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



 
MAKING THE GULF COAST WHOLE AGAIN: ASSESSING THE RECOVERY EFFORTS OF BP 

            AND THE OBAMA ADMINISTRATION AFTER THE OIL SPILL

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



                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 2, 2011

                               __________

                           Serial No. 112-59

                               __________

Printed for the use of the Committee on Oversight and Government Reform


         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on June 2, 2011.....................................     1
Statement of:
    Barbour, Haley, Governor, State of Mississippi...............     7
    Taffaro, Craig, president, St. Bernard's Parish, Louisiana; 
      Bill Williams, commissioner, Gulf Country, Florida; Cory 
      Kief, president, Offshore Towing, Inc.; Frank Rusco, 
      Director, Energy and Science Issues, Government 
      Accountability Office; and Michael Bromwich, Director, 
      Bureau of Ocean Energy Management, Regulation, and 
      Enforcement, U.S. Department of Interior...................    84
        Bromwich, Michael........................................   122
        Kief, Cory...............................................   104
        Rusco, Frank.............................................   109
        Taffaro, Craig...........................................    84
        Williams, Bill...........................................    96
Letters, statements, etc., submitted for the record by:
    Barbour, Haley, Governor, State of Mississippi, prepared 
      statement of...............................................    11
    Braley, Hon. Bruce L., a Representative in Congress from the 
      State of Iowa, prepared statement of.......................   152
    Bromwich, Michael, Director, Bureau of Ocean Energy 
      Management, Regulation, and Enforcement, U.S. Department of 
      Interior, prepared statement of............................   125
    Issa, Hon. Darrell E., a Representative in Congress from the 
      State of California, staff report..........................    24
    Kief, Cory, president, Offshore Towing, Inc., prepared 
      statement of...............................................   106
    McHenry, Hon. Patrick T., a Representative in Congress from 
      the State of North Carolina, letter dated June 17, 2011....   143
    Rusco, Frank, Director, Energy and Science Issues, Government 
      Accountability Office, prepared statement of...............   111
    Taffaro, Craig, president, St. Bernard's Parish, Louisiana, 
      prepared statement of......................................    87
    Towns, Hon. Edolphus, a Representative in Congress from the 
      State of New York, prepared statement of...................   150
    Williams, Bill, commissioner, Gulf Country, Florida, prepared 
      statement of...............................................    99


MAKING THE GULF COAST WHOLE AGAIN: ASSESSING THE RECOVERY EFFORTS OF BP 
            AND THE OBAMA ADMINISTRATION AFTER THE OIL SPILL

                              ----------                              


                         THURSDAY, JUNE 2, 2011

                          House of Representatives,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:37 a.m., in 
room 2154, Rayburn House Office Building, Hon. Darrell E. Issa 
(chairman of the committee) presiding.
    Present: Representatives Issa, Burton, Platts, McHenry, 
Jordan, Walberg, Lankford, Amash, Gosar, Labrador, Meehan, 
DesJarlais, Ross, Guinta, Farenthold, Kelly, Cummings, Towns, 
Maloney, Norton, Kucinich, Tierney, Clay, Connolly, Quigley, 
and Davis.
    Also present: Representative Palazzo.
    Staff present: Ali Ahmad, deputy press secretary; Thomas A. 
Alexander, Peter Haller, and Kristina M. Moore, senior 
counsels; Will L. Boyington and Drew Colliatie, staff 
assistants; Molly Boyl, parliamentarian; Lawrence J. Brady, 
staff director; Joseph A. Brazauskas, counsel; Benjamin Stroud 
Cole, policy advisor and investigative analyst; John Cuaderes, 
deputy staff director; Adam P. Fromm, director of Member 
services and committee operations; Linda Good, chief clerk; 
Tyler Grimm and Ryan M. Hambleton, professional staff members; 
Frederick Hill, director of communications and senior policy 
advisor; Christopher Hixon, deputy chief counsel, oversight; 
Justin LoFranco, press assistant; Mark D. Marin, senior 
professional staff member; Tegan Millspaw, research analyst; 
Laura L. Rush, deputy chief clerk; Jeff Solsby, senior 
communications advisor; Becca Watkins, deputy press secretary; 
Peter Warren, legislative policy director; Krista Boyd, 
minority counsel; Lisa Cody, minority investigator; Kevin 
Corbin, minority staff assistant; Ashley Etienne, minority 
director of communications; Jennifer Hoffman, minority press 
secretary; Carla Hultberg, minority chief clerk; Chris Knauer, 
minority senior investigator; Dave Rapallo, minority staff 
director; and Susanne Sachsman Grooms, minority chief counsel.
    Chairman Issa. The committee will come to order.
    The Oversight Committee exists to secure two fundamental 
principles: first, Americans have a right to know that the 
money Washington takes from them is well spent; and second, 
Americans deserve an efficient, effective government that works 
for them. Our duty on the Oversight and Government Reform 
Committee is to protect these rights. Our solemn responsibility 
is to hold government accountable to taxpayers, because 
taxpayers have a right to know what they get from their 
government. We work tirelessly in partnership with citizen 
watchdogs to deliver facts to the American people and bring 
genuine reform to the Federal bureaucracy. This is our mission.
    This morning we will review the enormous task confronted in 
the gulf as a result of the BP oil spill and the Obama 
administration's choices made then and to this day. It is clear 
that this was a man-made disaster that 11 people died in what 
should not have happened, but it is the choices after an 
initial event that we will focus on today.
    That is not to take away BP's ultimate responsibility, but 
this committee reviews government actions, both prospectively 
and retrospectively. We cannot expect to do a better job next 
time if we do not focus on what was done right and what was 
done wrong in this disaster.
    The government made several decisions under its authority. 
One of them was not to use the Stafford Act and, in fact, to 
leave the very entity that created this pollution in a position 
of authority and lead. There are many reasons this may have 
happened but we have to ask, should it happen again? Congress 
has the clear power and authority to change the rules of the 
road. We should not have to choose between holding a polluter 
responsible and empowering leaders at the Federal, State and 
Local level to do what they are responsible to do on behalf of 
their citizens.
    The reimbursement for actions, directly and indirectly, 
belongs to British Petroleum. They have said they will meet 
that challenge and we will hold them to it. But as the days and 
weeks went on after an initial spill 40-some miles out at sea, 
it became obvious that we lacked the resources in place to do 
the job that was coming. The response was slow and chaotic.
    Additionally, we will hear from testimony today that the 
secondary damage turned out to be in many cases far worse than 
the little or no oil that came to the shores of communities. 
That is part of what we have to do deal with here today.
    Oil spills and other events are inevitable. In my hometown 
of Cleveland, more than 60 years ago, a liquefied natural gas 
container went bad and many died. It has not stopped us from 
resourcing and using natural gas in America. Three Mile Island 
is still in the memory of people my age. It has not stopped us 
from using nuclear fuel as a primary source for base load.
    Coal miners, to our dismay, continue to die trying to 
harvest that fuel around the world. It is a necessary part of 
our society, that dangerous jobs are done by people who choose 
to do them and have a right to be protected in that process.
    But this hearing is not about the riskiness of any of these 
fuel sources. It is in fact about whether the Federal 
Government knows better this time than they did before this 
event.
    Additionally, it is important for us to understand that 
just as Hurricane Katrina told us that FEMA had problems 
working with States, FEMA was not necessarily ready for a loss 
of vast areas of response. We now know that even when the 
response capabilities were in place, even when it was a single 
event of a company that did not do their job and did not play 
properly by the rules, we find secondary events throughout the 
area. We find oil coming ashore and not being responded to for 
a number of reasons.
    We additionally find a loss of revenue in unrelated areas. 
We will hear from our second panel and from our first that the 
loss of tourism was needless and extreme in areas in which the 
water was clean, the shore was pristine, and in fact people 
were scared away. We need to make sure that does not happen 
again. We need to make sure that Governors and local officials 
are empowered to do what is in the best interests of their 
people and that the American people get a fair understanding of 
the scope of any problem or spill.
    Last, we will hear today that as a result of one reckless 
action, we find countless billions of dollars of revenue lost, 
good hardworking Americans out of work, resources necessary to 
make us less oil-reliant on countries that often are not 
friendly to us, leaving for the very countries that in fact 
will now produce the oil that we are forced to buy.
    In America today, both sides of the aisle talk about jobs. 
I for one am not an economist, but I can understand that if 
$400 billion worth of purchased oil were produced here in 
America, there would be countless millions of direct and 
indirect jobs available to Americans. There are many things 
that we are not competitive on here in America. Certainly one 
of them we are competitive on is natural resource extraction 
from our coastal waters and onshore locations.
    I look forward to hearing from my old friend and a 
considerably well-known figure to all of us and a great 
Governor, Governor Barbour. And with that I recognize the 
gentleman from Maryland for his opening statement.
    Mr. Cummings. Thank you very much, Mr. Chairman, and good 
morning.
    Let me first welcome Governor Barbour, and I thank you very 
much for being with us today. I also want to take a moment to 
recognize Dick Gregory, who is a person who has fought hard for 
so many people for so long in our audience; and thank you, Mr. 
Gregory, for being part of this hearing today.
    Governor Barbour, your State has been through a tremendous 
amount of difficulty, and I sincerely look forward to your 
testimony.
    Let me also welcome Michael Bromwich from the Department of 
Interior. Mr. Bromwich, you agreed to be here with incredibly 
short notice. So we thank you very much for your testimony and 
for your expertise.
    Finally, let me welcome the residents of the gulf who have 
traveled here today to share their views with the committee.
    Earlier this year, the National Commission on the BP 
Deepwater Horizon oil spill issued a comprehensive report on 
the causes of the spill. The report found that this disaster 
was avoidable and that it resulted from clear mistakes made in 
the first instance by BP, Halliburton and Transocean, and by 
government officials. These were extremely difficult lessons to 
learn. I am encouraged that now more than a year later, 
officials in both the oil industry and our government appear to 
be heeding these lessons and retooling the way they do 
business.
    First, we must never ever forget that 11 individuals lost 
their lives in an explosion on April 20th. To address 
deficiencies that contributed to these deaths, the Interior 
Department issued an improved workplace safety rule that many, 
including industry, believe will significantly enhance worker 
safety.
    The Department also completely reorganized the Minerals 
Management Service. MMS had been criticized because it oversaw 
the safety of drilling, the environmental impacts caused by 
drilling and the revenue generated from drilling. According to 
the National Commission, MMS had a built-in incentive to 
promote offshore drilling in sharp tension with its mandate to 
ensure safe drilling and environmental protection.
    The Department also implemented a number of critical safety 
measures to ensure that a blowout like this would never happen 
again. For example, a new drilling safety rule strengthened 
standards for well control procedure, drilling equipment and 
well design, and it required independent and third-party 
inspections.
    Finally, the Department issued a notice to lessees to 
require oil companies to demonstrate that they can actually cap 
a well, that they can actually cap a well and handle a 
deepwater blowout before any new drilling permits were issued.
    These were responsible steps taken after it became clear to 
the Nation after 87 days that BP simply did not have the 
technology available. In other words, the technology was far 
outdistancing our ability to control it.
    Mr. Chairman, I have to say that I am disappointed by your 
actions today. You stated that the committee investigations 
have interviewed investigators, have interviewed more than 
fifty government officials, scores of residents, business 
owners and whistleblowers as part of this investigation. That 
is news to everyone on this side of the aisle, because you 
completely excluded us from that effort. And you have not 
explained why. Unfortunately, this is the definition of 
partisanship and it undermines the integrity of this committee.
    And by the way, this report that is being submitted this 
morning was submitted to the press before we even saw it.
    Nevertheless, moving forward, it is our obligation as 
Members of the U.S. Congress to develop constructive ways to 
help people in the gulf rebuild their lives and their 
livelihoods.
    In my former capacity as chairman of the Subcommittee on 
Coast Guard and Maritime Transportation, I visited the Gulf 
twice while oil was flowing from the Macondo well. I saw 
firsthand how this spill affected small businesses that rely on 
tourism, fishing, and other industries that were decimated by 
the spill.
    I have offered several measures to provide real solutions 
to gulf residents. Last Congress, I offered a provision in the 
legislation that cut in half from 90 days to 45 days the amount 
of time responsible parties had to settle claims arising from 
the spill.
    I also worked on provisions with Chairman Oberstar to 
strengthen the Coast Guard's oversight of an oil spill response 
plans.
    This year, just recently, I offered an amendment to H.R. 
1229 to require all oil and gas exploration development and 
production activities in the gulf to be conducted by U.S.-
flagged vessels. Talking about jobs, that is jobs. This which 
would have immediately stimulated the gulf economy. 
Unfortunately, the Rules Committee did not allow a vote on my 
amendment.
    My basic point is this. We have a tremendous opportunity in 
this committee to really help people, people who have undergone 
extreme hardship. As the goal for today's hearing if we can 
focus our efforts on identifying even one positive proactive 
solution that we can all agree on, then I think today's hearing 
will be a success.
    And with that, Mr. Chairman, I thank you.
    Chairman Issa. I thank you.
    I ask for 1 minute unanimous consent to respond. Without 
objection.
    To my ranking member, just for your edification, this 
investigation began under your predecessor, Chairman Towns. We 
went down jointly and separately. He authorized minority trips 
when I was in the minority, in addition to the joint trips we 
did, including Members of both parties. When I took the chair, 
we continued that investigation. We have had joint trips, in 
addition to we have authorized minority trips down there. As a 
matter of fact we have never turned down a request by the 
minority to go on staff fact-finding. Every request has that 
has been asked for has been granted.
    It is true that both your side and my side, under both the 
majority and minority, have gone both together and 
independently, but I certainly think that I don't--I will not 
belittle any effort that your side made to get at individual 
and independent facts. I hope you were not intending to do so 
by saying that you were surprised that we had made 50 trips 
when some of them were made together.
    Mr. Cummings. Mr. Chairman, may I have a minute?
    Chairman Issa. Of course.
    Mr. Cummings. Let me say this, Mr. Chairman. As I said from 
the very beginning, my No. 1 concern is helping the American 
people, and it is about the integrity of this committee. I do 
not belittle for 1 second the findings and the things that the 
majority has done. What I am saying is that we want to be a 
true partner in all of that. I have said to you privately and 
openly that we, too, care about government operating properly. 
We, too, care about making sure that every agency of government 
does what it is supposed to do. We, too, want to make sure that 
there is no agency that is caught up in a culture of 
mediocrity. We refuse to have that and we have said that to 
this administration and we would say it to any administration.
    So I look forward--going forward, like I said, I want to 
move on, but I want to make it clear we, too, are partners. We, 
too, were elected by 700,000 people per district, and so we 
want to make sure our voices are heard too, and I appreciate 
your comments.
    Chairman Issa. I thank the gentleman.
    With that, we are prepared to introduce our first panel. I 
am going to deny myself the honor of introducing Governor 
Barbour and instead go to the newest Member of the Mississippi 
delegation, Congressman Steven Palazzo for his introduction of 
his Governor. And I understand you were Governor when you were 
in the State house. The gentleman is recognized for an 
introduction.
    Mr. Palazzo. Good morning. Thank you, Chairman Issa, 
Ranking Member Cummings, and Members for allowing me the 
privilege of introducing someone who I believe will provide 
your committee with the most credible testimony today.
    I have experienced his leadership firsthand after the 
devastation of Hurricane Katrina and, more recently, the 
Deepwater Horizon oil spill. Indeed, no other Governor has been 
as frequently challenged to rise to the occasion of leading a 
State during a time of crisis, whether man-made or natural, and 
each time Governor Barbour shouldered the burden of leadership 
in a manner that calmed tempers, mended broken hearts, and 
resulted in incredible efficient outcomes.
    To accomplish this, he met each event with a balanced 
regimen of compassion and order, allaying fears and the sense 
of loss with hope in the prospect of swift recovery. I vividly 
remember the many times the Governor and his beautiful wife 
Marsha walked hand in hand with the victims, and in the 
aftermath of it all, assured them that everything was going to 
be all right.
    More recently, he continues to guide our State through 
historical floods and a severe tornado season. He has not only 
led Mississippi through the country's worst natural and man-
made disaster, but he challenged us to build back bigger and 
better. He is a great leader in every sense of the word and, of 
course, I am talking about Mississippi's 63rd Governor, Haley 
Barbour.
    Mr. Chairman, as someone who represents a district 
devastated by the oil spill, I appreciate you directing the 
committee to assess the recovery efforts of BP and the Obama 
administration.
    I would like to briefly mention that as someone who has 
worked offshore on drilling platforms, I have a particular 
concern on how the administration came to the decision to 
institute a moratorium without conducting a study of how it 
will impact the Gulf Coast economy. We know now that this 
thoughtless decision will decrease oil production by up to 
250,000 barrels per day for the next 2 years. A loss of 
production of this magnitude will continue to have a negative 
impact on the Gulf Coast economy for years to come.
    Studies conducted by Louisiana State University put 
potential estimated job loss by the moratorium and subsequent 
permatorium on the Gulf Coast region at around 24,000. The 
ripple effect of these lost jobs and high energy prices hurts 
our national economy. The majority of the jobs lost in 
Mississippi are from the Fourth Congressional District of 
Mississippi, the district I represent.
    I have worked offshore. I know the value of the jobs that 
the offshore drilling industry provides. I look forward to 
further investigation into the economic impact of the 
administration's decisions and their motivations.
    I applaud the committee for the extensive work on this 
critical issue and I look forward to hearing the testimony by 
the witnesses and the outcome of this important hearing. And 
thank you again, Chairman Issa and the Members, for allowing me 
the honor of introducing Governor Haley Barbour.
    I yield back.
    Chairman Issa. I thank the gentleman.
    Pursuant to the rules of the committee, Governor, would you 
rise to take the oath.
    [Witness sworn.]
    Chairman Issa. Let the record reflect that the Governor 
answered in the affirmative.
    Governor, you know this routine. You have seen it for 
years. Your entire statement will be placed in the record. We 
will not hold you to an exact 5 minutes, but come as close as 
you can.

   STATEMENT OF HALEY BARBOUR, GOVERNOR, STATE OF MISSISSIPPI

    Governor Barbour. Thank you, Mr. Chairman, and to the 
ranking member and all the members of the committee, thank you 
very much for having me here. I am going to not read my 
statement.
    Let me start off by saying that this disaster is very 
different from other disasters. When Representative Palazzo 
talks about Katrina, we had utter obliteration on the coast. We 
had places where it looked like the hand of God had just wiped 
away the Gulf Coast for blocks and some places for miles. We 
had hurricane force winds 240 miles inland, and to get people 
where they got confident that the coast was going to come back, 
where they had hope for their families and their communities, 
where they were willing to return home, was an enormous part of 
the job.
    In this case, keeping people calm, you know, you had an oil 
well to blow out a hundred-plus miles away from our coast, and 
I should say at this point, this experience for us was a little 
different than for Louisiana. Louisiana was closer to the well. 
They got wet brown oil into some of their areas. We didn't. We 
were about 108 miles from the wellhead to the city of Gulfport, 
and by the time oil got to us, A, it had been a long time since 
the well blew out; B, what got to us you would not recognize as 
oil. There was this orange mixture of water and the remnant of 
oil that the oil people call mousse, and then there were what 
we call tar balls and tar patties.
    When I was a kid we used to go to the beach. We used to 
throw them at each other, tar balls, because the Gulf of Mexico 
seeps out somewhere as much as 1,400,000 barrels a year, 
according to the U.S. GIS, every year through the floor. So, 
you know, we were used to tar balls.
    But when this happened, people were obviously very, very 
concerned, and one of the big jobs was to keep people calm, to 
keep people understanding we are going to prepare, we are going 
to have a good plan, we are going to have the resources to 
execute the plan, we are going to protect the coast, 
particularly the habitat, particularly the coastal marshlands 
where the shrimp and other important wildlife actually are born 
and start to grow. And we had to do that with a different set 
of rules.
    And the first point I want to make is the Stafford Act. The 
decision was made that this disaster would be managed under the 
Oil Pollution Act, not the Stafford Act, as has been said to 
the committee by others. A disadvantage of that for us is we 
are used to the Stafford Act. Florida, Alabama, Mississippi, 
Louisiana, Texas, we have managed disasters under the Stafford 
Act because that's what hurricanes are managed under, that's 
what tornados are managed under, that's what floods like we 
have in Mississippi today. So, A, it was something we knew, but 
very important from a Governor's point of view, the Stafford 
Act expressly says that the Federal Government will supplement 
the work of the State, not supplant it.
    One of the problems we had under the Oil Pollution Act 
early on, and lasted for several weeks, the Coast Guard who 
headed the unified command, and we are accustomed to unified 
command, we have unified command under Stafford Act disasters, 
they took the position that the National Guard worked for them. 
And this became a real issue which I'll talk about in a minute. 
But under the Stafford Act it's very clear, the National Guard 
works for the Governor unless the President Federalizes the 
National Guard. We are not mad at anybody about it, but it 
didn't work well when they tried to assume command over the 
National Guard.
    And I should say President Bush, after Katrina, talked 
about Federalizing the response, and I very loudly and publicly 
said no, that we don't want the Army coming into Mississippi or 
the Marines coming into Mississippi. They're not trained for 
that. They don't know the terrain. They don't know the people.
    So Stafford Act, whether--and the Stafford Act, by the way, 
has a lot of improvement that it needs, but the Oil Pollution 
Act ought to be changed to say flatly, like the Stafford Act, 
it's supplemental to the States and it doesn't usurp the 
States' authority.
    Where this came into play was in our plan to defend the 
State's shoreline against oil. We developed a layered defense 
plan, beginning outside the barrier islands, using the barrier 
islands to protect us, protecting the gaps between the barrier 
islands that oil had got through to the sound. That would be 
our principal place to try to pick it up, to keep it from 
getting to shore, steering it toward beaches, keep it out of 
marshlands.
    As it turned out the Coast Guard approved that plan, never 
understood how to execute it; and after the second time that 
oil got to our barrier islands completely undetected, much less 
contested, undetected, we demanded that we be put in charge of 
this, and the Coast Guard agreed and we worked out a system 
that worked.
    I will just tell you before that there was no command and 
control. In fact, unified command could not even speak to the 
hundreds of vessels of opportunity that we had gotten BP to 
hire, to form picket lines to spot the oil as far out where we 
could try to steer it and collect it. They didn't have any 
means of talking to them. So we had to set that up to get 
command and control as it should be.
    Two other points I want to make. And I'll be glad to--I am 
trying not to get into too much detail. For us, this turned out 
to be primarily an economic disaster.
    Now, it may be that there is something slushing beneath the 
sea or that is going to develop that becomes ecologically 
dangerous, and we are all over that, and not just Mississippi, 
all of the States, the Federal Government, all kind of 
scientists. But thus far, environmental damage for us--again we 
are different from Louisiana--has been very manageable.
    We have on the coastline of Mississippi, we have 80 miles 
of coastline. We never closed 1 mile of beach except for one 
time in the whole experience. We had one 2-mile section of 
beach that we closed overnight because we had a high tide after 
a hurricane where some oil got across the highway and we 
couldn't clean it all up. Otherwise, we cleaned up the oil that 
got to the beaches every day, the day it got there. So our 
environmental damage, unless there is something to come, is not 
our issue.
    Our issue is a gigantic economic loss. Talked about 
tourism. Our tourism industry was clobbered. Our season starts 
when our schools get out, which are earlier than in the North. 
Our schools get out the middle of May. So that is when the 
tourist season starts. Of course, this happened late April.
    So people saw on TV the same brown pelican coated with what 
looked like 3 inches of oil, I mean looked like a chocolate 
pelican, and they showed it every hour, every day, 24 hours a 
day, 7 days a week, for weeks and weeks and weeks and weeks. 
And the news media, particularly 24-hour cable TV, gave 
citizens the impression the whole Gulf Coast was coated in oil. 
People deduced from that it was unsafe, unpleasant, don't want 
to go there. They canceled their reservations. They canceled 
their contracts to buy condominia, and not just in Mississippi 
but all across the Gulf Coast.
    The President, to his credit actually, it got so bad that 
the President came to Mississippi, Alabama, and Florida, and 
held news conferences on the beach to say, Look, the beaches 
are clean, the water is clear, it's beautiful down here, come 
on down here. But that one news day can't compete with what was 
being seen every day, every hour for weeks. Huge economic 
problem and loss there.
    And of course in the fishing side on seafood, huge losses 
because they closed our waters; and I should say to you right 
now, we have not since this oil spill had one sample of seafood 
in Mississippi waters that was tested that did not pass the 
test to meet every standard. The same is true for the Federal 
Government. We haven't had one, one sample of seafood that 
failed. Yet we have people that won't buy seafood from the Gulf 
Coast in New York and San Francisco and Chicago because of what 
they saw on television.
    So the fishermen have some mitigation of their losses 
because they got hired to be vessels of opportunity. The 
processors were slammed. So seafood, a huge problem. The oil 
and gas industry, the moratorium for which there was no reason. 
In fact, the government appointed a panel to look at this and 
the panel disagreed with the announcement that was made, that 
you got the impression it was the panel's recommendation to 
have a moratorium; and the panel after said, Whoa, that wasn't 
in our recommendation, we are against that. That was added 
after the panel was through.
    We drilled more than 31,000 oil wells in the Gulf of Mexico 
in the last 50 years, and this is the first time anything 
vaguely like this had happened. The moratorium hurt us 
financially; more important, hurt the country. Thirty percent 
of all the oil domestically produced in the United States is in 
the Gulf of Mexico and about 80 percent of that is deepwater. 
Yet, in the last year, the number of new--the number of permits 
for new deepwater drilling has decreased 85 percent. And that's 
a huge problem.
    Let me close by saying this. For those of y'all that want 
to help the States that were hurt, understanding that this is 
an economic problem for us--and again, Louisiana's a little 
different from the rest of us--this was an economic problem. 
Remember, the natural resources damage assessments and the 
payments that can be made under that are largely limited to 
environmental. And while there is some loss of use room there, 
largely these States cannot be compensated for their economic 
loss, except by getting part of the civil fines that are going 
to be assessed against BP and the responsible parties. And I 
would ask you to consider as Members of Congress, looking at 
this and understanding that this is, this is the best way to 
help these States recover, because it is economic recovery that 
they have to get, unless something really changes on the 
environment.
    I apologize I went over, Mr. Chairman.
    Chairman Issa. No apology required.
    [The prepared statement of Governor Barbour follows:]

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    Chairman Issa. I now ask unanimous consent that the staff 
report entitled, ``The BP Oil Spill Recovery Effort: The Legacy 
of Choices Made by the Obama Administration'' be entered in the 
record. Without objection, so ordered.
    [The information referred to follows:]
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    Chairman Issa. I would also note for the minority that 
after the break, it's my intention to have a committee vote to 
make this a committee report. So during this intervening 
period, if the minority has comments, questions, anything to 
add, the final report will reflect comments by the minority so 
that it is in fact a bipartisan report.
    The gentleman is recognized.
    Mr. Cummings. It is my understanding that, according to the 
committee rules, we have to have 3 days before a committee 
vote.
    Chairman Issa. That is correct. I am giving you more than 
10 days' notice.
    Mr. Cummings. I thought you said today.
    Chairman Issa. No, no. What I'm doing is I am--I asked and 
got permission to enter this in the record. It's a staff 
report. I am going to elevate it to a committee report after 
the minority has entered their comments and any adjustments are 
made. Right now, it's the basis for a committee report. The 
intention is to make sure that your staff that has been working 
on the same set of facts edit, make changes--suggest changes, 
make any other comments, so that it becomes a joint report. And 
I wanted it to reflect both majority and minority opinion and--
--
    Mr. Cummings. So when will that vote be?
    Chairman Issa. It will be after the break at the earliest, 
so more than 10 days.
    Mr. Cummings. Go ahead. I misunderstood you.
    Chairman Issa. I am just noticing it for the future. And 
with that, I'd like to recognize the former chairman of the 
full committee, the gentleman from Indiana, Mr. Burton, for his 
5-minute opening--or 5-minute questions.
    Mr. Burton. Welcome, Governor Barbour. It's great to see 
you again.
    Governor Barbour. Thank you.
    Mr. Burton. Looks like you elected a pretty good-looking, 
articulate young man to serve in the Congress, so 
congratulations.
    Governor Barbour. Won't take him long to get grey hair.
    Mr. Burton. That will come in time if he sticks around this 
place.
    First of all, let me say I have been to the Gulf Coast--not 
Mississippi, but I will come--and I walked on the beaches down 
there and also on beaches I believe on the east coast of 
Florida, and I saw these tar balls. This was when there was no 
oil well problem, and so when you just said that 1.4 million 
barrel of oils leak out naturally each year, I hope everybody 
in the country knows that; because that amount coming out 
naturally doesn't cause any kind of a problem and that ought to 
be included in the discussion when we talk about deepwater 
drilling in the gulf.
    You also said that 85 percent, there has been 85 percent in 
loss in drilling permits. That is tragic, especially in view of 
the fact that we just sent $2 billion down to Brazil so that 
they can drill in deepwater; and we can't, and it really 
surprised me. I think you said there were 31,000 wells in the 
last 50 years down there? And it's been done--drilled without 
any real big problems. And yet right now, this administration 
is stopping us from drilling here, and we are sending billions 
and billions and billions of dollars over to the Middle East to 
countries that don't like us very much, and that really really 
bothers me.
    And I hope that you are able to in effect go on a crusade 
to tell the story that you told us today, because I think the 
American people need to know that. We have the ability to move 
rapidly toward energy independence over the next decade if we 
use natural gas and oil and shale coal that can be converted 
into oil, and we are not doing any of that. And as a result, 
this country is really suffering. And I really sympathize with 
you on the impact, the fiscal impact that was going on that 
took place down there in the gulf during the terrible crisis.
    And I want to say one more thing about the media. I really 
sympathize with you in this drum beat that went on and on and 
on over a month or 2 months, showing the problems that were 
created down there, which obviously had a devastating impact on 
you and your economy. And I hope that in the future when these 
kinds of tragedies occur, the media will not sensationalize it 
to the degree that it hurts economies like that in the Gulf 
States.
    I just have a couple of questions. You said that the 
Stafford Act could have been handled--or it could have been 
handled much better under the Stafford Act. Can you elaborate--
you may have mentioned this in your opening remarks, but what 
could have been done that would have been better in helping to 
manage the problem in the gulf if you as Governor, and the 
Governor of Louisiana, did have the control that you wanted?
    Governor Barbour. The two big reasons of the Stafford Act 
being preferable to State and local governments, we're used to 
it. We deal with it all the time. I think when you have some of 
the local officials later today, we have all had to work under 
the Stafford Act because that's what we do, hurricanes, 
tornadoes, floods, etc.
    For me specifically as Governor, the Stafford Act expressly 
says that the efforts of the Federal Government under the 
Stafford Act are to supplement State efforts. Under the Oil 
Pollution Act, there was an impression that the Federal 
Government was in charge under the unified command and they 
told everybody what to do, and that not only is contrary to the 
U.S. Constitution and bad law, but it also didn't work. I mean, 
our people were much better able to do things than the Federal 
people were able to do. The Stafford Act isn't perfect, though, 
as I said.
    Mr. Burton. I know. But had the Federal Government 
recognized your jurisdiction under the Stafford Act, tell me 
how that would have been more of a positive situation or 
solution for you.
    Governor Barbour. Where it really became very apparent, we 
had a defense plan to defend our shores from oil--different 
from Louisiana because we were 100 miles away. We recruited 
1,100, ``vessels of opportunity.'' Those were people who were 
willing to rent their boats, paid for by BP. BP never flinched 
at paying for this, put them out to essentially form picket 
lines to try to spot the oil south of the barrier islands, 
between the barrier islands, in the sound, OK, so we had 
actually a five-layered defense. We found out weeks into that, 
the Coast Guard had no way of managing that. They had approved 
the plan; they had no way of managing that.
    We literally sent people to Wal-Mart to buy radios. We had 
a situation where our Air National Guard, starting 4 o'clock 
every morning, flew and did infrared photography of the whole 
Sound and south of the Sound to find the oil. The Coast Guard 
had no way to tell the vessels of opportunity where to go. We 
had to set up a whole communications system and a command-and-
control system, which we did not do for weeks because we 
thought the Coast Guard knew more about this than we did. But 
it turned out that we had to set up the communications system. 
We had to set up the command-and-control system; and frankly, 
they were cooperative when it got to it, but it should have 
never come to that. We were lucky that this disaster was 
manageable enough that you could make those kinds of mistakes 
and still clean them up.
    Mr. Burton. Thank you, Mr. Chairman. Thank you, Governor.
    Chairman Issa. Would the gentleman yield the remaining 
time?
    Mr. Burton. Be happy to.
    Chairman Issa. Oh, I am sorry, you were over it.
    Mr. Burton. I was over it, but I will be glad to yield.
    Chairman Issa. No, no. We do not yield the other side the 
remaining time.
    With that, I recognize the gentlelady from New York, Mrs. 
Maloney, for 5 minutes.
    Mrs. Maloney. I thank the chairman for recognizing me. And 
welcome, Governor. Welcome, Representative. It's very good to 
see you again.
    Governor Barbour. Thank you, ma'am.
    Mrs. Maloney. Thank you for being here.
    Governor, the Government Accountability Office, the 
nonpartisan, bipartisan unit issued--and I believe they are 
going to be testifying later on today on a panel--they issued 
several reports warning that taxpayers are not receiving a just 
or fair return for oil and gas leases in the Gulf of Mexico. 
Specifically, the GAO report faulted these so-called royalty 
reliefs granted by Congress in the mid-1990's when gas and oil 
companies were not doing as well as they are today, but they 
encouraged additional exploration at the time when oil and gas 
were lower. And under some of these leases, oil companies pay 
absolutely no royalties at all to the American people when they 
drill on Federal lands, and this is oil that is owned by the 
American people. It is on Federal lands. Usually there is a 
royalty paid back to the government, to the taxpayers, but here 
they are paid absolutely nothing back. And I would like to 
quote from their report, ``Special lower royalty rates, 
referred to as royalty relief, granted on leases issued in the 
deepwater areas of the Gulf of Mexico from 1996 to 2000, a 
period in which oil and gas prices and industry profits were 
much lower than they are today, could result in between $21 
billion and $53 billion in lost revenues to the American 
people--to the Federal Government compared with what it would 
have received without these provisions.''
    Our chairman, in a rare expression of bipartisan support, I 
want to compliment you, Mr. Issa, for the significant work that 
you have done in this area and on this issue. And you had 
called for an end to these leases.
    On October 7, 2009, Chairman Issa issued a staff report 
warning that actual shortfalls to U.S. taxpayers could be much 
much larger. And this is what his report said, ``Depending upon 
the market price of oil and natural gas, the total cost of 
foregone royalties could total nearly $80 billion. Oil and gas 
royalty payments represent one of the country's largest, nontax 
sources of revenue. Taxpayers must get every cent that is owed 
to them.'' And I agree completely with Chairman Issa.
    And Governor, do you agree with Chairman Issa on this 
statement?
    Governor Barbour. Ma'am, I can tell you that we are very 
familiar with this, in that for more than 50 years the rest of 
the country has been sucking the gulf dry and we get nothing. 
At the period of time you are talking about in the late 
nineties, all this production out of the Gulf of Mexico, and 
the States were paid nothing, zero, nothing. When you drill on 
government land in Wyoming, Wyoming gets some of the money.
    But fortunately, in the last administration, this was 
changed and we are going to start on a little stair-step basis, 
getting a little bit of the royalty and ultimately maybe about 
2017 or something, the States will get a legitimate fair share 
of the royalties. So I am very sympathetic to the royalty owner 
because we feel like we are--we should be considered royalty 
owners, too, and that the Federal taxpayer and the taxpayer in 
Mississippi both ought to be getting a fair royalty for the 
production of oil and gas, or if it's coal on land, or 
whatever, I think that is absolutely the case.
    But I hope y'all will please understand, when there are 
only five States in the country that allow offshore drilling, 
the other 45 ought to let us five who allow it, they ought to 
let us participate as royalty owners, too.
    Mrs. Maloney. The real royalty owner is the American 
taxpayer. So do you believe that the taxpayer has a right to 
every cent that is owed to them under these leases and that 
they should be completely corrected, as the chairman said?
    Governor Barbour. And that I believe the Mississippi 
taxpayer should share in that when we are dealing in the waters 
that are Mississippi waters and are part of the Outer 
Continental Shelf that's recognized as Mississippi. So, ma'am, 
I am not arguing with your point about the Federal taxpayers; I 
just want to make sure the State taxpayers get treated as 
royalty owners in the five States that allow this. It's not 
fair for the other 45 States to burn the oil that we have taken 
out of the Outer Continental Shelf, and they get treated the 
same way we do.
    Mrs. Maloney. Well, I must----
    Governor Barbour. That was a ``yes.''
    Mrs. Maloney. I must state for the record, though, that 
Chairman Markey, or Ranking Member Markey, has a bill on this 
that would correct it. And when it came before Congress early 
this year as an amendment, and several other amendments, 
regretfully, Chairman Issa, you voted against it. And I feel 
the same as Governor Barbour, that this should be directed--
that the American taxpayer is entitled to the royalties for oil 
extracted from taxpayer-owned Federal and State-owned property, 
and I hope that you will join with us in a bipartisan way to 
correct this going forward, so that there is fair treatment to 
the States and to government and basically to the American 
taxpayer. So I hope you will join us in that.
    Chairman Issa. I thank the gentlelady. We now recognize the 
gentleman from Oklahoma, Mr. Lankford.
    Mr. Lankford. Mr. Chairman, I'd like to yield my time back 
to the chairman.
    Chairman Issa. I'd like to take it. I thank the gentleman.
    Congressman, you don't have to remain, since we didn't 
swear you in, but you are welcome to stay. You look good with 
the Governor. You always look good next to the Governor. That 
will look good. I thank you.
    Governor, Congresswoman Maloney did make a valid point but 
I think I want to followup on your point, too. Today you are 
going to have an economic loss that will be unreimbursed as a 
result of the BP oil spill, correct?
    Governor Barbour. There's no question of that as it 
currently stands.
    Chairman Issa. And so for the foreseeable future, if there 
were to be another one, you would potentially have another oil 
loss in which the Federal Government was able to get fines. The 
Federal Government would--I don't think we actually collect 
royalties on what's spilled into the gulf, but short of that we 
would continue from that particular rig; that's not a relief 
one, it's not covered by the Clinton-era contract failures. The 
fact is you stand at risk without an ability to get any premium 
on that risk in the gulf----
    Governor Barbour. That's correct.
    Chairman Issa [continuing]. If it's outside the period.
    Governor Barbour. We are not compensated for what we do.
    Chairman Issa. So let me ask a straightforward question. Do 
you believe that from this side of the dais, that we should 
look at legislation that provides sooner and more specific 
revenue-sharing based on the potential risk; in other words, 
effectively insurance policy, where you would have revenue not 
for current expenditure, but for contingent expenditure if you 
have another economic event like this.
    Governor Barbour. Well, two things. There is legislation 
that was passed, I think in 2006, that is going to stair-step 
up, that's going to give the States a share and stair-step it 
up--and maybe by 2017.
    Chairman Issa. Gets 10 percent of the royalties or 
something.
    Governor Barbour. And maybe go up to 35 percent or 
something. But until that goes into effect--and I would urge 
y'all, put it in effect immediately, you know, that's what we 
would like to see, put it in effect immediately--then we would 
have some compensation for the risk we take. Right now, the 
only way that I see that we can reasonably be compensated for 
the damage done to us is if you take the Clean Water Act fines 
and they are going to be Clean Water Act fines here potentially 
in the billions, and that the States that were affected be 
given a share of that, with enough flexibility that they can 
spend it to help their economy; that they not have to get the 
money and say, We are going to use all this money to clean up 
from the BP oil spill. BP's already paid the cleanup for the BP 
oil spill. Our damage is economic damage to tourism, to the 
seafood industry; not that the seafood was hurt, just that 
nobody would buy it. They wouldn't let us fish for it. And then 
to the people that work in the oil and gas industry.
    Somebody mentioned a very sad thing, that 11 people died on 
this oil rig. Four of them were from Mississippi. Now this well 
wasn't in Mississippi waters, but that gives you an idea, sort 
of reference, that we have a lot of people that work in this 
industry; and right now you know where they are? I went and 
visited the Leviathan oil rigs 80 miles west of Haifa, Israel. 
I met two guys from Mississippi who were working that oil well 
in Israel, who had been working in the Gulf of Mexico the year 
before, and they had to leave because of the moratorium.
    Chairman Issa. Well, there you go. We certainly have seen a 
lot of those rigs sail off.
    Let me ask you a followup question. You mentioned the 
immediate following, the too much control by the Federal 
Government and BP. But, Governor, doesn't that continue till 
today? Isn't BP still in the driver's seat on a lot of things, 
including compensation? Aren't you sort of in a back-end 
ability to help your people?
    Governor Barbour. Regardless, you know, I am not--I am a 
recovering lawyer, so I know that a judge has ruled that the 
Gulf Coast Compensation Facility, whatever it's called, that is 
not truly independent of BP and that may legally, technically 
be right. I think they are trying to do a good job. We don't 
get many complaints in Mississippi.
    They are doing something that's complicated, and I will say 
this about it. It is sure better than having to litigate all 
this, where people wouldn't get their money for years and years 
and years, and the trial lawyers would get half the money. So 
it is a long way from perfect, just like what I do is a long 
way from perfect, but I think it is better than the alternative 
of litigation. And as I say, we have cases that are difficult 
cases where people are not satisfied, but we really don't get 
many complaints. And we have been paid. Mississippi companies, 
people have been paid about $340, $350 million.
    Chairman Issa. And the gentlelady from New York has left, 
but I might note for the record that I still am trying to find 
a constitutional way to adjust for those flawed contracts that 
were signed. This committee held hearings much earlier on it, 
found that the oil companies thought they were going to be 
paying royalties and were actually surprised when they found 
out that the defect in the contract allowed them not to.
    With that, I recognize the gentleman from Maryland, the 
ranking member, for 5 minutes.
    Mr. Cummings. Thank you, Mr. Chairman.
    Governor Barbour, in the Animal Kingdom down in Disney 
World, there's a saying over at Animal Kingdom that says this. 
It says, ``We do not inherit our environment from our 
ancestors, we borrow it from our children.''
    And in that light, you know, I was reading your written 
statement and it said, ``The other major economic impact 
resulted from the moratorium on drilling.'' And I want to shift 
away from broad generalities and focus on specific measures to 
prevent this kind of massive oil spill from ever happening 
again.
    Everyone remembers BP's repeated failures to cap the well. 
It became clear immediately that BP had no idea how to end this 
disaster. Every week they would try a new strategy, but it was 
a complete trial-and-error fiasco. They tried the top hat. By 
the way, I was down there when they were trying to build the 
top hat, and I actually watched them do it. This was a massive 
steel containment dome lowered into the well. Of course, that 
failed.
    They also tried the junk shot. They injected golf balls and 
shredded tires and drilled floor into the blowout preventer, 
but that too failed. They tried several more times until 
finally they tried the static kill. They basically injected mud 
into the blowoutpreventer to start regulating the flow of oil. 
But that all took 87 days, and it was crystal clear to everyone 
watching that BP simply did not have the technology to handle a 
deepwater blowout, which I think is atrocious.
    Governor, I want to ask you about a specific requirement 
issued by the Department of the Interior to require all 
companies to prove that they can cap a well before receiving a 
drilling permit. It was called NTL 2010-N10. Are you familiar 
with that requirement?
    Governor Barbour. I am not familiar with that specific 
requirement, Congressman.
    Mr. Cummings. All right. Let me read exactly what it says. 
Each oil company must demonstrate, ``that it has access to and 
can deploy surface and subsea containment resources that would 
be adequate to promptly respond to a blowout.''
    Is that--and so, Governor, here is my question. Do you 
think this specific safety measure should be repealed?
    Governor Barbour. Congressman, superficially that's a 
reasonable statement that you have just made. How it's enforced 
and regulated is something of which I am ignorant, but what I 
do know is we have had more than 31,000 wells drilled in the 
Gulf of Mexico in my life. This is the only time anything like 
this, anything vaguely like this has ever happened. And when 
you consider the amount of our domestic oil production that 
comes out of the gulf and comes from offshore drilling 
elsewhere, when you consider the fact that we have an energy 
security, a military security, and a national security issue in 
this country because we import way too much foreign oil, 
including a lot from people who are not our friends, then I 
would not be in favor of anything that reduces the production 
of domestic oil.
    I think the risks are way too small compared to what you'd 
give up.
    Mr. Cummings. So in other words, if this were to happen 
again, if we had 87 days of oil spewing out into our waters, 
you're saying that the risk of that far outweighs the economic 
situation; is that--I'm not trying to put words in your mouth, 
I'm trying to make sure I understand you.
    I will tell you, I saw a lot of what you're talking about. 
I saw the pelicans. I saw--I talked to the fishermen. I talked 
to the tourism people. I even talked to the industry people, a 
lot of them. And you know what they said? They said, you know 
what--this is before we knew the full impact of it--they said, 
you know what, we agree we ought to have some kind--we should 
have the ability, and it should be proven ability to cap 
something like this before we even continue.
    Governor Barbour. I think beyond that, Congressman, it is 
very clear that this well blew out because normal, standard 
procedures and protocols weren't followed. I don't think 
there's any question that corners were cut. I don't know whose 
fault it was. I don't know who the specific responsible party 
is, but I don't think there's any question that was the cause 
of all this. And this is why I say the risk, 1 out of 31,000, 
is worth taking when you're talking about something that is so 
important to the economy and the United States of America. 
That's why I have that view.
    Mr. Cummings. I understand. Thank you.
    Chairman Issa. I thank the gentleman. The gentleman from 
Tennessee, Mr. DesJarlais, is recognized for 5 minutes.
    Mr. DesJarlais. Thank you, Mr. Chairman. Thank you, 
Governor Barbour, for being here.
    Along the lines of the negative effects of stricter 
drilling regulations on the offshore industry, why don't we 
take a minute and have you expound on the effects that the 
Bureau of Ocean Energy Management, Revenue and Enforcement has 
been issuing. Let me back up. The Bureau of Ocean Energy 
Management, Revenue and Enforcement has been issuing a great 
deal of new regulations affecting offshore drilling. Have your 
constituents been in touch with you about these new rules.
    Governor Barbour. Yes.
    Mr. DesJarlais. Do they find them problematic?
    Governor Barbour. Well, the people that talk to us don't 
know all the details of the rules. All they know is that the 
regulatory efforts of the government are shutting down the 
gulf, have shutdown the gulf. I mentioned earlier I was in 
Israel this winter, like in February; went on an offshore 
drilling rig and two of the guys working on the rig were from 
Mississippi. Almost every American on that rig had been working 
in the Gulf of Mexico the year before. They had got run out of 
the gulf because of the moratorium and because of the belief, 
the perception, that it was going to be a long time before 
there was going to be drilling again in the Gulf of Mexico.
    That's what we get, people who've lost their jobs, whose 
kids have lost their jobs, who are worried about--who are 
worried about this.
    The service--we have people who work offshore, but we also 
have significant service industries in our State that repair 
rigs, that build service boats, that work on boats and that, so 
it's a big industry in the gulf South.
    Mr. DesJarlais. OK. How about let's talk a little bit about 
BP's actions during the spill and recovery. There were many 
officials and citizens that felt BP played too large a role in 
the spill response and the Federal Government should not have 
let them play this large of a role, and that was a common 
criticism we heard in the media at the time of the spill as 
well. At any point, either during the disaster or during the 
recovery phase, did BP have too much of a say in the response?
    Governor Barbour. No question, BP had a big say in the 
response and they were paying for it. But I have to tell you, 
Congressman, sometimes BP was easier to deal with than the 
government. That's just a fact of life that we learn that 
sometimes the Federal Government is not the easiest group to do 
business with.
    In fairness to BP, for us, everything that we asked them to 
do--and of course everything we were asking for they had to pay 
for--everything that we asked them to do they considered, and 
almost every time they did it; where many times we would ask 
the Federal Government for something like skimmers--when we 
were trying to get skimmers, we thought the Federal Government 
was supposed to have skimmers for us when the oil got close 
enough. Turns out we had to go get BP to give us the money to 
get some shipyards in Mississippi to build the skimmers so we'd 
have enough skimmers. So I'm not going berate that part of the 
Oil Pollution Act. What we didn't like was the usurpation of 
State sovereignty by the Federal Government.
    Mr. DesJarlais. If you want to put on your teacher's hat 
for a moment and grade response efforts of BP, the Coast Guard 
and the Obama administration, what grade would you give each of 
them?
    Governor Barbour. You know, when you have been through the 
worst natural disaster in American history as Governor of 
Mississippi, its--you learn not to criticize people too harshly 
for unprecedented, unforeseen disasters, natural disasters or 
otherwise. They had a hard time, they seemed slow to try to get 
in charge. We had the problems I'm talking about with command 
and control, but I don't want to be overly critical, because 
when stuff like this happens you make mistakes. And so that's 
why I try not to assess blame. Let's just figure out how to do 
it better.
    Mr. DesJarlais. I think that's very diplomatic and 
reasonable. No one can fully prepare for this. We always learn 
and we try to make improvements. And I think that I agree with 
your statement.
    One last thing on the seafood, you said in your opening 
statement the seafood is safe to eat. What about the 
reproduction, and are the seafood stocks where they should be, 
or is it too early to tell?
    Governor Barbour. Well, we have had no evidence whatsoever 
or finding of anything from the oil spill that got into the 
reproductive chain. We're not seeing fish with four eyes or 
anything like that. But for a variety of reasons we had a 
really great fall, but with the fresh water that's being 
allowed into the Mississippi Sound because of flood control on 
the river and the opening of the Bonnet Carre floodway through 
Lake Pontchartrain, we're getting an enormous amount of fresh 
water in the Sound that is going to kill all the oysters. It's 
got nothing to do with BP, literally, but it is going to kill 
all our oysters. We'll have to rebuild. The oysters can get 
away. The shrimp and fin fish, they all run away from the fresh 
water. It shouldn't affect them. We have had some losses in 
dolphins, sea turtles, that are more than normal. The peculiar 
thing about it is we started seeing it before the oil spill. 
Just a little bit before the oil spill this started happening. 
So nobody has been able to tie it. But that is something we got 
an antenna up about is that we have seen mortality rates among 
sea mammals and sea turtles for some reason have been rising 
since last March or so.
    Mr. DesJarlais. Thank you, Governor.
    Governor Barbour. Thank you, sir.
    Chairman Issa. The gentleman's time has expired. We now go 
to the gentlelady from the District of Columbia, Ms. Norton, 
for 5 minutes.
    Ms. Norton. Thank you very much, Mr. Chairman.
    Governor, I appreciate your coming. I've listened to what 
you had to say; much of it is reasonable. For example, you say 
it is a lot better than having to litigate. If you litigate, 
that means everybody is messed up. You have to have some 
impartial person.
    I also agree that you have blessings and curses in your 
part of the economy. The United States depends on much of your 
economy with the oil advocacy through there and they are 
sometimes at odds with one another. So there are certain of 
risks that have to be taken.
    I take it you would agree, therefore, that the best way to 
handle those risks is to prevent them.
    Governor Barbour. Well, ma'am, if you mean----
    Ms. Norton. I mean----
    Governor Barbour. Drilling oil.
    Ms. Norton. I mean preventing oil spills.
    Governor Barbour. No, ma'am, I don't think that's the best 
way.
    Ms. Norton. Well, obviously, Governor, I mean preventing an 
oil spill.
    Governor Barbour. I'm sorry.
    Ms. Norton. I mean preventing an oil spill.
    Governor Barbour. That's right. Follow the right protocols 
and procedures, because you don't have one to start with.
    Ms. Norton. Yes, sir, that's what this hearing is about is 
the oil spill.
    Now the administration has focused on how to prevent it 
from happening again. But it has been severely criticized for 
regulations that would apparently accomplish that. It's been 
criticized for these regulations; it's too burdensome. It has 
been criticized because these regulations would cost jobs. 
Therefore, I was intrigued by what some of the--from the very 
top of the oil industry is saying, and I'd like your view on 
this.
    Let's take John Watson who is the chairman and CEO of 
Chevron. He indicates that he himself--they themselves have a 
burden here. But he says, and I'm quoting now, ``Far from 
resisting those rules''--he means the regulations that are 
coming out--``our industry is helping to strengthen them. The 
proactive, uncompromising approach to safety is the test we 
should all apply to any company, starting with our own. In an 
industry that is always edging up against the frontiers of 
geology and engineering''--here goes your risk point--``the 
best practices should be the only practices. Corporate 
responsibility does not end with meeting market demand.''
    Would you agree with Mr. Watson, the chairman, the CEO, 
with his statement?
    Governor Barbour. As I understand the statement I would, 
because I think what he's saying is as the chairman of a big 
oil company, his incentive, among others, is he doesn't want 
his stockholders to be out $20 billion like the BP stockholders 
are, and that he's going to make sure they do it right the 
first time.
    Ms. Norton. And he is saying, and what is--what is--what is 
really interesting in what he's saying is that the company not 
only supports the administration's new safety measures, but 
they are working with the administration to make them stronger. 
He does not appear to be fighting the regulations for which the 
administration has been criticized.
    I want to give you another example from the top of the 
industry, the President of Shell, Marvin Odum, again 
shouldering his own responsibility, but he says additional 
safeguards, beyond what he himself would do, must be 
strengthened across the industry to develop the capacity to 
quickly respond and resolve a deepwater well blowout in the 
Gulf of Mexico regardless of how unlikely it is that this 
situation will occur.
    That doesn't come from Members of Congress or from 
environmentalists; that comes from the top of the oil industry. 
I just want to know if you would agree with Mr. Odum as well?
    Governor Barbour. Well, I certainly don't take any issue 
with what you said.
    Ms. Norton. Because I agree with you about the importance 
of preventing, rather than litigating, as you said. The only 
way to do that is to hold the industry accountable. Here you 
have another oil executive arguing for more robust requirements 
to demonstrate the capacity to cap a well if there's a blowout. 
I just think it's important to bring out how the industry, 
instead of fighting regulations, now is working with the 
administration for tougher regulations.
    I think their concern, Governor, is that these regulations 
be across the board, so some of them are not engaged in 
spending more money to be more safe than others. So if there 
are regulations saying, all of you are held now to the highest 
standard given this blowout, then everybody, it seems to me, in 
the marketplace will be on an even playing field.
    Chairman Issa. The gentlelady's time has expired.
    Governor Barbour. I would simply say, ma'am, these 
companies have huge incentives to self-regulate. We went from 
50 years with one--no occasions in 31,000 wells before BP. It's 
the only time it's ever happened. And I think what the CEO of 
Chevron is saying and the CEO of Shell are saying, is yes, we 
want to work with the government, we want to make sure there's 
rational regulation. That's not saying every regulation 
everybody can think of is something that we're for. In fact, 
Mr. Watson has been very, very public in saying that the 
moratorium was terrible and was a huge mistake.
    Ms. Norton. There is a difference between a moratorium and 
new regulations.
    Governor Barbour. Well, it is a form of regulation; we're 
going to shut you down while we write new regulations. So while 
everything that you said I am very comfortable with, there are 
connotations there that I don't think we should take too far. 
If the idea is that no risk is too small and no cost is too 
high, I don't think any of--in any company in any industry 
would agree with that. Balance risk with costs----
    Ms. Norton. Of course, Governor, that's a straw man.
    Chairman Issa. The gentleman from Pennsylvania is 
recognized, Mr. Kelly.
    Mr. Kelly. Thank you, Mr. Chairman. I would like to yield 
my time back to the chair.
    Chairman Issa. I thank the gentleman. Governor, that means 
he's given me the time.
    Governor Barbour. I couldn't see him, I'm sorry.
    Chairman Issa. I have no shortage of questions and 
responses. Governor, are you familiar with the Marine Well 
Containment Co?
    Governor Barbour. No, ma'am--no, sir. Sorry, I was thinking 
about Ms. Norton.
    Chairman Issa. A different line of questioning. They are 
the group basically overseeing a billion dollars' worth of 
funds that were put together by the various oil companies so 
that if this happens again, that 1 in 31,000 times, they would 
have a whole different category of response. Does that refresh 
your memory?
    Governor Barbour. I didn't know it by that name. But it is 
the industry effort for post oil spill. Yeah, I'm familiar with 
the program, not with the name.
    Chairman Issa. And wasn't that billion dollars spent by the 
companies who had never had a significant spill in the gulf?
    Governor Barbour. I think exclusively.
    Chairman Issa. Right. Exxon, Mobil, Shell, Chevron, and 
Conoco.
    Another thing I want to get into the record. As you know, 
Governor, when you and I first met, I was a businessman and you 
were a recovering lawyer then, too. That was a long time ago.
    Governor Barbour. A long time.
    Chairman Issa. It takes a long time to recover. But the 
number you gave earlier was meaningful enough to repeat it; 1.4 
million barrels per year seep into the gulf approximately, 
automatically. Right?
    Governor Barbour. Yes, sir. That is what the U.S. GIS says.
    Chairman Issa. And for eons, the gulf has absorbed that. It 
defuses it, things eat it eventually. It ultimately is part of 
the ecosystem.
    Well, let's go through the numbers here. As a businessman, 
one always wants to figure out the P&L as quickly as possible. 
The Federal Government estimates that approximately 25 percent 
of that 4.--or the Federal Government estimates 4.9 million 
barrels seeped in, or came out of the well into the gulf. 
Approximately 25 percent, or a little over 1.2 million, were 
recovered. That leaves us about 3.7 million barrels that got 
into the gulf in this disaster.
    I'm not reducing this for a minute, but let's just do the 
numbers. So of that, approximately another 25 percent was 
burned off, and another 25 percent was estimated to be 
dispersed, using dispersement. And we all understand there is 
some controversy about whether to use dispersement.
    So if you take the amount that was evaporated and burned 
off, you're now down to about half; you're down into the 2.-
some million, nearly 3 million barrels. No matter how you look 
at it, whether you take the whole amount or the reduced 
amounts, you've got less than 3 years of oil in one short 
quarter of a year period. You have about 2 years if you would 
give credit for these efforts to mitigate.
    Is it any surprise to you that the gulf fish, shellfish and 
so on, are doing just fine when in fact this is essentially, 
including the natural amount that's still coming into the 
gulf--this about 3 year's worth, maybe total, that went into 
the gulf in 1 year--that this is not such a big thing, even 
though it is a big thing to us individually and a big thing 
when it gets to your shores?
    Governor Barbour. Congressman, right after the oil spill 
happened--when I say right after, the first month or so--we had 
professors and experts who told us that the gulf would over a 
period of time, for lack of a better term, digest this; that 
there are micro-organisms in the Gulf of Mexico, and I think in 
other places where you have oil seeps, that eat the oil----
    Chairman Issa. Including Santa Barbara, California, where 
it has come ashore for years.
    Governor Barbour. I think probably the first place in the 
country that it was ever talked about was Santa Barbara, that 
they have oil that seeps through the floor there. But there 
were signs that predicted that the gulf would essentially eat 
this up, that these little organisms, that's what they do, and 
that there are a lot of them and that they would multiply.
    Now if you're in the job of disaster management, you don't 
assume that's true. So we never assumed it was true. But it 
looks like to the laymen from afar, that is in fact what 
happened; that the micro-organisms were able to manage this, 
and maybe that wasn't totally unforeseeable because they do eat 
up so much oil every year.
    Two or things I would mention. Unlike Exxon Valdez, this 
was light oil. And second, the water was warm. Exxon Valdez, 
the water was very, very cold. Here the water was pretty dang 
warm, and the light cuts, the benzenes, the toluene, the 
xylenes, they all evaporate faster in that warm water.
    Chairman Issa. I thank the gentleman. The time has expired. 
I recognize Mr. Clay for 5 minutes.
    Mr. Clay. Thank you, Mr. Chairman. And thank you, Governor, 
for coming today to the hearing.
    Governor Barbour. Thank you, sir.
    Mr. Clay. The National Commission Report noted something 
that may seem obvious, which is that the offshore oil and gas 
industry is inherently dangerous. But the Commission also 
reported that accidents are surprisingly common that involve 
loss of well control.
    Here is what the report said: Drilling rigs are themselves 
dangerous places to work, dense with heavy equipment, hazardous 
chemicals, and flammable oil and gas, all surrounded by the 
open sea environment, far from shore, where weather and water 
conditions can change rapidly and dramatically. The seriousness 
of these risks to worker safety and the environment are 
underscored by the sheer number of accidents.
    Governor, the Commission report then says that there have 
been 76 accidents in the gulf, between 1996 and 2009, that 
involve loss of well- control accidents. And many of these 
accidents occur very close to your Sate. Were you aware of 
these figures, 76 accidents?
    Governor Barbour. Of course. My State is an oil and gas 
State, not just offshore. And a drilling rig is dangerous. I 
mean, you see a lot of people who worked in the oil fields that 
have lost fingers, got hurt, got hurt one way or another, got 
burned. It's--it's a dangerous thing.
    The accidents you're talking about, though, all turned out 
to be--were managed; they were manageable and managed. This, 
the BP Macon well spill is unique. But yes, sir, it's a 
dangerous industry, and there are accidents that happen on 
shore and off.
    Mr. Clay. Do you think these numbers indicate that new 
safety measures were long overdue well before the deepwater oil 
spills?
    Governor Barbour. I think the industry tries very hard to 
protect their people, because it is very expensive when they 
don't. So rational regulation is something we ought to all be 
for. We need to be careful of the excessive, unnecessary, 
harmful regulation is my point.
    Mr. Clay. OK, fair enough. Governor, some have suggested 
that new safety measures should apply only to deepwater wells 
because that's where BP's rig was when it exploded. Do you 
believe that shallow water drilling should be exempt from new 
safety measures the administration is implementing?
    Governor Barbour. Well, again, if you're talking about 
safety measures to try to prevent injuries--I don't think 
that's what you're talking about--I think you're talking about 
treating shallow water wells the same as--my only view is I 
would treat deepwater wells in the Gulf of Mexico the same way 
as deepwater wells off the shore of Brazil.
    Mr. Clay. Thank you for that answer.
    Governor, Dr. Harriet Perry of the University of Southern 
Mississippi Gulf Coast research lab, identified oil droplets in 
blue crab larvae last summer. This was the first time she had 
seen anything like that in 42 years of studying the species. Do 
you think those oil droplets were due to the moratorium or the 
BP disaster?
    Governor Barbour. If they had showed up in any samples that 
we ever took out of the gulf, I would have been concerned about 
it, seafood samples. We're very proud of the Gulf Coast 
laboratory of UM, but that finding was never replicated, or we 
didn't have any similar findings in any samples that came out 
of the catch. And that's why it hasn't--that hasn't bothered 
me. We just have had no seafood sample--neither has the Federal 
Government, according to what they reported to us--that had any 
kind of evidence or oil pollution on it.
    Mr. Clay. Well, Governor, there are a number of reports of 
red snapper showing up with lesions in the gulf. A Louisiana 
State University professor is fairly confident that these 
lesions are consistent with the toxic oil exposure.
    I can share it with you, but here is a photo of the lesion 
on the red snapper. Do you think that was a result of the 
spill?
    Governor Barbour. Again, Congressman, if this were showing 
up in any samples of seafood taken by the government, Federal 
Government or State government, I would be more concerned about 
it than when a college professor finds it in some anomalous 
place.
    Mr. Clay. But would you be concerned about digesting this?
    Governor Barbour. If it was showing up in seafood samples 
that we're sampling by the thousands between the Federal 
Government and State government, then that would give me real 
pause. But we're not. The fact that we're not finding it means 
that I'm really not--I don't know what the professors are 
finding or purporting to the news media.
    Chairman Issa. The gentleman's time has expired. The 
question has been asked and answered.
    We go to the gentleman from Texas. And please, Mr. 
Foretold, do not get into this Texas versus Mississippi oil. 
You are recognized for 5 minutes.
    Mr. Farenthold. Absolutely not. Texas and Mississippi share 
a common bond. Both border the Gulf of Mexico and are both 
deeply affected by what happens in the Gulf of Mexico, both 
environmentally and economically.
    I think you alluded in the answer to one of your answers to 
the previous questions, Governor, there are other countries 
that are drilling in the Gulf of Mexico, and whose oil and gas 
rigs, if there were to be an accident similar to BP or even 
smaller, would affect our coast; is that not correct?
    Governor Barbour. Particularly Florida. Texas too, sure. 
Sorry.
    Mr. Farenthold. You have Brazilians looking at drilling, 
Cuba offering leases, just immediately nearby to Florida. 
Mexico for a long time has been exploring the Gulf of Mexico. I 
realize you're only a recovering attorney. I'm a recovering 
attorney, too.
    Your recollection of lawsuit--United States doesn't have 
any jurisdiction over any of those drilling operations. We can 
enact every imaginable regulation. Cuba or Mexico or Brazil can 
say, eh, no.
    Governor Barbour. That's correct as I understand.
    Mr. Farenthold. So don't you think it might be a better use 
of our resources, rather than crippling our domestic companies 
and our domestic exploration and 25 percent of our domestic oil 
supply, that we might be focusing on how to respond in the 
event one of these accidents or any sort of accident occurs 
again?
    Governor Barbour. I do think it's more--I think it is 
appropriate that the oil industry is doing it itself, paying 
for it. They know more about it than anybody else. It looks to 
me we ought to be using our resources to have more American 
energy, that we need to get ourselves off of foreign energy. 
And the best way to do that is it to increase supply and 
production of American energy.
    This has hurt that, because this is a big source of 
domestic oil and the number of permits for new deepwater wells 
which produce 80 percent of the 30 percent, about a fourth of 
all our oil, is down 85 percent the first year. And whether its 
coal or oil or gas or hydraulic fracturing, we need to produce 
more American energy.
    Mr. Farenthold. And in your opinion, no amount of 
government regulation can protect us from what other 
countries----
    Governor Barbour. If we have rational regulation, that is 
good. But to have excessive regulation, unnecessary regulation, 
that's bad.
    Mr. Farenthold. And regulations like--and slowdowns in 
issuing permits I think you would consider to be falling 
under--to be a problem, too.
    Governor Barbour. Of course it is.
    Mr. Farenthold. And like Texas, I assume Mississippi has 
seen significant job loss as a result of this.
    Governor Barbour. We have. Most of the guys have just left.
    Mr. Farenthold. Are y'all seeing assets that have been 
based in your State moving into other areas of the world, 
drilling platforms?
    Governor Barbour. What we saw happen after the moratorium, 
some of the big rigs came in for maintenance. Good time for 
maintenance because you can't work. But after the maintenance 
was done, they left. And, you know, the way the industry works, 
those big rigs, they work on big jobs. They are very expensive 
to move, not only in cost of moving, but opportunity costs. 
They get paid huge amounts of money a day to operate them. 
Whether they will come back, how soon they will come back, is a 
very serious issues.
    So we saw not only the jobs move, but we saw the drilling 
rigs that produce the jobs go to Australia, go to Angola, 
Brazil. So that's a big damage to us, not just in jobs on the 
platforms, but jobs in the service industry.
    Mr. Farenthold. I appreciate your coming up and taking time 
to share your experiences with us. I know your time is valuable 
so I'll yield back.
    Chairman Issa. Would the gentleman yield?
    Mr. Farenthold. Yes, sir.
    Governor Barbour. Thank you, sir.
    Chairman Issa. Governor, 250,000 barrels a day less are 
going to be taken out of the gulf. If more than a quarter of 
that is Mississippi related--economic related, what does that 
do to your economy relative to oil in the foreseeable future? 
That's the estimate. It is undenied for the next 2 years.
    Governor Barbour. We get so little of it----
    Chairman Issa. I'm not talking about the royalty revenues, 
I'm talking about the jobs.
    Governor Barbour. Well, it does have an effect on jobs. We 
have a lot of people who work offshore. As I said, I don't mean 
this as precision, but 4 of the 11 people killed on the rig 
were from Mississippi, which gives you a sense of the number of 
people that we have working in the industry on rigs, in the 
service industries. We have companies in my State that 
manufacture drilling rigs, that build service boats. So it 
ripples all through the economy.
    Chairman Issa. Governor, last question. Isn't it really a 
question of do we get it in America or do we get it somewhere 
else? Isn't that really the gulf question today?
    Governor Barbour. Well, if you look at when has the United 
States had reduced use of oil, it is every time there's been a 
recession. And so I don't want a recession. If we're going to 
keep a strong economy, we've got to produce more energy in the 
United States, including oil. And to go shoot the best goose 
we've got laying golden eggs, the Gulf of Mexico where we're 
getting 30 percent of our oil--or we were--and that production 
is going down now, and it's going to keep going down.
    Remember, oil production today is based on decisions that 
were made in the past, normally several years in the past. A 
moratorium is one of the few things that has an immediate 
impact. When we see what we're seeing right now with high 
energy prices, the speculators are speculating the United 
States is going to be producing less and less oil, because they 
think the administration's policies will result in that. So 
they are betting the price of oil is going to go up.
    And then you take that with the value of a dollar, which 
oil prices are denominated in dollars, since the value of a 
dollar goes down, then that's a double-whammy for the people 
who are paying $4 for gasoline. And for the people who think 
you're going to deal with that by raising taxes on oil 
companies, forget that; they won't pay those taxes. They are 
just going to pass it along to the guy who pumps gas and his 
pickup truck. The best thing is produce more oil, and at the 
end of the day--not next week or next month--that's the best 
thing to keep oil prices reasonable.
    Chairman Issa. Thank you, Governor. Mr. Davis is recognized 
for 5 minutes.
    Mr. Davis. Thank you very much, Mr. Chairman. And thank 
you, Governor, for being here.
    Governor Barbour. Thank you, sir.
    Mr. Davis. I've listened intently to your testimony. Of 
course, I grew up in the Mississippi Delta on the other side of 
the river, near Greenville, Mississippi, just a few miles. And 
as Dick Gregory knows, in Chicago we fondly say that the only 
place where you will find more African Americans from 
Mississippi is in Mississippi than in Chicago.
    Governor Barbour. Amen.
    Mr. Davis. And so we have a tremendous relationship with 
the State itself, and we watch very closely what takes place 
and what goes on.
    I know we're talking about the worst environmental disaster 
in the history of our country, but as you indicated in your 
testimony it also had a massive economic impact, particularly 
the fishing and tourism industries. And I want to focus a 
little bit there.
    According to the NOAA, the total amount of shrimp caught 
commercially in the gulf decreased 27 percent from 2009 to 
2010. The amount of shrimp caught commercially in Mississippi 
was down 60 percent last year from the year before.
    Could you share--and you've done it eloquently--a bit more 
of the economic impact that has occurred in the State as a 
result of the oil spill?
    Governor Barbour. The fishing industry hurts very badly 
because waters were closed. Federal waters were closed first. 
Mississippi waters were closed once we had encroachment. 
Louisiana, because they were closer to the well, their waters 
were closed very early as well. And this is fisheries for us 
for shrimp. We have big shrimp boats that will go all the way 
down to Texas coast and come all the way back around the 
Florida coast, but there are not that many of them that are 
that big that go that far. So we have a lot of fishermen in the 
shrimp industry whose waters were closed to them.
    Their losses were mitigated by the fact BP was willing to 
hire their boats to be part of this Vessels of Opportunity 
program. About 1,100 boats participated, and most days we would 
have 500, 600, 700 boats out there. And they would be getting 
paid, some of them more than they made fishing. But the 
processors got clobbered. And so the fishermen are nowhere if 
they don't have processors. And so while they were getting a 
chance to be helped, there was nobody who was helping the 
processors. And without the processors, there's no fishermen. 
And so fishing was hurt that way.
    Recreational fishing, which is a real industry in my State. 
There are people from Chicago who come down there and pay boat 
captains to take them out fishing. Shut out, shut down. Again 
they got some relief from the VOO, but hurt very badly, just in 
that little small segment.
    If we ever talk about motels, restaurants--Louisiana, to 
their great credit, they have New Orleans. And if there is oil 
on the beach in Venice, tourists will come to New Orleans.
    Mr. Davis. Are you confident that our Food & Drug 
Administration and Environmental Protection Agency, that the 
agencies that we rely upon to determine the safety in many 
instances of especially the things we consume, that they are 
equipped to really give us the information that we need to know 
to feel comfortable and secure?
    Governor Barbour. I have no reason not to be, Congressman, 
so I am. It's a team, State and Federal. But yes, sir.
    Mr. Davis. Let me ask you, other than perhaps the listing 
of any moratorium, what else can the Federal Government do that 
might assist with the economy? We know that the economy 
obviously was hurt badly. We know what the economy was even 
before the spill. What can the Federal Government do to add 
further assistance?
    Governor Barbour. The Federal Government is able to collect 
enormous fines under the Clean Water Act. The Federal 
Government can assess through fines and through whatever 
process, either through agreement or by litigation--say BP's 
going to pay X billions--the Federal Government could take that 
and just put it in a general Treasury and move on, use it to 
reduce the debt. It might cover a day or two worth of deficit.
    But we think the best thing the Federal Government can do 
is let some of the fine money--and there's legislation in the 
Senate, I believe, to let most of the fine money go to the 
States. Let the States use the money with flexibility for 
economic growth there. Maybe it has to be related to the gulf 
and the gulf economy. We are going to have people who were 
fishermen 2 years ago, who are not fishermen today, and they 
will never be fishermen because because of the capital 
investment and the cost. We need to create jobs for them on the 
coast, maybe at the port; maybe in Alabama they've got 
something totally different; or maybe in Florida there is a 
whole different concept. But we would like to see a significant 
part of the fine money be given to the States and the States 
allow the flexibility to use the money to produce the maximum 
economic growth in the coastal areas for that state.
    Mr. Davis. Thank you very much.
    Governor Barbour. Thank you, Congressman, for asking.
    Chairman Issa. I thank the gentleman. We now go to the 
gentleman from Idaho, Mr. Labrador, for 5 minutes.
    Mr. Labrador. Hello, Governor.
    In Idaho, obviously, we don't have an oil industry, so I 
don't spend a lot of time thinking about this, but I think 
about common sense. It seems like there is a lot of common 
sense just lacking here. And I'm going to just give you an 
example. You've had a colloquy with several people here on the 
panel, I mean on this side, and sometimes common sense just 
seems to lack in Washington, DC.
    A couple weeks ago, or maybe a month ago, the First Lady, 
her plane was close to--they claim that there was close to an 
accident. And apparently she was within 3 miles of another 
plane. And the regulations said that all planes should be 
within 5 miles of each other, and apparently the First Lady was 
within 3 miles. I'll get to my point, and I think you'll get it 
in just a second.
    So the response in Washington, DC, was not hey, geez, 
somebody screwed up and they failed to comply with the 
regulation; it should have been 5 miles instead of 3 miles. The 
response in Washington was, we need new regulations. It seems 
like that's all I ever hear about in Washington, DC. When 
somebody screws up, when somebody makes a mistake, we don't 
say, hey, that idiot didn't follow the regulations. What we say 
is, we need new regulations. And it's just to me 
incomprehensible that all we can ever think about is adding 
regulation upon regulation when the regulators are not doing 
their job. They already have regulations that should actually 
be enforced. And instead, all we ever talk about is making it 
more difficult for industries, for private enterprise, and for 
individuals to live to survive.
    So can you explain to me, and I think you mentioned this 
earlier, I think you mentioned that the Macondo incident 
occurred because regulations were not followed. In fact, I 
think your word was that some corners were cut.
    Can you explain that a little more to me, what you meant by 
that?
    Governor Barbour. I can't slight the regulatory regime, but 
in the normal standards and protocols of shutting in a well, it 
was clear from the reports at the time, and nobody has denied 
it, that they didn't follow the standards and protocols that 
the industry had been using, settled on, and had worked with 
great results for a long, long, long, long time. This was 
widely reported.
    And so it always seemed to me pretty clear why the well 
blew out. And this was reportedly, again with nobody arguing, 
this was a pretty tough well. They had trouble with this well. 
It had hiccups, it had belches of natural gas that they had 
trouble with. They had to shut the well down at least once 
during this. So this wasn't a well to cut corners on. This was 
a big elephant well, but they did cut corners. And you're right 
when you say the issue is following the regulations we got now. 
I can't improve on your statement.
    Mr. Labrador. So why is it that here in Washington we don't 
seem to understand this? Why is it that we can't understand 
that we have regulations? I think you used the number, we've 
done this in the gulf over 30,000 times and this is the first 
time something like this happened. Can you repeat that again? 
You said----
    Governor Barbour. Yeah. There have been more than 31,000 
oil wells drilled in the Gulf of Mexico in the last 50 years--
or since they opened the gulf--in our four States and there has 
never been anything vaguely like this to happen.
    Mr. Labrador. I think I will yield the rest of my time to 
the chairman. For the life of me, I cannot understand why we 
cannot in Washington, DC. Just understand that if we enforce 
the regulations that are in place, we will actually be able to 
have a good environment, we will be able to have good water, 
and we will be able to have jobs and the economy will improve. 
Thank you very much.
    Governor Barbour. Thank you.
    Chairman Issa. I'm going to followup on the gentleman's 
line of questioning because I think it was excellent.
    Governor, on the day that the oil well blew 100 miles off 
your shore, there were two MMS officials, a father and son 
team. They came on, reviewed, passed and left; isn't that so, 
as far as you know?
    Governor Barbour. I don't know that, but I----
    Chairman Issa. It wouldn't surprise you.
    Governor Barbour. I assume it is true.
    Chairman Issa. We're going to have the administrator of the 
successor organization, MMS, next. That's going to be one of 
our questions, is why is it that what failed before won't fail 
again? And that's going to be a line of questioning is not just 
other new regulations, but an agency that failed to ensure 
safety; what has changed there? So hopefully they will be as 
candid as you've been.
    Governor Barbour. Well, I have to say to you, I accept that 
because the 31,000 wells I actually go from Janet Napolitano, 
so I accept people in authority's statement of fact. So I 
accept the fact that those two guys were there.
    Chairman Issa. I thank you, Governor. The gentleman from 
Virginia, Mr. Connolly.
    And by the way I didn't have to look up what chutzpah was 
in your opening statement, but it was interesting to see you 
using imported words.
    Mr. Connolly. Thank you. Where I come from, chutzpah is a 
very common word.
    I want to welcome Governor Haley Barbour to this committee. 
And I was just thinking to myself, I regret very much you're 
not running for President. I think you would have added some 
good, common, political sense and a lot of good humor, and 
would have humanized the process. It desperately needs it, so 
we're sorry we are not going to see your candidacy.
    Governor Barbour. Thank you very much, Congressman, that is 
very gracious.
    Mr. Connolly. And thank you for your service.
    Governor, I was listening to your exchange with Congressman 
Burton and complaining about the negative media attention. As 
somebody who ran a very large county with 1.1 million people, I 
can sympathize. But on the other hand, was it the bad media 
that caused a hit to the Mississippi economy, or was it the 
devastation of the oil spill itself?
    Governor Barbour. Congressman, we didn't have devastation. 
The problem was, the news media took the very, very, very worst 
areas in Louisiana and they repeatedly showed that over and 
over and over. And it gave people the impression that's the way 
it was all the way over the Gulf Coast. They would actually 
have stories about Mississippi and pictures from Louisiana.
    Mr. Connolly. Hmm.
    Governor Barbour. And you may not have been in here--
literally, on our 80-mile shoreline, we never closed 1 foot of 
beach for 1 day except on one occasion. We had a high tide 
either right before or right after a hurricane missed us, and 
it pushed some water over the highway and through a culvert, 
and it pushed some oil patties up there. And we closed that 
beach for more than--we actually closed that beach overnight. 
That is the only time.
    But if you watched TV in Virginia, you saw Louisiana and 
you thought Mississippi and Florida and Alabama, for that 
matter, and Texas were all the same way. And that's what killed 
our tourist season.
    Mr. Connolly. Yes. Common problem with the media sometimes.
    Governor Barbour. Amen. That's a bipartisan.
    Mr. Connolly. Absolutely.
    When you look back now, and if someone gave you a truth 
serum, do you think in retrospect that the process for 
permitting and improving the Deepwater Horizon oil rig was 
flawed? For example, it got a categorical exclusion under the 
process because the process allowed for that. In retrospect was 
that a mistake?
    The NEPA--and then one other aspect, Governor, and then 
please respond--the NEPA process predicted under the NEPA 
review, which was truncated, that under the worst-case scenario 
we were looking at 4,300 barrels of oil spilled and it would 
never reach the shore.
    Governor Barbour. Congressman, in answer to your question, 
I think that what we have done for 50 years, with more than 
31,000 oil wells, with very positive results--in fact, nothing 
like this ever having happened--I would not take issue with 
that. I mean regardless of what we do, occasionally you're 
going to have the bad outcome. But we're not going to make 
people quit taking left-hand turns, we're not going to outlaw 
left-hand turns because they are a little bit more dangerous 
than regular driving. And I really see this, that rational 
regulation of this had resulted in 31,000 times, nothing like 
this--now this has happened one time. Does that mean we have to 
turn the world upside down? And I think the answer is no.
    Mr. Connolly. Governor, I would agree with you. I don't 
think we have to turn the world upside down. But really my 
question, isn't that--that's not our only choice. The question 
is: Could we in retrospect have tightened up regulation and 
been more rigorous in the review process, such that--and the 
enforcement, for example--get the blowout protection equipment 
that might have stemmed the spill or contained it?
    I mean, I take your point that the devastation wasn't what 
was presented visually on television. I fully respect and 
understand that. But on the other hand, at one point the extent 
of the spill on the surface of the water would have gone from 
my district in Northern Virginia, Dale City, all the way to New 
York City, if it were superimposed on the map here. That's eye-
popping and that's of deep concern to all of us.
    All I'm asking, don't turn the world upside down, but could 
we not on a bipartisan basis agree that in light of that 
experience, it only requires one to create such environmental 
havoc. This isn't the category it seems to me of a nuclear 
disaster, it only requires one. Turning left hand and having an 
accident, God forbid, is a terrible thing if someone is hurt, 
but it is a very contained thing.
    Governor Barbour. If the chairman is correct that there 
were two government regulators on the rig that day, and if the 
reports that have been written over and over and over, without 
contradiction, they did not follow the normal protocols and 
they did not follow the standards, and these two regulators 
were on the well that day, I think the Congressman from Idaho's 
point is the right point. It's not that we need more 
regulation, it's that we need to actually enforce the 
regulations in real life, if, that is factually accurate. I 
have no reason to think it's not.
    Mr. Connolly. Mr. Chairman, will you indulge me just one--
--
    Chairman Issa. The gentleman is recognized for one more 
question.
    Mr. Connolly. Just a clarification, Mr. Chairman, thank 
you.
    Do you mean by that, let's have the full regulatory process 
that's on the books right now, no more exclusions?
    Governor Barbour. I couldn't go that far because of my lack 
of information. There may be some exclusions that are well-
founded, that are like we see in many, many other processes, 
regulatory and otherwise. You fill out the form, if the answer 
to C is no, skip down to F. I just don't know if those 
exclusions are of that type.
    Mr. Connolly. Thank you, Governor.
    Chairman Issa. I thank the gentleman.
    Governor, this may come as a surprise to you, but I haven't 
had my round of questioning yet, and I'm going last. There may 
be another minority member coming, but I'm going now and 
recognizing myself for 5 minutes.
    Governor, I'm going to put up on the board a quote from 
Secretary Salazar for your comment. I'll read it. ``There is no 
question that the suspension of deepwater drilling will have a 
significant, negative, economic impact on direct and indirect 
employment in the oil and gas industry, as well as other 
secondary economic consequences.
    Governor Barbour. That's correct.
    Chairman Issa. But he did it anyway.
    Governor Barbour. That's correct.
    Chairman Issa. Can you explain why somebody would know that 
it was going to hurt economically--and by the way, he follows 
that up, which isn't on this quote--he follows this up by 
noting that there's an extremely good history of safety in the 
oil and gas industry.
    Governor Barbour. Mr. Chairman, my own view is that the 
policy of the administration is to increase the cost of energy 
so that people will use less of it and, therefore, there will 
be less pollution and alternative forms of energy will become 
more economically competitive. I have said that publicly a 
thousand times. I might as well say it here.
    When they did the moratorium, that was my assumption, that 
this was consistent with that policy. And, look, it's one 
policy that works. I mean, we have $4 gasoline; and gasoline in 
January 2009 was a dollar eighty something. But that's what I 
took to be the rationale for that is. To make these other 
alternatives economically competitive, you had to increase the 
price of oil and other traditional.
    Chairman Issa. Well, it's certainly done that.
    By the way, the quote that wasn't on the screen is, I am 
also aware that, as a general matter, the safety record for 
deepwater drilling has been good.
    I am going to go to one more very interesting quote, 
because the next panel's going to be dealing with this.
    Last week or 2 weeks ago, I guess it was, Secretary Hayes 
was here and told us there was no connection between high oil 
prices and domestic production, meaning he was quite sure that 
if we drilled more here it wouldn't change the global price.
    I'm going to take you to page 23 of an MMS report, titled 
MMS Economic Impact Assessment. At the time, they were 
assessing--and I will just read it because it's a little hard 
to read that one--they were assessing that at $75 a barrel--
which is where we were, not where we are, unfortunately--that 
if production went down by 84,000 barrels a day, .84 million 
barrels a day, that we would have an increase of about 47 cents 
a barrel. Now, it went down by three times that.
    Now, you're not an oil speculator, neither am I, but it 
would not surprise you that if you got a half dollar increase 
for such a minor one and if you decrease by three times that 
amount, wouldn't you guess it would go up a whole lot more than 
that; $10, $15 a barrel could certainly happen if you took that 
much out of the limited economy?
    Governor Barbour. And potentially, if the market believes 
that this is going to be policy for a while, that you are going 
to have a moratorium in the Gulf, that you're going to reduce 
production in the Gulf, that you're going to issue 85 percent 
fewer new deepwater drilling permits, that the market sees that 
as there's going to be less U.S. oil production. And while 
whoever said you can't affect the price of oil overnight, well, 
of course, that is absolutely true, but if there is a belief 
that the United States is going to produce less and less oil 
going forward, particularly because of government policy, then 
the price of oil is going to go up.
    Chairman Issa. One more thing I wanted to get into the 
record. Governor, you are one of the many States that are Right 
to Work States, aren't you?
    Governor Barbour. Yes, sir.
    Chairman Issa. In fact, every State in the Gulf of Mexico--
every oil State is a Right to Work State.
    Governor Barbour. I think all the States in the Gulf of 
Mexico. I don't know if every oil State----
    Chairman Issa. I'm sorry. California is an oil State. We're 
not Right to Work. But every Gulf oil State is, in fact, a 
right to work State.
    Governor Barbour. My belief.
    Chairman Issa. Does it surprise you that the policies of 
this administration seem to be targeting the economic well-
being of your area--and I'm not trying to say it's a big plot 
or anything else--but it does seem like if 9/11 aircraft fly 
into the Pentagon, fly into the Twin Towers, the next day we 
are figuring out how to get airplanes back in the air. And yet 
the economy, the seafood economy, the tourism economy, and the 
oil economy of your State, when you're suffering, it seems like 
there's no limit to how long this administration will take to 
have a moratorium to think about whether or not they can let 
you do something that's so vital to your economy.
    Governor Barbour. Well, the moratorium was a mistake. It 
was very harmful not only to our State but I think, more 
importantly, very harmful to the country. And I can't read 
what's in people's hearts or what's inside their heads, but I 
have noted--and I hadn't said it here, but I think it is 
appropriate to say--there has been an effort to raise taxes on 
the oil industry because it's a very profitable industry.
    Chairman Issa. Every day here, Governor.
    Governor Barbour. It's interesting, in the Senate bill to 
raise taxes on the oil industry, the idea was deficit reduction 
to raise the taxes $2 billion a day--I mean, $2 billion in a 
year. The problem is that's half of 1 day's deficit. You know, 
you would have to raise the taxes on the oil industry by a 
factor of 700 times more than that, because a $2 billion tax 
increase on the oil industry is equal to one-half of 1 day's 
deficit.
    I mention that because it says to me that can't be the real 
reason. I mean, the real reason can't be to touch the deficit, 
because it doesn't even touch the deficit. And of course, as we 
know, the guy who's going to pay it is the one who pumps gas in 
his truck.
    So do I think there are some people who don't like the oil 
industry or think it's a good whipping boy politically, I 
suspect that. But I can't say what's inside people's hearts or 
minds and don't pretend to, but I do know it wouldn't do 
anything about the deficit.
    Chairman Issa. Well, Governor, I couldn't agree with you 
more that we can't be sure of somebody's motives. Although, I 
can be sure that if Wall Street were to cause an economic 
meltdown that this administration would allow it to be up and 
running the next day. Because they did. The last administration 
did. This administration did. We have had great disasters and 
great impacts in other areas of the economy, but, amazingly, 
the reforms came after everyone was back up and running, not 
before they were allowed to go back up and run.
    Governor, you have been very kind with your time. We 
appreciate your being here. You're probably the most welcome 
relief to us in Congress, to see somebody who's doing the right 
things, who's making the right decisions, who's steering a 
course for your State, and we appreciate you taking your 
valuable time to be up here today.
    Governor Barbour. Thank you, Mr. Chairman. Thank you, 
Congressman Cummings.
    Chairman Issa. We will now take a 5-minute recess to set up 
the next panel.
    [Recess.]
    Chairman Issa. We now recognize the second panel.
    We have Mr. Craig Taffaro, who is president of St. 
Bernard's Parish in the State of Louisiana. Mr. Bill Williams 
is commissioner of Gulf County District 3 in the State of 
Florida. Mr. Frank Rusco is the director of Energy and Science 
Issues at the Government Accountability Office--GAO was 
prominently mentioned in the first panel. Mr. Cory Kief is 
president of Offshore Towing, Inc. And Mr. Michael Bromwich 
is--and is very welcome--director of the Bureau of Ocean Energy 
Management, Regulation, and Enforcement, previously referred to 
as MMS but now reformed.
    With that, as you saw in the first panel, I'd ask all the 
witnesses to rise and take the oath.
    [Witnesses sworn.]
    Chairman Issa. Let the record reflect that all witnesses 
answered in the affirmative.
    Gentlemen, the first panel was one; you are five. I will 
ask you to please summarize your opening statements and stay 
within the 5 minutes for each others and our side, and I 
apologize for the first panel going long, but, hopefully, it's 
set up questions and answers for all of you in the second 
panel.
    Mr. Taffaro.

 STATEMENTS OF CRAIG TAFFARO, PRESIDENT, ST. BERNARD'S PARISH, 
LOUISIANA; BILL WILLIAMS, COMMISSIONER, GULF COUNTRY, FLORIDA; 
   CORY KIEF, PRESIDENT, OFFSHORE TOWING, INC.; FRANK RUSCO, 
DIRECTOR, ENERGY AND SCIENCE ISSUES, GOVERNMENT ACCOUNTABILITY 
OFFICE; AND MICHAEL BROMWICH, DIRECTOR, BUREAU OF OCEAN ENERGY 
  MANAGEMENT, REGULATION, AND ENFORCEMENT, U.S. DEPARTMENT OF 
                            INTERIOR

                   STATEMENT OF CRAIG TAFFARO

    Mr. Taffaro. Thank you, Mr. Chairman, committee members, 
Ranking Member Cummings. Appreciate the opportunity to speak 
with you today.
    While there have been numerous reviews, reports, and 
studies completed in relation to the BP oil spill disaster, the 
reality of the impact continues to unfold, and the intermediate 
and long-term obstacles and effects are just coming into focus.
    The experiences and lessons learned through the first year 
of the oil spill response must be used to guide us through the 
remaining years of the oil spill recovery. These insights, 
while certainly fueled by the passionate experiences of those 
directly and indirectly impacted by this spill, are offered as 
just that, insights.
    My hope is that the message delivered is not lost in the 
corporate world of spin marketing or in the spin-off media 
exposes designed to sensationalize the event and leave the 
victims and the coast without the attention it is warranted.
    Insight one. Hold the responsible party accountable. There 
are few axioms of our society more basic than the one we 
learned in some of our earliest social development. If you make 
a mess, clean it up. As simple as this axiom sounds, there has 
been an ever-present allowance in this disaster that has 
allowed BP to make it right on their own terms and not based on 
the terms of the impacted States, communities, businesses, and 
individuals.
    Unlike the natural disasters that we continue to respond to 
as a Nation, this disaster has an identified responsible party. 
There is no value in talking about the disaster in terms of 
responsibility if there are loopholes and justifications that 
allow the agent that created the mess to define the terms of 
the response.
    Added to this axiom referenced here is the understood 
message about the mess versus the mess maker. Somehow we seem 
to be routed into an ongoing focus of is BP good or bad or is 
deepwater drilling good or bad, instead of a consistent focus 
of who is responsible for the mess and has it been cleaned up 
quickly, comprehensively, and in a way that does not create 
another mess. The reality is that the value in cleaning up a 
mess that was created offers as much immunity and positive spin 
to the mess maker as any spin marketing campaign could 
accomplish.
    The second insight I offer is to remove the response and 
restoration authority from the responsible party. This insight 
must not confuse the terms ``authority'' and 
``responsibility.'' The responsible party being responsible 
should translate into doing what is deemed to be required to 
complete the actions involved in addressing the environmental, 
coastal, social, economic, medical, and emotional impacts of 
the given disaster. Removing the authority to decide what those 
interventions that shall be required from the responsible party 
protects the impacted States, communities, businesses, and 
individuals from further victimization. In an 
oversimplification illustration, when we are involved in a car 
accident, the person who caused the accident doesn't get to 
dictate how and what treatment or repair is dictated.
    Insight No. 3. Legislate for the disaster that will happen 
versus one that has already happened. A critical lesson that 
continues to face us is the need to address current legislation 
in a way that transcends the most recent disaster. While the 
need to know causal information in any disaster is important, 
the framework of legislation that allows flexibility in 
accomplishing the overarching mission of effective and 
expedient response and the ability to require action by a 
responsible party must be examined.
    While new legislation will not correct any of the ills of 
the BP Deepwater Horizon spill, we can implement language that 
authorizes broader oversight and intervention authority, 
stiffer penalties for a lack of cooperation, including language 
that revokes a company's ability to operate under other permits 
if it has not been compliant, while in all terms making sure 
that production is not mutually exclusive with safety.
    Unfortunately, we as a collective unit of citizens, 
government officials, and industry leaders cannot predict the 
next disaster, but we can predict the next response. We can 
predict the next worst-case scenario and ensure that 
legislation with the appropriate flexibility and force is 
enacted to protect the interests of all citizens.
    And, finally, the last insight is to localize the response 
process to better serve the impacted victims. The shortest 
distance between two lines is a straight line--or the shortest 
distance between two points is a straight line. No one argues 
that, but we continue to set aside this scientific law as we 
develop and address local needs at a nationalized approach.
    While impacted citizens of St. Bernard Parish continue to 
have less than 25 percent of their claims settled, the monthly 
payment to Mr. Feinberg continues unfettered. While I have no 
problem with an honest day's pay for an honest day's work, I do 
question an assignment of claims processing and the payment 
thereof without a performance clause in favor of the victims.
    We were told that claims processed through the Feinberg 
plan was independent. It's not true.
    We were told that the claims would be easier to process at 
the local level in the Feinberg plan. It's not true.
    We were told that the Feinberg plan had greater flexibility 
and was implemented to address the victims, regardless of the 
impact to BP. We have found that this is also not true.
    I have met Mr. Feinberg and have no personal problem with 
him as an individual. I do not claim to know his business, but 
I do know that, because of the lack of ability to resolve 
claims at the local level, his program and process has been 
ineffective. St. Bernard has offered at no cost to the Feinberg 
plan to assist him in identifying claimants that are likely to 
be questionable versus those whose local work history supports 
their need for assistance.
    A common tenet in the disaster response industry is that 
disasters are local. This is supported because the impact of 
disaster is most real for the individuals living or mourning 
through it. We would ask that the local government and local 
involvement continue to be involved not only in the 
compensation process but equally in the response and 
restoration phase of all disasters.
    Thank you for allowing me to share my thoughts, and thank 
you for keeping this issue at the forefront of your agenda.
    [The prepared statement of Mr. Taffaro follows:]
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    Chairman Issa. Thank you.
    Mr. Williams.

                   STATEMENT OF BILL WILLIAMS

    Mr. Williams. Thank you, Mr. Chairman.
    On behalf of Florida's 67 counties, and more specifically 
our coastal communities and counties of northwest Florida, I 
would like to thank Chairman Issa and the committee members for 
the opportunity to address the House Oversight and Government 
Reform Committee this morning.
    Before I begin my presentation to the committee, I would 
also like to take the opportunity and tell the Chairman thank 
you for sending down two great staff members that saw firsthand 
the things within my community and the State of Florida, Mr. 
Tyler Grimm and Mr. Ryan Hambleton. Their presence provided a 
special opportunity for our entire community to share their 
experiences and tell their stories firsthand to Members of this 
committee.
    I am here today to speak to you about the struggle that the 
Florida counties and our constituents faced in the days and 
months following the Deepwater Horizon oil spill. It is clear 
in hindsight that even in the face of these struggles we cannot 
ignore the good intentions and Herculean efforts by the Federal 
and State response teams. Even though the response--and even 
the responsible party tried to do their best while facing this 
unique and global tragedy.
    However, as a lifelong Florida resident and survivor of 
more than 20 hurricanes, best efforts and good intentions are 
not enough. We must learn from our mistakes so that the 
disaster response is not just swift but clear, organized and 
collaborative for the communities impacted.
    There is no question that Florida has the foremost disaster 
response team in our country and arguably the world. With a 
hurricane season that lasts 6 months and can boast up to 20 
named storms, Florida can ill-afford anything but to be the 
best. Yet in the immediate aftermath of the Deepwater Horizon 
oil spill, our expert response teams were forced under Oil 
Pollution Act of 1990, rather than the tried and true Federal 
Stafford Act.
    Our traditional emergency management system was turned 
upside down and on its head, leaving the Florida counties at 
the mercy of a unified command structure that was established 
outside of Florida altogether. For example, during the first 
critical weeks of the oil spill, individuals based in Alabama 
who had never stepped foot in Gulf County or other Panhandle 
counties of Florida that were using 10-year old ACP, or area 
contingency plan maps were making final decisions regarding how 
Gulf beaches and all of Florida's beaches would be protected. 
Local expertise and resources were ignored as strangers decided 
whether to place oil protection booms near county beaches, 
inland water bodies, and sensitive environmental resources.
    To compound matters, communications from unified command 
was limited and rarely consistent from day-to-day, leaving my 
county and all of Florida counties in the dark and concerned 
that any preparation and response effort would be too little, 
too late. With little information coming from unified command, 
local communities were forced to expend significant financial 
resources gearing up and preparing for potential events that 
could be quantified or predicted. These financial commitments 
came, as you well know, at a time when Florida counties and 
most governments were laying off employees and facing extreme 
budget shortfalls due to the economy. Yet it took more than 4 
months to begin seeing reimbursement for the emergency 
expenditures.
    Faced with these challenges, our coastal counties organized 
themselves under the umbrella of the Florida Association of 
Counties to address a range of concern as we evolved from 
response to recovery. And while counties consistently met with 
State and Federal officials, in most instances the role of the 
local community was minimized. More importantly, in spite of 
our efforts, recommendations regarding what type of recovery 
structure would meet our needs and the communities directly 
impacted were never specifically sought.
    This story and the experiences have produced a short list 
of priorities that I would like to call lessons learned. I 
share this with you in hopes that Congress will take these 
concepts, review them, and develop proposals so that any future 
disasters are operated with clear organization, collaboration, 
strong communication, focused on the local community, 
individuals and the businesses directly impacted.
    We strongly encourage Congress to review and evaluate OPA. 
Florida's emergency response system, which operates under the 
Stafford Act, doesn't just work. It is an example to be 
followed. Why not take the best response plans and teams in the 
world and use them as the foundation of our disaster. The 
Stafford Act works because local communities are the first 
responders, the State Government responding to our local needs 
and the Federal Government responding to the State needs.
    OPA failed because it was a top-down approach that looked 
to the responsible party rather than to utilize local expertise 
and resource. This lack of collaboration created duplication 
and triplication of all efforts.
    In regards to the claims in general, it would be our 
recommendation that Congress provide greater clarity and 
direction to the process. Probably the greatest frustration for 
everyone involved, both private and public, were constant 
changes in the claims process. There were eight different 
policies, procedures, processes and applications within the 
first 2 months. The summer was almost over before our 
businesses and individuals finally had a solid process.
    As for our public or government claims, it would be our 
recommendation that costs associated with first responder 
expenses such as protection, prevention strategies, mitigation 
strategies, and cleanup should be clearly laid out similarly to 
the Stafford Act and not held hostage by the responsible party. 
In preparation for the next potential event, a separate funding 
process should be established so State emergency operations and 
local first responder plans are not abrogated or delayed 
because of questions of financial capacity or whether the 
responsible party will approve the specific cost.
    In addition, loss of revenue claims by public entities 
should be included in a process that incorporates an 
independent third-party review. The parties should not have 
leverage over the States and local communities concerning 
economic issues, determining methodologies for measurement, and 
potential veto over certain claims. Any independent, unbiased 
process should be established, almost a year before it was 
completed as instituted by the loss revenue claims.
    We also ask Congress to establish and approve a Gulf Coast 
Recovery Fund, with 80 percent going directly to the 
environmental restoration and economic recovery of the Gulf 
Coast region. I personally support and ask Congress to support 
the recommendations of the Secretary of the Navy's report 
published in September of last year.
    Mr. Chairman, like you, we are committed to working with 
our Federal and State partners, and we appreciate the 
opportunity to be before you today.
    [The prepared statement of Mr. Williams follows:]
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    Chairman Issa. Thank you.
    Mr. Kief.

                     STATEMENT OF CORY KIEF

    Mr. Kief. Good morning and thank you for the opportunity to 
testify on behalf of Offshore Towing and how we have been 
impacted in the Gulf of Mexico as a result of the BP disaster, 
the moratorium, and related issues.
    Offshore Towing is a partnership with three smaller marine 
towing companies who collectively operate a fleet of seagoing 
tugboats in the Gulf of Mexico, providing services in the oil 
and gas sector, primarily towing drilling rigs to and from 
various locations in shallow water. We are located along the 
Gulf Coast in Larose, LA, and collectively employ approximately 
110 people.
    Although the moratorium has been lifted and the shallow 
water sector was not to be impacted as the deepwater sector, 
substantially negative economic impacts have been felt and 
economic recovery is more distant now than ever before. This 
company used to move 25 to 30 rigs a month, and now we move 10 
or less due to the lack of drilling permits being issued. On 
top of that, other rigs are leaving the Gulf as well due to the 
challenges with issuance of drilling permits.
    We do not have term contracts and work on the job to job on 
the spot market. BP will not compensate companies like ours 
because they claim that our economic losses are a result of the 
moratorium, not the spill.
    I was present at Mr. Bromwich's testimony in March before 
the House Natural Resources Committee and heard his testimony. 
He testified that he felt as though the government was 
responsible as well for the blowout, but this administration 
continues to reflect as much light as they can on BP or anyone 
else that they can blame. $20 billion sounds good but grants us 
no relief, and unforgiving governmental agencies, such as the 
BOEMRE, do not provide much hope for us when it comes to 
addressing our economic issues.
    We have had few layoffs because of this crisis because we 
maintained an optimistic view relative to the industry 
rebounding in a timely fashion. We have used capital blended 
with lines of credit to offset the shortcomings that normal 
earnings would support, but even that exercise has its 
thresholds. The beginning of the tolerance levels that have 
been established have been met now. Expectations for a timely 
recovery are lower than ever. Our confidence in this 
administration, government, and its agencies are not what they 
used to be, and we do not believe in any reasonable solutions 
are in our near future. We have recently reduced wages on 
employees and have started a plan to begin reducing employees. 
We can no longer afford to subsidize unemployment and must 
enforce these unpopular but necessary exercises.
    Our maintenance schedules have also been modified and 
changed to later dates because the necessity to replace and/or 
overhaul machinery will no longer be necessary due to the lack 
of use. Factories such as Caterpillar, General Motors, and John 
Deere, who produce our engines and replacement parts, will 
begin to be impacted as well. Therefore, States such as 
Michigan and Illinois will be feeling this slowdown along with 
the rest of us. There are a variety of different items that 
could be identified, but this is the biggest example that I 
could describe.
    We understand that precious lives were lost and that an 
environmental disaster that was some years in the making should 
not be ignored. However, there was a governmental agency that 
had a hand to play in this along with the others. 
Environmentally, the American government and several 
administrations over the past 60 years have ignored our 
environmental needs in this region. The Louisiana coast, 
marshes, and wetlands are disappearing at astonishing rates. So 
our government has ignored more environmental issues, including 
Macondo, than anyone else.
    Mr. Bromwich claims to be offended by the term 
``permitorium'', but he doesn't understand that millions of 
people are offended by the actions or lack of actions of this 
administration, the government, and its agencies.
    The administration, the government, the agencies, the 
media, and the press have done a good job of separating the 
American people by creating political boundaries to satisfy 
political agendas. When the truth of the matter is that America 
is more interwoven than what it is being given credit for. We 
need our brothers and sisters in Michigan and Illinois, and 
they need us. Americans all over this country depend on one 
another for a variety of different resources. Our leaders 
should focus on that.
    This government is so broken and is beginning to virally 
infect the American people who deserve better. It is your duty 
as stewards of the public to fix this. Please do your best for 
the American people. Put this Nation back to work.
    Thank you again for the opportunity to be heard.
    [The prepared statement of Mr. Kief follows:]
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    Chairman Issa. Thank you.
    Mr. Rusco.

                    STATEMENT OF FRANK RUSCO

    Mr. Rusco. Thank you.
    Chairman Issa, Ranking Member Cummings, and members of the 
committee, I'm pleased to speak with you today about the 
Department of the Interior's challenges associated with 
managing Federal oil and gas in the aftermath of the Macondo 
oil spill.
    Interior leases Federal lands and waters for oil and gas 
exploration, development, and production. These activities 
provide a domestic source of energy, create jobs, and raise 
revenues that are shared between Federal, State, and tribal 
governments. Revenue generated from oil and gas on Federal 
lands and waters is one of the largest non-taxed sources of 
Federal Government funds, totaling billions of dollars 
annually.
    The deadly explosion onboard the Deepwater Horizon and 
resulting oil spill emphasize the importance of Interior's 
permitting and inspection processes to ensure operational and 
environmental safety. As found by the National Commission on 
the BP Deepwater Horizon Oil Spill and Offshore Drilling, this 
disaster was the product of several individual missteps and 
oversights by BP, Halliburton, and TransOcean which government 
regulators lacked the authority, the necessary resources, and 
the technical expertise to prevent.
    In recent years, GAO has evaluated many aspects of 
Interior's management of Federal oil and gas resources. We have 
found material weaknesses in three broad areas; and, as a 
result, in 2011, GAO placed Interior's management of Federal 
oil and gas on the high-risk list.
    First, Interior has been unable to complete production 
inspections, maintain reliable royalty and production data, and 
provide reasonable assurance that the public is receiving its 
fair share of oil and gas revenues. In recent years, Interior 
has not consistently met its statutory or agency goals for 
verifying that companies accurately report volumes of oil and 
gas produced on Federal leases. Interior has also lacked 
consistent and reliable data on the production and sale of oil 
and gas from Federal lands and has been unable to provide 
reasonable assurance that it was appropriately assessing and 
collecting royalties.
    Second, Interior faces longstanding challenges in hiring, 
training, and retaining staff in key oil and gas inspection and 
engineering positions. In addition to hampering production 
verification efforts, these human capital challenges have 
resulted in delays in issuing leases and caused Interior to be 
unable to meet its statutory and agency goals for performing 
safety and environmental inspections of oil and gas facilities.
    Finally, in May 2010, Secretary Salazar announced plans to 
reorganize the Minerals Management Service into three bureaus. 
Under this reorganization, offshore leasing, planning, and 
permitting will be done in the Bureau of Ocean Energy 
Management; offshore inspections and enforcement by the Bureau 
of Safety and Environmental Enforcement; and revenue collection 
by the newly created Office of Natural Resources Revenue.
    Organizational transformations are complex endeavors, 
requiring concerted and sustained efforts of management and 
staff. Interior's reorganization will be challenging, because 
it is happening at a time when the agency is working to 
implement dozens of recommendations made by GAO, Interior's 
Inspector General, and other entities and because Interior is 
still responding to the aftereffects of the Macondo oil spill. 
These efforts include implementing new practices and procedures 
for planning, permitting, inspections, and enforcement. In 
addition, Interior has stated that its reorganization will 
require increased levels of funding, and this will be very 
difficult to achieve in this time of tight budgets.
    It is essential that Interior gets this reorganization 
right. The agency must provide Congress and the public with 
reasonable assurance that billions of dollars of revenues owed 
the public are properly assessed and collected and that 
oversight of oil and gas activities on Federal lands and waters 
maintains an appropriate balance between efficiency and 
timeliness on one hand and protection of the environment and 
operational safety on the other.
    While Interior has already come a long way toward 
implementing organizational change and has responded to many 
recommendations, it may require congressional attention to 
fully accomplish its goal of restructuring and improving the 
management of public oil and gas resources.
    This ends my oral statement. Thank you. I will be happy to 
respond to any questions you may have.
    [The prepared statement of Mr. Rusco follows:]
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    Chairman Issa. Thank you.
    Mr. Bromwich.

                 STATEMENT OF MICHAEL BROMWICH

    Mr. Bromwich. Thank you, Chairman Issa, Ranking Member 
Cummings, and members of the committee. I'm happy to be here in 
response to your invitation and to discuss the activities of 
the Bureau of Ocean Energy Management, Regulation, and 
Enforcement following the Deepwater Horizon oil spill in the 
Gulf of Mexico.
    These activities include putting in place strengthened 
safety measures and regulatory reforms relating to reviewing 
and approving exploration and development plans and 
applications for permits to drill. Those measures and the many 
other steps we have taken over the past year have been part of 
our response to Deepwater Horizon and its aftermath. But, as 
you know, aside from one grant program, my agency is not 
directly involved in Gulf Coast recovery efforts, nor do we 
work with BP on its recovery efforts. To the extent that the 
issues the committee is exploring today extend beyond my 
agency's jurisdiction I will take those questions back to the 
Department of the Interior to other agencies.
    At BOEMRE, we have devoted enormous efforts over the past 
year to put in place a new and necessary set of rigorous 
standards for safety and responsibility in our offshore 
development program. Our aggressive reforms to offshore oil and 
gas regulation and oversight are the most extensive in U.S. 
history. These reforms strengthen requirements for everything 
from well design and workplace safety to corporate 
accountability and are helping to ensure that the United States 
can safely and responsibly expand development of our energy 
resources.
    Over the past year, multiple reviews and investigations 
have produced reports advocating the need for change in our 
agency. The President's Commission on Deepwater Horizon, the 
Department of the Interior's Inspector General, the 
Department's own Safety Oversight Board, and multiple 
committees of the House and Senate, including this one, all 
have highlighted the need for reform in the way the Department 
does business and in the way oil and gas operations are carried 
out offshore.
    Many of the recommendations presented in these reports have 
validated the administrative actions and reforms we have been 
undertaking at the Department to promote safety and science in 
offshore oil and gas operations. These changes were necessary 
to ensure that industry and government worked to help prevent 
an accident like Deepwater Horizon from happening again.
    We have issued new regulations to bolster safety and to 
enhance the evaluation and mitigation of environmental risks. 
Our new drilling safety rule put in place tough new standards 
for well design, casing, cementing, and blowout preventers, 
including the requirement that the drilling process be 
certified by a professional engineer. Our performance-based 
SEMS rule requires operators to develop a comprehensive safety 
and environmental management program that identifies the 
potential hazards and risk reduction strategies for all places 
of activity.
    BOEMRE has also issued notices to lessees that provide 
additional guidance to clarify how operators must comply with 
existing regulations. We have clarified that operators must 
have a well-specific blowout and worst-case discharge scenario 
that provides the assumptions and calculations behind those 
scenarios. We have clarified that operators must certify that 
they will conduct their drilling operations in compliance with 
all applicable agency regulations, including the new drilling 
safety rule, and we have clarified that we will assess whether 
each operator has submitted adequate information to demonstrate 
that it has access to, and can deploy, subsea containment 
resources sufficient to respond to a deepwater blowout.
    In addition to our enhancing drilling and workplace safety, 
we have focused much of our attention on the reorganization of 
the former MMS into independent entities with distinct 
missions. These missions are leasing and energy development, 
the regulation of offshore drilling, and the collection of 
revenues from Federal energy development. Having these three 
conflicting functions reside within the same bureau enhanced 
the potential for internal conflicts of interest among the 
objectives of the agency. Instead of one agency with multiple 
and conflicting missions, we will have three new entities, as 
Mr. Rusco has just described. They are BOEM, BSEE, and ONR. We 
are on track to complete the reorganization by October 1st of 
this year.
    BOEMRE continues to facilitate domestic exploration by 
issuing permits. We have continued to issue shallow water 
permits in every case where the application complies with the 
heightened standards that apply to shallow water operations. To 
date, 55 new shallow water well permits have been issued since 
last June when new safety and environmental standards went into 
effect. Just seven of these permits are currently pending, with 
seven having been returned to the operator for more 
information.
    Deepwater drilling applications fall into two categories. 
First, there are deepwater permits that involve activities that 
were barred by the deepwater drilling moratorium. We have 
approved 40 of these permits for 15 unique wells since industry 
demonstrated in mid-February that it had developed subsea 
containment capability. Twenty-five permits are pending, and 20 
permits have been returned to the operator.
    Second, there is a category that is frequently ignored in 
discussions, deepwater activity not barred under the 
moratorium, including water injunction wells, completions, and 
workovers. Since the implementation of these safety and 
environmental standards, 40 of these permits have been 
approved. Only one is currently pending.
    Although our permitting of drilling activity has been 
moving ahead steadily over the past 3 months, there are good 
reasons why the pace is somewhat slower than in the past. Our 
new regulations have required operators to make sure their 
applications fully comply with the new requirements. In 
addition, our drilling engineers have had to work to ensure 
compliance with the expanded set of requirements. This process 
may have proved frustrating to some in the industry, but the 
additional rules and heightened scrutiny are completely 
appropriate and in the best interests of this Nation.
    In closing, Mr. Chairman, we have made significant strides 
in reforming the way offshore oil and gas programs are carried 
out at the Department of the Interior and on the Outer 
Continental Shelf. We have raised standards and promoted safety 
and science in offshore oil and gas operations; and because of 
the hard work of industry and people in BOEMRE, we have been 
approving and issuing plans and permits and getting people back 
to work.
    That concludes my statement, and I'm happy to answer any 
questions you or the other Members may have.
    [The prepared statement of Mr. Bromwich follows:]
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    Chairman Issa. Thank you, sir. Thank all of you.
    I now go to the gentleman from Texas, Mr. Farenthold, for 5 
minutes.
    Mr. Farenthold. Thank you very much, Mr. Chairman.
    And I'd like to first, the members from industry on our 
panel, I'd like to thank you guys for coming up and sharing 
your thoughts and concerns. I hope you will excuse me if I 
ignore you and talk to the government regulator that I think 
may be giving you some of the problems.
    So if I could ask a couple--Mr. Bromwich, you went through 
a lot of numbers here pretty quick, and I just want to make 
sure I got an adequate handle on those and talk to you a little 
bit about the pace that we are looking at. So you said there 
have been permits on 15 projects that have been issued since 
the moratorium was ended; is that correct?
    Mr. Bromwich. For deepwater wells, for activities that were 
prohibited under the moratorium, we have permitted 15 unique 
wells. The 15th was yesterday.
    Now there are multiple permits frequently for individual 
unique wells which leads to the larger number.
    Mr. Farenthold. And of that 15, how many of them were in 
the process before the moratorium went into effect?
    Mr. Bromwich. It depends what you mean by ``in the 
process.'' Can you clarify what you mean?
    Mr. Farenthold. That have filed the application, that y'all 
have been working on and just, you know, stuck on the shelf.
    Mr. Bromwich. Well, we haven't stuck any on the shelf. A 
number of the projects were ongoing. They were stopped by the 
moratorium, and then applications had to be resubmitted to make 
sure that they complied with new enhanced safety regulations.
    Mr. Farenthold. Right. So the number I have--and you can 
correct me if I am wrong--is there have been about four or five 
that are actually new ones that weren't resubmitted or however 
you want to--they weren't already in the works prior to the 
moratorium.
    Mr. Bromwich. That's about right. I think the number 
actually may be slower, but those are still projects that are 
ongoing to put people back to work. So the distinction between 
projects that had been previously submitted and new projects is 
really quite irrelevant.
    Mr. Farenthold. So how long are we looking at--if I had 
gotten a lease and wanted to drill a well, how long under the 
current process would it typically take, assuming I'm 
reasonable about my paperwork?
    Mr. Bromwich. Well, that's a big assumption. One of the 
challenges that we have seen that industry has faced--and they 
fully acknowledge this--is that they have frequently submitted 
both plans that are incomplete and noncompliant--and let me 
finish--and permit applications that are incomplete and 
noncompliant. We are working with industry every day to try to 
eliminate the number of times that we have to return either 
plans or permits so that we can process them straight on 
through and approve them.
    Mr. Farenthold. But is this a result of the fact there's so 
many new regulations that y'all aren't even completely sure 
what needs to be done? The complaint I'm hearing from my 
friends in the industry--I'm from Corpus Christi, TX. It's 
pretty big in Gulf drilling--is that they don't even know what 
they need to do to satisfy your criteria. I mean, I understand 
there's some growing pains, but these things were getting out 
in 2 weeks prior to the Deepwater Horizon.
    Mr. Bromwich. Before the new enhanced safety environmental 
regulations. That's right. They were being churned out quickly, 
and the new safety and environmental rules makes the process 
move a little more slowly.
    Mr. Farenthold. So are we talking now 2 months, 6 months? I 
mean, if we have only got four new ones since February, that 
seems like we are looking at much longer.
    Mr. Bromwich. Well, I can tell you, Congressman Farenthold, 
that if a fully compliant exploration plan was submitted and 
then a fully compliant ATD, application to drill, was 
submitted, we're talking about a few weeks, not a large number 
of months. That has not so far been our experience so far.
    But I take issue with your suggestion that industry doesn't 
understand what the requirements are, because I think they do. 
I think they didn't fully understand them at the beginning. I 
think they do now, and if you talk to them today, I think they 
would acknowledge that.
    Chairman Issa. Would the gentleman yield?
    Mr. Farenthold. I will. Yes, Mr. Chairman.
    Chairman Issa. Would you say that months ago when the 
moratorium officially was lifted that you had full and complete 
guidance available to those oil companies on that day?
    Mr. Bromwich. No, I don't think we had full and complete 
guidance. But let me make something clear----
    Chairman Issa. That's all I really wanted.
    Mr. Bromwich. But the new rules that I focused on in my 
opening statement were issued October 15th, so 3 days after the 
moratorium was lifted, and that's what began the adjustment 
time and cost both for industry and, to some extent, for us. So 
I just wanted to clarify the timeline.
    Mr. Farenthold. What's happening with the 33 previously 
permitted deepwater wells?
    Mr. Bromwich. Well, we don't track them that way, 
Congressman. A number of them have not resubmitted their 
applications. We obviously can't do anything about that. We can 
only act on the applications that we have.
    Mr. Farenthold. So they were permitted, the rules changed, 
you moved the goalpost, and they have to start over again?
    Mr. Bromwich. No, that's not the way I'd put it at all.
    One of the main obstacles to companies getting their 
permits approved is the fact that they now have to demonstrate 
access to and ability to deploy containment. I don't think you 
or I want anybody drilling in deepwater that can't show that.
    Mr. Farenthold. I am out of time. So if we get to another 
round of questions, I do have a couple more. So thank you very 
much.
    Chairman Issa. I thank the gentleman.
    The gentleman from Maryland, ranking member, for 5 minutes.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Director, first, thank all of you for your testimony. It's 
been extremely helpful.
    One of the things that I say to my constituents is that 
this is our watch. We are on the Earth now, and we have a duty 
to pass on a better environment than the one we found when we 
came upon this Earth. And I truly believe that.
    And, Director Bromwich, you know, I was listening to 
Governor Barbour; and he said something that was very 
interesting. When I asked him about the Department of Interior 
drilling permit requirement--and it's called NTL 2010-N10--and 
what it says, and it was talking about the moratorium, and it 
said that these companies they have to show it has access to 
and can deploy surface and subsea containment resources that 
will be adequate to promptly respond to a blowout.
    And, you know, it's interesting and it kind of surprised me 
when Governor Barbour said that he felt that the risk--the risk 
of what happened with Deepwater Horizon was worth it when he 
considered the cost. And I understand--believe me, I sympathize 
with people being out of work. As a matter of fact, I have done 
everything I know how to try to make sure they get compensated. 
But tell me, do you have an opinion on that based upon what you 
have been doing in the administration?
    Mr. Bromwich. Yes, I do. I actually would like to take 
issue with something else Governor Barbour said, which was that 
the Deepwater Horizon blowout was the first event of its kind 
or anything close to it in the history of deepwater drilling. 
The President's Commission says that's not so. They cite 79 
incidents of loss of well control, which is what Macondo was, 
loss of well control, between 1996 and 2009. So another way to 
describe that is 79 near misses, 79 almost Deepwater Horizons. 
So, without going into the details of each one, that's what the 
President's Commission found.
    So to say that the risk is one in a million or one in X 
thousand of deepwater wells drilled is not accurate. Now we 
will never be able to reduce the risk to zero. We know that, 
and you know that. But we have to work constructively to try to 
diminish those risks in a balanced way so that we don't impose 
inappropriately high costs on industry and yet we do raise the 
bar on safety.
    We have done that. So I think we have lowered the risk, and 
my risk threshold may be different from Governor Barbour's 
because I would not have been comfortable going forward without 
the strengthening of the safety rules that we put into place.
    Mr. Cummings. Let me ask you, the administration also put 
in place a requirement that all companies have a formal 
contract to call on that service if service is needed.
    Let me quote the new requirement. It says, BOEMRE will 
evaluate whether each operator has submitted adequate 
information demonstrating that it has access to and can deploy 
surface and subsea containment resources that will be adequate 
to promptly deal with the blowout.
    Let me ask you this. Can you explain in laymen's terms why 
you now require oil companies to demonstrate that they can 
respond to deepwater blowouts before new permits are issued?
    Mr. Bromwich. For the very reason that I think you and 
other Members said in the questioning of Governor Barbour. I 
think we were all sickened by the fact that for 87 days the oil 
flowed into the Gulf with the trial-and-error process that was 
used to try to cap the well. And, finally, after 87 days, it 
was capped.
    We don't want that to ever happen again. We want industry 
to be prepared. And, in a way, talking about the period of the 
moratorium is a false issue, because the fact is the 
containment requirement is critically important, and industry 
admits it was not ready with containment until the middle of 
February of this year.
    Mr. Cummings. Now, you say in your testimony that the 
temporary moratorium on deepwater drilling was lifted in 
October of last year, but you didn't issue the first deepwater 
drilling permit until February. Why is that?
    Mr. Bromwich. Because there were not the containment 
systems and resources that were ready until the middle of 
February. In the first panel, we talked about the Marine Well 
Containment Co. There's another group, the Helix Well 
Containment Group, but neither of those groups was ready, had 
its equipment, had tested its equipment, until the middle of 
February this year.
    Mr. Cummings. I see my time has expired. Thank you.
    Chairman Issa. I thank the gentleman.
    The gentleman from New Hampshire for 5 minutes, Mr. Guinta.
    Mr. Guinta. Thank you, Mr. Chairman.
    Mr. Bromwich, I just have one question for you. Then I want 
to get to some of the other panelists.
    In considering the plans or permits, how much do you look 
at the economic impact and the loss of economic activity in 
considering the process by which your agency goes through?
    Mr. Bromwich. Well, the individual plans and permits are 
reviewed by our field personnel in the Gulf of Mexico. I have 
absolutely no role in that. And I don't think it would be 
appropriate for them to scrutinize the plan applications or 
permit applications for any other reason other than to 
determine whether they are complying with all applicable 
regulations. So they do not, and they should not.
    Mr. Guinta. So they do not consider the economic impact.
    Mr. Bromwich. They do not, and they shouldn't.
    Mr. Guinta. OK.
    Mr. Bromwich. Somebody who is inspecting plans and permits 
should not do that.
    Mr. Guinta. I want to move to Mr. Kief. Thank you as well 
for coming.
    Can you just describe to me very, very quickly the type of 
company you have and then the average employee that you have, 
the kind of individual that you represent?
    Mr. Kief. We are in the tugboat business, so we move 
drilling rigs for a living. And I would say 80 percent of our 
employees are sailors, ordinary seamen, engineers, captains, 
mates; and the rest of the 20 percent are staff, from 
maintenance people to personnel and administration.
    Mr. Guinta. How many people are employed?
    Mr. Kief. Approximately 110.
    Mr. Guinta. And has that number changed since the 
moratorium?
    Mr. Kief. Well, as I stated, we have had few layoffs, but 
we have had to adjust wages on our employees. And, you know, we 
have thresholds that we are meeting where we know that we are 
going to have to lay off people and tie up equipment.
    Mr. Guinta. So not only are you going to have to lay off 
people in the future but you have reduced salaries?
    Mr. Kief. Yes, sir.
    Mr. Guinta. For almost everyone in the company?
    Mr. Kief. For about 50 percent of----
    Mr. Guinta. About 50 percent. These are families that are 
depend on that source of income?
    Mr. Kief. Yes. As a matter of fact, three of the companies 
we have--this company, Offshore Towing, is a partnership of 
three companies. One of them was actually founded by my 
grandfather, and my aunt actually owns it now and her 
daughters, and I run that company as well.
    Mr. Guinta. I assume it's safe to say you'd like to see the 
economy grow, come back as quick as possible, and you'd like to 
see the government participate in a positive way to make that 
happen?
    Mr. Kief. Yes, I would.
    Mr. Guinta. Thank you very much.
    Mr. Taffaro, thank you for being here.
    I also wanted to ask you a little bit about economic 
impact. It seems to me here in Washington we are so focused on 
the regulatory side of this, and there's good reason to be 
concerned about the regulatory environment. I don't think 
anybody disagrees that we want to have safety. We want to make 
sure that this never happens again. I don't think that's a 
partisan issue. I think that makes sense, good public policy.
    My concern is with the thousands of people who are 
negatively impacted for the long term in the decisions that 
have been made by this administration. My heart goes out to 
each and every individual who no longer has a job, who is 
waiting desperately to have the possibility of getting back to 
work. And I believe that we ought to consider that as we move 
forward in just about every public policy decision that we do.
    Now, it doesn't mean that you provide a permit if it's not 
appropriate. It doesn't mean that you provide a permit to 
someone who's not capable of handling it. But I do think that 
we have a responsibility to consider the negative impacts that 
have occurred to regular, everyday people who are desperately 
looking for employment.
    Can you just talk a little bit about how that's impacting 
the people that you're representing.
    Mr. Taffaro. Well, the main issue I think is that we have 
to keep in mind that part of what happens is there's a trickle-
down effect. A rig not being permitted or a drill operation not 
being permitted doesn't just affect those men and women who 
work the rig. It affects every other spin-off company and 
agency that provides support for those businesses or for that 
operation. That's where we really feel the effects in St. 
Bernard Parish and along the entire coastal Louisiana and 
beyond, as you heard.
    The main issue that we want to make sure is that the 
comprehensive impact is reviewed. While we want safety, and 
certainly we don't want to have another impact or another 
disaster such as the one that we experienced just over a year 
ago, we definitely don't want to exacerbate that call to safety 
by undermining the economics of our region.
    Mr. Guinta. Thank you. Thank you, Mr. Chairman.
    Chairman Issa. I thank you.
    Mr. Clay for 5 minutes.
    Mr. Clay. Thank you so much, Mr. Chairman; and let me thank 
the witnesses for being here.
    People who have long been concerned about the public 
welfare have raised some important questions about the 
aftermath of the BP oil spill disaster. Some disturbing 
information has come to light regarding money spent during 
efforts to recover from the spill.
    For example, from my hometown, Mr. Dick Gregory, who is 
here today, he and others have brought to my attention some 
investigative articles written by ProPublica and the Washington 
Post. These articles are worrying. They allege that there are 
some who profited from the BP oil spill disaster. These people 
apparently gamed the system to take so much money 
inappropriately that they earned the nickname 
``spillionaires''. Two of those who were named in these 
investigative articles are here testifying today on this panel.
    Now, as a politician, I know what it is like to read a 
newspaper article about issues with which I am involved. I have 
had the experience of reading articles where I cannot recognize 
the events as they have been described by the reporters. So I 
know how it can be sometimes for others in similar 
circumstances, and we don't always have an opportunity to 
respond to those articles and perhaps set the record straight.
    Therefore, I feel duty bound, Mr. Taffaro and Mr. Williams, 
to give you the opportunity here today to respond to those 
articles and to what they have alleged about your conduct in 
the wake of the BP oil spill disaster.
    Mr. Taffaro, would you like to take a stab at it.
    Mr. Taffaro. Sure, Congressman. I will be glad to. If you 
could give me a specific question, I'll be glad to answer it.
    Mr. Clay. Sure. In both articles, the Washington Post and 
ProPublica, they talk about hand-picked contractors. They talk 
about you implementing a 30-day emergency, which allowed you to 
pick contractors outside of normal government procedure.
    One contractor was leasing land at $1,700 a month and 
happened to lease the land back to BP for $1.1 million a month. 
Is that accurate?
    Mr. Taffaro. Well, I would be glad to respond to that, Mr. 
Congressman----
    Chairman Issa. The gentleman will suspend.
    You're under oath. You're not--you're required to speak 
truthfully. You are not required to answer questions outside 
the scope of this hearing. You may choose to answer. But that 
would be true of any of our witnesses, is that if something is 
outside the scope and the meaning of this hearing, including, 
quite frankly, any impugning of individuals who came here to 
testify, there is no obligation to respond. But the gentleman--
--
    Mr. Taffaro. I would be glad to.
    Unfortunately, this is exactly the concern that has been 
raised and is raised again, that--excuse my frankness--a 
hatchet job by Ms. Barker, who had no--I think if your staff 
researches that information--has no factual data to compensate 
or substantiate your comments.
    The idea is we were under a state of emergency. I did 
declare a disaster. I think everyone who had any involvement in 
the process would certainly see that as justifiable.
    As far as handing out contracts, St. Bernard Parish 
government, me as the elected--chief elected official, signed 
one contract regarding the operations of the BP oil spill 
disaster.
    Mr. Clay. And that was the company owned by the Saint 
Bernard Parish Sheriff----
    Mr. Taffaro. That's not accurate, Mr. Congressman.
    Mr. Clay [continuing]. Who charged more than $1 million a 
month for land it had been leasing----
    Mr. Taffaro. I think what you point out is exactly the 
problem with the way the operations were run. BP executives 
authorized representatives on the ground with BP to initiate 
and negotiate land deals, vendor agreements, use of resources, 
and then changed those personnel out and then didn't pay them 
what they were owed. That is a true economic impact of what we 
have going on.
    Mr. Clay. How about the selection of certain fishermen to 
help with the cleanup and then some getting picked and some 
didn't get picked? What was the criteria there?
    Mr. Taffaro. Every selection process that we used to employ 
the exact individuals who were impacted by the spill, whose 
livelihoods overnight were ripped from them, whose 
generational, cultural identity overnight was ripped from them, 
every selection process that was implemented was done in a 
public forum and was continuously reviewed and modified to make 
sure that those individuals who were most impacted were those 
people who were being put to work, to respond to the disaster 
of no doing of their own.
    Mr. Clay. Thank you for your response.
    Mr. Chairman, may I ask Mr. Williams?
    Chairman Issa. Yes, your time has expired.
    Mr. Williams, you may respond.
    Mr. Williams. Congressman, I appreciate that question; and 
I think it is very critical, as Mr. Taffaro indicated.
    I come from a county in northwest Florida that has less 
than 20,000 people. We're a very small county. We have an 
operating budget on a millage based on $9 million. You're going 
to run into family folks.
    I felt like--and certainly I'm glad that we're here in an 
office of oversight and reform, because personally--not that I 
take offense. I appreciate the question. But I feel like it is 
a red hearing for the issues that we are here to address today.
    We were under a tremendous amount of pressure. I have two 
people in my emergency management department, two. We had no 
resources from the State. We had no guidance from the Federal 
Government. We were put under tremendous strain.
    And the article that you're referring to, the author of 
that never came to my county, never stepped foot in our county. 
What you're indicating there is that a girlfriend worked as a 
public information officer, and she had volunteered through 
that period of time tremendously through that process.
    So I think, with all due respect, sir, my scenario would be 
you have to understand that I'm proud of what we did, trying to 
put people to work together, amassing what we had, basically a 
militia of people who were trying to fight what was coming on 
our shores. And so I appreciate the question, but I think it is 
very misleading to the ultimate goal that I would like to do 
and present from the Federal Government what you can do to help 
me at the local level.
    Mr. Clay. And I'm glad that you both have responded in the 
way you have.
    Chairman Issa. Thank you.
    For the record, did your ethics board clear that action?
    Mr. Williams. Yes, Mr. Chairman. I appreciate you giving me 
the opportunity.
    Actually, before that was done, the board of county 
commissioners did not approve any of the contracts, as my 
colleague indicated. This was done primarily through our county 
administrator. However, we went through our legal counsel. We 
went to the State of Florida's ethics commission. We also went 
to the Governor's task force that was guiding that and asked 
for permission ahead of time to make sure it was there.
    So I feel like the media certainly exploited this scenario 
to make it look bad for a lot of folks who were doing the best 
they could and being proud to work for their communities.
    But, yes, sir. Mr. Chairman, I appreciate you giving me the 
opportunity. Because I was ahead of time--we did it right. We 
stopped profiteering. I served on the Governor's task force. We 
went through, and we saw companies coming in and asking for 
several hundred thousands of dollars to man some of these small 
counties. We refused to do that. We turned and asked the 
Governor for assistance; and, through the Department of 
Emergency Management, we worked under the guidelines and under 
the premises; and we did the best we could under the 
circumstances.
    Mr. Clay. Thank you for your response.
    I yield back. Thank you.
    Chairman Issa. I thank the gentleman.
    I now recognize myself for 5 minutes.
    I'm just old enough to remember, I guess, the 1960's in 
some cases, but Mark McCormack, who was a prolific writer, 
wrote, among other things, the terrible truth about lawyers and 
what they don't teach you at the Harvard Business School. And I 
don't take away every quote from all of those books, but I take 
away one, which is that a problem is something money can't 
solve.
    Mr. Bromwich, if money was not the problem--and I presume 
money was available, whether it is the $20 billion from BP, the 
billion dollars from the industry to form a quick response for 
future potential spills, etc.--why did it take you not just the 
6 months of the moratorium but essentially another many, many 
months of permitorium before you had guidance so that we could 
begin having oil wells--new oil wells drilled again and 
permitted?
    Mr. Bromwich. Mr. Chairman, I think it is fair to say that 
Deepwater Horizon was an earthquake through the industry--they 
acknowledged that--and through the government.
    Chairman Issa. Please answer my question.
    Mr. Bromwich. I am answering your question.
    Chairman Issa. Well, no. Let's put it in perspective. Your 
agency's inspectors went on a rig that had not one but two 
battery packs not active, an oil well that--you mentioned the 
79--this thing had had repeated missteps. This oil well was 
like a drunken driver swerving, crossing the line repeatedly, 
and MMS did nothing to do it. MMS had a study back in 2003 that 
questioned the bypass blowout preventers but did nothing but 
say pick one. All of these things had occurred prior to that 
date.
    So was it an earthquake in your organization or was it an 
earthquake to the oil industry? The oil industry has made it 
pretty clear that BP was a bad actor on this well and a bad 
actor in the Gulf, but that in fact there was a reason that 
their actions were not consistent with other drillers in the 
Gulf. So which earthquake was it? Was it an earthquake within 
the oil drilling industry or an earthquake within your agency?
    Mr. Bromwich. Both. And as the President's Commission 
notes, it is inappropriate to single out BP as the only bad 
actor here. That report, which is based on a thorough 
investigation, pointed out that Halliburton was at fault and 
Transocean was at fault. As you know, Halliburton and 
Transocean do work and are involved in providing services in a 
huge percentage of deepwater----
    Chairman Issa. I hear you, Mr. Bromwich. But isn't it 
true--actually, I'll go to Mr. Rusco. Isn't it true that the 
reorganization is as much at fault for the delay in the ability 
to get America working again in the Gulf? Isn't that what the 
GAO study finds, is that this is a distracted agency because it 
is reorganizing?
    Mr. Rusco. I think it's a complicating factor. I can't say 
that it caused the delays. I take Mr. Bromwich's point that, 
once they decided that companies needed to demonstrate the 
ability to contain a blowout, that was the binding constraint 
until----
    Chairman Issa. And when was that request made? When was the 
starting date for that?
    Mr. Rusco. I'm going to have to defer to Mr. Bromwich.
    Chairman Issa. Mr. Bromwich, when was the starting date for 
the blowout preventer's demonstration requirement that they 
could contain if the blowout----
    Mr. Bromwich. Two different things, Mr. Chairman, blowout 
preventer, additional----
    Chairman Issa. If it failed, if the blowout preventer 
failed containment, when did you say they must prove they can 
contain?
    Mr. Bromwich. We clarified what we think had been clear to 
many, but we clarified it in writing on November 8th.
    Chairman Issa. November 8th?
    Mr. Bromwich. Yes.
    Chairman Issa. How long was that after the moratorium 
began?
    Mr. Bromwich. Less than a month--after it began?
    Chairman Issa. Yes.
    Mr. Bromwich. The first moratorium was put in place, I 
believe, in May, so several months after.
    Chairman Issa. So you have a 6-month moratorium, and a 
month after that moratorium is over, basically, then you say 
you have to do that. Isn't this a second--isn't this taking 6, 
7 months to decide that you're going to add one more way to 
stop the oil industry from starting again? Wasn't that reckless 
to go 7 months and discover--6 months and discover that you had 
missed something as basic as that?
    Mr. Bromwich. No, I don't think it was reckless; and I 
don't think we----
    Chairman Issa. How did it get missed for 6 months?
    Mr. Bromwich. Nobody said it was missed, other than you. It 
wasn't missed----
    Chairman Issa. Why wasn't it asked----
    Mr. Bromwich. The industry, as you know, Mr. Chairman, 
formed the Marine Well Containment Co. in July. So they knew at 
that point that was going to be an obstacle to getting 
deepwater permits until they could put together the resources. 
So it took them, and then it took later Helix, a number of 
months, close to 7 months, from the time they recognized that 
it needed to be done and they announced it until they were 
ready to go. The mere fact that we clarified what was required 
in November didn't start any clock and doesn't reflect any 
recklessness at all.
    Chairman Issa. Mr. Bromwich, are you still clarifying 
various things for the industry?
    Mr. Bromwich. Of course. That's what a regulator does.
    Chairman Issa. So when will it be clear?
    Mr. Bromwich. I think it's clear to 95 percent of the 
operators now. The other 5 percent come forward and ask 
questions of us, we'll clarify it for them.
    We meet all the time, Mr. Chairman, with operators. We met 
this week with a group of Gulf area operators, a delegation 
headed by Director of Natural Resources for Louisiana, Scott 
Angelle. They have been a forum for asking questions, asking 
for clarification and getting them.
    Chairman Issa. Mr. Kief, I'm sorry that we really can't do 
more for you today, but we are not going to give up on this, on 
any of your testimony here today.
    Mr. Bromwich, you said you would take something back if it 
was outside of the mainstream. I want to make sure you take 
this back today. There's pending litigation or there is current 
litigation in the Eastern District of Louisiana challenging 
seismic surveys in the Gulf of Mexico by the infamous NRDC vs. 
Salazar. Our information is that the Secretary has in fact 
worked out to stay that case and is discussing settlements.
    The question for Department of Interior is, if you settle 
one more time with a radical environmental group that sues and 
then gets settlements leading to regulatory changes or areas 
off limits, don't you have a conflict of interest? In fact, 
shouldn't this case be a case in which those with a vested 
interest, the States and the oil companies, should have a seat 
at the table, rather than having a settlement issued around 
what they would call their interest, along with the gentlemen 
here today?
    Mr. Bromwich. I don't need to take that one back, because 
I'm involved in that matter.
    First of all, I think the characterization of NRDC as a 
radical environmental organization is not accurate----
    Chairman Issa. They sue and bill endlessly.
    Mr. Bromwich. But, second, we have to make litigation 
judgments. The solicitor's office has to make litigation 
judgments about whether to settle cases or not.
    Without going into the details of settlement discussions, 
there are settlement discussions ongoing; and I will tell you 
that one of the goals of such settlement discussions is to 
prevent more radical injunctions or actions being taken by a 
court.
    With respect to the involvement of the oil companies, they 
are interveners in that case, so they have a seat at the table.
    Chairman Issa. But they are locked out if you settle.
    In fact, the NRDC has on their Web site their litigation 
motive and method as part of their fundamental way of doing 
business. So you may not consider them radical, but an 
organization that basically litigates in order to legislate and 
an agency that settles in order to effectively create 
legislation is exactly what this committee is concerned about. 
So you may not consider them radical, you may not consider your 
settlement around the intervenors as in fact somehow unAmerican 
or that you have a conflict, but this organization here is 
finding that conflict more and more consistent.
    I want to thank you all for your--oops, I want to thank you 
all for your continued testimony. We now recognize the 
gentleman from North Carolina, Mr. McHenry, for 5 minutes.
    Mr. McHenry. I thank the chairman, and I thank the 
witnesses for being here today.
    Mr. Bromwich, I've got a question about the Marine 
archeologist rule, the new rule that your organization's 
promulgated. So is it true that operators will have to employ a 
Marine archeologist in order to comply with this?
    Mr. Bromwich. Do they have to what?
    Mr. McHenry. Pardon me?
    Mr. Bromwich. Is it true they have to what? I didn't hear 
what you said.
    Mr. McHenry. Oh, OK, I'll repeat.
    In context of the new archeological assessment report, is 
it true that operators will have to employ a Marine 
archeologist to comply with this rule?
    Mr. Bromwich. They will have to have a survey conducted, 
whether its by hiring somebody, contracting with someone or 
whatever. We don't mandate that, but they will have to do an 
archeological survey, yes.
    Mr. McHenry. And why is that necessary?
    Mr. Bromwich. Why is that necessary? It's because a number 
of discoveries have been made in recent years of shipwrecks and 
other structures that are protected by various Federal laws, 
including the National Environmental Policy Act.
    And as we've eliminated the categorical exclusions with 
which we used to do exploration plans and now are doing 
environmental assessment, site-specific environmental 
assessments, the way the process works is we have different 
subject matter experts who have to look at the issues and our 
archeologists subject matter experts will simply not sign off 
on an exploration plan without that kind of a survey. So that's 
the reason.
    Mr. McHenry. OK. Well, so in terms of what your 
organization does, does that have anything to do with safety?
    Mr. Bromwich. It has to do with protecting the environment, 
which is part of our mandate.
    Mr. McHenry. OK, all right. Was there a cost benefit 
analysis in context with this regulation?
    Mr. Bromwich. I'm not--I'm not sure whether there was or 
there wasn't.
    Mr. McHenry. Would you be willing to followup with the 
committee and give us your assessment of the cost and benefits 
of this regulation?
    Mr. Bromwich. Sure, I'd be happy to.
    Mr. McHenry. Thank you.
    [The information referred to follows:]
    [GRAPHIC] [TIFF OMITTED] 70821.083
    
    [GRAPHIC] [TIFF OMITTED] 70821.084
    
    Mr. McHenry. Mr. Williams, thank you for being here today. 
It is certainly an interesting process to testify before 
Congress.
    But, in context with your experience, there's a difference 
between the OPA and the Stafford Act in terms of 
responsibilities and everything else. Do you think that 
operating under OPA was reasonable, proper, good? Was it a 
better outcome than operating under Stafford?
    Mr. Williams. No, sir.
    Mr. McHenry. Would you turn on your mic?
    Mr. Williams. I'm sorry. No, sir, it actually paralyzed us 
at the local level.
    I think components of OPA--we're not trying to basically 
supplant OPA with the Stafford Act, but we are trained, 
particularly in the State of Florida. We have test modeled. We 
have put everything through, over and over, case studies. And 
because we are so impacted by our storms, we were unable at the 
local level to make decisions firsthand. It has always been at 
the local level and work that up.
    Under the unified command, the responsible party high-
jacked the entire process. We were basically at their mercy, 
their decisionmaking. We were disconnected from our State 
partners and I believe from our Federal partners in the 
process.
    We actually called it unidentified command. We would wait 
for weeks and weeks trying to get things done. We wasted 
incredible amounts of time looking at boom strategies and 
national contingency plans and area contingency plans that were 
extremely dysfunctional. They were antiquated. There was no 
span of control. There was no unified command.
    The State of Florida in my area in the Panhandle was being 
controlled from Mobile. It was a breakdown, as the Governor 
indicated earlier, from communications and processes, the 
methodologies. It was completely broken.
    So to answer your question, emphatically no. OPA did not 
work on the ground level, it did not work at the State level, 
and I think it failed the folks in our country.
    Mr. McHenry. So this was a management problem.
    Mr. Williams. Yes, sir.
    Mr. McHenry. Clearly.
    Mr. Williams. Yes, sir.
    Mr. McHenry. And your experience with storms is what?
    Mr. Williams. Primarily living in Florida, and I guess 
growing up originally it started, I guess, when I was 4 in 
Camille, MS. But, with Florida, I've been elected since 2004, 
2005. You know the history where we crisscrossed our State with 
four hurricanes in 1 year, heavy, heavy damage. And as an 
elected official I have watched a masterful process.
    And, obviously, Florida has mastered--Mr. Fugate now being 
head of FEMA coming from Florida. We know how to do it at the 
ground level. We make good decisions. We work with our 
emergency management partners. We work with our State partners 
to make those critical on-line decisions. This process was 
dysfunctional and broken.
    Mr. McHenry. And Stafford was clearly better?
    Mr. Williams. Yes, sir. It gives the local government the 
ability to pull on the resources as necessary, but to make on-
the-ground field decisions that we can implement immediately. 
We had to go through an approval process. To give you a very 
poor analogy, it is like go ask your mom, go ask your dad; and 
I could never get a straight answer.
    It is a system that I think this group particularly in 
Congress has to look at. There are lessons in Homeland 
Security. There are lessons--as the Governor indicated earlier, 
if we drill off of Cuba, China, etc., as bad as the responsible 
party scenario was, without a responsible party, where would we 
be? Multijurisdictional lines and centralized command has to be 
charged.
    One point I would like to make, I came a few months ago 
during the National Association of Counties and met with 
Intergovernmental Affairs and requested the ability for 
Intergovernmental Affairs from the administration to work with 
the directors of emergency management within the five affected 
States so that we could go back and look at case examples and 
studies and what could we do better. That I think is very 
critical. And I would ask that the chairman and this commission 
review that so we can get down to our emergency management 
people at the State level and to our county level so this never 
happens again.
    Mr. McHenry. Thank you again.
    Chairman Issa. We are not going to do a second round, but 
there will be just a couple of quick comments, one from the 
gentleman from Texas and one from the ranking member.
    Please go ahead.
    Mr. Farenthold. Thank you very much.
    To Mr. Bromwich, do you think that what's going on now--the 
increased permitting process and the time involved--is driving 
up the price of gasoline at the pump?
    Mr. Bromwich. No, I don't.
    Mr. Farenthold. You don't think there is a concerted effort 
going on to do that with the slowdown in the Gulf of Mexico, 
which is a quarter of our domestic supply?
    Mr. Bromwich. Concerted effort by whom?
    Mr. Farenthold. I think this administration.
    I'm typically not a black helicopters guy, but if you look 
at what's going on, if I were a speculator, I would be buying 
oil futures.
    We've got the slowdown in the Gulf. We've got a slowdown of 
land leases. We've got the EPA talking about fracking 
regulations. We've got the sage lizard, which is another 
quarter of the production, in the Permian Basin of Texas. It is 
like we're trying to run these gas prices up.
    Mr. Bromwich. Well, I can speak for the issues that I'm 
aware of, which is offshore. There is no such effort. There has 
never been any such effort.
    Chairman Issa. Would the gentleman yield for just a second?
    Mr. Farenthold. Yes, please.
    Chairman Issa. If the gentleman could respond to the MMS 
finding up on the board which we cited earlier, that might 
clarify it, since MMS found that there was a correlation 
between a reduction in the Gulf and increase in price. That's 
your own study.
    Mr. Bromwich. Chairman, I'd never seen that before. I don't 
like to comment on things that I've just been introduced to.
    I have read in recent weeks a lot of very knowledgeable 
commentators, including economists, who say it is a world 
market. And a relatively minor slowdown in permitting here has 
virtually no impact on prices.
    In addition to that, as you know----
    Chairman Issa. The gentleman's time----
    Mr. Bromwich [continuing]. There has been no cessation or 
delays in production. Production has continued all along. There 
was never a moratorium on production.
    Mr. Farenthold. I do want to just reclaim my time for a 
second.
    Historically speaking, you actually see a spike in the 
price of oil, whether it is driven by speculators or the 
market, even when there's a hurricane that's delaying 
production in the Gulf just over a couple of days. How can you 
rationally say that a long-term slowdown in the permitting 
process isn't going to affect the price of oil?
    Mr. Bromwich. Because I don't--well, you asked me whether 
it was causing a rise in the price of oil now. My understanding 
of world market conditions is that production has continued at 
pace, that the projections for declining production are not for 
the present, they are for the future. And, therefore, I thought 
the question was about the present; and I don't think it is 
having an effect at present.
    Mr. Farenthold. Just real quickly, there have been 
reports--you know, we've had record oil production in 2010--
domestic production. Do you think that record is going to 
continue through 2012 as we start to see the results of some of 
these changes in policies?
    Mr. Bromwich. Well, the EIA, which is considered the most 
reliable sources of energy production, does predict a decline 
in 2011 and in 2012. I don't have a crystal ball, but I'm not 
in a position to dispute that.
    Mr. Farenthold. So a decrease in production typical under 
supply and demand would probably result in an increase in price 
of oil and corollary price of gasoline at the pump?
    Mr. Bromwich. Well, but that presumes that we only have a 
domestic market, which we don't.
    Chairman Issa. We've been joined--I thank the gentleman.
    We've been joined by--wait a second, would the gentleman 
yield for just a second from his time?
    Mr. Farenthold. Yes, sir.
    Chairman Issa. Mr. Bromwich, I would just like you to--we 
will give you a copy of it, but since that study that said 
there would be a rise based on a lesser reduction in the Gulf 
than actually occurred or is occurring, that was delivered 
under our discovery request from your organization. You gave it 
to us. So, hopefully, you'll take it back, look at the 
information that we received pursuant to our request from you, 
and figure out whether or not you should have seen that 
document before your agency allowed you to come here.
    Mr. Bromwich. Just to be clear, Mr. Chairman, I don't 
review every document that you ask for and receive. Just to be 
clear.
    Chairman Issa. I understand. But since this one said just 
the opposite of what Mr. Hayes said and what you're saying, I 
think it's a good one for to you review. And you can comment 
back about whether you think it was accurate, since it was an 
internal document.
    Mr. Bromwich. Happy to do it.
    Chairman Issa. And we've been joined again by the gentleman 
from Virginia, Mr. Connolly, for 5 minutes.
    Mr. Connolly. Thank you, Mr. Chairman. I have another 
hearing at Foreign Affairs, so that's why I'm going back and 
forth, and I think the Chair's indulgence.
    Mr. Bromwich, during the first panel you probably heard 
what I heard Governor Barbour state, that simply enforcing 
existing rules would prevent future oil spills. When the 
National Commission of the Gulf Oil Spill issued its report, 
did it say that simply enforcing existing regulations would be 
sufficient?
    Mr. Bromwich. No.
    Mr. Connolly. What did it say?
    Mr. Bromwich. It pointed to a series of contributing causes 
to the oil spill, a variety of primarily human errors committed 
by personnel from BP, Transocean, Halliburton, and so forth. 
And it specifically said that, I believe, as I recall, that 
enforcement of existing regulations would not have prevented 
it.
    Mr. Connolly. Would not?
    Mr. Bromwich. Would not have prevented the oil spill.
    Mr. Connolly. Are there improvements in the enforcement or 
in the regulatory framework itself that could be helpful?
    Mr. Bromwich. Yes, and we have already taken many of those 
steps. Our drilling safety rule, which is addressed to well 
design, well casing, cementing, and blowup preventers, we think 
substantially reduces the risks of another spill like Deepwater 
Horizon.
    As I said before--I'm not sure you were here--we will never 
be able to reduce it to zero. We won't. But we have reduced it 
already substantially. And I think over time, as industry wants 
to go into deeper and deeper water and the regulatory process 
needs to keep up, I hope that we can further reduce that risk. 
But it will never be reduced to zero.
    Mr. Connolly. One of the arguments made by Governor Barbour 
and others is that you have 31,000 oil rigs, the safety record 
is fine. You know, once in a while one bad apple shouldn't 
cause us to turn everything on its head.
    My point to Governor Barbour was, well, but one blowout of 
this magnitude is pretty significant, and shouldn't we be doing 
everything on our part to try to minimize that ever happening? 
And the fact that this happens once is once too many, given the 
severity and magnitude of the disaster.
    What is the view of the administration with respect to sort 
of rolling the dice and taking our chances on a blowout?
    Mr. Bromwich. Well, we don't want to roll the dice and take 
a chance on a major blowout.
    Again, the risk will never be reduced to zero. But we think 
we can do and have already done many commonsense things to 
reduce that risk.
    And, further--I'm not sure whether you were here at the 
time--but this is not unprecedented in the sense of losses of 
well control that nearly led to blowouts. This was the only 
actual blowout, but the President's Commission found that there 
were 79 instances of loss of well control between 1996 and 
2009. So another way to put it is 79 almost Deepwater Horizons.
    Mr. Connolly. So the idea that this is a unique event and 
really apparently an act of God or something like that is 
misleading.
    Mr. Bromwich. Well, thankfully, it was unique in terms of 
the fact that the well totally blew and you had 4.9 million 
barrels of oil spill into the Gulf. But in terms of the 
problems that arise particularly in deepwater with high 
pressures and so on, no, it's not so far out of the norm that 
it begs to be dismissed.
    Mr. Connolly. One of the things that the Obama 
administration did that some might view as prudent after such a 
high-magnitude accident was a temporary moratorium on 
additional permitting until we had our arms around the causes 
and the prevention and so forth. In listening to some of the 
rhetoric and even reading some signs we seem to favor around 
here, one would have the impression that that moratorium has 
led to a significant plummet in domestic production. Is that 
the case?
    Mr. Bromwich. No, it's had no impact on production, because 
production was never stopped or delayed.
    Mr. Connolly. It is not true, as a matter of fact, that 
domestic oil production in the Obama administration is actually 
higher than that of the Bush administration?
    Mr. Bromwich. Yes. As of the end of 2010 that's exactly 
right.
    Mr. Connolly. And is it also true that applications for 
permits to drill actually increased in the Obama administration 
over the Bush administration?
    Mr. Bromwich. I believe that's right.
    Mr. Connolly. And is it also true that production on the 
Outer Continental Shelf actually also increased under the Obama 
administration over the Bush administration?
    Mr. Bromwich. It has.
    Mr. Connolly. Thank you very much.
    Chairman Issa. I thank the gentleman.
    We have had a vote called on the floor; and so, with that, 
I want to thank all of our witnesses for your generosity of 
your time. The record will remain open for an additional week 
to allow you to add additional information, plus opening 
statements of Members on the dais who were not able to be here.
    With that, we stand adjourned.
    [Whereupon, at 1 p.m., the committee was adjourned.]
    [The prepared statements of Hon. Edolphus Towns and Hon. 
Bruce L. Braley follow:]
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