and I want to re-thank the first panel for being 
here, and once again if there are follow-up questions to be 
sent to you, I think Mr. Holt has one, at least I encouraged 
him to do that, that you would respond in a timely manner and 
of course make it available to everybody on the Committee.
    With that, the Committee stands adjourned.
    [Whereupon, at 1:20 p.m., the Committee was adjourned.]
    [Additional material submitted for the record follows:]

        Statement submitted for the record by Joseph R. Mason, 
                       Louisiana State University

    Thank you for this opportunity today to submit a written statement 
on the lingering impacts of the Obama administration's six-month 
moratorium on offshore drilling for oil and natural gas. It has been 
one full year since this moratorium was officially lifted. Yet, U.S. 
federal energy policy today remains woefully out of balance.
    These policies, or quite frankly lack thereof, have had severe 
consequences for U.S. domestic oil production since the moratorium was 
lifted. According to the U.S. Energy Information Administration (EIA), 
U.S. domestic production will decrease by 250,000 barrels per day (bpd) 
each year going forward under the current production policy regime. In 
particular, EIA estimates that, in the Gulf of Mexico (GOM) alone, oil 
production will decline approximately 14 percent both in 2011 and 2012 
due to the administration's unwillingness to grant expedient and 
sufficient access to U.S. reserves.
    In sum, not very much has changed in the Gulf region--and the 
country at-large--since my initial study on this topic in July of last 
year, ``The Economic Cost of a Moratorium on Offshore Oil and Gas 
Exploration to the Gulf Region.''
I. Continued Regulatory Burdens
    The current regulatory framework charged with overseeing the U.S. 
oil and natural gas industry has continued to hamper economic growth 
generally and the oil and natural gas sector specifically. Since the 
offshore moratorium has been lifted, executive agencies such as the 
Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) 
have worked tirelessly to prove their worth and flex their muscles. As 
such, new agencies like these regularly undergo dramatic power shifts 
before settling into anything that could be considered a stable role in 
the U.S. regulatory framework. And these types of power struggles and 
yearning for approval inevitably lead to rampant inefficiencies.
    Jim Noe, senior vice president, general counsel and chief 
compliance officer of Hercules Offshore Inc., the largest shallow-water 
drilling company in the Gulf of Mexico, recently noted that, ``the 
backlog of permits awaiting decisions within the Department of the 
Interior just reached its highest level since the Gulf spill 1 1/2 
years ago.''
    The pace at which new permits for new wells are issued has come to 
an almost complete crawl. The current average is 5.2 per month; this 
level has not been evidenced since energy demand plummeted in 2009.
    But laborious regulations and continued delays are not the only 
costs threatening U.S. oil and natural gas operations. The 
administration's continued advocacy of repealing Section 199 of the 
American Jobs Creation Act and Section 1.901-2 of the U.S. Department 
of the Treasury Regulations (``dual capacity'') presents the industry 
with additional challlenges. Those changes would eliminate domestic and 
international tax credits for the U.S. energy sector. Although 
regulators are hoping to raise substantial revenues from the repeals, 
the fully-scored economic cost of the regressive legislation could 
further debilitate the oil and natural gas sector and most likely 
result in decreased tax revenues from the industry.
    The Peterson Institute for International Economics detailed the 
harmful effects of the administration's new proposed taxation schemes. 
In a new policy brief, US Tax Discrimination Against Large Corporations 
Should Be Discarded, authors Gary Clyde Hufbauer and Martin Vieiro 
argue that, ``If the targets of discrimination are the nation's largest 
firms, the country will find it harder to compete on a global scale in 
industries that require dedicated research, industries that exhibit 
huge scale economies, and industries that network across national 
borders.'' U.S. oil and natural gas firms are, by and large, some of 
the nation's largest and most internationalized of companies.
    In looking at the political economy of new regulatory arrangements 
like BOEMRE, therefore, we must look with skepticism and concern upon 
both the political motivations of the regulatory officials charged with 
enforcing the rules, and the economic power that will be concentrated 
in those regulatory officials as a result of their influence over the 
implementation costs and economic redistribution. Without restraint, a 
toxic mix of politics and power may damage both the industry and the 
environment.
II. Painful Consequences of Administration's Negligent Energy Policies
    Using my July 2010 report's results--but also accounting for delays 
following the official end of the six-month moratorium--is it evident 
that regional economic losses continue to grow.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




    Table 1 shows that output losses continue to mount with stalled 
development in the GOM, rising from $2.1 billion regionally and $2.8 
billion nationally to $3.3 billion and $4.4 billion, respectively. Job 
losses are estimated to have increased from 8,000 regionally and 12,000 
nationally to 13,000 regionally and 19,000 nationally. Lost wages 
previously estimated to amount to $500 million regionally and $700 
million nationally are now $800 million regionally and $1.1 billion 
nationally. Finally, lost tax revenues estimated to be $100 million on 
the state and local level and $200 million on the national level now 
amount to $155 million and $350 million, respectively.
    With the latest jobs figures released last week from the U.S. 
Bureau of Labor Statistics (BLS) showing national unemployment remains 
at 9.1 percent, we simply cannot afford to give up any more economic 
activity.
III. Conclusion
    IHS Global Insight recently published a study that puts the impacts 
on jobs, energy production and local economies of the Obama's 
administration's precarious attitude toward conventional energy into 
clear context. The report states that, next year, releasing 
restrictions on ``the [Gulf oil and gas] industry could create 230,000 
American jobs, generate more than $44 billion of U.S. [gross domestic 
product], contribute $12 billion in tax and royalty revenues, produce 
150 million barrels of domestic oil, and reduce by $15 billion the 
amount the U.S. sends to foreign governments for imported oil.''
    Nonetheless, oil and natural gas production is set to decline in 
response to higher taxes, onerous government regulation and greater 
political uncertainty. That means less jobs, lower wages, and lower 
gross domestic product (GDP) growth than would otherwise occur. Those 
are indisputable laws of economics, regardless if policymakers agree 
with them or not. In the spirit of hope, I look forward to the day the 
administration realizes the very real pain that its energy policies are 
having on U.S. job creation, capital allocation and broader economic 
recovery, as well as the environmental threats, political instability, 
and market volatility that come from meeting U.S. energy needs from 
foreign supplies.
                                 ______
                                 
    [An email submitted for the record from Randall S. 
Ogrydziak, Liquefied Gas Carrier National Center of Expertise, 
follows:]

From: Ogrydziak, Randal CDR
Sent: Monday, May 10, 2010 1:02:23 PM
To: Odom, Michael LCDR
CC: Thorne, Paul CDR
Subject: Re: DWH Marine Board
Mike,
    You should not have any concerns with the Marine Board. Will you be 
returning to Port Arthur before your leave starts (15-25 May)?

Randall S. Ogrydziak, CRD, USCG
Supervisor, Liquefied Gas Carrier National Center of Expertise
Wk: (409) 723-9874; Cell: (409) 284-2296; Fax: (409) 723-6504
                                 ______
                                 
----Original Message----
From: Odom, Michael LCDR
Sent: Monday, May 10, 2010 9:01 AM
To: Ogrydziak, Randal CDR
Cc: Fernie, James
Subject: DWH Marine Board
    I made it to NOLA last night we are starting the prep work not for 
my testimony. Just as an fyi if you're interested the questions they 
will be asking are attached. Call me if you need anything everything is 
pretty informal and I can't be in the hearing room till it is my turn 
in the barrel, so there will be a fair amount of standing around time.

                                 * * *
                                     



                    OVERSIGHT HEARING ON THE BOEMRE/
        U.S. COAST GUARD JOINT INVESTIGATION TEAM REPORT: PART 2

                              ----------                              


                      Wednesday, November 2, 2011

                     U.S. House of Representatives

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Committee met, pursuant to call, at 2:40 p.m. in Room 
1324, Longworth House Office Building, Hon. Doc Hastings 
[Chairman of the Committee] presiding.
    Present: Representatives Hastings, Young, Duncan of 
Tennessee, Lamborn, Wittman, Broun, Fleming, Coffman, 
McClintock, Thompson, Benishek, Rivera, Tipton, Gosar, Flores, 
Runyan, Johnson, Amodei, Markey, Kildee, DeFazio, Pallone, 
Napolitano, Grijalva, Bordallo, Heinrich, Lujan, Sarbanes, 
Tsongas, Pierluisi, and Hanabusa.

    STATEMENT OF THE HON. DOC HASTINGS, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF WASHINGTON

    Mr. Hastings. The Committee will reconvene or come back to 
order, and the Chair notes the presence of a quorum, which 
under Rule 3[e] is two Members.
    The Committee meets again today to continue its October 13, 
2011, hearing on the BOEMRE/U.S. Coast Guard Joint 
Investigative Team Report. At that hearing, if you recall, the 
Committee heard from seven witnesses, including the two Co-
Chairs of the Investigative Team, the Director of BOEM, the 
Vice Admiral of the Coast Guard and executives representing BP, 
Transocean and Halliburton, three companies, each of whom was 
cited in the JIT report.
    Under Rule 4[f][1], there are no opening statements since 
we are continuing a hearing that was already going on. This 
obviously gives the Minority an opportunity to call their 
witnesses, but since none of the individuals requested by the 
Minority are here to testify, to be very honest with you, what 
would be in order would be a motion to adjourn.
    However, prior to adjourning I will inquire if the Ranking 
Member, Ranking Democrat, wants to pursue a different course, 
and I will yield to the gentleman.

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

    Mr. Markey. I thank you, Mr. Chairman. Mr. Chairman, 
following the BP oil spill this Committee has a responsibility 
to the American people to ensure that offshore oil and gas 
drilling is occurring in a safe and responsible manner.
    We must vigorously exercise our oversight responsibilities 
to make certain that BP and other oil companies involved in the 
Deepwater Horizon disaster are taking the corrective steps 
necessary to protect the workers, economy and environment of 
the Gulf and to ensure that we never have a similar spill 
again.
    BP and the other companies involved in the oil spill are 
now seeking to resume drilling operations in the Gulf. BP has 
now applied for and had approved by the Interior Department its 
first exploration plan and drilling permit in the Gulf 
following this accident.
    Mr. Hastings. Reclaiming my time from the Ranking Member, 
we are aware of that. Remember, this is a continuation hearing 
on the Joint Investigative Team.
    My question to you, since we afforded you the courtesy of 
getting witnesses, we sent the letter out obviously in a timely 
manner and the witnesses declined to come for whatever reasons. 
Since there is no panel, as I said in my opening statement, it 
is certainly in order to accept a motion to adjourn, but as a 
courtesy to you.
    I have read the reports, press reports that you have sent 
out, and, listen, I respect that. I just want to know what your 
intentions are. I fully understand the difference of opinion 
that we may have on these issues, but I just want to know what 
your intentions are. That is all.
    Mr. Markey. All right.
    Mr. Hastings. And I will yield to the gentleman.
    Mr. Markey. I thank the gentleman. Pursuant to Clause 
2[k][6] and 2[m] of Rule 11 of the Rules of the House, I move 
that the Committee issue subpoenas to the following individuals 
to compel them to appear before the Committee to provide 
testimony regarding the findings of the Joint Investigative 
Team Report on the Deepwater Horizon oil spill: Mr. Robert 
Dudley, CEO of BP; Mr. Steven Newman, President and CEO of 
Transocean; Mr. David Lesar, Chairman of the Board, President 
and CEO of Halliburton; and Mr. Jack Moore, Chairman, President 
and CEO of Cameron.
    I do believe they have a responsibility to testify 
postinvestigation as to their view of the findings so that they 
can be accountable to the U.S. Congress as the protectors of 
the oceans of the United States.
    Mr. Hastings. The Chair notes the absence of a quorum and 
so I will announce that a 15-minute quorum call be made, and 
the clerk will call the roll.
    Ms. Locke. Mr. Hastings?
    Mr. Hastings. Present.
    Ms. Locke. Mr. Markey?
    Mr. Markey. Present.
    Ms. Locke. Mr. Young?
    Mr. Young. Here.
    Ms. Locke. Mr. Kildee?
    Mr. Kildee. Present.
    Ms. Locke. Mr. Duncan of Tennessee?
    Mr. Duncan of Tennessee. Present.
    Ms. Locke. Mr. DeFazio?
    Mr. Gohmert?
    Mr. Faleomavaega?
    Mr. Bishop?
    Mr. Pallone?
    Mr. Lamborn?
    Mr. Lamborn. Here.
    Ms. Locke. Mrs. Napolitano?
    Mr. Wittman?
    Mr. Holt?
    Mr. Broun?
    Mr. Grijalva?
    Mr. Fleming?
    Dr. Fleming. Present.
    Ms. Locke. Ms. Bordallo?
    Ms. Bordallo. Present.
    Ms. Locke. Mr. Coffman?
    Mr. Coffman. Present.
    Ms. Locke. Mr. Costa?
    Mr. McClintock?
    Mr. McClintock. Present.
    Ms. Locke. Mr. Boren?
    Mr. Thompson?
    Mr. Thompson. Present.
    Ms. Locke. Mr. Sablan?
    Mr. Denham?
    Mr. Heinrich?
    Mr. Benishek?
    Dr. Benishek. Here.
    Ms. Locke. Mr. Lujan?
    Mr. Lujan. Present.
    Ms. Locke. Mr. Rivera?
    Mr. Sarbanes?
    Mr. Duncan of South Carolina?
    Ms. Sutton?
    Mr. Tipton?
    Mr. Tipton. Here.
    Ms. Locke. Ms. Tsongas?
    Mr. Gosar?
    Mr. Pierluisi?
    Mr. Pierluisi. Present.
    Ms. Locke. Mr. Labrador?
    Mr. Garamendi?
    Ms. Noem?
    Ms. Hanabusa?
    Mr. Southerland?
    Mr. Flores?
    Mr. Flores. Here.
    Ms. Locke. Mr. Harris?
    Mr. Landry?
    Mr. Runyan?
    Mr. Runyan. Present.
    Ms. Locke. Mr. Johnson?
    Mr. Johnson. Present.
    Ms. Locke. Mr. Amodei?
    [Pause.]
    Mr. Hastings. The clerk will call those that did not answer 
present.
    Ms. Locke. Mr. DeFazio?
    Mr. Gohmert?
    Mr. Faleomavaega?
    Mr. Bishop?
    Mr. Pallone?
    Mr. Pallone. Yes. Present.
    Ms. Locke. Mrs. Napolitano?
    Mrs. Napolitano. Present.
    Ms. Locke. Mr. Wittman?
    Mr. Holt?
    Mr. Broun?
    Mr. Grijalva?
    Mr. Costa?
    Mr. Boren?
    Mr. Sablan?
    Mr. Denham?
    Mr. Heinrich?
    Mr. Rivera?
    Mr. Sarbanes?
    Mr. Duncan of South Carolina?
    Ms. Sutton?
    Ms. Tsongas?
    Mr. Gosar?
    Mr. Labrador?
    Mr. Garamendi?
    Ms. Noem?
    Ms. Hanabusa?
    Mr. Southerland?
    Mr. Harris?
    Mr. Landry?
    Mr. Amodei?
    Mr. Amodei. Present.
    [Pause.]
    Mr. Grijalva. Present.
    Ms. Locke. Mr. Grijalva votes present.
    [Pause.]
    Mr. Hastings. How is Mr. Wittman recorded?
    Ms. Locke. He has not been recorded.
    Mr. Wittman. Present.
    Ms. Locke. Mr. Wittman is present.
    Mr. Hastings. Is Mr. Gosar recorded?
    Dr. Gosar. Here.
    Ms. Locke. Mr. Gosar votes present.
    Voice. Mr. Chairman, there is the presence of a quorum.
    Mr. Hastings. The Chairman notes the presence of a quorum. 
We have a motion before us, and I will recognize myself.
    Let me be very clear. If the companies officially cited for 
the oil spill had outright refused to provide witnesses, 
testimony or answers to the Committee, then I would be leading 
the effort to compel them to appear by subpoena if necessary.
    But those are not the facts. For the record, this hearing 
is occurring at the request of the Democrat Minority, who 
exercised their rights under the Rules of the House and the 
Committee to demand a second day of hearings with witnesses 
that they request.
    The original hearing occurred on October 13, and for the 
record, that hearing featured testimony and the opportunity for 
every Member of the Committee to ask questions of seven 
witnesses on two panels: the two Co-Chairs of the Joint 
Investigative Team, the heads of the respective agencies, BSEE, 
Director Bromwich, and Vice Admiral Salerno of the Coast Guard, 
and the executives that were officially representing the three 
companies cited in the investigative report, BP, Transocean and 
Halliburton.
    With that, I recognize the gentleman from Colorado.
    Mr. Lamborn. Mr. Chairman, I move that the motion be 
tabled.
    Mr. Hastings. The motion is not debatable. The clerk will 
call the roll.
    Voice. Don't we do a voice first, all those in favor?
    Mr. Hastings. Yes. I know it is going to be a roll call. We 
may as well roll call.
    Ms. Locke. Mr. Hastings?
    Mr. Hastings. Aye.
    Ms. Locke. Mr. Hastings votes aye.
    Mr. Markey?
    Mr. Markey. No.
    Ms. Locke. Mr. Markey votes no.
    Mr. Young?
    Mr. Young. Aye.
    Ms. Locke. Mr. Young votes aye.
    Mr. Kildee?
    Mr. Kildee. No.
    Ms. Locke. Mr. Kildee votes no.
    Mr. Duncan of Tennessee?
    Mr. Duncan of Tennessee. Aye.
    Ms. Locke. Mr. Duncan votes aye.
    Mr. DeFazio?
    [No response.]
    Ms. Locke. Mr. Gohmert?
    [No response.]
    Ms. Locke. Mr. Faleomavaega?
    [No response.]
    Ms. Locke. Mr. Bishop?
    [No response.]
    Ms. Locke. Mr. Pallone?
    Mr. Pallone. No.
    Ms. Locke. Mr. Pallone votes no.
    Mr. Lamborn?
    Mr. Lamborn. Aye.
    Ms. Locke. Mr. Lamborn votes aye.
    Mrs. Napolitano?
    Mrs. Napolitano. No.
    Ms. Locke. Mrs. Napolitano votes no.
    Mr. Wittman?
    Mr. Wittman. Aye.
    Ms. Locke. Mr. Wittman votes aye.
    Mr. Holt?
    [No response.]
    Ms. Locke. Mr. Broun?
    Mr. Broun. Aye.
    Ms. Locke. Mr. Broun votes aye.
    Mr. Grijalva?
    Mr. Grijalva. No.
    Ms. Locke. Mr. Grijalva votes no.
    Mr. Fleming?
    Dr. Fleming. Aye.
    Ms. Locke. Mr. Fleming votes aye.
    Ms. Bordallo?
    Ms. Bordallo. No.
    Ms. Locke. Ms. Bordallo votes no.
    Mr. Coffman?
    Mr. Coffman. Aye.
    Ms. Locke. Mr. Coffman votes aye.
    Mr. Costa?
    [No response.]
    Ms. Locke. Mr. McClintock?
    Mr. McClintock. Aye.
    Ms. Locke. Mr. McClintock votes aye.
    Mr. Boren?
    [No response.]
    Ms. Locke. Mr. Thompson?
    Mr. Thompson. Aye.
    Ms. Locke. Mr. Thompson votes aye.
    Mr. Sablan?
    [No response.]
    Ms. Locke. Mr. Denham?
    [No response.]
    Ms. Locke. Mr. Heinrich?
    [No response.]
    Ms. Locke. Mr. Benishek?
    Dr. Benishek. Aye.
    Ms. Locke. Mr. Benishek votes aye.
    Mr. Lujan?
    Mr. Lujan. No.
    Ms. Locke. Mr. Lujan votes no.
    Mr. Rivera?
    Mr. Rivera. Aye.
    Ms. Locke. Mr. Rivera votes aye.
    Mr. Sarbanes?
    Mr. Sarbanes. No.
    Ms. Locke. Mr. Sarbanes votes no.
    Mr. Duncan of South Carolina?
    [No response.]
    Ms. Locke. Ms. Sutton?
    [No response.]
    Ms. Locke. Mr. Tipton?
    Mr. Tipton. Aye.
    Ms. Locke. Mr. Tipton votes aye.
    Ms. Tsongas?
    Ms. Tsongas. No.
    Ms. Locke. Ms. Tsongas votes no.
    Mr. Gosar?
    Dr. Gosar. Aye.
    Ms. Locke. Mr. Gosar votes aye.
    Mr. Pierluisi?
    Mr. Pierluisi. No.
    Ms. Locke. Mr. Pierluisi votes no.
    Mr. Labrador?
    [No response.]
    Ms. Locke. Mr. Garamendi?
    [No response.]
    Ms. Locke. Ms. Noem?
    [No response.]
    Ms. Locke. Ms. Hanabusa?
    Ms. Hanabusa. No.
    Ms. Locke. Ms. Hanabusa votes no.
    Mr. Southerland?
    [No response.]
    Ms. Locke. Mr. Flores?
    Mr. Flores. Aye.
    Ms. Locke. Mr. Flores votes aye.
    Mr. Harris?
    [No response.]
    Ms. Locke. Mr. Landry?
    [No response.]
    Ms. Locke. Mr. Runyan?
    [No response.]
    Ms. Locke. Mr. Johnson?
    Mr. Johnson. Aye.
    Ms. Locke. Mr. Johnson votes aye.
    Mr. Amodei?
    Mr. Amodei. Yes.
    Ms. Locke. Mr. Amodei votes aye.
    Mr. Hastings. Any Member not recorded? How is Mr. DeFazio 
recorded?
    Ms. Locke. Mr. DeFazio has not been recorded.
    Mr. DeFazio. No.
    Ms. Locke. Mr. DeFazio votes no.
    Mr. Hastings. How is Mr. Heinrich recorded?
    Ms. Locke. Mr. Heinrich has not been recorded.
    Mr. Heinrich. No.
    Ms. Locke. Mr. Heinrich votes no.
    Voice. It is 13 to 16.
    Mr. Hastings. The clerk will report.
    Ms. Locke. Mr. Chairman, on this vote, the yeas are 17 and 
the nays are 13.
    Mr. Hastings. The motion is agreed to. There being no 
further business before the Committee, without objection, the 
Committee stands adjourned.
    [Whereupon, at 2:57 p.m., the Committee was adjourned.]

                                 
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