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








                  PREVENTING AN ECONOMIC SHOCK WAVE: 
          SECURING THE PORT OF HOUSTON FROM A TERRORIST ATTACK

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

                             FIELD HEARING

                               before the

                       SUBCOMMITTEE ON OVERSIGHT,
                     INVESTIGATIONS, AND MANAGEMENT

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            AUGUST 24, 2011

                               __________

                           Serial No. 112-41

                               __________

       Printed for the use of the Committee on Homeland Security
                                     


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                     COMMITTEE ON HOMELAND SECURITY

                   Peter T. King, New York, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Daniel E. Lungren, California        Loretta Sanchez, California
Mike Rogers, Alabama                 Sheila Jackson Lee, Texas
Michael T. McCaul, Texas             Henry Cuellar, Texas
Gus M. Bilirakis, Florida            Yvette D. Clarke, New York
Paul C. Broun, Georgia               Laura Richardson, California
Candice S. Miller, Michigan          Danny K. Davis, Illinois
Tim Walberg, Michigan                Brian Higgins, New York
Chip Cravaack, Minnesota             Jackie Speier, California
Joe Walsh, Illinois                  Cedric L. Richmond, Louisiana
Patrick Meehan, Pennsylvania         Hansen Clarke, Michigan
Ben Quayle, Arizona                  William R. Keating, Massachusetts
Scott Rigell, Virginia               Kathleen C. Hochul, New York
Billy Long, Missouri                 Janice Hahn, California
Jeff Duncan, South Carolina
Tom Marino, Pennsylvania
Blake Farenthold, Texas
Mo Brooks, Alabama
            Michael J. Russell, Staff Director/Chief Counsel
               Kerry Ann Watkins, Senior Policy Director
                    Michael S. Twinchek, Chief Clerk
                I. Lanier Avant, Minority Staff Director
                                 ------                                

       SUBCOMMITTEE ON OVERSIGHT, INVESTIGATIONS, AND MANAGEMENT

                   Michael T. McCaul, Texas, Chairman
Gus M. Bilirakis, Florida            William R. Keating, Massachusetts
Billy Long, Missouri, Vice Chair     Yvette D. Clarke, New York
Jeff Duncan, South Carolina          Danny K. Davis, Illinois
Tom Marino, Pennsylvania             Bennie G. Thompson, Mississippi 
Peter T. King, New York (Ex              (Ex Officio)
    Officio)
                  Dr. R. Nick Palarino, Staff Director
                   Diana Bergwin, Subcommittee Clerk
              Tamla Scott, Minority Subcommittee Director

















                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Michael T. McCaul, a Representative in Congress 
  From the State of Texas, and Chairman, Subcommittee on 
  Oversight, Investigations, and Management:
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable William R. Keating, a Representative in Congress 
  From the State of Massachusetts, and Ranking Member, 
  Subcommittee on Oversight, Investigations, and Management......     6
The Honorable Gene Green, a Representative in Congress From the 
  State of Texas:
  Oral Statement.................................................     8
  Prepared Statement.............................................     9
The Honorable Sheila Jackson Lee, a Representative in Congress 
  From the State of Texas:
  Prepared Statement.............................................     9

                               Witnesses

Mr. Stephen L. Caldwell, Director, Maritime and Coast Guard 
  Issues, Homeland Security and Justice Team, Government 
  Accountability Office:
  Oral Statement.................................................    11
  Prepared Statement.............................................    13
Captain James H. Whitehead III, Sector Commander, Sector Houston-
  Galveston, U.S. Coast Guard:
  Oral Statement.................................................    27
  Prepared Statement.............................................    28
Sheriff Adrian Garcia, Harris County, Texas:
  Oral Statement.................................................    30
  Prepared Statement.............................................    31
Mr. James T. Edmonds, Chairman, Port of Houston Authority:
  Oral Statement.................................................    33
  Prepared Statement.............................................    36
Captain William J. Diehl (United States Coast Guard, Ret.), 
  President, Greater Houston Port Bureau, Inc.:
  Oral Statement.................................................    38
  Prepared Statement.............................................    39

 
PREVENTING AN ECONOMIC SHOCK WAVE: SECURING THE PORT OF HOUSTON FROM A 
                            TERRORIST ATTACK

                              ----------                              


                       Wednesday, August 24, 2011

             U.S. House of Representatives,
    Subcommittee on Oversight, Investigations, and 
                                        Management,
                            Committee on Homeland Security,
                                                       Houston, TX.
    The subcommittee met, pursuant to call, at 10:06 a.m., at 
Port of Houston Authority, 111 East Loop North, Houston, Texas, 
Hon. Michael T. McCaul [Chairman of the subcommittee] 
presiding.
    Present: Representatives McCaul and Keating.
    Also Present: Representatives Jackson Lee and Green.
    Mr. McCaul. The committee will come to order. Let me first 
thank the Houston Port Authority and all the people here who 
have made this happen. I want to thank the witnesses for being 
here today, and I also want to thank the Ranking Member for a 
yeoman's effort coming all the way down from beautiful Cape Cod 
and Nantucket, Massachusetts, where the weather is about 80 
degrees and beautiful to 110 degrees Houston, and so thank you 
very much for being here today.
    I want to thank my colleague Gene Green for being here as 
well and I know he will have a statement as well.
    With that, this is an official Congressional hearing. It is 
not a town hall meeting. We have to abide by the House rules, 
the House of Representatives, and I just want to, again, thank 
everybody again for being here today. I now recognize myself 
for an opening statement.
    Osama bin Laden's ``war of a thousand cuts'' on the U.S. 
economy has always been a key facet of his strategy. His 
personal files found in his lair at Abbottabad, Pakistan, 
revealed a brazen idea to blow up oil tankers. By doing so, he 
hoped to damage not only the United States, but the world's 
economy. The picture of an oil tanker ablaze, like this one off 
the coast of Yemen, would indeed add fuel to our financial 
crisis.
    Al-Qaeda and its affiliates have a history of attacking 
ships. In January 2000, there was an attack on the USS 
Sullivan. In October of 2000, a small boat with explosives blew 
a hole in the side of the USS Cole, killing 17 of our sailors. 
In October 2002, a French oil tanker was set ablaze, killing 
and injuring several crew members in the Straits of Hormuz. In 
2005, there was an attack against the USS Ashland. In July of 
2010, there was a terrorist attack on a Japanese oil tanker.
    The Government Accountability Office, or GAO, in its report 
on terrorist attacks targeting energy tankers states the supply 
chain faces three types of threats: Suicide attacks with 
explosive-laden boats similar to the one used against the USS 
Cole in the Gulf of Aden; standoff attacks with weapons 
launched from a distance, such as rocket-propelled grenades 
and; third, an armed assault used by pirates off the coast of 
Africa.
    Not only would a successful attack result in the loss of 
life and have a detrimental effect on the economy, it would 
also be a psychological blow and would have environmental 
consequences.
    The Port of Houston is the energy capital of the United 
States, and it is a target-rich environment. The port stretches 
from Galveston Bay, past Texas City, across the Gulf 
Intercoastal Waterway, past Bayport and the San Jacinto 
Monument, and deep into the City of Houston. The port includes 
a ship channel, a 52-mile highway for shipping. It has a wide 
range of businesses and is not just one of the physically 
largest ports in America, but also a leader in the movement of 
cargo.
    Houston brings in more imports than any other U.S. harbor. 
Houston has the second-highest level of exports and the second-
highest level of maritime tonnage. More than 7,800 vessels 
arrive and 150,000 large movements are registered annually.
    Most importantly, roughly 25 percent of the oil imports for 
America flow through the Port of Houston. Each day, 25 to 30 
oil and chemical tankers move along the Houston Ship Channel, 
and 31 percent of America's crude oil refining capacity takes 
place right here in this harbor. If catastrophe struck the 
port, there is little spare capacity to import and refine crude 
oil elsewhere in the country. In short, an attack on the 
Houston port could cripple this.
    A 2007 study by the Houston Port Authority estimated that 
the port directly leads to $285 billion in National economic 
activity, 1.5 million jobs, and $16.2 million in Nation-wide 
tax revenues. The U.S. Coast Guard estimates that if the 
Houston Ship Channel were closed, it would have a direct 
negative impact on the economy of approximately $406 million 
per day.
    Americans are now paying nearly $4 for a gallon of gas. 
Even an attack causing little damage could raise prices at the 
pump by a dollar or more. The Port of Houston is integral to 
America's economy. We must ensure there are no gaps in our 
security at this port and ensure that terrorists do not wound 
our economy or harm our citizens by successfully carrying out 
an attack in Houston.
    The U.S. Coast Guard, Texas State and county officials, and 
industry stakeholders associated with the Port of Houston, have 
done a great deal to protect this port and its shipping from a 
terrorist attack. The U.S. Coast Guard, who is present here 
today, and local police, as the Sheriff is here today, have 
access to a real-time satellite tracking system that pinpoints 
the exact size and location of every ship in and around 
Houston. The Coast Guard has heavily armed vessels patrolling 
the channel along with the Harris County Sheriff boats. Equally 
important, Texas established the Houston Ship Channel Security 
District, a unique industry-Government partnership, to assist 
protecting the facilities surrounding the ship channel.
    The GAO has made several recommendations to mitigate 
terrorist attacks at ports. It recommends that all participants 
should plan for meeting the growing security workload as 
liquefied natural gas shipments increase; that ports should 
plan for dealing with the economic consequences of an attack; 
that terrorism and oil spill response plans at the National and 
local level should be integrated; and that performance metrics 
should be developed for an emergency response. All agencies 
agree with these recommendations.
    I do want to point out another issue, and that is that once 
the Panama Canal, which I recently visited, its project is 
complete in 2004 to deepen the Canal, they will be able to 
accommodate vessels with drafts up to 50 feet. Unfortunately, 
the Houston Ship Channel cannot accommodate such large ships 
because it only is dredged to 45 feet. Larger ships will not be 
able to enter the Houston Ship Channel. Additionally, it is 
notable that if a ship were sunk in the middle of the Channel, 
it would effectively cut off commercial traffic in the port 
until the ship could be refloated and moved. The cost of a 
shutdown would damage this economy extremely.
    So, today, we examine whether the GAO recommendations have 
been instituted, what needs to be done to enlarge the Houston 
Ship Channel, and whether we need to do more to prevent--what 
we need to do more to prevent al-Qaeda and its affiliates from, 
again, wounding our economy as they did on September 11.
    Again, I want to thank the witnesses for being here and 
especially my great thanks to the Ranking Member for making a 
long journey from a very nice place in America down to 
beautiful Houston, Texas, and with that, I recognize him.
    [The statement of Chairman McCaul follows:]
            Prepared Statement of Chairman Michael T. McCaul
                            August 24, 2011
    Osama bin Laden's ``war of a thousand cuts'' on the U.S. economy 
has always been a key facet of his strategy. His personal files, found 
in his lair at Abbottabad, Pakistan, revealed a brazen idea to blow up 
oil tankers. By doing so he hoped to damage, not only the United 
States, but the world's economy. The picture of an oil tanker ablaze 
would indeed add fuel to our financial crisis. Al-Qaeda and its 
affiliates have a history of attacking ships:
   In January 2000 there was an attack on the USS Sullivan;
   In October 2000, a small boat with explosives blew a hole in 
        the side of the USS Cole, killing 17 of our sailors;
   In October 2002 a French oil tanker was set ablaze, killing 
        and injuring several crewmembers;
   In 2005 there was an attack against the USS Ashland and 
        Kearsarge; and
   In July 2010 there was a terrorist attack on a Japanese oil 
        tanker.
    The Government Accountability Office (GAO) in its report on 
terrorist attacks targeting energy tankers states the supply chain 
faces three types of threats:
   Suicide attacks with explosive-laden boats, similar to the 
        one used against the USS Cole in the Gulf of Aden;
   Standoff attacks with weapons launched from a distance, such 
        as rocket-propelled grenades; and
   An armed assault, as used by pirates off the coast of 
        Africa.
    Not only would a successful attack result in loss of lives and have 
a detrimental effect on the economy, it would also be a psychological 
blow and may have environmental consequences.
    The Port of Houston is the energy capitol of the United States, and 
a target-rich environment. The port stretches from Galveston Bay, past 
Texas City, across the Gulf Intercoastal Waterway, past Bayport and the 
San Jacinto Monument, and deep into the City of Houston. The port 
includes the Houston Ship Channel; a 52-mile highway for shipping.
    It has a wide range of businesses and is not just one of the 
physically largest ports in America, but also a leader in the movement 
of cargo.
   Houston brings in more imports than any other U.S. harbor 
        (88.2 million tons valued at $60.1 billion in 2010).
   Houston has the second-highest level of exports (73.2 
        million tons valued at $70.8 billion in 2010), and the second-
        highest level of total maritime tonnage (220 million tons in 
        2010) in the United States.
   More than 7,800 vessels arrive and 150,000 barge movements 
        are registered annually.
   Most importantly roughly 25% of the oil imports for America 
        flow through the Port of Houston. Each day 25-30 oil and 
        chemical tankers move along the Houston ship channel. And 31% 
        of America's crude oil refining capacity is in this harbor. If 
        catastrophe struck the port, there is little spare capacity to 
        import and refine crude oil elsewhere in the country.
    A 2007 study by the Houston Port Authority estimated that the port 
directly leads to $285 billion in National economic activity, 1.5 
million jobs and $16.2 million in Nation-wide tax revenues. The U.S. 
Coast Guard estimates that if the Houston Ship Channel was closed, it 
would have a direct negative impact on the economy of approximately 
$406 million per day.
    Americans are now paying nearly $4.00 for a gallon of gas. Even an 
attack causing little damage could raise prices at the pump by a dollar 
or more. The Port of Houston is integral to America's economy. We must 
ensure there are no gaps in our security at this port, and ensure that 
terrorists do not wound our economy or harm our citizens by 
successfully carrying out an attack in Houston.
    The U.S. Coast Guard, Texas State and County officials, and 
industry stakeholders associated with the Port of Houston have done a 
great deal to protect the port and its shipping from a terrorist 
attack. The U.S. Coast Guard and local police have access to a real-
time satellite tracking system that pinpoints the exact size and 
location of every ship in and around Houston. The Coast Guard has 
heavily armed vessels patrolling the channel, and along with Harris 
County Sheriff boats, stand ready to respond. Equally important, Texas 
established the Houston Ship Channel Security District, a unique 
industry-government partnership to assist protecting the facilities 
surrounding the ship channel.
    The GAO has made several recommendations to mitigate terrorist 
attacks at ports. It recommends:
   All participants should plan for meeting the growing 
        security workload as liquefied natural gas shipments increase;
   Ports should plan for dealing with the economic consequences 
        of an attack;
   Terrorism and oil spill response plans at the National and 
        local level should be integrated; and
   Performance metrics should be developed for an emergency 
        response.
    All agencies generally agreed with the GAO recommendations.
    I would be remiss if we did not consider one other major point. 
Once the Panama Canal's deepening project is complete in 2014, the 
Canal will be able to accommodate vessels with drafts up to 50 feet. 
Houston cannot accommodate such large ships because it is only dredged 
to 45 feet. Larger ships will not be able to enter the Houston Channel. 
Additionally, it is notable that if a ship were sunk in the middle of 
the channel, it would effectively cut off commercial traffic in the 
port until the ship could be refloated and moved. The cost of a 
shutdown would damage the U.S. economy.
   Today we examine whether the GAO recommendations have been 
        instituted, what needs to be done to enlarge the Houston Ship 
        Channel and whether we need to do more to prevent al-Qaeda and 
        its affiliates from again wounding our economy as they did on 
        9/11.
    I thank the witnesses for being here and I especially want to thank 
the Ranking Member of the subcommittee, the gentleman from 
Massachusetts, Mr. Keating, for being with us today and recognize him 
for 5 minutes for the purpose of making an opening statement.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




    Mr. Keating. Well, thank you, Mr. Chairman, and thank you 
for having what I think is an extremely important hearing.
    Where my house is, I can view the Cape Cod Canal because it 
is right there on the water, and so I see the Cape Cod Canal, 
and I will tell you, having the view of this canal just dwarfs 
that so much, and this is an extraordinary site and very 
important in terms of our economic input. So I would like to 
thank you for having the hearing.
    I would like to also acknowledge my colleagues that are 
here, Representative Gene Green. It is great to allow, you 
know, an outsider to come into your area like that. I 
appreciate it.
    We will be joined at some point by Representative Sheila 
Jackson Lee, who is also on the committee.
    I will tell you, both Chairman McCaul and I realize that 
you cannot conduct proper oversight in a vacuum, which means 
that you must go into the field and see first-hand the security 
measures mandated by Congress and do our best to make sure that 
things are running smoothly and determine what else may have to 
be done to provide help, and we are here in Houston just to do 
that.
    It gives me a great pleasure to be here in Texas, and I 
look forward to hosting Chairman McCaul in Boston when we 
conduct a field hearing there to examine the aviation security 
procedures at Logan Airport which is also a port as well.
    Today, however, we are going to examine the Port of Houston 
which links the city of Houston with over 1,053 ports in 203 
countries and is, therefore, an excellent location to determine 
exactly what the best practices are in maritime security.
    The Port of Houston, as the Chairman mentioned, is one of 
the largest ports in the world, and it is home to the world's 
largest concentration, as Representative Green knows, of 
petroleum facilities and $15 billion in petrochemical complex, 
which is ranked second in the entire world.
    Although much attention is given to aviation security since 
9/11, and rightly so, we cannot ignore the very real potential 
of threats that exist in the maritime sector and the steps that 
must be taken to protect our ports and waterways from the 
threat of terrorist activity.
    In my district, it sits right on the water and includes 
parts of the South Shore and, as the Chairman mentioned, Cape 
Cod and the islands, but my district is also near the Port of 
Boston, which is the oldest running port in the Western 
hemisphere. So I am no stranger to the maritime environment, 
and I look forward to examining the similarities and 
differences between security measures here in Houston and those 
in the Port of Boston which supplies 90 percent of the 
Massachusetts heating and fossil fuels.
    Both the Port of Houston and Boston house tankers carrying 
liquefied natural gas, liquefied petroleum gas, and oil. If a 
terrorist attack occurred at a port like that and resulted in 
the explosion of any of these volatile materials, the result 
would truly be catastrophic.
    Unfortunately, terrorists overseas have demonstrated that, 
indeed, they have the ability to carry out these type of 
attacks, and the fact that they haven't occurred here in our 
country should mean nothing to us. We should be vigilant and 
ready.
    We could have said the same thing about aviation security 
before 9/11 and Logan Airport, where that terrible day 
initiated, which we will be looking at the anniversary quite 
soon of 10 years.
    The Chairman mentioned the very real possibility in terms 
of the suicide boat attacks of the tanker Limburg off the coast 
of Yemen that killed one person, injured 17, and spilled 90,000 
barrels of oil. In 2010, the Coast Guard approved shipments of 
liquefied natural gas from Yemen to our home area within 50 
feet of residential neighborhoods, despite concerns that the 
cargo was coming from a country that has been identified as a 
terrorist safe haven and has previously experienced terrorist 
attack of their own.
    The economic impact of the Limburg attack included a short-
term collapse in international shipping in the Gulf of Aden 
and, ultimately, cost Yemen $3.8 million a month. If that type 
of attack ever occurred here and caused a massive oil spill, 
even larger than the one that occurred in Yemen, we may, once 
again, experience the type of economic damage that occurred in 
the aftermath of Deepwater Horizon and its oil spill.
    According to Dun and Bradstreet, Deepwater Horizon's oil 
spill negatively impacted 7.3 million active businesses in 5 
Gulf States, 85 percent of which were small businesses with 
less than 10 employees. So this just isn't a big corporation or 
big business concern, economically it affects even our small 
businesspeople. It also affected 34 million jobs, $5.2 trillion 
in sales, and as we all remember what happened, the price of 
oil went up.
    So even though I am here sharing a concern about maritime 
security, each and every American should be concerned about the 
security of this Houston port. Any major stoppage in that, any 
interruption will affect them drastically in all their economic 
endeavors and cripple our country.
    Given the upcoming anniversary of September 11 and its 
attacks, coupled with our current economic climate, we need to 
make sure that any additional damage to the job market is 
protected, and the cost in terms of jobs of such an attack 
would be incredible.
    So I look forward to the hearing. I look forward to hearing 
from our witnesses, and I thank the Chairman, again, in 
bringing to the attention at this important time this National 
security necessity.
    Mr. McCaul. I thank the Ranking Member.
    The Chairman asks unanimous consent that the gentleman, Mr. 
Green, be allowed to participate in this hearing and provide an 
opening statement, and without objection, so ordered.
    Mr. Green. Thank you, Mr. Chairman. I will be very brief.
    First, I want to welcome you to the Port of Houston, both 
Chairman McCaul and also my colleague from Massachusetts, and I 
actually had the opportunity a few years ago to watch that LNG 
tanker go through the Boston Harbor to the facility there and 
the security protections that are provided for it.
    But I represent most of the Port of Houston. I also share 
the Port of Houston with Congressman Ted Poe and Pete Olson to 
the east, but where you are standing or sitting today is in our 
district. As you know, it is the No. 1 foreign tonnage port in 
the country. It is the lifeblood of the economy in southeast 
Texas, but I think in the whole country, because of what we 
produce in refined products and other products in our 
community.
    Best example I know is that when we first started using the 
transport worker identification card, the TWIC card, it was 
estimated we would have 50- or 60,000 people who work on the 
port who would need those cards. The last time I checked--and 
our port chair may tell us--we had over 250,000 of those cards 
issued at the Port of Houston. So 250,000 people, a quarter of 
a million people, come to the port to work and have to use that 
TWIC card to get on the site unless they are escorted.
    So it is such an economic generator. We have five 
refineries and more chemical plants than I can count. Without 
the port, they wouldn't be here. In fact, we are working on an 
historic designation, if we can ever get it through the House. 
Buffalo Bayou, which is the Port of Houston's historical name, 
to be a National heritage area, not just based on the San 
Jacinto battleground and some of the historic things we have, 
but how did the biggest petrochemical complex in the country, 
second-largest in the world, develop here on the port, and how 
did this port 50 miles inland become developed? So we are 
working on that with the support of the Port of Houston and all 
of our local communities.
    But I want to welcome you. There has been some great 
successes here, and I know we will hear about them from our 
panel today. I welcome our panel, particularly our sheriff, who 
is a constituent and also a long-time friend, and our port is 
safer today than it was after 9/11 but we can still do 
improvements. I think if you compare our port security to every 
other port that I know of in the country, we have done so much 
more because, again, of the volatility of the products we 
produce.
    But again, thank you, Mr. Chairman, for being here and 
thank you, Bill.
    [The statement of Hon. Green follows:]
               Prepared Statement of Honorable Gene Green
                            August 24, 2011
    Thank you Chairman McCaul for holding this important hearing and 
inviting me to participate. Ensuring the security of our Nation's ports 
is a top priority in Congress and we have all worked together to secure 
these key assets that are critical to our economy. Here in Houston and 
East Harris County, we rely on the safety and security of our port and 
the facility operators directly surrounding the port live this every 
single day.
    The Port of Houston is the largest foreign tonnage port and the 
largest petrochemical port in the country. In fact, it moves the 
second-largest amount of cargo in the country, as 8.5% of our Nation's 
cargo moves through the Port of Houston. The commerce that occurs at 
our port is critical to our Nation's energy and chemical sectors and to 
our country's ability to trade and move goods throughout our country. 
It is a port of National significance. We must ensure the security and 
safety of the people who work at and near the port, the community 
surrounding the port and the facilities here.
    Whether the threat is from nature or it is manmade, preparedness is 
the key to maintaining our security and safety. The Federal Government 
has partnered with the Port of Houston Authority, facilities at the 
port and along the ship channel, as well as State and local government 
agencies. This partnership, the Houston Ship Channel Security District, 
is critical to maintaining a high level of security.
    Forming the Houston Ship Channel Security District was a major 
accomplishment that increases the area's emergency preparedness and 
disaster response capabilities. This important partnership takes 
advantage of the long tradition of cooperation among companies and 
governmental entities working in the ship channel area.
    Since fiscal year 2002, the port has received nearly $19 million 
from the Federal Port Security Grant Program, which is part of over $30 
million in Federal homeland security funds that are providing the 
latest in technology, detection, and oversight for security purposes. 
These funds are crucial to keeping our country safe and protecting the 
communities and workers at our Nation's ports.
    I look forward to working with my friend Chairman McCaul and our 
colleagues to identify the needs of the Port of Houston and ports 
across the country and to address them as we move forward to strengthen 
our country and our economy.

    Mr. McCaul. Let me thank you for being here as well and 
participating in this important hearing.
    [The statement of Hon. Sheila Jackson Lee follows:]
             Prepared Statement of Hon. Sheila Jackson Lee
    Thank you Chairman McCaul and Ranking Member Keating for convening 
this very important field hearing to examine the programs, policies, 
procedures, and implementation of maritime security efforts at the Port 
of Houston with an emphasis on protecting the port and the supply chain 
from a terrorist attack. I would like to welcome our witnesses today: 
Mr. Stephen L. Caldwell, Director of Maritime and Coast Guard Issues, 
Homeland Security and Justice Issues, Government Accountability Office; 
Captain James Whitehead, Sector Commander, Sector Houston-Galveston, 
U.S. Coast Guard, U.S. Department of Homeland Security; my friend, 
Sheriff Adrian Garcia, Harris County Sheriffs Office, Texas; Mr. James 
T. Edmonds, Chairman, The Port of Houston Authority; and Captain 
William Diehl (USCG Ret.), President, Greater Houston Port Bureau, Inc. 
Thank you for participating in this very important field hearing.
    The Port of Houston is home of the second-largest petrochemical 
complex.
    The country's largest refinery is located on the Houston Ship 
Channel, where refined energy products are transported by way of an 
infrastructure made up of pipelines, rails, and our roadways.
    The infrastructure utilized through these transportation resources 
includes the Colonial Pipeline system, which is the largest petroleum 
product pipeline system in the Nation and is vital to the demands of 
energy throughout the Southern part of our Nation and the East Coast. 
The Nation's economy and security are heavily dependent on oil, natural 
gas, and other energy commodities. Bolstering port security in Houston 
and throughout the country is of paramount concern. The Port of Houston 
is a 25-mile-long complex of public and private facilities located just 
a few hours' sailing time from the Gulf of Mexico. The port is ranked 
first in the United States in foreign waterborne commerce, second in 
total tonnage, and sixth in the world.
    More than 220 million tons of cargo moved through the Port of 
Houston in 2009. More than 7,700 vessel calls were recorded at the Port 
of Houston during the year 2009.
    Economic studies reveal that ship channel-related businesses 
support more than 287,000 direct and indirect jobs throughout Texas 
while generating nearly $11 billion in economic impact. Additionally, 
more than $649 million in State and local tax revenues are generated by 
business activities related to the port. Approximately 87,000 jobs are 
connected with the Port of Houston itself, and over 80% of those people 
live in the Houston Metropolitan area.
    Centrally located on the Gulf Coast, Houston is a strategic gateway 
for cargo originating in or destined for the U.S. West and Midwest. 
Houston lies within close reach of one of the Nation's largest 
concentrations of consumers. More than 17 million people live within 
300 miles of the city, and approximately 60 million live within 700 
miles.
    Safe and secure seaports are an essential element in building 
efficient and technologically advanced supply chains that move cargo 
quickly to distribution centers, stores, and factories around the 
world.
    Although we have made progress since the 9/11 attacks in enhancing 
the security of the Nation's ports, we cannot afford to be complacent.
    The danger is very real that we may be escorting a weapon of mass 
destruction to its target. For every mile along the Houston Ship 
Channel that dangerous cargo passes, an additional 2,000 people are at 
risk. Clearly, once the cargo reaches the city, the risk is at its 
greatest.
    I will continue to support strong efforts that make the movement of 
cargo through the global supply chain as secure as possible, and I am 
committed to doing everything feasible to ensure the security of the 
Nation's ports.
    I am interested to hear from our witnesses on all aspects of 
securing the offshore energy infrastructure, including security 
inspections in place and other measures to better secure Outer 
Continental Shelf facilities and deepwater ports. How the United States 
Coast Guard assesses the offshore infrastructure as we look to our 
ports is critical.
    The findings from the National Commission on the BP Deepwater 
Horizon Oil Spill incident illustrated how examining the role that the 
industry and Government sectors played in assessing vulnerabilities and 
the impact the incident had on the economic, social, and environmental 
systems. The quality of information shared from this unfortunate event 
could improve the quality of information that informs Congress on the 
most appropriate programs and budget decisions to best ensure security 
for our ports and how to utilize scarce resources in a constrained 
fiscal environment.
    From reviewing your testimonies, please know that I share your 
concerns about achieving a balance between securing our ports and 
maintaining our viable business options. As such, I would like to 
assure all of you that in my capacity as Ranking Member of the Homeland 
Security Subcommittee on Transportation Security, it has been my 
priority to see a vibrant and secure America, where people and trade 
are safe and secure to move throughout this great Nation.
    I am aware of the increased demands of security and the allocation 
of Federal funds, as a result, I am committed to doing everything in my 
power to ensure that transportation and port security grants are 
allocated in a timely and targeted manner.
    Today's hearing is most important at the Port of Houston for 
Houston is home to hundreds of energy companies and many of these 
companies are involved in exploring for and producing oil and natural 
gas in the Gulf of Mexico and transporting it from sea to shore. 
Furthermore, energy tankers sail through Houston Ship Channel, and 
major facilities for refining oil are located along or the Ship 
Channel.
    As a Member of Homeland Security, I am glad that Chairman McCaul 
and Ranking Member Keating have called this issue to the forefront. I 
would like to welcome everyone to the 18th Congressional District of 
Houston, Texas, and thank you for your strong initiative in making our 
seas and ports more secure.

    Mr. McCaul. With that, I will introduce the witnesses. We 
have, first, Mr. Steve Caldwell, director in GAO's Homeland 
Security and Justice Team. His recent GAO reports and testimony 
have covered issues related to protecting critical 
infrastructure, particularly in the ports, including the 
implementation of the Maritime Transportation Security Act, or 
SAFE Port Act.
    He has an extensive international experience having spent 
almost a third of his career overseas visiting 27 countries as 
part of his work on homeland security and other issues. Thank 
you for being here.
    Next, we have Captain James Whitehead, who currently serves 
as commander of the U.S. Coast Guard Sector Houston-Galveston, 
after serving for 2 years as deputy commander. He serves as the 
Officer in Charge of Marine Inspections, or OCMI, Captain of 
the Port, Federal Maritime Security Coordinator, Search and 
Rescue Mission Coordinator, and Federal On-Scene Coordinator 
for an area spanning from Matagorda Bay, Texas, to Lake 
Charles, Louisiana. Captain Whitehead is a graduate of the 
Coast Guard Officer Candidate School and the U.S. Naval War 
College. Captain, thank you for being here today.
    Next, we have your constituent and my friend as well, 
Sheriff Adrian Garcia who heads the largest sheriff's office in 
Texas and the third-largest in the United States. Sheriff 
Garcia is a native Houstonian. He became an officer with the 
Houston Police Department in 1980. In 1999, Mayor Lee Brown 
promoted him to director of the mayor's Anti-Gang Office, where 
he served until 2003. Sheriff Garcia was elected to the Houston 
City Council in 2003, and he chaired the council's Public 
Safety and Homeland Security Committee before being elected to 
sheriff. Sheriff, thank you so much for being here today.
    Next, another friend, Mr. Jim Edmonds, was appointed 
chairman of the Board of Commissioners of the Port of Houston 
Authority in June 2000. He was first appointed to the Port 
Commission in October 1996, representing Harris County, and 
under Chairman Edmonds' leadership, the Port of Houston 
Authority has been able to expand its business opportunities. 
In addition to his responsibilities with the Port of Houston, 
Chairman Edmonds serves as a member of the Board of Pilots 
Commissioners and on the board of Memorial Hermann Healthcare 
System, the I-69 TxDOT Advisory Committee, and the Gulf Coast 
Rail District. Thank you, Jim, for being here today as well.
    Finally, we have Captain Bill Diehl, the U.S. Coast Guard. 
He is president of the Greater Houston Port Bureau, a maritime 
trade organization of 125 companies. Captain Diehl became 
president of the Port Bureau after retiring from the Coast 
Guard in 2009 where he served in a variety of challenging jobs, 
including being the senior U.S. diplomat at the Panama Canal. 
Captain Diehl is a graduate of the Coast Guard Academy. Mr. 
Diehl, thank you also for being here as well.
    With that, we will begin our opening statements and the 
Chairman now recognizes Mr. Caldwell for his testimony.

STATEMENT OF STEPHEN L. CALDWELL, DIRECTOR, MARITIME AND COAST 
 GUARD ISSUES, HOMELAND SECURITY AND JUSTICE TEAM, GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Mr. Caldwell. Thank you very much, Chairman McCaul and Mr. 
Keating and Mr. Green. I also want to thank the other witnesses 
for what they do every day to protect this port and the other 
ports in our country.
    While my written statement today doesn't focus that much on 
tankers, I do want to point out the report we did in 2007, 
which was a comprehensive report with a lot of detail on the 
threats to tankers, the tankers that arrive every day to supply 
our refineries and to power our economy. Mr. McCaul and Mr. 
Keating have already talked a little bit about the different 
kinds of attacks that can occur on a tanker and the 
consequences of those attacks. So I will skip on to some of the 
other things here.
    One of the areas that we have been particularly concerned 
about is the attacks on tankers at maritime choke points, and 
these could be international straits, major transit canals, or 
channels within a port such as the Houston Ship Channel we have 
here, and our concerns do appear validated by the recent 
revelations about al-Qaeda's intentions, as well as the attack 
on the MV Star in the Straits of Hormuz.
    While our previous report on tankers only touched briefly 
on the issue of piracy, that has actually become a bigger 
threat than terrorist threats to tankers. Specifically, there 
were 48 attacks on tankers in 2006, 149 in 2010, and it is 
trending even higher in 2011. Those are pirate attacks, and 
then from the pirate perspective, they have a very successful 
business model with ransoms for tankers going from about $3 
million in 2009 up to $12 million in 2011.
    To date, these terrorist attacks and these pirate attacks 
have occurred far from Houston, thankfully, where United States 
has limited control over the security situation. But now, I 
will turn my attention to U.S. ports and the waters where there 
is a lot we can do to prevent and respond to these type of 
attacks.
    Our previous report, as has been mentioned, had five 
recommendations specific to planning for, and responding to, a 
terrorist attack on a tanker within a U.S. port. Two of our 
recommendations do remain unaddressed. One related to the 
integration of operational plans, and the other related to 
performance measures.
    Moving beyond Houston and touching on some of the areas 
that Mr. Keating talked about, let's go offshore. There are 
over 4,000 offshore platforms and related infrastructure within 
the Gulf of Mexico, and the Deepwater Horizon oil spill showed 
just what the consequences of an explosion on such a platform 
can be. I suspect that those that wish us harm could not help 
but notice the difficulties the Nation faced in capping an oil 
spill deep on the seabed. We all remember the media count day 
after day for the 84 days it took to cap that well and for the 
4 million barrels of oil that were spilled into the Gulf.
    Now, we can imagine another explosion or even multiple 
explosions done on purpose. In addition to the response to 
protect the environment that we already saw, we would have to 
add to the complexity of that by putting on a law enforcement 
and a security response as well.
    Now, with this testimony, another thing that we are doing, 
based on work we are doing for the subcommittee, is reporting 
on Coast Guard security assessments of such offshore 
infrastructure. We found that the Coast Guard was not 
addressing about one-quarter of the assessments it should have 
been doing. We also found that the Coast Guard was--I am 
sorry--the Coast Guard was not doing these assessments. Based 
on that, we are making recommendations to the Coast Guard which 
they have accepted which will improve their internal controls 
so that they can identify all of those facilities that do 
require such assessments.
    One of the Coast Guard's other big challenges in doing 
these kinds of offshore assessments harkens back to the 
Deepwater Horizon in that such facilities are actually vessels 
called MODU's, mobile offshore drilling units, do not fall 
under the Coast Guard's current regulations for security; thus, 
the Coast Guard is not conducting the same kinds of security 
assessments on MODU's that it is in doing in terms of an oil 
platform or production facility.
    In closing, we will continue with our other work for the 
committee, continuing to look at Coast Guard work at offshore 
facilities, both oil production platforms and deepwater ports 
such as LOOP and some others that are in Massachusetts Bay.
    I will be happy to respond to any questions. Thank you.
    [The statement of Mr. Caldwell follows:]
               Prepared Statement of Stephen L. Caldwell
                            August 24, 2011
GAO Highlights
    Highlights of GAO-11-883T, a testimony before the Subcommittee on 
Oversight, Investigations, and Management; Committee on Homeland 
Security; House of Representatives.
Why GAO Did This Study
    The Nation's economy and security are heavily dependent on oil, 
natural gas, and other energy commodities. Al-Qaeda and other groups 
with malevolent intent have targeted energy tankers and offshore energy 
infrastructure because of their importance to the Nation's economy and 
National security. The U.S. Coast Guard--a component of the Department 
of Homeland Security (DHS)--is the lead Federal agency for maritime 
security, including the security of energy tankers and offshore energy 
infrastructure. The Federal Bureau of Investigation (FBI) also has 
responsibilities for preventing and responding to terrorist incidents. 
This testimony discusses the extent to which: (1) The Coast Guard and 
the FBI have taken actions to address GAO's prior recommendations to 
prevent and respond to a terrorist incident involving energy tankers, 
and (2) the Coast Guard has taken actions to assess the security risks 
to offshore energy infrastructure and related challenges. This 
testimony is based on products issued from December 2007 through March 
2011 and recently completed work on the Coast Guard's actions to assess 
security risks. GAO reviewed documents from the Coast Guard's risk 
model and relevant laws, regulations, policies, and procedures; and 
interviewed Coast Guard officials.
What GAO Recommends
    GAO is recommending that the Coast Guard revise policies and 
procedures to ensure its analysts receive the annual updated list of 
regulated offshore energy facilities to ensure risk assessments are 
conducted on those facilities. The Coast Guard concurred with this 
recommendation.
maritime security.--progress made, but further actions needed to secure 
                       the maritime energy supply
What GAO Found
    The Coast Guard and the FBI have made progress implementing prior 
recommendations GAO made to enhance energy tanker security. In 2007, 
GAO made five recommendations to address challenges in ensuring the 
effectiveness of Federal agencies' actions to protect energy tankers 
and implement response plans. The Coast Guard and the FBI have 
implemented two recommendations, specifically: (1) The Coast Guard, in 
coordination with U.S. Customs and Border Protection, developed 
protocols for facilitating the recovery and resumption of trade 
following a disruption to the maritime transportation system, and (2) 
the Coast Guard and the FBI participated in local port exercises that 
executed multiple response plans simultaneously. The Coast Guard has 
made progress on a third recommendation through work on a National 
strategy for the security of certain dangerous cargoes. It also plans 
to develop a resource allocation plan, starting in April 2012, which 
may help address the need to balance security responsibilities. 
However, the Coast Guard and the FBI have not yet taken action on a 
fourth recommendation to develop an operational plan to integrate the 
National spill and terrorism response plans. According to DHS, it plans 
to revise the National Response Framework, but no decision has been 
made regarding whether the separate response plans will be integrated. 
Also, DHS has not yet taken action on the final recommendation to 
develop explicit performance measures for emergency response 
capabilities and use them in risk-based analyses to set priorities for 
acquiring needed response resources. According to DHS, it is revising 
its emergency response grant programs, but does not have specific plans 
to develop performance measures as part of this effort.
    The Coast Guard has taken actions to assess the security risks to 
offshore energy infrastructure, which includes Outer Continental Shelf 
(OCS) facilities (facilities that are involved in producing oil or 
natural gas) and deepwater ports (facilities used to transfer oil and 
natural gas from tankers to shore), but improvements are needed. The 
Coast Guard has used its Maritime Security Risk Analysis Model (MSRAM) 
to examine the security risks to OCS facilities and deepwater ports. To 
do so, the Coast Guard has coordinated with the intelligence community 
and stakeholders, such as the Department of the Interior's Bureau of 
Ocean Energy Management, Regulation, and Enforcement. However, the 
Coast Guard faces complex and technical challenges in assessing risks. 
For example, the Coast Guard does not have data on the ability of an 
OCS facility to withstand an attack. The Coast Guard generally 
recognizes these challenges and has actions underway to study or 
address them. Further, GAO determined that as of May 2011, the Coast 
Guard had not assessed security risks for 12 of the 50 security-
regulated OCS facilities that are to be subjected to such assessments. 
Coast Guard officials later determined that they needed to add these 
OCS facilities to MSRAM for assessment and have completed the required 
assessments. However, while the list of security-regulated facilities 
may change each year based on factors such as production volume, the 
Coast Guard's current policies and procedures do not call for Coast 
Guard officials to provide an annual updated list of regulated OCS 
facilities to MSRAM analysts. Given the continuing threat to such 
offshore facilities, revising its procedures could help ensure that the 
Coast Guard carries out its risk assessment requirements for security-
regulated OCS facilities.
    Chairman McCaul, Ranking Member Keating, and Members of the 
subcommittee: I am pleased to be here today to discuss Federal efforts 
to ensure the security of energy tankers and the offshore energy 
infrastructure that produces, transports, or receives oil and natural 
gas. The Nation's economy and security are heavily dependent on oil, 
natural gas, and other energy commodities. Further, it is fitting that 
today's hearing is in Houston because the city and the surrounding area 
play a central role in the maritime energy sector. Houston is home to 
hundreds of energy companies and many of these companies are involved 
in exploring for and producing oil and natural gas in the Gulf of 
Mexico and transporting it from sea to shore. In addition, energy 
tankers sail through the Houston Ship Channel, and major facilities for 
refining oil are located along or near the channel.
    Al-Qaeda and other groups with malevolent intent continue to target 
energy tankers and offshore energy infrastructure because of their 
importance to the Nation's economy and National security. In May 2011, 
the Department of Homeland Security (DHS) issued a press statement that 
intelligence information showed that throughout 2010 there was 
continuing interest by members of al-Qaeda in targeting oil tankers and 
commercial oil infrastructure at sea. While a terrorist attack on 
energy tankers or offshore energy infrastructure has not occurred in 
the United States, other countries have experienced such attacks.
    Additionally, while it was not the result of an attack, the 
Deepwater Horizon explosion in April 2010 showed that the consequences 
of an incident on offshore energy infrastructure could be significant. 
The explosion resulted in 11 deaths, serious injuries, and the largest 
oil spill in the history of the United States. The response to the 
incident encountered numerous challenges, and by the time the well was 
sealed nearly 3 months later, over 4 million barrels of oil had spilled 
into the Gulf. The spill created significant environmental damage and 
had an adverse impact on workers and businesses, with an estimated cost 
to compensate for these damages totaling billions of dollars.
    The U.S. Coast Guard--a component of DHS--is the lead Federal 
agency for maritime security, including security of energy tankers and 
offshore energy infrastructure. The FBI--an agency in the Department of 
Justice (DOJ)--shares responsibility with the Coast Guard for 
preventing and responding to terrorist incidents in the maritime 
environment, including incidents involving energy tankers. In December 
2007, we issued a report that examined Coast Guard and FBI efforts to 
prevent and respond to an incident involving energy tankers and we made 
several recommendations to the Coast Guard and the FBI to improve 
efforts in these areas.\1\
---------------------------------------------------------------------------
    \1\ GAO, Maritime Security: Federal Efforts Needed to Address 
Challenges in Preventing and Responding to Terrorist Attacks on Energy 
Commodity Tankers, GAO-08-141 (Washington, DC: Dec. 10, 2007).
---------------------------------------------------------------------------
    My testimony today will address two main objectives:
   the extent to which the Coast Guard and the FBI have taken 
        actions to address our prior recommendations to prevent and 
        respond to terrorist incidents involving energy tankers; and,
   the extent to which the Coast Guard has taken actions to 
        assess the security risks to offshore energy infrastructure and 
        the challenges, if any, in conducting such assessments.
    My statement is based on our past work on energy tankers issued in 
December 2007 and recently completed work on actions the Coast Guard 
has taken to assess security risks in the maritime environment.\2\ To 
obtain information on the first objective, we reviewed our prior 
reports on energy tankers, and asked the Coast Guard and the FBI to 
provide us an update, along with supporting documentation, on any 
actions that they have taken to address our recommendations from the 
December 2007 report. To provide additional information on threats to 
energy tankers, we also reviewed our recent work on piracy.\3\ More 
detailed information on the scope and methodology used for our past 
reviews appears in those reports.
---------------------------------------------------------------------------
    \2\ GAO-08-141.
    \3\ GAO, Maritime Security: Actions Needed to Assess and Update 
Plan and Enhance Collaboration Among Partners Involved in Countering 
Piracy off the Horn of Africa, GAO-10-856 (Washington, DC: Sept. 24, 
2010); and Maritime Security: Updating U.S. Counterpiracy Action Plan 
Gains Urgency as Piracy Escalates off the Horn of Africa, GAO-11-449T 
(Washington, DC: Mar. 15, 2011).
---------------------------------------------------------------------------
    To address the second objective, we interviewed officials in Coast 
Guard headquarters and field offices in New Orleans, Louisiana and 
Boston, Massachusetts because these officials were knowledgeable about 
how the Coast Guard uses the Maritime Security Risk Analysis Model 
(MSRAM)--a tool that the Coast Guard uses to assess the security risks 
to vessels and offshore energy infrastructure.\4\ Moreover, the New 
Orleans and Boston field offices are the only offices presently 
conducting assessments of offshore energy infrastructure. We also 
reviewed Coast Guard documents on MSRAM, such as Coast Guard guidance 
to its field units and the MSRAM training manual. In addition, we 
reviewed relevant laws and regulations, policies and procedures, and 
other documents related to security risk assessments. For example, we 
reviewed the DHS Quadrennial Review,\5\ the National Infrastructure 
Protection Plan,\6\ and a National Research Council report on risk 
assessments at DHS.\7\ We also reviewed our prior report on risk 
assessment efforts carried out by the Coast Guard.\8\ In addition, we 
compared the Coast Guard's policies and procedures regarding security 
actions with criteria in Standards for Internal Control in the Federal 
Government.\9\ Further, we interviewed representatives from two 
companies that together operate 18 of the 50 Outer Continental Shelf 
facilities, a type of offshore energy infrastructure, regulated for 
security in 2011. While the information obtained from these interviews 
is not generalizable to the offshore energy industry as a whole, it 
provided insights into owners' and operators' concerns regarding 
security and actions they have taken to address such concerns. This 
testimony concludes our work on Coast Guard efforts to assess security 
risks for offshore energy infrastructure.\10\
---------------------------------------------------------------------------
    \4\ In looking at the Coast Guard's assessments of risks, we 
focused on security risks--risks emanating from terrorists or others 
that would purposely attack or sabotage offshore energy infrastructure. 
We did not focus on accidental risks to such infrastructure. However, 
we have on-going work to assess industry plans for developing new 
methods or technologies to control and contain blowouts occurring in 
subsea environments. We are conducting this work at the request of the 
Ranking Member of the House Committee on Energy and Commerce. We expect 
to issue this related report in the winter of 2012. We are also 
conducting broader work examining the Coast Guard's use of MSRAM for 
the Chairman of the Senate Committee on Commerce, Science, and 
Transportation; the Ranking Member of the Senate Committee on Homeland 
Security and Governmental Affairs; and the Chairwoman of the House 
Homeland Security Committee, Subcommittee on Border and Maritime 
Security. We expect to issue this report later in 2011.
    \5\ The DHS Quadrennial Review outlines a strategic framework for 
stakeholders, including Federal, State, local, Tribal, territorial, 
nongovernmental, and private-sector entities, in responding to security 
threats. For more information about the DHS Quadrennial Review, see 
GAO, Quadrennial Homeland Security Review: 2010 Reports Addressed Many 
Required Elements, but Budget Planning Not Yet Completed, GAO-11-153R 
(Washington, DC: Dec. 16, 2010).
    \6\ The National Infrastructure Protection Plan represents a 
strategy for protecting critical infrastructure and key resources, and 
it offers a framework for assessing risk. For more information about 
the National Infrastructure Protection Plan, see GAO, Critical 
Infrastructure Protection: Update to National Infrastructure Protection 
Plan Includes Increased Emphasis on Risk Management and Resilience, 
GAO-10-296 (Washington, DC: Mar. 5, 2010).
    \7\ National Research Council: Review of the Department of Homeland 
Security's Approach to Risk Analysis (Washington, DC: 2010).
    \8\ GAO, Risk Management: Further Refinements Needed to Assess 
Risks and Prioritize Protective Measures at Ports and Other Critical 
Infrastructure, GAO-06-91 (Washington, DC: Dec. 15, 2005) and Maritime 
Security: DHS Progress and Challenges in Key Areas of Port Security, 
GAO-10-940T (Washington, DC: July 21, 2010).
    \9\ GAO, Standards for Internal Control in the Federal Government, 
GAO/AIMD-00-21.3.1 (Washington, DC: November 1999).
    \10\ We will continue our broader work looking at the security of 
offshore energy infrastructure, including Coast Guard security 
inspections and other challenges.
---------------------------------------------------------------------------
    We conducted this performance audit from October 2010 through 
August 2011 in accordance with generally accepted Government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives.
                               background
    The Nation's economy and security are heavily dependent on oil, 
natural gas, and other energy commodities. Nearly half of the Nation's 
oil is transported from overseas by tankers. For example, about 49 
percent of the Nation's crude oil supply--one of the main sources of 
gasoline, jet fuel, heating oil, and many other petroleum products--was 
transported by tanker into the United States in 2009.\11\ The remaining 
oil and natural gas used in the United States comes from Canada by 
pipeline or is produced from domestic sources in areas such as offshore 
facilities in the Gulf of Mexico. With regard to these domestic 
sources, the area of Federal jurisdiction--called the Outer Continental 
Shelf (OCS)\12\--contains an estimated 85 million barrels of oil, more 
than all onshore resources and those in shallower State waters 
combined.\13\ In addition, the Louisiana Offshore Oil Port (LOOP), a 
deepwater port, is responsible for transporting about 10 percent of 
imported oil into the United States.
---------------------------------------------------------------------------
    \11\ This figure is based on the most recently available data for a 
full year from the U.S. Energy Information Administration.
    \12\ The OCS is a designation for all submerged lands of which the 
subsoil and seabed are outside the territorial jurisdiction of a U.S. 
State, but within U.S. jurisdiction and control.
    \13\ Based on an estimate from the National Commission on the BP 
Deepwater Horizon Oil Spill and Offshore Drilling, Deep Water: The Gulf 
Oil Disaster and the Future of Offshore Drilling (Washington, DC: 
January 2011).
---------------------------------------------------------------------------
Federal Agency Roles
    As the lead Federal agency for maritime security, the Coast Guard 
seeks to mitigate many kinds of security challenges in the maritime 
environment. Doing so is a key part of its overall security mission and 
a starting point for identifying security gaps and taking actions to 
address them. Carrying out these responsibilities is a difficult and 
challenging task because energy tankers often depart from foreign ports 
and are registered in countries other than the United States, which 
means the United States has limited authority to oversee the security 
of such vessels until they enter U.S. waters. Offshore energy 
infrastructure also presents its own set of security challenges because 
some of this infrastructure is located many miles from shore. The FBI 
shares responsibility with the Coast Guard for preventing and 
responding to terrorist incidents in the maritime environment, 
including incidents involving energy tankers.
Risks to Energy Tankers
    Energy tankers face risks from various types of attack. We 
identified three primary types of attack methods against energy tankers 
in our 2007 report, including suicide attacks, armed assaults by 
terrorists or armed bands, and launching a ``standoff'' missile attack 
using a rocket or some other weapon fired from a distance. In recent 
years, we have issued reports that discussed risks energy tankers face 
from terrorist attacks and attacks from other criminals, such as 
pirates. Terrorists have attempted--and in some cases carried out--
attacks on energy tankers since September 11, 2001. To date, these 
attacks have included attempts to damage tankers or their related 
infrastructure at overseas ports. For example, in 2002, terrorists 
conducted a suicide boat attack against the French supertanker Limburg 
off the coast of Yemen, and in 2010, an incident involving another 
supertanker, the M/V M. Star, in the Strait of Hormuz is suspected to 
have been a terrorist attack. Our work on energy tankers identified 
three main places in which tankers may be at risk of an attack: (1) At 
foreign ports; (2) in transit, especially at narrow channels, or 
chokepoints; and (3) at U.S. ports. For example, foreign ports, where 
commodities are loaded onto tankers, may vary in their levels of 
security, and the Coast Guard is limited in the degree to which it can 
bring about improvements abroad when security is substandard, in part 
because its activities are limited by conditions set by host nations. 
In addition, while tankers are in transit, they face risks because they 
travel on direct routes that are known in advance and, for part of 
their journey, they may have to travel through waters that do not allow 
them to maneuver away from possible attacks. According to the Energy 
Information Administration, chokepoints along a route make tankers 
susceptible to attacks. Further, tankers remain at risk upon arrival in 
the United States because of the inherent risks to port facilities. For 
example, port facilities are generally accessible by land and sea and 
are sprawling installations often close to population centers.
    Beyond the relatively rare threat of terrorist attacks against 
tankers, the threat of piracy has become relatively common.\14\ In 
particular, piracy threatens tankers transiting one of the world's 
busiest shipping lanes near key energy corridors and the route through 
the Suez Canal. The vast areas at risk for piracy off the Horn of 
Africa, combined with the small number of military ships available for 
patrolling them, make protecting energy tankers difficult. According to 
the International Maritime Bureau, 30 percent (490 of 1,650) of vessels 
reporting pirate attacks worldwide from 2006 through 2010 were 
identified as tankers.\15\ See table 1 for a summary of tankers 
attacked by pirates during 2006 through 2010.
---------------------------------------------------------------------------
    \14\ The motivation behind an attack may distinguish piracy from 
terrorism. For example, the motivation for piracy is often monetary, 
whereas terrorism is politically motivated.
    \15\ The International Chamber of Commerce's International Maritime 
Bureau operates a Piracy Reporting Center that collects data on pirate 
attacks worldwide.

                           TABLE 1.--NUMBER OF TANKERS ATTACKED BY PIRATES, 2006-2010
----------------------------------------------------------------------------------------------------------------
              Type of Commodity Transported                   2006       2007       2008       2009       2010
----------------------------------------------------------------------------------------------------------------
Bitumen*.................................................          0          1          0          2          2
Chemical/Product**.......................................         35         52         55         69         96
Crude Oil................................................          9         25         30         41         43
Liquefied Natural Gas....................................          0          1          0          1          1
Liquefied Petroleum Gas..................................          4          5          6          5          7
                                                          ------------------------------------------------------
      Totals.............................................         48         84         91        118       149
----------------------------------------------------------------------------------------------------------------
Source: International Maritime Bureau, Piracy and Armed Robbery Against Ships Annual Report (United Kingdom,
  2010).
* Bitumen is a heavy black viscous oil often used in paving materials and sealants.
** This category includes tankers that transport chemicals or oil products other than crude oil.

    As shown in the table, pirate attacks against tankers have tripled 
in the last 5 years, and the incidence of piracy against tankers 
continues to rise. From January through June 2011, 100 tankers were 
attacked, an increase of 37 percent compared to tankers attacked from 
January through June 2010. Figure 1 shows one of the recent suspected 
pirate attacks. In addition, tankers are fetching increasing ransom 
demands from Somali pirates. Media reports indicate a steady increase 
in ransoms for tankers, from $3 million in January 2009 for the Saudi 
tanker Sirius Star, to $9.5 million in November 2010 for the South 
Korean tanker Samho Dream, to $12 million in June 2011 for the Kuwaiti 
tanker MV Zirku. The U.S. Maritime Administration and the Coast Guard 
have issued guidance for commercial vessels to stay 200 miles away from 
the Somali coast. However, pirates have adapted and increased their 
capability to attack and hijack vessels to more than 1,000 miles from 
Somalia using mother ships, from which they launch smaller boats to 
conduct the attacks.\16\ To address the growing concern over piracy, 
the Coast Guard has issued a directive with guidelines for U.S. vessels 
operating in high-risk waters. This directive provides vessel owners 
and operators with direction for responding to emerging security risks.
---------------------------------------------------------------------------
    \16\ For more information on U.S. Government efforts to combat 
piracy, see GAO-10-856, which discusses the Coast Guard's and other 
agencies' progress in implementing efforts to prevent piracy attacks. 
This report contains recommendations to improve U.S. Government efforts 
to combat piracy. 



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



Risks to Offshore Energy Infrastructure
    Offshore energy infrastructure also faces risks from various types 
of attacks. For example, in 2004, a terrorist attacked an offshore oil 
terminal in Iraq using speedboats packed with explosives, killing two 
U.S. Navy sailors and a U.S. Coast Guardsman. Potential attack methods 
against offshore energy infrastructure identified by the Coast Guard or 
owners and operators include crashing an aircraft into it; using a 
submarine vessel, diver, or other means of attacking it underwater; 
ramming it with a vessel; and sabotage by an employee. Offshore energy 
infrastructure may face security risks because this infrastructure is 
located in open waters and generally many miles away from Coast Guard 
assets and personnel.
    In addition to our work on energy tankers, we have recently 
completed work involving Coast Guard efforts to assess security risks 
and ensure the security of offshore energy infrastructure. 
Specifically, our work focused on two main types of offshore energy 
infrastructure that the Coast Guard oversees for security. The first 
type are facilities that operate on the OCS and are generally described 
as facilities temporarily or permanently attached to the subsoil or 
seabed of the OCS that engage in exploration, development, or 
production of oil, natural gas, or mineral resources.\17\ As of 
September 2010, there were about 3,900 such facilities, and if a 
facility of this type meets or exceeds any one of three thresholds for 
production or personnel, it is subject to 33 C.F.R. part 106 security 
requirements.\18\ In this testimony, we focus on the 50 facilities 
that, in 2011, are regulated for security because they meet or exceed 
the threshold criteria. We refer to these security-regulated facilities 
as OCS facilities. The second type of offshore energy infrastructure 
are deepwater ports, which are fixed or floating manmade structures 
used or intended for use as a port or terminal for the transportation, 
storage, or handling of oil or natural gas to any State and includes 
the transportation of oil or natural gas from the United States' 
OCS.\19\ There are currently four licensed deepwater ports--two in the 
Gulf of Mexico and two in Massachusetts Bay.\20\ Unlike OCS facilities, 
which are involved in the production of oil or natural gas, deepwater 
ports enable tankers to offload oil or liquefied natural gas for 
transport to land by underwater pipelines.
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    \17\ See 33 C.F.R.  106.105.
    \18\ Facilities meeting any of the threshold criteria are often 
referred to as Maritime Transportation and Security Act (MTSA)-
regulated facilities. The production or personnel thresholds for 
determining whether an OCS facility will be subject to security 
requirements in accordance with 33 C.F.R. part 106 are: (1) Producing 
greater than 100,000 barrels of oil a day, (2) producing more than 200 
million cubic feet of natural gas per day, or (3) hosting more than 150 
persons for 12 hours or more in each 24-hour period continuously for 30 
days or more. According to 33 C.F.R.  140.10, production means those 
activities which take place after the successful completion of any 
means for the removal of minerals, including, but not limited to, such 
removal, field operations, transfer of minerals to shore, operation 
monitoring, maintenance, and workover. According to the Coast Guard, 
the statement; ``transfer of minerals to shore'' encompasses fixed 
facilities that operate as ``Transmission Facilities.'' Production 
quantities shall be calculated as the sum of all sources of production 
from wells on the primary and any attending platform(s), including the 
throughput of other pipelines transferring product across the same 
platform(s).
    \19\ See 33 C.F.R.  148.5. Although deepwater ports are generally 
not regulated for security in accordance with MTSA, owners and 
operators generally carry out similar measures to those carried out for 
OCS facilities by, among other things, developing security plans 
comparable to those implemented by OCS facilities pursuant to part 106. 
See 33 C.F.R.  150.15(x).
    \20\ According to the Coast Guard, one of the Gulf of Mexico 
deepwater ports is expected to be decommissioned in the near future.
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 progress made addressing our recommendations, but additional actions 
                   could help improve tanker security
    In 2007, we assessed Coast Guard and FBI efforts to ensure the 
security of energy tankers and respond to terrorist incidents involving 
energy tankers.\21\ We found that actions were being taken, 
internationally and domestically, to protect tankers and port 
facilities at which tankers would be present. For example, the Coast 
Guard visits foreign exporting ports to assess the effectiveness of the 
anti-terrorism measures in place. Additionally, port stakeholders in 
the United States have taken steps to address vulnerabilities at 
domestic ports. For example, the Houston Ship Channel Security District 
is a public-private partnership that was established to increase 
preparedness and response capabilities with the goal of improving 
security and safety for facilities, employees, and communities 
surrounding the Houston Ship Channel. The security district has 
installed technology, such as night vision and motion-activated 
detection equipment, and conducts patrols on land and in the water. 
However, we also reported on challenges that remained in: (1) Making 
Federal agencies' protective actions more effective, and (2) 
implementing plans for a response to an attack, if a terrorist attack 
were to succeed despite the protective measures in place.
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    \21\ GAO-08-141.
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    We made five recommendations in our 2007 report, three of which 
were directed to the Secretary of Homeland Security and two of which 
were directed jointly to the Secretary of Homeland Security and the 
Attorney General. The departments concurred or partially concurred with 
all of the recommendations. The Coast Guard and the FBI have made 
progress in implementing these recommendations--two have been 
implemented, and the Coast Guard is in the process of implementing a 
third--but actions have not yet been taken to address the remaining two 
recommendations. See table 2 for a summary of our findings, 
recommendations, and the current status of agency efforts to implement 
our recommendations.

 TABLE 2.--STATUS OF GAO RECOMMENDATIONS ON TANKER SECURITY FROM GAO-08-
                                   141
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               Findings                    Recommendation and Status
------------------------------------------------------------------------
Resource allocation.--Based on Coast   Recommendation.--We recommended
 Guard records, we found that Coast     that the Coast Guard develop a
 Guard field units in several energy-   National resource allocation
 related ports had been unable to       plan that would balance the need
 accomplish many of the port security   to meet new LNG security
 responsibilities called for in Coast   responsibilities with existing
 Guard guidance. According to the       security responsibilities and
 data we obtained and our discussions   other Coast Guard missions.
 with field unit officials, we         Status.--In progress. The Coast
 determined that resource shortfalls    Guard has begun work on a
 were the primary reasons for not       National strategy for reducing
 meeting these responsibilities.        the maritime security risks
 Furthermore, the Coast Guard had not   present in the bulk
 yet developed a plan for addressing    transportation and transfer of
 new liquefied natural gas (LNG)        certain dangerous cargoes,
 security resource demands.             including LNG. Coast Guard
                                        officials expect to finalize the
                                        strategy in April 2012 at which
                                        point they expect to develop a
                                        resource allocation plan to
                                        implement the strategy. In the
                                        interim, the Coast Guard has
                                        published guidance to clarify
                                        the timing and scope of the
                                        process that is necessary to
                                        ensure full consideration is
                                        given to safety and security of
                                        the port, the facility, and the
                                        vessels transporting LNG.
Guidance for helping to mitigate       Recommendation.--We recommended
 economic consequences.--We reported    that the Coast Guard develop
 that the economic consequences of a    guidance that ports could use to
 terrorist attack on a tanker could     plan for helping to mitigate
 be significant, particularly if one    economic consequences,
 or more ports are closed. We           particularly in the case of port
 identified some ports that, on their   closures.
 own initiative, were incorporating    Status.--Implemented. The Coast
 economic recovery considerations       Guard and U.S. Customs and
 into their port-level plans, but at    Border Protection (CBP) have
 the time of our review in 2007,        developed Joint Protocols for
 there was no National-level guidance   the Expeditious Recovery of
 for use by local ports.                Trade. These protocols establish
                                        a communications process and
                                        describe how the Coast Guard and
                                        CBP will coordinate with other
                                        Federal agencies and the
                                        maritime industry to facilitate
                                        recovery and resumption of trade
                                        following an event that causes a
                                        major disruption to the maritime
                                        transportation system.
Integration of spill and terrorism     Recommendation.--We recommended
 response at the National level.--We    that the Coast Guard and the FBI
 found that while National- and port-   coordinate at the National level
 level plans exist to address spill     to help ensure that a detailed
 response or terrorism response,        operational plan be developed
 Federal agencies and ports could       that integrates the different
 face challenges in using them          spill and terrorism sections of
 effectively. We reported that the      the National Response Plan.
 separate spill and terrorism          Status.--Not implemented. The
 response plans should be integrated    different spill and terrorism
 for responding to an attack on an      response sections of the
 energy commodities tanker.             National Response Plan remain
                                        separate annexes in the renamed
                                        National Response Framework.
                                        According to the Coast Guard,
                                        the National Response Framework
                                        is currently under revision, but
                                        no decision has been made
                                        regarding the spill and
                                        terrorism response annexes.
                                        Pending that decision, the FBI
                                        has not taken any action to
                                        implement this recommendation.
Integration of spill and terrorism     Recommendation.--We recommended
 response at the local level.--In       that the Coast Guard and FBI
 addition to the need for operational   coordinate at the local level to
 plans as noted above, we reported      help ensure that spill and
 that agencies should conduct joint     terrorism response activities
 exercises that simulate an attack      are integrated for the best
 and the agencies' responses. Without   possible response by maximizing
 such exercises, it would be            the integration of spill and
 questionable whether joint Coast       terrorism response planning and
 Guard and FBI activities would         exercises at ports that receive
 proceed as planned.                    energy commodities where attacks
                                        on tankers pose a significant
                                        threat.
                                       Status.--Implemented. In April
                                        2008, the Coast Guard updated
                                        guidance which states that the
                                        ability to simultaneously
                                        execute multiple plans,
                                        including Federal, State, and
                                        local response and recovery
                                        plans, should be part of an
                                        overall exercise and
                                        preparedness program. In
                                        accordance with this guidance,
                                        the Coast Guard, along with the
                                        FBI and other stakeholders, has
                                        conducted exercises that address
                                        an integrated spill and
                                        terrorism response.
Performance measures for emergency     Recommendation.--We recommended
 response.--We found that some ports    that the Secretary of Homeland
 had reported difficulty in securing    Security work with Federal,
 response resources to carry out        State, and local stakeholders to
 planned actions and decisions about    develop explicit performance
 the need for more response             measures for emergency response
 capabilities were hindered by a lack   capabilities and use them in
 of performance measures tying          risk-based analyses to set
 resource needs to effectiveness in     priorities for acquiring needed
 response.                              response resources.
                                       Status.--Not implemented.--DHS
                                        has not yet developed explicit
                                        performance measures for
                                        emergency response capabilities.
                                        According to DHS, it is revising
                                        its grant programs, but
                                        performance measures have not
                                        yet been developed as part of
                                        this effort.
------------------------------------------------------------------------
Source: GAO.

    Regarding our recommendation that the Coast Guard and the FBI 
coordinate to help ensure that a detailed operational plan be developed 
that integrates the different spill and terrorism sections of the 
National Response Framework, DHS is in the process of revising this 
document and did not have further information regarding whether or how 
the spill and terrorism response annexes may be revised. Further, the 
FBI has not taken independent action to implement this recommendation, 
in part because it did not concur with the need to develop a separate 
operational plan. In the event of a successful attack on an energy 
tanker, ports would need to provide an effective, integrated response 
to: (1) Protect public safety and the environment, (2) conduct an 
investigation, and (3) restore shipping operations in a timely manner. 
Consequently, clearly defined and understood roles and responsibilities 
for all essential stakeholders are needed to ensure an effective 
response, and operational plans for the response should be explicitly 
linked. Regarding our recommendation that DHS develop performance 
measures for emergency response capabilities, DHS has begun to revise 
its grant programs, but it is too early in that process to determine 
whether and how performance measures will be incorporated into those 
revisions. Performance measures would allow DHS to set priorities for 
funding on the basis of reducing overall risk, thereby helping ports 
obtain resources necessary to respond. We continue to believe that the 
recommendations not yet addressed have merit and should be fully 
implemented.
        coast guard had not assessed risks to all ocs facilities
    In accordance with Federal statutes and Presidential directives, 
the Coast Guard assesses security risks as part of its responsibilities 
for ensuring the security of OCS facilities and deepwater ports. In 
doing so, the Coast Guard, among other things, uses a tool called the 
Maritime Security Risk Analysis Model (MSRAM). Coast Guard units 
throughout the country use this tool to assess security risks to about 
28,000 key infrastructure in and around the Nation's ports and 
waterways. For example, MSRAM examines security risks to National 
monuments, bridges, and oil and gas terminals.
    The Coast Guard's efforts to assess security risks to OCS 
facilities and deepwater ports are part of a broader effort by DHS to 
protect critical infrastructure and key resources.\22\ To further guide 
this effort, in 2009 DHS issued an updated version of the 2006 National 
Infrastructure Protection Plan which describes the Department's 
strategic approach to infrastructure protection.\23\ The plan placed an 
increased emphasis on risk management and it centered attention on 
going beyond assessments of individual assets by extending the scope of 
risk assessments to systems or networks.\24\ For example, while the 
2006 plan focused on assessing the vulnerability of facilities, the 
2009 plan discussed efforts to conduct systemwide vulnerability 
assessments.
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    \22\ The Homeland Security Act of 2002, enacted the same day as 
MTSA (November 25, 2002), established DHS and gave the Department wide-
ranging responsibilities for, among other things, leading and 
coordinating the overall National critical infrastructure protection 
effort. Title II of the Homeland Security Act, as amended, primarily 
addresses the Department's responsibilities for critical infrastructure 
protection. According to DHS, there are thousands of facilities in the 
United States that if degraded or destroyed by a manmade or natural 
disaster could cause some combination of significant casualties, major 
economic losses, or widespread and long-term disruptions to National 
well-being and governance capacity.
    \23\ DHS, National Infrastructure Protection Plan, Partnering to 
Enhance Protection and Resiliency (Washington, DC: January 2009). This 
plan represents a strategy for protecting critical infrastructure and 
key resources and it offers a framework for assessing risk. DHS issued 
the original plan in June 2006.
    \24\ Network effects involve the ripple effect of an incident or 
simultaneous incidents on key sectors of the economy. For example, 
production facilities, pipelines, transfer stations, and refineries are 
part of the oil and natural gas network in and around the Gulf of New 
Mexico. Assessing network effects could involve determining whether a 
terrorist attack on a few key assets would have a disproportionate 
effect on the performance of this network. Such an assessment could 
examine the degree to which such an incident could disrupt the flow of 
oil or natural gas to industries that use these types of energy as 
inputs to their production functions.
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Progress Made Assessing Offshore Security Risks
    The Coast Guard has taken a number of actions in assessing security 
risks to OCS facilities and deepwater ports. The Coast Guard has used 
MSRAM to, among other things, examine security risks to OCS facilities 
and deepwater ports by assessing three main factors--threats, 
vulnerabilities, and consequences.\25\ First, Coast Guard analysts use 
MSRAM to assess security risks against such energy infrastructure by 
examining potential scenarios terrorists may use to attack OCS 
facilities or deepwater ports. For example, MSRAM assesses attack 
scenarios, such as an attack by a hijacked vessel, a small boat attack, 
sabotage, or an attack by a swimmer or diver. Second, the analysts use 
MSRAM to evaluate vulnerabilities of OCS facilities and deepwater ports 
by examining the probability of a successful attack by assessing 
factors such as the ability of key stakeholders, including the owner, 
operator, or law enforcement, to interdict an attack and the ability of 
a target to withstand an attack. Third, the analysts use MSRAM to 
evaluate potential consequences of an attack, such as deaths or 
injuries and economic and environmental impacts.\26\ MSRAM's output 
produces a risk index number for each maritime target--such as an OCS 
facility or deepwater port--that allows Coast Guard officials at the 
local, regional, and National levels to compare and rank critical 
infrastructure for the purpose of informing security decisions. 
According to Coast Guard officials, based on MSRAM's output, which is a 
relative risk ranking, OCS facilities are not considered to be high-
risk targets.
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    \25\ DHS defines threat as a natural or manmade occurrence, 
individual, entity, or action that has or indicates the potential to 
harm life, information, operations, the environment, and/or property. 
For the purpose of calculating risk, the threat of an intentional 
hazard is generally estimated as the likelihood of an attack being 
attempted by an adversary; for other hazards, threat is generally 
estimated as the likelihood that a hazard will manifest itself. In the 
case of terrorist attacks, the threat likelihood is estimated based on 
the intent and capability of the adversary. DHS defines vulnerability 
as a physical feature or operational attribute that renders an entity 
open to exploitation or susceptible to a given hazard. In calculating 
the risk of an intentional hazard, a measure of vulnerability is the 
likelihood that an attack is successful, given that it is attempted. 
DHS defines consequence as the effect of an event, incident, or 
occurrence; reflects the level, duration, and nature of the loss 
resulting from the incident. For the purposes of the National 
Infrastructure Protection Plan, consequences are divided into four main 
categories: Public health and safety (i.e., loss of life and illness); 
economic (direct and indirect); psychological; and governance/mission 
impacts.
    \26\ MSRAM assesses consequences of six factors: (1) Deaths and 
injuries, (2) primary economic impact, (3) environmental impact, (4) 
National security impacts, (5) symbolic impacts, and (6) secondary 
economic impacts.
---------------------------------------------------------------------------
    To inform analysts' inputs into MSRAM, the Coast Guard has 
coordinated efforts with the intelligence community and key 
stakeholders. For example, the Coast Guard's Intelligence Coordination 
Center inputs threat assessment data into MSRAM. Coast Guard analysts 
also use information from other stakeholders, such as reports produced 
by the Department of the Interior's Bureau of Ocean Energy Management, 
Regulation, and Enforcement (BOEMRE), which contain oil and gas 
production data, to inform their evaluations of vulnerabilities and 
consequences. Based on the assessments of threats, vulnerabilities, and 
consequences, MSRAM produces a risk index number for each OCS facility 
and deepwater port. The Coast Guard has also taken actions to 
supplement MSRAM by, among other things: (1) Including new data fields 
on the frequency with which tankers visit a port and (2) adding 
additional threat scenarios, such as a threat involving a cyber attack, 
to its data set.
    While MSRAM has been applied to deepwater ports, Coast Guard 
officials have also used an independent risk assessment to assess 
security risks as part of the application process for recently 
constructed deepwater ports. For example, in December 2006, as part of 
the application process for a proposed deepwater port in the 
Massachusetts Bay, the Coast Guard, the owner and operator, and other 
stakeholders collectively identified and assessed threat scenarios as 
well as the potential consequences and vulnerabilities of each 
scenario. Based on this assessment, stakeholders identified and agreed 
to carry out security measures to mitigate the risks, such as 
installing camera systems and increasing radar coverage.
Challenges in Data and Scope Hinder Risk Assessments
    The Coast Guard faces complex and technical challenges in assessing 
security risks. The Coast Guard recognizes these challenges and 
generally has actions underway to study or address them. Coast Guard 
officials noted that some of these challenges are not unique to the 
Coast Guard's risk assessment model and that these challenges are faced 
by others in the homeland security community involved in conducting 
risk assessments. Specific challenges are detailed below.
            Challenges in Data
   Vulnerability-related data.--The Coast Guard does not have 
        data on the ability of an OCS facility to withstand an attack, 
        which is defined in MSRAM as target hardness. The Coast Guard 
        recognizes that target hardness is an important consideration 
        in assessing the vulnerability of OCS facilities. However, 
        MSRAM analysts described challenges in assessing target 
        hardness because empirical data are not available or research 
        has not been conducted to do so. For example, research on 
        whether a hijacked boat or an underwater attack could sink an 
        offshore oil or natural gas platform would give the Coast Guard 
        and owners and operators a clearer sense of whether this attack 
        scenario could result in major consequences. Coast Guard 
        officials and corporate security officers with whom we spoke 
        indicated that such research would advance knowledge about the 
        vulnerabilities of OCS facilities and deepwater ports. Gaining 
        a better understanding of target hardness of these and other 
        threat scenarios could improve the quality of the output from 
        MSRAM. According to Coast Guard's MSRAM Program Manager, the 
        Coast Guard may recommend conducting more research on the 
        vulnerability to and consequences of attack scenarios as a 
        result of a study it is currently conducting on OCS facilities 
        in the Gulf of Mexico. The Coast Guard initiated this study in 
        the fall of 2010 after the Deepwater Horizon incident. The 
        study initially reviewed the ``lessons learned'' from Deepwater 
        Horizon and how those lessons could be used to improve MSRAM. 
        During the course of our review, Coast Guard officials stated 
        that the scope of the study has been expanded to include OCS 
        facilities and that the Coast Guard expects to issue its report 
        in the fall of 2011.
   Consequences-related data.--The input for secondary economic 
        impacts \27\ can have a substantial effect on how MSRAM's 
        output ranks a facility relative to other potential targets. 
        Undervaluing secondary economic impacts could result in a lower 
        relative risk ranking that underestimates the security risk to 
        a facility, or inversely, overvaluing secondary economic 
        impacts could result in overestimating the security risk to a 
        facility. However, the Coast Guard has limited data for 
        assessing secondary economic impacts from an attack on OCS 
        facilities or deepwater ports. Coast Guard analysts stated that 
        gathering these data is a challenge because there are few 
        models or guidance available for doing so. During the course of 
        our review, the Coast Guard started using a tool, called 
        ``IMPLAN,'' that helps inform judgments of secondary economic 
        impacts by showing what the impact could be for different 
        terrorist scenarios.\28\ The tool, however, has limits in that 
        it should not be used where the consequences of a terrorist 
        attack are mainly interruption to land or water transportation. 
        Enhancing DHS's and the Coast Guard's ability to assess 
        secondary economic impacts could improve a MSRAM analyst's 
        accuracy in assessing the relative risk of a particular target. 
        Coast Guard officials added that they are working with DHS's 
        Office of Risk Management and Analysis in studying ways to 
        improve how it assesses secondary economic impacts.
---------------------------------------------------------------------------
    \27\ According to the Coast Guard, secondary economic impacts are a 
factor representing a description of follow-on economic effects of a 
successful attack.
    \28\ IMPLAN stands for IMpact Analysis for PLANning. It is a tool 
that assesses economic relationships between primary economic impacts 
and secondary economic impacts.
---------------------------------------------------------------------------
            Challenges in Scope
   Challenges in assessing security risks to OCS facilities.--
        We determined that the Coast Guard did not conduct MSRAM 
        assessments for all 50 of the OCS facilities that are subject 
        to Federal security requirements in 2011. Coast Guard guidance 
        calls for MSRAM analysts to identify and assess all significant 
        targets that fall within a unit's area of responsibility, which 
        includes all security-regulated OCS facilities. Specifically, 
        as of May 2011, we found that MSRAM did not include 12 of the 
        50 OCS facilities operating at that time. Coast Guard officials 
        generally agreed with our finding and they have since 
        incorporated these 12 facilities into MSRAM and completed the 
        required risk assessments. While the Coast Guard plans to 
        update its policies and procedures for inspecting and ensuring 
        the security of OCS facilities in the future, the current set 
        of policies and procedures do not call for an updated list of 
        OCS facilities to be provided to MSRAM analysts to assess the 
        security risks to such facilities annually. Coast Guard 
        officials acknowledged that their policies and procedures did 
        not include this requirement. Revising policies and procedures 
        to include such a requirement is important in that the number 
        of OCS facilities could change each year. For example, some 
        facilities may drop below the production or personnel 
        thresholds described earlier in this statement, thereby falling 
        outside the scope of 33 C.F.R. part 106, or other facilities 
        could meet or exceed such thresholds, thereby rendering them 
        subject to part 106. Standards for Internal Control in the 
        Federal Government state that policies and procedures enforce 
        management directives and help ensure that actions are taken to 
        address risks.\29\ In addition, internal control standards 
        state that such control activities are an integral part of an 
        entity's planning, implementing, reviewing, and accountability 
        for stewardship of Government resources and for achieving 
        effective results. Developing such procedures could help ensure 
        that the Coast Guard carries out its risk assessment 
        requirements for such security-regulated OCS facilities.
---------------------------------------------------------------------------
    \29\ GAO/AIMD-00-21.3.1.
---------------------------------------------------------------------------
   Challenges in assessing security risks to offshore energy 
        infrastructure that is not subject to security requirements.--
        With respect to OCS facilities, analysts only use MSRAM to 
        assess security risks associated with those OCS facilities that 
        are regulated for security under 33 C.F.R. part 106. For 
        example, the Deepwater Horizon did not meet the threshold 
        criteria subjecting it to regulation under part 106, and 
        therefore, MSRAM was not used to assess its security risks (see 
        figure 2 for a photo of the Deepwater Horizon explosion). 
        According to Coast Guard officials, mobile offshore drilling 
        units (MODUs), such as the Deepwater Horizon, do not generally 
        pose a risk of a terrorist attack since there is little chance 
        of an oil spill when these units are drilling and have not 
        struck oil.\30\ However, the officials noted that there is a 
        brief period of time when a drilling unit strikes a well, but 
        the well has yet to be sealed prior to connecting it to a 
        production facility. The Deepwater Horizon was in this stage 
        when it resulted in such a large oil spill. During that period 
        of time, MODUs could be at risk of a terrorist attack that 
        could have significant consequences despite a facility not 
        meeting the production or personnel thresholds. For example, 
        such risks could involve the reliability of blowout preventer 
        valves--specialized valves that prevent a well from spewing oil 
        in the case of a blowout. Gaining a fuller understanding of the 
        security risks associated with MODUs, such as the Deepwater 
        Horizon, could improve the quality of program decisions made by 
        Coast Guard managers on whether actions may be needed to ensure 
        the security of this type of facility. According to Coast Guard 
        officials, they are studying the ``lessons learned'' from the 
        Deepwater Horizon incident and part of the study involves 
        examining whether analysts should use MSRAM to assess MODUs in 
        the future.
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    \30\ MODUs engage in drilling rather than production. 


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
   Challenges in assessing systemic or network risks.--MSRAM 
        does not assess systemic or network risks because, according to 
        Coast Guard officials, these types of assessments are beyond 
        the intended use of MSRAM. The 2009 National Infrastructure 
        Protection Plan, 2010 DHS Quadrennial Review,\31\ and a 
        National Research Council evaluation of DHS risk assessment 
        efforts \32\ have determined that gaining a better 
        understanding of network risks would help to understand 
        multiplying consequences of a terrorist attack or simultaneous 
        attacks on key facilities. Understanding ``network'' risks 
        involves gaining a greater understanding of how a network is 
        vulnerable to a diverse range of threats. Examining how such 
        vulnerabilities create strategic opportunities for intelligent 
        adversaries with malevolent intent is central to this 
        understanding. For example, knowing what damage a malicious 
        adversary could achieve by exploiting weaknesses in an oil-
        distribution network offers opportunities for improving the 
        resiliency of the network within a given budget.\33\
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    \31\ U.S. Department of Homeland Security: Quadrennial Homeland 
Security Review Report: A Strategic Framework for a Secure Homeland 
(Washington, DC: February 2010).
    \32\ National Research Council: Review of the Department of 
Homeland Security's Approach to Risk Analysis (Washington, DC: 2010).
    \33\ See Gerald G. Brown, W. Matthew Carlyle, Javier Salmeron, and 
Kevin Wood, Operations Research Department, Naval Postgraduate School: 
Analyzing the Vulnerability of Critical Infrastructure to Attack and 
Planning Defenses (Monterrey, California: 2005). According to DHS, 
resiliency is the ability to resist, absorb, recover from, or 
successfully adapt to adversity or a change in conditions.
---------------------------------------------------------------------------
    How the Coast Guard assesses offshore infrastructure within the 
broader set of networks is important. The findings of the National 
Commission on the BP Deepwater Horizon Oil Spill incident illustrate 
how examining networks or systems from a safety or engineering 
perspective can bring greater knowledge of how single facilities 
intersect with broader systems.\34\ The report noted that ``complex 
systems almost always fail in complex ways'' and cautioned that 
attempting to identify a single cause for the Deepwater Horizon 
incident would provide a dangerously incomplete picture of what 
happened. As a result, the report examined the Deepwater Horizon 
incident with an expansive view toward the role that industry and 
Government sectors played in assessing vulnerabilities and the impact 
the incident had on economic, social, and environmental systems. 
Enhancing knowledge about the vulnerabilities of networks or systems 
with which OCS facilities and deepwater ports intersect could improve 
the quality of information that informs program and budget decisions on 
how to best ensure security and use scarce resources in a constrained 
fiscal environment. Doing so would also be consistent with DHS's 
Quadrennial Review and other DHS guidance and would provide information 
to decision makers that could minimize the likelihood of being 
unprepared for a potential attack. Coast Guard officials agreed that 
assessing ``network effects'' is a challenge and they are examining 
ways to meet this challenge. However, the Coast Guard's work is this 
area is in its infancy and there is uncertainty regarding the way in 
which the Coast Guard will move forward in measuring ``network 
effects.''
---------------------------------------------------------------------------
    \34\ National Commission on the BP Deepwater Horizon Oil Spill and 
Offshore Drilling, Deep Water: The Gulf Oil Disaster and the Future of 
Offshore Drilling (Washington, DC: January 2011).
---------------------------------------------------------------------------
                              conclusions
    The threat of terrorism against energy tankers and offshore energy 
infrastructure highlights the importance of the Coast Guard having 
policies and procedures in place to better ensure the security of 
energy tankers, OCS facilities, and deepwater ports. The Coast Guard 
has taken steps to implement prior GAO recommendations to enhance 
energy tanker security, and it continues to work towards implementing 
the three outstanding recommendations. Improvements in security could 
help to prevent a terrorist attack against this infrastructure, which 
could have significant consequences, such as those resulting from the 
Deepwater Horizon incident. While the Coast Guard does not consider OCS 
facilities that it has assessed in MSRAM to be high-risk, it is 
important to assess all OCS facilities as required by Coast Guard 
guidance. Since May 2011, when we determined that some OCS facilities 
were not assessed, the Coast Guard has completed its assessments for 
the previously omitted facilities. However, given that the list of 
security-regulated facilities may change each year based on factors 
such as production volume, it is important to ensure that any 
facilities added to the list in the future will be assessed for 
security risks in MSRAM. By revising policies and procedures to help 
ensure that an updated list of OCS facilities is provided to MSRAM 
analysts on an annual basis, the Coast Guard would be better positioned 
to ensure that all risk assessments for facilities requiring such 
assessments be conducted in a manner consistent with the law and 
Presidential directive.
                  recommendations for executive action
    To strengthen the Coast Guard's efforts to assess security risks 
and ensure the security of OCS facilities, we recommend that the 
Commandant of the Coast Guard revise policies and procedures to ensure 
that MSRAM analysts receive the annual updated list of security-
regulated OCS facilities to ensure that risk assessments have been 
conducted on all such OCS facilities.
                   agency comments and our evaluation
    We provided a draft of this testimony to DHS and DOJ for comment. 
The Coast Guard concurred with our recommendation to revise policies 
and procedures to ensure that MSRAM analysts receive the annual updated 
list of security-regulated OCS facilities. DHS and DOJ provided oral 
and technical comments, which we incorporated as appropriate.
    Chairman McCaul, Ranking Member Keating, and Members of the 
subcommittee, this concludes my prepared statement. This testimony 
concludes our work on Coast Guard efforts to assess security risks for 
offshore energy infrastructure. However, we will continue our broader 
work looking at the security of offshore energy infrastructure, 
including Coast Guard security inspections and other challenges. Our 
evaluation will focus on Coast Guard security inspections and other 
measures to better secure OCS facilities and deepwater ports.\35\ We 
will continue to work with the Coast Guard to develop solutions to 
ensure that inspections of OCS facilities are completed as required.
---------------------------------------------------------------------------
    \35\ We are conducting this work for the Chairman of the Senate 
Committee on Commerce, Science, and Transportation; the Ranking Member 
of the Senate Committee of Homeland Security and Governmental Affairs; 
the House Committee on Energy and Commerce; the Chairman of the House 
Committee on Transportation and Infrastructure; the Ranking Member of 
the House Committee on Homeland Security; and the Ranking Member of the 
House Committee on Natural Resources; and the Chairman of the House 
Homeland Security Committee's Subcommittee on Oversight, 
Investigations, and Management.
---------------------------------------------------------------------------
    I would be happy to respond to any questions you may have.

    Mr. McCaul. Thank you, Mr. Caldwell.
    The Chairman now recognizes Captain Whitehead for his 
testimony.

STATEMENT OF CAPTAIN JAMES H. WHITEHEAD III, SECTOR COMMANDER, 
           SECTOR HOUSTON-GALVESTON, U.S. COAST GUARD

    Captain Whitehead. Good morning, Mr. Chairman, Congressman 
Green, Congressman Keating. Thank you for the opportunity to 
appear before you and discuss port security in the Houston-
Galveston area.
    Mr. Chairman, you mentioned many of the titles so I will 
skip all those that I hold. But I would like you to know that 
the Sector focuses on three fundamental roles, and it is 
maritime safety, security, and stewardship. As the Commandant, 
Admiral Robert Papp, has stated, ``We protect those on the sea; 
we protect America from threats delivered by sea; and we 
protect the sea itself.''
    These primary roles are accomplished in cooperation with 
our maritime partners through three committees in this area: 
Houston-Galveston Navigation Safety Advisory Committee, Area 
Maritime Security Committee, and the Central Texas Coastal Area 
Committee. These committees represent robust, active 
collaborations of a wide range of Federal, State, local 
stakeholders from law enforcement, industry, port authorities, 
shippers, agents, and educational institutions, and others. 
Members from all three meet, train, exercise together regularly 
to develop and refine plans, address issues of concern, 
disseminate information, and share ideas and best practices in 
pursuit of continuous improvement in all three fundamental 
roles. The largest of the three is the Area Maritime Security 
Committee chartered in 2004, now comprising over 400 members 
at-large.
    In Houston, we routinely conduct integrated operations with 
our city, county, State, and Federal law enforcement partners. 
The joint agency, Houston Area Maritime Operations Center, is a 
prime example of the type of coordination directed in the 
Maritime Operations Coordination Plan recently signed by the 
U.S. Coast Guard, U.S. Customs and Border Protection, and U.S. 
Immigration and Customs Enforcement. These operations typically 
involve the Harris County's Sheriff Office and local police 
department marine divisions as well as CBP, ICE, FBI, Bureau of 
Alcohol, Tobacco, Firearms, and Explosives and other partners.
    We also rely heavily on our port partners to be our ``eyes 
on the water.'' With an average of 350 tow and 700 deep draft 
ship movements daily in the Houston Ship Channel in over 100 
waterfront facilities with a vigilant security presence, we 
have a valuable resource of maritime industry stakeholders who 
are best positioned to recognize when things are out of the 
ordinary and who diligently report on breaches of security and 
suspicious activity.
    We also receive reports on fraudulent use of the 
Transportation Worker Identification Card and work closely with 
our local law enforcement and legal agencies, such as the 
Harris County District Attorney, to ensure these cases are 
prosecuted.
    The Ship Channel Security District, as has been mentioned, 
represents a unique private-public partnership formed to 
improve security and safety for facilities, employees, and 
communities surrounding the Houston Ship Channel. The Coast 
Guard played an important role in the formation of the district 
and continues to work closely with them to ensure alignment of 
our priorities and unity of effort. As Sector commander, I am a 
member of the Security District Advisory Council and regularly 
sit on that.
    The Sector also makes excellent use of our robust vessel 
traffic service. The VTS' primary role is facilitating the safe 
transit of vessels in the waterways and ports along the Houston 
Ship Channel. The VTS' cameras, automatic identification system 
feeds, remote radar observation capability, and radio 
communications also provide an additional layer of security. In 
addition to the VTS resources in the Houston Ship Channel 
Sector, Houston-Galveston has access to feeds from three AIS 
receivers mounted on offshore oil platforms which provide 
heightened awareness of activities in the maritime domain.
    Mr. Chairman, threats and vulnerabilities will always 
exist, but through the active involvement of hundreds of 
partners who are directly involved with or impacted by the 
maritime industry in the Houston-Galveston area, this Sector is 
committed to deterring incidents before they happen, well-
prepared to respond to them should they occur, and has a 
resiliency to rebound quickly in the aftermath.
    Thank you for the opportunity to testify before you today. 
I am happy to answer any questions you may have.
    Mr. McCaul. Thank you, Captain.
    [The statement of Captain Whitehead follows:]
          Prepared Statement of Captain James H. Whitehead III
                            August 24, 2011
    Good afternoon, Mr. Chairman and distinguished guests, I want to 
thank you for the opportunity to appear before you today to discuss 
port security in the Houston-Galveston area.
    As the Sector Commander and Captain of the Port in Houston-
Galveston, I serve as the region's Federal Maritime Security 
Coordinator, the Federal On-Scene Coordinator, and the Officer-in-
Charge Marine Inspection. The Sector focuses on two major operational 
processes--PREVENTION and RESPONSE--in support of three fundamental 
roles: Maritime Safety; Maritime Security; and Maritime Stewardship. As 
the Commandant, ADM Robert Papp, has stated, ``We protect those on the 
sea; we protect America from threats delivered by sea; and we protect 
the sea itself.''
    We accomplish these fundamental roles by cooperating with our 
maritime partners through three committees: The Houston-Galveston 
Navigation Safety Advisory Committee; the Area Maritime Security 
Committee; and the Central Texas Coastal Area Committee.
    These committees represent robust, active collaboration between a 
wide range of Federal, State, and local stakeholders from law 
enforcement, industry, port authorities, shippers, agents, and 
educational institutions, among others. Members from all three 
committees meet, train, and exercise together regularly to develop and 
refine plans, address issues of concern, disseminate information, and 
share ideas and best practices. The largest of the three committees is 
the Area Maritime Security Committee which was chartered in 2004 and 
now includes over 400 members-at-large. The committee has active 
working groups in the areas of facility security, intelligence, law 
enforcement, grants, public affairs/outreach, and joint training and 
exercises. The work is continuous, and progress in the various areas is 
reported to the membership during quarterly meetings.
    In Houston, we routinely conduct integrated operations with our 
city, county, State, and Federal Law Enforcement partners. The joint 
agency Houston Area Maritime Operations Center is a prime example of 
the type of coordination directed in the Maritime Operations 
Coordination Plan recently signed by the U.S. Coast Guard, U.S. Customs 
and Border Protection (CBP) and U.S. Immigration and Customs 
Enforcement (ICE). These operations typically involve the Harris County 
Sheriff's Office and local city Police Department marine divisions as 
well as CBP, ICE, Federal Bureau of Investigation, Bureau of Alcohol, 
Tobacco, Firearms, and Explosives and other Federal partners.
    This concept will continue to grow and expand across the entire 
Sector in the coming months, as our implementation plan takes effect. 
Efforts are also underway with our neighboring Sectors to align and 
streamline our operations across all jurisdictional boundaries.
    We also rely heavily on our port partners to be the ``eyes on the 
water.'' With an average of 350 daily tow movements in the Houston Ship 
Channel and more than 100 waterfront facilities with a vigilant 
security presence, marine industry stakeholders are well-positioned to 
recognize when things are out of the ordinary and serve as a valuable 
resource by diligently reporting breaches of security and suspicious 
activity. We also receive reports on fraudulent use of the 
Transportation Worker Identification Card, and work closely with our 
local enforcement and legal agencies such as the Harris County District 
Attorney to ensure these cases are prosecuted.
    In terms of maritime traffic and cargo, the Port of Houston ranks 
first in the United States for number of ship arrivals and second in 
total cargo tonnage. Houston handles over 50 percent of all 
containerized cargo arriving at Gulf of Mexico ports. Additionally, 
more than 50 percent of the gasoline used in the United States is 
refined in this area. With more than 100 petrochemical waterfront 
facilities, Houston is the second-largest such complex in the world. 
Major corporations such as Exxon-Mobil, Shell, Saudi ARAMCO, Stolt 
Nielson, Odfjell USA Inc., Sea River and Kirby Marine have National or 
international headquarters in Houston.
    In recognition of the significance of Houston's shipping activity, 
the State of Texas formally established the Houston Ship Channel 
Security District (HSCSD) in 2010. The HSCSD represents a unique 
public-private partnership formed to improve security and safety for 
facilities, employees, and communities surrounding the Houston Ship 
Channel. The Coast Guard played an instrumental role in the formation 
of the HSCSD, and continues to work closely with the HSCSD to ensure 
alignment of priorities and unity of effort. As Sector Commander, I am 
a member of the HSCSD Advisory Council and Sector Port Security 
specialists attend HSCSD board meetings. The district provides 
oversight of comprehensive and cost-effective security solutions, 
leveraging more than $30 million in Federal Port Security grants along 
with $4 million in annual member assessments to install technology and 
security infrastructure and provide funds for specific security 
projects, maintenance, and operational services.
    The Port of Houston accommodates a large number of tankers carrying 
crude oil, refined products and chemical cargoes. With approximately 
9,600 deep draft ship arrivals each year, the Coast Guard maintains a 
very extensive Port State Control program in the Houston-Galveston 
area. The Port State Control program ensures the safe carriage of 
hazardous materials in bulk. Because over 90 percent of cargo bound for 
the United States is carried by foreign-flagged ships, this National 
program prevents operation of substandard foreign ships in U.S. waters.
    The Sector also makes excellent use of its robust Vessel Traffic 
Service (VTS). The VTS's primary role is facilitating safe vessel 
transits in the waterways and ports along the Houston Ship Channel. The 
VTS cameras, Automatic Identification System (AIS) feeds, remote radar 
observation capability, and radio communications, also provide an 
additional layer of security. In addition to the VTS resources in the 
Houston Ship Channel, Sector Houston-Galveston has access to feeds from 
three AIS receivers mounted on off-shore oil platforms, which provide 
heightened awareness of activities in the maritime domain.
    Mr. Chairman, threats and vulnerabilities will always exist. But 
through the active involvement of hundreds of partners who are directly 
involved with or impacted by the maritime industry in the Houston-
Galveston area of responsibility, this Sector is committed to deterring 
incidents before they happen and is well-prepared to respond to them 
should they occur.
    In 1787, Alexander Hamilton, in Federalist Paper Number 12 laid the 
foundation for the modern Coast Guard when he noted that ``[a] few 
armed vessels, judiciously stationed at the entrances of our ports, 
might at a small expense, be made useful sentinels of our laws.'' We're 
proud of that legacy and our role in continued national strategy to 
keep our homeland secure. Thank you for the opportunity to testify 
before you today. I will be happy to answer any questions you may have.

    Mr. McCaul. The Chairman now recognizes Sheriff Garcia for 
his testimony.

    STATEMENT OF SHERIFF ADRIAN GARCIA, HARRIS COUNTY, TEXAS

    Sheriff Garcia. Thank you, distinguished Members of the 
subcommittee, and thank you, my friend Congressman McCaul. 
Thank you all for bringing much-needed attention to our good 
work here at the Port of Houston and the Houston Ship Channel. 
I would like to think that we are demonstrating to Washington 
how we can work in a bipartisan, nonpartisan way to make sure 
that all stays well and healthy for our communities.
    You have heard from others today already about how this 
port and this ship channel is growing and how it is serving 
this incredible community and how it is one of America's most 
important lifelines to the world. You have at your fingertips 
all the facts and figures about the essential raw materials and 
products that move along the Houston Ship Channel, enabling us 
to live our everyday lives in the modern world.
    As you have mentioned, Congressman McCaul, we have learned 
about Osama bin Laden, how he had some of the same information 
showing how important the ship channel is and the Port of 
Houston is. No doubt would-be terrorists in the United States 
and foreign countries know this, too. Next time they scheme to 
kill Americans and disrupt the energy supply of Planet Earth, 
they may think about targeting the very ground that we are on 
today.
    I am here as the person in charge of local law enforcement 
that has been chosen to coordinate the protection of the ship 
channel and all of its crucial assets. There is no mission more 
important to me than preventing a terrorist attack on Harris 
County. I assure you that our partners and I, Coast Guard, CBP, 
and others, are actively working to pursue this mission every 
day. We patrol the waterway in boats and in air with our fixed-
wing aircraft, and I have been working to add an airborne drone 
to our surveillance arsenal so we can exploit the latest 
advances in such technologies.
    We keep our electronic eyes trained on the ship channel 24/
7 with camera sensors, radar, and other technology. Data from 
these high technology devices is fed into a monitoring center 
that we operate on the other side of town 24/7. We help the 
Coast Guard escort high-value asset vessels. We join the Coast 
Guard and CBP in boarding ships and scanning ship hulls, and 
although several operations are highly sensitive, I can tell 
you that our patrols on land and water have responded to calls 
for service such as suspicious persons in vehicles, security 
zone breaches by personal water craft, sunken boats, downed 
power lines, industrial accidents, security card violations at 
plant gates, and others.
    In addition, we have helped industry sites evaluate their 
own security efforts and equipment to point out any 
vulnerabilities because prevention is job No. 1. We also have 
to prepare for disaster, man-made or not. We work hand-in-hand 
with Federal, State, and local authorities not only to share 
intelligence, but also to conduct emergency response exercises. 
I would like to recognize Major Michael Wong and Captain 
Cordova, Deputy Hidorga as some of the key folks in these 
efforts that handle these matters on a day-to-day basis.
    We are also in touch with pipeline companies, railroads, 
and emergency planners.
    In a very different kind of pioneering outreach, I have 
established what we call the Incidence Response Forum. We use 
it to engage the widespread Middle Eastern and South Asian 
communities in the Houston area. This is a two-way 
communication pathway for law enforcement to share information 
with key civic and religious leaders. The spirit in which we 
started this program several months ago was expressed very well 
in a Homeland Security memo issued by the Federal Government 
within the last 3 weeks. It is titled, ``Empowering Local 
Partners To Prevent Violent Extremism In The U.S.'' Here is a 
brief excerpt that refers to the attempts by terrorist groups 
to recruit American residents: ``Countering radicalization to 
violence is frequently best achieved by engaging and empowering 
individuals and groups at the local level to build resilience 
against violent extremism. Law enforcement plays an essential 
role in keeping us safe, but so too does engagement and 
partnership with communities.''
    But our Incident Response Forum has other uses. By sharing 
information with these constituents, we help protect them 
against misguided attacks that may stem from terrorist acts 
anywhere in the world. These leaders can also report hate 
crimes, help calm tensions that may arise in ethnic communities 
and provide feedback about the effectiveness of law enforcement 
by the Harris County Sheriff's Office. We are conducting crisis 
response exercises with this group.
    Overall, in Harris County, there is no deficit of will, 
dedication, cooperation, coordination, or maximization of 
resources when it comes to protecting the Houston Ship Channel, 
but we do need additional funding, as I have stated in my 
previous testimony in Washington, to hire the necessary 
personnel to fulfill all the responsibilities that we want. We 
would also like to encourage funding for the type of community 
engagements as I just mentioned regarding the Incident Response 
Forum.
    I just will close by saying this: Congressman, you 
mentioned that international polls indicate that folks in other 
parts of the world may not see America as strong. The Harris 
County Sheriff's Office is ready to work alongside our partners 
and you to prove to domestic and international terrorists that 
they are mistaken about America's strength and determination.
    Thank you.
    [The statement of Sheriff Garcia follows:]
                  Prepared Statement of Adrian Garcia
                            August 24, 2011
    Thank you, distinguished Members of the subcommittee, and thank you 
to my friend, the gentleman from Texas, Congressman McCaul, for 
inviting me to provide testimony about Harris County. I'm glad you 
represent part of our county. I'm glad you and I have been able to work 
together on several pressing issues involving the well-being and safety 
of our constituents. I'd like to think we're showing Washington how to 
work in harmony on a bi-partisan and non-partisan basis.
    You have heard from others today about how this growing, bustling, 
sprawling community is one of America's most important lifelines to the 
world. You have at your fingertips all the facts and figures about the 
essential raw materials and products that move along the Houston Ship 
Channel, enabling us to live our everyday lives in a modern world.
    We have learned that Osama bin Laden had some of the same 
information showing how important this lifeline is. No doubt, would-be 
terrorists in the United States and foreign countries know this, too. 
Next time they scheme to kill Americans and disrupt the energy supply 
of planet Earth, they may think about targeting the ground we are on 
today. Obviously, oil tankers, refineries, and petrochemical plants are 
potential targets because they have huge physical profiles, and most of 
them contain highly flammable substances.
    I'm here as the person in charge of the law enforcement agency that 
has been chosen to coordinate the protection of the Ship Channel and 
all of its crucial assets. This may surprise some of our local 
audience, because the Sheriff's Office is known more for running the 
Nation's third-largest jail and patrolling an unincorporated area with 
the same number of residents as the city of Philadelphia. But there is 
no mission more important to me than preventing a terrorist attack on 
Harris County.
    I assure you, we actively pursue this mission every day. We patrol 
the waterway in boats. Sometimes we patrol from the air with our fixed-
wing craft, and I have been looking into adding an airborne drone to 
our surveillance arsenal so we can exploit the latest advances in such 
technology. We keep our electronic eyes trained on the Ship Channel 
area 24/7 with cameras, sensors, radar, and other technology. Data from 
these high-technology devices is fed into a monitoring center that we 
operate on the other side of town, safe from any damage that would be 
caused in this zone.
    We help the Coast Guard escort ``High Value Asset'' vessels. We 
join the Coast Guard and Customs in boarding ships and scanning ship 
hulls. We've even acquired technology from at least one other security-
minded nation to help keep our eyes on the situation underwater.
    Although much of our operations are highly sensitive, I can tell 
you that our patrols on land and on the water have responded to calls 
for service such as these:
   Suspicious persons and vehicles
   Security zone breaches by personal watercraft
   Sunken boats and downed power lines
   Industrial accidents
   Security card violations at plant gates.
    Fortunately, none of these incidents stemmed from a plot to bring 
us massive harm.
    In addition, we have helped industrial sites evaluate their own 
security efforts and equipment to point out any vulnerabilities. 
Prevention is Job One, after all.
    But we also have to prepare for a disaster, man-made or not. We 
work hand-in-hand with Federal, State, and local authorities not only 
to share intelligence, but also to conduct emergency response 
exercises. We're in touch with pipeline companies, railroads, and 
emergency planners.
    In a very different kind of pioneering outreach, I have established 
what we call the Incidence Response Forum. We use it to engage the 
widespread Middle Eastern and South Asian communities in the Houston 
area. This is a two-way communications pathway for law enforcement to 
share information with key civic and religious leaders.
    The spirit in which we started this program several months ago was 
expressed very well in a homeland security memo issued by the Federal 
Government within the last 3 weeks. It's titled ``Empowering Local 
Partners To Prevent Violent Extremism in the United States.'' Here is a 
brief excerpt that refers to attempts by terrorist groups to recruit 
American residents:

``Countering radicalization to violence is frequently best achieved by 
engaging and empowering individuals and groups at the local level to 
build resilience against violent extremism. Law enforcement plays an 
essential role in keeping us safe, but so too does engagement and 
partnership with communities.''

    But our Incidence Response Forum has other uses. By sharing 
information with these constituents, we help protect them against 
misguided attacks that may stem from terrorist acts anywhere in the 
world. These leaders can also help report hate crimes, help calm 
tensions that may arise in ethnic communities, and provide feedback 
about the effectiveness of law enforcement by the Harris County 
Sheriff's Office. We are conducting crisis response exercises with this 
group.
    Overall: In Harris County, there is no deficit of will, dedication, 
cooperation, coordination, and maximization of resources when it comes 
to protecting the Houston Ship Channel. But we do need additional 
funding so we can stay ahead of domestic and international terrorism 
threats.
    A few weeks ago in Washington, I testified to one of your sister 
subcommittees about the bottom line in Harris County: We are not yet 
able to deploy personnel to the extent that this type of responsibility 
demands.
    We received $30 million in Homeland Security grants from the 
Federal Government for new security hardware. But the grants do not 
allow for investment into the most critical of resources; and that is 
the full-time deputies and the necessary training they need to be 
effective in policing a unique environment like the Ship Channel. We'd 
also like to see Federal funding for the kind of community engagement 
programs I described moments ago. We appreciate the Federal 
Government's direction on this; we'd also appreciate more resources 
that address the Federal Government's root mission of protecting the 
homeland.
    Another financial challenge is local. The Ship Channel Security 
District collects assessment fees from its 100 or so private industry 
members and pays the money to county government in return for security 
services and enhancements. But the National economy has harmed property 
values in the Houston area, and these values are the foundation of the 
tax base the county uses to fund all of its operations, including my 
agency. The county cut its overall spending by forcing a hiring freeze. 
I have lost several hundred employees as a result since October 2009, 
with more than 125 just from our Patrol Bureau. All of my crime-
fighting programs are strained; I have had to pay an exorbitant amount 
of overtime just to staff my jail at required State standards.
    And yet, we have not been awarded any COPS grants from the Justice 
Department, apparently because law enforcement agencies that have had 
to lay off employees got first priority. I hope Congress and the 
administration will recognize that a forced hiring freeze--not even 
replacing attrition--is in fact a layoff--especially when it prevents 
us from deploying more crime-fighters to the National security asset 
known as the Houston Ship Channel. We'd welcome any kind of assistance 
from Washington, whether it comes from COPS grants or elsewhere.
    If you will invest in us, one of the things we can give you in 
return is a National model for cooperation among Government agencies 
and the business community. Eight cities border the Ship Channel 
Security District. Other partners in the security district include the 
Texas Department of Transportation, the Metropolitan Transit Authority, 
the county's Office of Emergency Management and its other agencies, and 
the University of Houston. The security district has an 11-member 
board, eight of whose members come from private industry.
    The Coast Guard, Merchant Marine, and Customs and Border Patrol 
play major roles here. We also fall under the Area Maritime Security 
Council, which takes a regional approach to maritime and border 
security in Houston and nearby Galveston, Freeport, and Texas City, 
Texas. Of course our port authority is another major partner. In your 
National research, you will probably find it difficult to find another 
locale where the job of combining private industry interests with the 
operations of efficient Government has been carried out so 
successfully.
    We all want to meet the highest expectations of our community, of 
the Nation, and of the world. And we need your help.

    Mr. McCaul. Thank you, Sheriff, and let me--appreciate the 
good work that you do and we certainly support our local 
sheriff as well.
    So, with that, Mr. Edmonds, you are recognized for 
testimony.

   STATEMENT OF JAMES T. EDMONDS, CHAIRMAN, PORT OF HOUSTON 
                           AUTHORITY

    Mr. Edmonds. Thank you, Mr. Chairman and Members. I 
appreciate very much the opportunity to speak to you today 
about how security and emergency preparedness is handled at the 
Port of Houston.
    I believe that we have a good story to tell. As you know 
and as has been pointed out, the Port of Houston is one of the 
busiest ports in the country. As has been pointed out, it is 
the second-largest petrochemical complex in the world. There 
are more than 150 distinct maritime entities along the upper 
Houston Ship Channel, which includes, of course, the Port 
Authority, and each of us has a different business model, and 
we all have different security risks.
    But I am proud to say that when it comes to security and 
emergency preparedness, the industrial community at the Port of 
Houston has a strong tradition of effective collaboration and 
communication, but before I talk about security, and at the 
risk of being redundant, let me provide you with a brief 
overview of the port. Specifically, how the port is organized 
and its various pieces will help you understand how security is 
handled here.
    There is a saying in the port business if you have seen one 
port you have seen one port. In fact, they are all different, 
one way or another. The Port of Houston is a 25-mile complex 
comprised of 150 private companies as well as the public 
facilities that the Port Authority operates. The Port Authority 
is the public entity, and we operate eight terminals. As I 
mentioned to Congressman Keating, we operate some of those for 
ourselves. We have others that know better than we do, operate 
those kind of facilities.
    While the Port Authority does have the overall 
responsibility as the local partner with the Federal Government 
in maintaining the Houston Ship Channel, in practical terms, we 
really are just one of many players that make up the greater 
Port of Houston.
    As you know, the Federal Government has the primary 
responsibility at the port regarding security and emergency 
response. We have obviously a number of Federal partners, but 
it is primarily the U.S. Coast Guard that will provide 
direction and coordination in any kind of all-hazard event. The 
Coast Guard's mission, as you have heard, is also to protect 
the waterway and to regulate the security of vessels into 
maritime facilities.
    While the Federal Government provides the overall guidance 
and authority on large incidents, each of us along the Houston 
Ship Channel has developed emergency response plans that 
conform to standards in Federal law. I can speak, of course, to 
the Authority's eight terminals. Our plan is on-going, 
coordinated by the Port Security Emergency Operations 
Department to respond to any security or emergency situation. 
On a regular basis, the Port Authority works closely with the 
U.S. Coast Guard, Harris County Sheriff, and Houston Police 
Department, other Federal and local agencies, as well as a 
broad spectrum of external industry stakeholders to provide a 
coordinated response to any kind of a security situation that 
may arise.
    The Port Authority has an internal committee that meets 
regularly to review and revise our emergency operations plans 
which includes the National Incident Management System 
procedures. We are also the first port in the United States to 
be certified as obtaining the International Organization of 
Standardization, the ISO, 28000.2007 security standard, and I 
am pleased to say that we were just recertified in March of 
this year for another 3 years.
    Our port security and emergency operations team is led by 
Captain Marcus Woodring, right behind me. Captain Woodring 
joined the port team in July after retiring from 28 years of 
service with the U.S. Coast Guard, the last 5 years here in 
Houston as both the captain of the port and as deputy 
commander. He is the certified emergency manager and oversees 
our port police and our marine departments, encompassing 
approximately 150 professional responders. We are very pleased 
that he has joined us, and I think that he will bring a serious 
upgrade to our operations and we are excited about that.
    As you can see, there are many players involved in security 
at the port. As I mentioned, there is 150 private industries, 
as well as all of our partners at the Federal and State and 
local levels. It is, indeed, a complex mix, and the stakes are 
high, but altogether the port is, as has been pointed out by 
you, a significant economic engine.
    I will give you another statistic. According to a recent 
economic impact study, marine cargo activity at the public and 
private terminals at the Port of Houston along the Houston Ship 
Channel generates $118 billion of local economic activity in 
Texas. This activity produces $3.7 billion in tax revenue and 
is responsible for more than 785,000 direct and indirect jobs.
    To give you some magnitude of the activity in 2010, there 
were 7,800 vessel calls at the Port of Houston, and as the 
Chairman mentioned, there is over 150,000 barge movements 
annually. So this activity makes the overall port the largest 
in the Nation in foreign water-borne tonnage and second in 
total tonnage.
    The port is critical to our Nation's energy security. As I 
mentioned earlier and as has been mentioned, the port is home 
to the largest petrochemical complex in the United States and 
second in the world. The Port of Houston is ranked as the 
largest importer and exporter of petroleum and petroleum 
products in the United States. The country's largest refinery 
with a refining capacity of 567,000 barrels of oil a day is 
located on the channel.
    From Houston, refined energy products are delivered over 
the infrastructure that transports them to every market east of 
the Rocky Mountains through a network of roads, rails, and 
pipelines that originate along the Houston Ship Channel, and 
this includes the 5,519-mile long colonial pipe system, which 
is the largest petroleum product pipeline system in the Nation 
and is vital to the energy for the south and the east coast of 
the United States.
    Despite the inherent challenges of this many people and 
interests, the Port of Houston has demonstrated that we 
effectively collaborate on security issues. Our assets have 
been recognized in that we have been called a model for the 
Nation. A quote from the 2009 report by the U.S. Coast Guard on 
port Interagency information sharing states that: ``Port 
partnerships are predictably strongest, most collegial and most 
proactive where major calamities have necessitated life-and-
death relationships of trust. This was most evident in the 
partner interviews in Sectors New York and Houston.''
    One of our significant efforts that helped us earn this 
accolade is an initiative that was passed by the Texas 
legislature. As has been mentioned, the State of Texas provided 
great leadership and foresight in the creation and usage of the 
Houston Ship Channel Security District. Captain Diehl will 
speak more to that in his testimony, but I want to take just a 
minute to highlight the importance of this recently-appointed 
entity.
    The security district was created to complement the Federal 
port security programs. The Federal dollars given to ports for 
security allow for great improvements through purchasing 
equipment or supporting training exercises, but they did not 
include money for operation and maintenance. In our case, that 
is about $4 million annually. So Harris County, the Port 
Authority, and Houston Ship Channel industries worked together 
with the legislature to create the management district around 
the port, and the district assesses the industries within a 
certain boundary, and these funds then are used for the O&M of 
the district.
    I would say to you that I am very pleased to be a small 
part of that. I think former Secretary Chertoff saw that as a 
model for this country, in fact, during the legislative process 
wrote letters of support for us, but he saw immediately the 
viability of this concept. I believe that I am correct in 
saying that I think other ports have looked at that model for 
their own security needs, and so we are very pleased that it is 
here, and I am very pleased that Captain Diehl and his 
organization basically administer that entity.
    So I, like the other gentlemen, am pleased to answer any 
questions that you may have when that is appropriate.
    [The statement of Mr. Edmonds follows:]
                 Prepared Statement of James T. Edmonds
                            August 24, 2011
    Good morning, Mr. Chairman and Members. Thank you for this 
opportunity to appear before your panel to talk about how security and 
emergency preparedness is handled at the Port of Houston. I believe 
that we have a good story to tell. As you may know, the Port of Houston 
is one of the busiest ports in the country and is home to the second-
largest petrochemical complex in the world. There are more than 150 
distinct maritime entities along the upper Houston Ship Channel, 
including the port authority, and each of us has different business 
models and security risks. But I am proud to say that when it comes to 
security and emergency preparedness, the industrial community at the 
Port of Houston has a strong tradition of effective collaboration and 
communication. I hope that my participation, along with my colleagues 
here on this panel, that you will have a better understanding of our 
challenges and successes.
    Before talking about security, it is important to provide you with 
an overview of the Port of Houston. Specifically, how the port is 
organized and its various pieces will provide the fundamental 
understanding of how security is handled. There is a saying that if you 
have seen one port, you have seen one port. The Port of Houston is a 
25-mile-long complex comprised of these 150-plus private companies, as 
well as the public facilities operated by the Port of Houston 
Authority.
    The port authority, which I represent, is the public entity along 
the ship channel and it owns or operates eight terminals. While the 
port authority does have the overall responsibility as the local 
partner with the Federal Government in maintaining the Houston Ship 
Channel, in practical terms, we are one of many players that make up 
the greater Port of Houston.
    As you may know, the Federal Government has the primary authority 
at the port regarding security and emergency response. We have several 
Federal partners, but it is primarily the U.S. Coast Guard that would 
provide direction and coordination in any all-hazard event. The Coast 
Guard's mission is also to protect the waterway and regulate the 
security of vessels and maritime facilities.
    While the Federal Government provides the overall guidance and 
authority on large incidents, each of us along the Houston Ship Channel 
has developed emergency response plans that conform to standards in 
Federal law. I can speak, of course, to the port authority's plan for 
our eight terminals. Our plan is an on-going, coordinated effort by the 
Port Security and Emergency Operations Department to respond to any 
security or emergency situation. On a regular basis, the port authority 
works closely with the U.S. Coast Guard, Harris County Sheriff's 
Office, Houston Police Department, Federal and local agencies as well 
as a broad spectrum of external industry stakeholders to provide a 
coordinated response to security situations.
    The port authority has an internal committee that meets regularly 
to review and revise our Emergency Operations plan, which includes 
National Incident Management System (NIMS) procedures. We also are the 
first port in the United States to be certified as obtaining the 
International Organization of Standardization (ISO) 28000:2007 security 
standard, and were just recertified in March, 2011, for another 3 
years.
    Our Port Security and Emergency Operations Team is led by Captain 
Marcus Woodring, who joined the Port Authority team in July after 
retiring from 28 years of service in the U.S. Coast Guard, the last 5 
years here in Houston as both the Captain of the Port and Deputy 
Commander. He is a Certified Emergency Manager and oversees our Port 
Police and Marine Departments, encompassing approximately 150 
professional responders. He is here with me today, and has the 
responsibility of directing and monitoring the port authority's 
security and emergency program while meeting Federal, State, U.S. Coast 
Guard, and other regulatory requirements.
    As you can see, there are many players involved in security at the 
Port of Houston. There is the port authority, 150 private industries, 
as well as partners or authorities at the Federal, State, and local 
levels. It is a complex mix. And the stakes are high. Altogether, the 
Port of Houston is a significant economic engine. According to a third-
party economic impact study, marine cargo activity at the public and 
private terminals of the Port of Houston and along the Houston Ship 
Channel generates nearly $118 billion in economic activity in the State 
of Texas. This activity produces $3.7 billion in tax revenue and is 
responsible for more than 785,000 direct and indirect jobs. In 2010, 
there were 7,800 vessel calls at the Port of Houston and over 150,000 
barge movements. This activity makes our overall port the largest in 
the Nation in foreign waterborne tonnage and second in total tonnage.
    This port is also critical to our Nation's energy security. As I 
mentioned earlier, the port is also home to the largest petrochemical 
complex in the United States. The Port of Houston is ranked as largest 
importer and exporter of petroleum and petroleum products in the United 
States. The country's largest refinery, with a refining capacity of 
567,000 barrels a day, is located on the channel. From Houston, refined 
energy products are delivered over the infrastructure that transports 
them to every market east of the Rocky Mountains through the networks 
of roads, rails, and pipelines originating in Houston. This includes 
the 5,519-mile Colonial Pipeline system, which is the largest petroleum 
product pipeline system in the Nation and is a vital energy artery for 
the South and East Coast.
    But, despite the inherent challenges of this many people and 
interests, the Port of Houston has demonstrated that we effectively 
collaborate on security issues. Our successes have been recognized in 
that we have been called a model for the Nation. A quote from a 2009 
report by the U.S. Coast Guard on Port Interagency Information Sharing 
states:

``Port partnerships are predictably strongest, most collegial and most 
proactive where major calamities have necessitated life-and-death 
relationships of trust. This was most evident in the partner interviews 
in Sectors New York and Houston . . .''.

    One of the significant efforts that helped us earn this accolade is 
an initiative that was passed by the Texas Legislature. The State of 
Texas provided great leadership and foresight in the creation of the 
Houston Ship Channel Security District. Captain Bill Diehl, who is also 
a part of your panel will speak more about the district and its role in 
more detail, but I want to spend a few moments and highlight the 
importance of this recently formed entity. The security district was 
created to complement the Federal port security programs. The Federal 
dollars given to ports for security allowed for great improvements 
through purchasing equipment or supporting training exercises, but it 
did not include money for operation and maintenance, personnel, or any 
matching requirement. Harris County, the port authority, and private 
industry worked together with the legislature to create a management 
district around the port. The district assesses the industries within 
its boundaries and these funds will be used in concert with the Federal 
funds to implement regional and port-wide security solutions.
    Thank you for the opportunity to host your committee hearing here 
today. I'm happy to answer any questions you may have.

    Mr. McCaul. Thank you, Mr. Edmonds. I agree with you, the 
security district is a model for the Nation, and I applaud 
everybody who has participated in it.
    With that, I recognize Captain Diehl for his testimony.

  STATEMENT OF CAPTAIN WILLIAM J. DIEHL (UNITED STATES COAST 
   GUARD, RET.), PRESIDENT, GREATER HOUSTON PORT BUREAU, INC.

    Captain Diehl. Good morning, Mr. Chairman and Members of 
the committee. Thank you.
    I appreciate the opportunity you have provided me today to 
discuss port security from an industry perspective. I represent 
businesses that depend on the ship channel, and we have a very 
vested interest in keeping it safe, secure, efficient, and 
operational. Currently, the lack of dredging funding is a big 
issue for us, as discussed in my submitted testimony, but in 
the interest of time I will focus my verbal comments on the 
Houston Ship Channel Security District.
    After 9/11, a group of industry leaders from East Harris 
County Manufacturers Association sat down with law enforcement 
officers from Harris County, the city, Coast Guard, the Port of 
Houston Authority, and others to discuss ways to help. Because 
of the inherent nature of security, that is, you need weapons 
and jurisdiction, industry-backed several large security 
initiatives sponsored by Harris County. With industry, State, 
and local authority support, legislation was passed forming the 
Ship Channel Security District, which gave the district 
authority to assess its members.
    The security district concept of industry assessing 
themselves and then decide how to allocate the funding works 
because it is run by industry. Of the 11 members of the Houston 
Ship Channel Security District board of directors, eight are 
industry representatives who work as senior plant managers. If 
Government were to assess significant security tariffs on 
industry and then allocate the funding without industry 
prioritization, I doubt that it would be as well supported as 
it is. When a board member is obligated to interact with their 
fellow plant managers and justify their decisions, you get 
better industry participation and support on security 
initiatives.
    As a result of this work, we now have a unique public-
private partnership that improves security for facilities, 
employees, and communities by providing increased preparedness 
and response capabilities. The district's infrastructure 
improvements include wireless and fiber optic wire 
communication systems with integrated analytical and 
intelligence video software, surveillance and detection 
cameras, night vision, motion detection technology, and 
additional technology components such as radar, sonar, and 
sensor packages. We have already added 112 cameras, 69 handheld 
radiation detectors, two marine side-scan sonar units, four 
patrol boats, seven patrol trucks, five radar sites, and an 
underwater remotely-operated vehicle to our regional security 
picture.
    I do have one suggestion that will help us in utilizing 
grant fundings more efficiently. We need the grant process to 
be either faster or more flexible. Because of the lag between 
grant approval and receipt of funds, we have a situation where 
agencies that several years ago needed boats and cameras now 
have different infrastructures or are unable to staff, due to 
budget cuts, previous rounds' equipment.
    Business allocates large sums of money for long-term 
projects, but as they move forward towards completion they 
don't put them on auto pilot. They are continually modifying 
and completely changing them to give them the best return for 
investment. That is sort of the industry model, but we lose 
that with these Federal grants because of the slow, rigid grant 
funding process.
    In summary, the security district is a learn-as-you-go 
process, no different than what all of us experience as we grow 
in this 9/11 security world. We know that working together we 
move more ships in this port than any other port in the United 
States. Moreover, we know the main reason this industry-led 
security district works is because, at the end of the day, we 
are all focused on keeping the ship channel open. Our security 
district decisions must complement our effective, productive 
businesses and keep traffic moving. Industry wants to be 
involved and wants to be part of this solution. We understand 
security's expensive. We think that by bonding together, by 
using this model, we get better security at less cost.
    I want to close by emphasizing industry is not looking to 
supplant the responsibility of DHS, but rather, to work with 
them to gain the maximum security practical for our part.
    Mr. Chairman, thank you for allowing me to appear before 
you today, and I look forward to any questions that you or the 
committee Members may have.
    [The statement of Captain Diehl follows:]
                 Prepared Statement of William J. Diehl
                            August 24, 2011
    Mr. Chairman and Members of the committee: I appreciate the 
opportunity you have provided me today to discuss port security in 
Houston from an industry perspective.
    As President of the Greater Houston Port Bureau I work with our 130 
member companies to facilitate commerce in the maritime community. 
These companies include the ports, terminals, longshoremen, line 
handlers, agents, and others. The Port Bureau also provides 
administrative services to the Houston Customhouse Brokers and Freight 
Forwarders Association (roughly 100 companies), and to the Houston Ship 
Channel Security District (124 companies). This means we work a lot 
with the companies who depend on the Houston Ship Channel.
    Chairman Edmonds discussed the significance of the port and I agree 
it has huge value to our Nation and economy. I may be biased, but I see 
maritime transportation as the most important mode of transportation to 
our country. Think about it, roughly one-third of our GDP is tied to 
global trade and 95% of that tonnage moves through our Nation's ports, 
so keeping commerce flowing is critical to us as a Nation. President 
Obama set a goal of doubling U.S. exports by 2015. The only way we are 
going to get there is through our ports. To keep our ports vibrant we 
need trade agreements, reliable intermodal transportation (i.e., roads, 
rail, & barge infrastructure) and dredging. Of these three, dredging is 
the most pressing. We are choking our global competitiveness by not 
maintaining our ship channels. Currently 8 of our 10 largest ports are 
not at their authorized width or depths. We can talk today about 
securing our ports, but if we cannot get ships in or out, then that 
conversation will not mean much. Needless to say, at the Port Bureau, 
we are dedicated advocates for the immediate passage of the Realize 
America's Maritime Promise (RAMP) Act (H.R. 104) and the corresponding 
Senate bill S. 412.
    As I transition to my security comments I want to be very clear 
from the start that industry is not looking to supplant the 
responsibility of DHS, but rather to work with them to gain the maximum 
security practical for our port. Houston is the busiest port in the 
Nation and the centers of the petrochemical and break bulk industries 
for the United States. Our speed and efficiency are what make us 
successful. What we like as industry is a stable, predictable business 
environment. This can sometimes be a challenge along a ship channel: 
Ship collisions, allisions, and groundings, hurricanes, oil spills and 
now security incidents can threaten our ability to conduct business. 
Like any liability to a business, one puts plans and procedures into 
place to reduce the risk and to mitigate the effects when these 
incidents do occur.
    When I was with the Coast Guard we talked about Safety, Security, 
and Environmental Stewardship; I can tell you that industry gets it, 
for without an operating ship channel we go out of business. For safety 
and environmental response, most companies found co-ops as an effective 
way to pool resources, and utilize more expertise at less cost than 
going it on their own. When 9/11 happened they looked to this 
successful co-op approach. However in this case, forming co-ops turned 
out to be a bit more challenging because of the inherent law 
enforcement framework of security. Private security guards have no 
jurisdiction on the channel. Put simply: When an event occurs, you need 
someone on scene with a weapon and the authority (badge) to take action 
and resolve the situation.
    To address this post-9/11 security liability a group of industry 
leaders from the East Harris County Manufacturers Association sat down 
with the law enforcement officers from Harris County, the City, Coast 
Guard, the Port of Houston Authority and others to discuss ways to 
help. Under the Area Maritime Security Committee they furthered 
communications and prioritization of the port security grant process to 
maximize the benefits to the entire community. This successful 
interaction grew and besides elevating their own facility security, 
these leaders, with the guidance of Pat Bellamy from the University of 
Houston, pushed the idea of using technology to coordinate a regional 
security approach to protecting the ship channel. Because a 
Governmental agency could best deliver security across many facilities, 
Harris County stepped forward to be the sponsor for the project. When 
large matching funds were required industry backed the plan by 
championing the formation of the Houston Ship Channel Security 
District. With industry, State, and local authority support, 
legislation was passed, so that the District could assess its members.
    The Security District concept of industry assessing themselves and 
then deciding how to allocate the funding works because it is run by 
industry. Of the eleven members of the Houston Ship Channel Security 
District Board of Directors, eight are industry representatives who 
work as senior plant managers. The other three Board members represent 
local municipalities, Harris County and the Port of Houston Authority, 
comprising a governing body in which everyone is vested in stimulating 
cargo movement and protecting commerce. If Government were to assess a 
significant security tariff on industry and then allocate that funding 
without industry prioritization, I doubt that it would be as well 
supported as it is. When board members are obligated to interact with 
their fellow plant managers and justify their decisions you get better 
industry participation and support of the security initiatives.
    As a result of this work, we now have a unique public-private 
partnership that improves security for facilities, employees, and 
communities by providing increased preparedness and response 
capability. The first year's assessment raised over $4.5 million 
dollars in support of the Harris County Security Project which has had 
an immediate impact on local law enforcement. The District's 
infrastructure improvements include wireless and fiber-optic wired 
communication systems with integrated analytics and intelligent video 
software, surveillance and detection cameras, night vision, motion 
detection technology and additional detection components such as radar, 
sonar, and security sensors. With specially trained law enforcement 
personnel using marked cars, patrol boats, and enhanced communications 
systems, the district not only works to deter terrorism, but is able to 
impact theft and aid with other safety and security issues. We have 
added 112 cameras, 69 handheld radiation detectors, 2 marine side-scan 
sonar units, 4 patrol boats, 7 patrol trucks, 5 radar sites, and an 
underwater remote operated vehicle to our regional security picture. We 
have another patrol boat, 14 land vehicles, and communications 
infrastructure under construction.
    We've seen two dividends emerge from the Security District: 
Resiliency and coordination. Bolstering resiliency, this equipment will 
help mitigate disruption of business during events such as hurricanes, 
evacuations, or plant upsets, and help district members recover and 
restore normal operations quicker. For coordination, we know that 
during a security incident, everyone in the area will be called upon to 
contribute. What we're doing now is ramping up so that during an 
incident, our response is brought to bear seamlessly and coherently.
    I do have one suggestion that would help us utilize grant funding 
more efficiently. We need the grant process to either be faster or more 
flexible. Right now, the grant process only generates money several 
years after it has been awarded. This time delay is aggravated by the 
substantial constraints on the way funds are spent. Because of the lag 
between grant approval and receipt of funds, we have a situation where 
agencies that, several years ago may have needed boats and cameras, now 
have different infrastructure or are unable to staff (due to budget 
cuts) previous rounds' equipment. If we have the ability to address our 
needs when we receive the grants instead of after years of wading 
through a bureaucratic process, we can use the money more efficiently 
by addressing current concerns. Businesses allocate large sums of money 
for long-term projects, but as they move towards the completion they 
don't put them on autopilot. They are continually modifying or 
completely changing them to give them the best return for the 
investment. Currently, we lose that with this slow and rigid grant 
funding process.
    I will close by saying that we see the Security District as a 
learn-as-you-go process, no different than what all of us are 
experiencing as we grow into this post- 
9/11 security world. We know that by working together we move more 
ships in this port than any other port in the United States. Moreover, 
we know the main reason that this industry-led Security District works 
is because at the end of the day, we're all focused on keeping the ship 
channel open. Our Security District decisions must complement our 
effective, productive businesses and keep traffic moving. Industry 
wants to be involved and wants to be a part of the solution. We 
understand security is expensive. We think that by bonding together--by 
using this model--we are getting better security with less cost.
    Mr. Chairman, thank you for allowing me to appear before you today, 
and I look forward to any questions that you or the committee Members 
may have.

    Mr. McCaul. Thank you, Captain.
    The Chairman now recognizes himself for questions.
    As I stated, the recent killing of Osama bin Laden revealed 
a lot of things in a treasure trove of documents, one relating 
to a spectacular, potential attack on the 10-year anniversary 
of 9/11; the other, targeting oil tankers at ports such as the 
Houston Port Ship Channel. That obviously got my attention as 
one of the main reasons I am having this hearing today.
    When you look at the past, they have done it before. I 
mean, this is a picture of the oil tanker attacked and targeted 
by al-Qaeda off the coast of Yemen. So it is nothing new these 
tactics. This is the kind of scenario we want to prevent, and 
that is the purpose of the hearing today.
    The GAO I think did a very good study and analysis of 
security concerns and what needs to be done to make sure that 
something like this never happens at this port in Texas. 
However, there was a picture taken of the Houston Ship Channel 
with a very small vessel going into the port, into the ship 
channel, which did raise some concern.
    So my first question is to Mr. Caldwell: How often does 
this type of scenario occur where a small vessel, kind of like 
what attacked the USS Cole, has come into the ship channel 
undetected?
    Mr. Caldwell. It is a hard question. I don't want to 
exaggerate an antidote because, when I took that picture, I had 
been to the ship channel area several times down here in my 
maritime security work, but I am not always on the channel that 
often, but I am on the channel and took that picture. So I 
think some of the things that have been talked about like 
cameras and patrols may help reduce that, but it is my 
understanding this is a prohibited zone. So I was quite 
concerned actually to see that boat when I took that picture.
    Mr. McCaul. Is this a frequent occurrence or just a rare 
occurrence?
    Mr. Caldwell. Well, I have been to--it has happened twice--
of the two times, I have been on the channel, it has happened 
that one time.
    Mr. McCaul. That is something obviously--and let me just 
first say, though, that the Coast Guard, Harris County 
Sheriff's Office, Port Authority have done a fantastic job I 
think securing this. We can never emphasize hardening our 
security more, and I think that is one point of this hearing.
    My next question is to Mr. Edmonds and Captain Diehl. This 
is basically an illustration of the energy supply for the 
Nation, and when you look at this map, it really brings out the 
fact that the majority of the energy for the Nation comes right 
out of here. I know the ExxonMobil refinery refines about 31 
percent of the Nation's energy. If that was taken out by a 
small vessel like this one, you can imagine the long-term 
consequences, economic. It could cripple this Nation from an 
energy standpoint and an economic standpoint.
    Can both of you speak to that issue in terms of how 
important this port really is?
    Mr. Edmonds. Well, the numbers that I use in my speeches--
and these gentlemen can help me if I am wrong--but something in 
the neighborhood of 49 percent of the refined products used in 
this country every day come from the Houston Ship Channel 
industries and an eighth of the gasoline consumed every day. So 
it would be devastating to the economy of the country.
    The tragedy is you don't even have to blow up an Exxon. You 
can just shut off access to the waterway and you shut down all 
that refining capability. There is something leaving this port 
24 hours a day through a pipeline or railcar or truck. So there 
is all kinds of arteries of movement, and you damage any one of 
those and that has a devastating economic impact.
    The one thing I would say, Captain Diehl mentioned the East 
Harris County Manufacturers Association. That is organization 
of the ship channel--the big producers along the Houston Ship 
Channel. They are very effective people. They have their own 
security systems and plans, and I think that I can sit here 
with a degree of confidence and say to you that an Exxon or 
Shell or those people, they are sophisticated. They know what 
they are doing. They are very well-protected in their own 
right. What we try to do is overlay that protection to help 
them, support whatever systems that they have in place to make 
sure that the entire channel is safe. I go to sleep pretty much 
every night not worrying about that.
    But I have to say to you that it could sure happen, and it 
could quickly and easily. But, that said, I think we are 
vigilant and I think that the ship channel on the whole 
cooperates very well. Nine-eleven brought us all together, and 
since then we have had a lot of port-wide security systems and 
committees and approaches and sharing of information and 
cooperation that has made this, for what it is and for the 25 
miles of it, about as safe and secure as I think we can make 
it.
    Mr. McCaul. Thank you.
    Captain Diehl.
    Captain Diehl. Yes. Thank you.
    I won't repeat the numbers that the Chairman put in his 
statement, but I would just summarize it this way for you.
    One-third of our economy is associated with global trade, 
and that trade comes and goes through our ports. Ninety-five 
percent, 99 percent of it by tonnage probably comes in and out 
of our ports by ships. So it is not only the Port of Houston, 
but it is all our major ports are key to our economy. You shut 
it down; we are going to start heading towards a recession.
    What makes us unique as Houston is these refineries. You 
can shut down a container port and move up the coast to the 
next container port to deliver those boxes. You can't package 
up the refinery and move it. You can't take those pipelines and 
pull them out of the ground and shift them over to New Orleans. 
That is what is unique.
    But I will tell you, though, when we look at it from the 
industry point of view, we look at security as a liability, the 
same as we look at safety and environmental response. Those are 
all liabilities. We want to keep it safe, secure, 
environmentally sound, and we want to make money. That is the 
liabilities we look at. So any one of these is sort of key for 
us, and I think what you see out of it, we form these groups, 
these partnerships to address those.
    We have great safety partnerships. We now have--with the 
security district, we have a very solid security partnership. 
We have environmental co-ops and things like that to ensure 
that we can respond. It has proven to work in a big natural 
disaster such as when Hurricane Ike came through here that 
everyone was able to get this thing back up and running in 
short order.
    Mr. McCaul. Yeah, let me just take a moment to commend you 
and Mr. Edmonds and Sheriff Garcia for your great work on the 
security district and Captain Whitehead with the Coast Guard. I 
think that it really is a model for the Nation, and it was so 
successful that it moved us up in terms of the port security 
grants from No. 3 to No. 2 in the Nation, which I think was 
fantastic.
    One area of funding I am concerned with--and I think, 
Captain Diehl, you talked about it--is with respect to 
dredging. The Port of Houston contributes, as you know, about 
$120 million into this trust fund for maintenance, and yet we 
only get back about $20 million or $22 million. The 
administration sent back about $20 million. The Army Corps of 
Engineers is recommending somewhere between $40- to $80 million 
for dredging purposes. With the canal the way it is at 50 feet, 
we won't be able to accept some of those ships coming from the 
canal into the Houston Ship Channel if we don't have the 
funding to dredge. Can you speak to that issue?
    Mr. Edmonds. You are right, and the channel maintenance is 
one of the biggest priorities we have.
    From the sea buoy to shale is about 45 feet. We have 
received three 8,100 TEU ships so far. I did not believe--none 
of us believed that we would receive a ship that large this 
soon. We thought we would wait until 2014.
    The first priority that we have is to dredge the channel 
from the main channel into Bayport. It is about $150 million. 
To be candid with you, for us to go through the normal Federal 
Government process, it would be 10 to 12 years before we could 
even get started, and we would lose our customer base if we do 
that. So we are going to fund the $150 million ourselves to 
make sure that that happens so we don't lose any of that 
business opportunity.
    But I think at the end of the day about an 8,500 TEU ship 
will be the large ship that will call on Houston. That is a lot 
of cargo movement, and you get six or seven of those in here 
every day or 2 days, it is a lot of product that will come.
    But the biggest on-going, No. 1 priority in my mind, other 
than the construction of Bayport and those things to have the 
appropriate dock and moorage capability--is that channel 
maintenance, and we are losing every year a significant amount 
of the depth that we were granted in the last widening and 
deepening project.
    Mr. McCaul. I hope that, Mr. Green, you and I and the 
Ranking Member would like to do this as well, to work on this 
effort to get more of the funding back.
    Mr. Edmonds. Thank you.
    Mr. McCaul. I am not sure about the Ranking Member. I know 
Mr. Green and I have co-sponsored the RAMP Act, which 
essentially says that 100 percent of the money sent to the 
trust fund come back for harbor maintenance, and I think that 
is----
    Mr. Edmonds. We don't even need the whole 120. If we could 
just get 80 or 40 or 50 of it, that would be fine--take care of 
our own needs.
    Mr. McCaul. We will work on that one.
    Mr. Edmonds. Thank you.
    Mr. McCaul. Finally, I know I have taken more than my time, 
but I want to ask Mr. Caldwell and the Sheriff, in terms of 
your recommendations on what needs to be done to ensure that 
the type of tanker explosion I showed earlier does not occur in 
the Houston Ship Channel, what more can we do in terms of 
security at the port?
    Mr. Caldwell. Well, one of the things that we have noted 
is, you know, one of our recommendations is that they do more 
local exercises and integrate both the law enforcement and the 
spill response. Coast Guard did provide us some information on 
those exercises. There was one that met our criteria in Port 
Arthur, but we had not seen one for Houston. So that would be 
one that I would want Houston to do, given it is important, as 
we talked about today. We have closed that recommendation 
because the Coast Guard is doing those exercises. It is just I 
would like to see one in Houston.
    Mr. McCaul. Captain Whitehead, do you have any 
recommendations?
    Captain Whitehead. I can say we have done exercises where 
we have combined it in Houston. So I am not sure how the 
information flowed, but it is important. Many of the terrorist 
exercises will have an aspect of oil spill along with it, so we 
combine those together, realizing that, you know, the 
likelihood of those occurring together would be high.
    Mr. McCaul. Sheriff.
    Sheriff Garcia. Congressman, I think that, as we have been 
talking, unfortunately, when it comes to effective security of 
such a critical asset like the Port of Houston, the ship 
channel, funding and funding to accomplish a variety of these 
initiatives always seems to be the common thread. We are using 
technology. We are very grateful for all the work that the 
security district has accomplished for us and the various 
technologies that we have, but with that comes the cost of 
operations and maintenance. All the technology is great if you 
can have a body to turn it on and to monitor. So personnel and 
ability to fund those boots on the ground in a tight economy, 
like what we are currently in, is important to look at.
    So a recommendation that I would bring forth is that--I 
know that there is debate about the COPS--the state of the COPS 
program from the Department of Justice, but I would urge this 
body to look at a COPS program for ports. I think that is an 
area that seriously needs to be considered so that you can 
accomplish support to local communities, involving Federal and 
National security assets like the port, but that you help local 
law enforcement meet those goals and work effectively alongside 
our partners.
    So I would urge a COPS program for ports, as well as, you 
know, in a significant area like Harris County and maybe a few 
other places in the country. UASI plays a very critical role, 
but then we still have the challenges of drug cartels and 
transnational gangs and organized crime and all those 
challenges. So I would also urge that maybe a UASI for ports be 
considered in addition to that.
    Mr. McCaul. I think that is an excellent recommendation. I 
have consistently supported the COPS program. You and I have 
discussed it personally, and I sent letters to the Department 
of Justice to get that funding for your office and for Harris 
County, and I want to thank you for your testimony.
    With that, I recognize the Ranking Member.
    Mr. Keating. Thank you, Mr. Chairman.
    Just a quick question because of the concerns I have 
regionally as well. So, Mr. Edmonds, specifically on LNG and 
LNG tankers themselves, can you just comment on some of your 
experience, what you learned, what you are doing, you think is 
the most vital, you know, type of approach to LNG and LNG 
tanker security?
    Mr. Edmonds. I am not prepared to answer that question, 
sir, because the Port Authority is the public side of this. The 
private side operates itself, and we have no authority or 
control over it.
    Having said that, though, Captain Whitehead can respond as 
the captain of the port.
    Captain Whitehead. Yes, Congressman. In fact, 2 days from 
now we have a Yemeni--you mentioned earlier a Yemeni LNG 
tanker. We have one coming into the Port Arthur area. Although 
we don't have any LNG tankers come into this area, the Houston 
Ship Channel, but we do have them come into both Freeport, Lake 
Charles, and Port Arthur. With those, we do take additional 
measures. We utilize our MSSTs. Our maritime security safety 
teams assist us in securing the--as well as we work with our 
port partners when they come in as well to secure the port, 
make sure that we board the vessel before it even comes in, do 
security sweep, escort the vessel in. So we take additional 
security measures with LNG tankers that come into port.
    Mr. Keating. That really prompts another question I had, 
Captain. There has been an estimate of as many as 15 countries 
that aren't maintaining effective anti-terrorism measures in 
their port facilities. So it is not just a question of keeping 
our own port safe. These are coming in from other countries, 
and the Coast Guard has the authority to deny them access, if 
necessary, from doing this, which is a very strong potential 
tool to get those countries to cooperate. What can we do more 
from your vantage point? Because you can enforce it. You have 
that ability. What can we do more to make those countries do a 
better job on the front end of this with the anti-terrorism 
kind of securities that should be in place before they ever 
leave their port?
    Captain Whitehead. I would have to take that one for the 
record. It is better answered from our Coast Guard 
headquarter's perspective.
    What we can do, in general as a Coast Guard, I can tell you 
we have--in my time here, we have denied entry to a few vessels 
based on the countries they were coming from inadequate 
security measures, as well as delayed the ships from coming in 
until--because if they don't have adequate security measures, 
we board the ships, hold them offshore, board the ships, and do 
those additional security sweeps.
    Mr. Keating. I think that--just from our own vantage point, 
I think that is a tremendous tool we should use to make sure 
those countries are doing their part on their end to make our 
job easier and make everyone safer.
    So thank you. I am interested in maybe taking that up with 
headquarters in that regard.
    Sheriff, you mentioned the woeful state of financing--I 
think if I am paraphrasing for you. You know, some of this is 
penny-wise and pound-foolish. Because if you look at the 
economic impact that we have here and one of the largest, right 
here, in the country and having, you know, the inadequate 
funding resources to do this is something that really doesn't 
seem to be very wise on my part. Because the impact of even at 
choke points, even sinking vessels, even using the vessels as a 
missile, even doing damage to bridge and infrastructure, what 
that could do to just shut everything down is a great concern.
    So what would you do and where do you see that translating 
into your not being able to do your job as well as possible and 
what other things would you do if you had more resources?
    Sheriff Garcia. Thank you for the question, Congressman. I 
will tell you that there is probably no other responsibility 
that I have that keeps me up at night and as a part of my daily 
conversation and part of what I regularly challenge my major, 
who is over our homeland security emergency preparedness 
responsibilities, and it is frustrating for us not to have the 
personnel to be able to be on point at all places and present 
and visible so that we can provide all the deterrence 
necessary.
    So, first of all, I would say that if we had additional 
resources it would be to make sure that we have the personnel 
available to provide all the levels of monitoring, patrol--both 
on land and water and in air--and resources to provide 
dedicated air support for the port, dedicated air surveillance 
for the port, and then also investment in other forms of 
technology that would help us create a greater zone of 
protection around the port and in the respective community.
    I had the opportunity to visit Haifa--the Port of Haifa as 
an example. You don't go near that place or move around that 
place without somebody knowing about it. Doesn't matter whether 
you are coming off a neighborhood street or major thoroughfare 
or the entry into the port area, people know about it, and that 
is the way this area should be, and it should be secured. So 
finding other forms of technology to accomplish that level of 
security is critical.
    Then, you know, higher levels of training with private 
industry, higher levels of coordination and information sharing 
would be areas where I would invest as well.
    Mr. Keating. Thank you.
    I think that segues to another question that I had, Captain 
Diehl and maybe all of you can take a shot at this, but it is 
the idea that you have got so many resources here and you seem 
to be ahead of the curve in terms of sharing those resources 
and dealing with it. But are the sophisticated technological 
equipment, the monitoring, the videotapes in the private 
sector, are they at the disposal and shared all the time with 
local law enforcement, with the Coast Guard?
    Captain Diehl. The idea--the concept of the Ship Channel 
Security District, as we say, is to create this ring of steel 
where there will be nodes to the Coast Guard, to the Port 
Authority, to the Sheriff, to the city, to all the 
municipalities' law enforcement, Pasadena, Deer Park, and all 
those people would have access to this information. That is the 
vision that we have for growing into it. Right now, we are in 
the--as we come on-line, we are turning it on for different 
places and letting them look at it.
    I just want to sort of go back to what the sheriff said 
about it, though. We do have some good technology that makes us 
more efficient. Without the manning, though, it becomes a 
concern for us. As industry people, you know, we can't just 
hire security guards and send them down. You have to have 
jurisdiction. You have got to have the ability to use weapons 
in this thing. So we really want to back--and that is why the 
partnership works for the security district is we look to local 
law enforcement, the Coast Guard, Sheriff, and the city and 
others that have badges to operate and know what they are doing 
on the thing.
    The bottom line, though, comes--and this is what concerns 
us a little bit as we go forward--knowing that the deficit, 
things coming off the Hill and things like that is people say, 
okay, when are we going to be done with the Ship Channel 
Security District. It would be the same as going to your local 
police department and saying, hey, by the end of the year we 
want crime solved, because next year it is not going to be in 
the budget. That is sort of what my members tell me. Hey, 
security is not going away. It is a liability for us that we 
have got to address, and we know we are in it for the long 
term, and the long term means that we have got to have bodies, 
bullets, boats and all that--buildings and things like that to 
take us to the next level.
    Mr. Keating. So we have the technology. We don't have the 
manpower to monitor it?
    Captain Diehl. We have technology that we are implementing. 
We are not quite where we want to be on it. As I said, we put 
this thing together. We look at it and go, that works, that 
doesn't work. As we grow into it, it is sort of like the best 
practices you see that normally go into the area of maritime 
security. We are actually heavily involved in looking at and 
saying that doesn't work for the Sheriff to get that 
information to respond appropriately.
    So they give us that feedback, and then we are adjusting. 
So we are learning as we go. We are not perfect, but we are 
further along than what we were many years ago.
    Mr. Keating. So you have the feed that can go directly to 
the Sheriff's office----
    Captain Diehl. Yes.
    Mr. Keating. That is a great partnership you have got going 
there.
    Certainly I think your point is well made. I mean, when you 
look at--we do have needs as a country, and we are in a deficit 
situation. However, two of our biggest issues besides--putting 
today's hearing aside in terms of our own security--are jobs 
and our economy, and if we are investing in that area, it makes 
sense to me that that is an area where we are going to get 
multiple effect back.
    I just had one other question to Mr. Caldwell, and then I 
will yield my time back.
    Again, in terms of integration, we have got a sense with 
the captain in terms of what is done, but I think the two 
things that--you know, your initiative the GAO recommended for 
the FBI working with the Coast Guard for spills and for 
terrorist threats, working together, how is that integration 
going with the FBI and--what is the state of that?
    Mr. Caldwell. I mean, unfortunately, it has been somewhat 
of a moving target. I mean, when we made that recommendation, 
DHS was basically reorganizing what had been called the Federal 
response plan into the National response framework, and you 
need kind of that big picture in place to figure out where your 
detailed operational plans would be. Now, they are under 
another revision to that. So, unfortunately, some of that big-
picture stuff has to be taken care of.
    But certainly from a Coast Guard perspective they have been 
pretty active in exercises; FBI less so.
    Mr. Keating. Sheriff, how is your interaction with the FBI?
    Sheriff Garcia. Excellent. We have a great working 
relationship with the Bureau; and every time we have had a 
change in SACs, we have a discussion soon thereafter 
introducing one another. I have called on them on a number of 
occasions for a variety of things, including public corruption, 
and so we have an outstanding working relationship with them.
    I did want to go back to one other area of investment on 
your question, Congressman, if I may, and that is as you see 
this law enforcement and private and public industry 
relationship, an important investment, if I had the resources, 
would be in public engagement. Having the relationship with the 
community, with the great diverse community that we have in 
this area is critical. You know, if folks don't have the 
confidence and trust to come forward with anything they may be 
aware about, then, you know, our technology isn't going to 
light up. Because, ultimately, some tip, some information 
starts with a human being, and we have got to make sure that 
local law enforcement and our Federal partners have that 
relationship and the ability to build and strengthen those 
relationships.
    So going back to the Incident Response Forum, that is a 
critical area that we have to also look at. It is not 
technology, but it is an important investment to make in terms 
of building active and human relationships.
    Mr. Keating. Thank you, Sheriff. I yield my time.
    Mr. McCaul. Thank you, Bill.
    Now, the Chairman recognizes Mr. Green for his questions.
    Mr. Green. Thank you, Mr. Chairman.
    Again, thank you for the courtesy of not being on the 
committee in allowing me to both make a statement and ask 
questions.
    First of all, I don't want to take anything away. 
Obviously, we need dredging money. Because that 250,000 folks 
that have those transport worker cards would probably not be 
here unless we keep that dredging going and, of course, for the 
growth; and I know a lot of other ports are having the same 
problem. So that is an issue.
    Sheriff and Captain, I was out on a Coast Guard helicopter 
right after 9/11 when we had joint boardings of Coast Guard 
personnel and Navy personnel. Obviously, the Navy for the 
defense and Coast Guard because of the law enforcement 
capability. I don't think we do that anymore, but it is still 
available if needed simply because we have a better 
intelligence network and if there is a ship coming in from an 
unusual location that we don't feel comfortable with that is 
still available, whether it is in the Port of Houston or 
elsewhere I know.
    But I also know that since 9/11 and having our Sheriff with 
us today, I am fortunate to represent a lot of cities along the 
Houston Ship Channel; and they all have law enforcement. At one 
time, there wasn't any coordinated effort. But the Sheriff is a 
designated State law enforcement--and the city of Houston, the 
city of Deer Park, Pasadena, you name it, all the way out to 
Baytown and La Porte.
    So that is the benefit we have. We have one Sheriff. I have 
to admit, we did have some problems between Federal and State 
after 9/11, the coordination effort there, but that was dealt 
with. Because, like the Sheriff said, our deputy ISAC, about 2 
years into 9/11, the FBI told me they had been on every plant 
along the channel to give them an assessment of their 
vulnerability.
    The Houston area and the port and the businesses in the 
area that form the port security district by State law that was 
supposed to come up with some of the maintenance money--and 
this is industry who is going to tax themselves based on, you 
know, the grants that the port gets and the area gets for 
security apparatus. So that is important.
    I am real familiar with LNG, though. We don't have an LNG 
facility in the Port of Houston. That is why we don't get the 
LNG tankers. We have a great pipeline network that comes in. I 
am familiar with the one that comes into Boston Harbor, and I 
don't know if Captain Whitehead, Captain Diehl, the agreement 
on that from Yemen--and I don't know if this is true for every 
cargo from Yemen--but I know going into Boston Harbor they 
actually go to the Island of Malta and are inspected. Are 
either of you familiar with that? That was a Coast Guard 
arrangement?
    Captain Whitehead. I am somewhat familiar with it. I know 
they have it for the tankers going into Boston. I don't want to 
speak for Boston, but I know they did do some pre-boardings of 
it in the Malta area.
    Mr. Green. I know the company. There is a Houston company 
that actually has that contract, and that has been the 
agreement. They would check that Yemen cargo, although 
previously that were actually coming in from Algeria, and I 
understand now they are probably going to come in from--because 
of the problems in Yemen, they will come in from Trinidad for 
the LNG for the Boston area.
    So there are ways we can deal with that and still have 
imported LNG or, in our case, we are looking at exporting LNG, 
which can be the same volatile product if it is on a ship. That 
is important.
    Let me ask the Sheriff, though, briefly, the Homeland 
Security appropriations bill passed by the House would cut 
numerous Homeland Security grant programs to State and local 
entities. The bill would cut local and State grant programs 
about 55 percent when compared to fiscal year 2011 enacted and 
67 percent compared to the President's request. Your local law 
enforcement depends on these grant dollars to help fund the 
maritime security missions and prepare needed maritime assets 
our ports depend on. Can you talk about if you don't have those 
up-front grants, at least can have the apparatus?
    Also I wonder if you could share about the port security 
district and what it has been doing and on the technology side 
to make literally a wireless and fiber optic communications 
between not only law enforcement agencies, the plant, the port 
plants, and the port to make sure we have that capability.
    But also mainly we talk about money, and if you don't have 
that up-front money, it doesn't do any good to worry about 
maintaining it, because we just don't have the infrastructure.
    Sheriff Garcia. Well, Congressman, thank you for your very 
pointed question. The fact is, without the support of the 
Federal Government in regards to the local mission that we have 
as it relates to a National security interest, we can't get it 
done; and so it is imperative that your colleagues hear the 
value of that support and what it means to the local community 
and local agencies like myself, and so we have to maintain that 
funding.
    A 50 percent cut in what we are currently getting, which 
isn't enough, equals to dire circumstances and tremendously 
reduced capacity and ability to respond effectively to National 
and international threats to our local communities. So that is 
scary, and so it is imperative that that be heard.
    Second, as Captain Diehl has said, thanks to a variety of 
resources and collaborations and to the security district, we 
have a true ring of steel. It is so--we are light years in 
front of many people. We are a model for other communities in 
terms of how tying in technology systems has been effective and 
has gotten us to the point that we are at.
    But it all goes back to it is great technology. We are 
truly a model. We are contemporary. We are very futuristic in 
many senses. But at the end of the day, we need, you know, 
blood, sweat, and tears to be able to monitor those systems.
    Mr. Green. Thank you, Mr. Chairman. That is all my 
questions, but, again, I appreciate the courtesies of both of 
you having the hearing here but also allowing me to weigh on 
the committee.
    Mr. McCaul. Absolutely. It is great to see you over the 
August recess as well.
    With that, the Chairman now recognizes the gentlelady from 
Houston, who arrived just in the nick of time before 
adjournment, Ms. Sheila Jackson Lee.
    Ms. Jackson Lee. Mr. Chairman, thank you so very much. To 
my colleagues, it is a pleasure to be with Congressman Gene 
Green. We work very hard and together on great assets of this 
whole community and one that is in his Congressional district 
that he shares but has really been a focused leader on the 
issues necessary in support of the port.
    Congressman Keating, please feel welcomed. We knew that you 
had enough cool breezes in Massachusetts, and we wanted to make 
sure that you could appreciate the diversity of this great land 
by coming here to Houston, Texas. We welcome you to our 
multiple Congressional districts, and we hope that you have 
benefited from coming to this great asset.
    To all of you, and certainly to be at the port is one of my 
chief, if I might say, joys. Because as I have traveled and 
represented this area and traveled internationally and been on 
the Homeland Security Committee, it takes all of the witnesses 
collectively in their respective responsibilities to really 
ensure that this economic engine is protected and that it 
continues to achieve as it has done.
    Chairman McCaul, thank you as well. You recognized a very, 
very important topic, and if I might just say a few opening 
words that may have already been said, but I think it is 
important to just note that this port has really been the basis 
for some 287,000 direct and indirect jobs, generating $11 
billion in economic impact and more than $649 million in State 
and local tax revenues and approximately 17,000 jobs that are 
connected with the Port of Houston.
    I was the convener and leader of a conference on 
international investments, which is why I was delayed with a 
number of out-of-town guests, and I thank you for your 
indulgence. But it also allowed me to receive one or two more 
briefings on the occurrence yesterday in the eastern region 
that impacted cities coming from Canada into New York and into 
Washington, DC, and beyond, starting in Mineral, Virginia. I 
think it is important, as I ask a series of questions, to focus 
on the importance of preparedness.
    We saw a 5.9 on the Richter scale earthquake. People in New 
York thought it was a terrorist attack. People in Washington, 
DC, as I was keeping up with staff and getting reports, were 
not aware of what it might be, and in that city were probably 
millions or at least hundreds of thousands of tourists, along 
with our remaining staff, certainly some Members of Congress 
and others, and, frankly, it was the seat of Government and 
then many, many other places.
    I think this hearing, although it is focusing on the port, 
it really has to raise the question of preparedness. I don't 
mind adding to the record, Chairman McCaul, because we might 
likely have a hearing on this issue when we return, is the 
level of preparedness, and it is clear that we are not 
prepared, that information did not segue into the population as 
it should have. The evacuation might have been incorrect. I 
need to be corrected, but I am told that earthquakes require 
one to go into places, as opposed to go out of places, and 
everybody was evacuated out of the building, and there may be 
some question.
    But I think this hearing points to being prepared in order 
to confront the aftermath of not being prepared, and I am 
grateful that it was a 5.9 earthquake that did not see, to our 
knowledge--reports may still be coming in--a loss of lives, and 
of course, we not have yet assessed the damage.
    But just imagine that kind of impact, without the 
preparedness that is necessary, which really includes 
resources. I want us to get to the point where we feel 
comfortable with preparedness for a natural disaster and a man-
made disaster, which is what we are speaking of today.
    So I am going to first pose questions to Mr. Caldwell of 
the GAO because I think integration of our law enforcement and 
preparedness agencies--I know that you did a report in 2007 
trying to encourage the transfer of information, the 
integration of information between our local and State, but I 
assume our other law enforcement agencies--and we now have a 
multiple number of agencies dealing with terrorism after 9/11. 
Could you respond more in depth to that question and tell us 
exactly in 2011 where we are in making progress on that 
integration?
    Mr. Caldwell. We had five recommendations in our earlier 
report, and three of those have been either closed or they are 
in progress of being closed. Two that were not closed, one had 
to do with exactly the issue you are talking about, the 
integration of operational plans. So that one is still being 
done; and, at this point, we don't have a commitment from DHS 
or FEMA about how low--to what operational level of planning 
they are going to take that integration.
    Ms. Jackson Lee. Why don't you pause for a moment and just 
tell us what that would be like? Maybe you want to give an 
example of an incident or what does that mean when you have the 
integration of operational plans?
    Mr. Caldwell. So, in our report that we did, we found that 
there was separate operational response plans for an oil spill 
or an environmental response and separate plans for a law 
enforcement response and terrorist attack on a tanker. You 
would have to integrate those two at the same time. The report 
has detailed comparison of the plans and how they have to be 
integrated, and so we were asking for exercises, which have 
been done, as well as integration of those operational plans so 
everyone knows their role when something actually happens.
    Ms. Jackson Lee. So you believe that, if we reached that 
goal, this very question that we are asking about, potential 
economic impact, if a port like the Port of Houston was 
actually subjected to a terrorist attack, we would be better 
prepared and better able to address it? So it really has to do 
with saving lives and dollars?
    Mr. Caldwell. It has to do with making sure everybody knows 
what they want to do to maximize protection of lives and the 
economy, things like that.
    Also leads to the other recommendation which is still open 
which was on performance measures. We have talked a lot about 
money and resources that are needed, but we still don't really 
have a clear path of measuring either DHS or FEMA in terms of 
some of these response assets, which ones work, which ones are 
going to actually help us be more prepared. So that is still a 
very open question. It is a very difficult thing to do. How do 
you measure preparedness of a lot of systems? It is not just of 
an individual program. It is how these things fit together.
    Ms. Jackson Lee. I think that is key. Because I guess I 
would interpret it as one hand knowing what the other hand is 
doing, either to jump immediately into action or to use all the 
necessary principles that needed to be involved if there was a 
terrorist act. The question I raise for the earthquake was 
whether or not we had everyone involved that needed to be 
involved as we looked at this up and down the East Coast.
    Mr. Edmonds, there is another captain at the table, but you 
are the administrative captain of this very large area. First, 
I would like you to give me, if you have the acreage of what 
you supervise in the Houston port for people to get the 
magnitude of how large it is. Again, focus on the responsible 
use of resources, the moneys that you could use and have used. 
We have been very glad to provide you with a number of funding. 
I have been very glad to be a supporter of that for the port 
for terrorist prevention, if you will. I don't think that is 
something that necessarily can be, but tell me how additional 
resources would be helpful in managing this very huge entity 
that you have supervision over.
    Mr. Edmonds. First, I don't know the acreage size. Does 
anyone know the acreage size? We will get that for you.
    Ms. Jackson Lee. Just the magnitude, if somebody knows how 
many city blocks.
    Mr. Edmonds. It is pretty good size. By Texas standards, it 
is pretty good size, but we will get that for you in a minute.
    Ms. Jackson Lee. It is big.
    Mr. Edmonds. It is big.
    But let me go back to something that I think speaks to the 
baseline of your question.
    Because of our geography and because of weather patterns, 
as you well know, we are hurricane prone. So for many, many 
years we have had a very sophisticated hurricane plan. After 9/
11, that was our baseline to begin to build off of to try to 
apply security issues to that plan because they are very much 
interrelated.
    I will say to you that in the most recent situation with 
Ike, I think the hurricane plan worked very, very well. Not to 
get into the detail of it, but it is a port-wide committee 
chaired by captain of the port or NOAA, one of those two 
agencies. All the stakeholders in the port are involved in it. 
There is a schedule that, as a storm begins to come, we begin 
to get ships out of the channel, begin to batten down 
everything until basically everything is secured, including 
container of wharf grains. Everything is secured and everything 
is gone or tied down, and it worked very well for us in Ike.
    But, after 9/11, we took that baseline and said, okay, we 
will try to now apply that to different security issues. We 
have been the recipient I think of some $45 million roughly of 
security grants since 9/11, thanks very much to you, 
Congressman and all of you, but we have used those for gate and 
fence and different kind of hardware security improvements to 
make sure that we can secure our properties.
    The security district, the quick history on that was a 
former county judge was approached by a bunch of ship channel 
industries to apply for a grant for a port-wide security 
communications capability. They didn't feel like they qualified 
under the grant program. So the county judge applied for that 
and got $26 million from the original grant. The problem was 
the $4 million of O&M money. So that is how we came together to 
supply that.
    So we have been an active participant. We have been fairly 
successful, but we have used those moneys for programs and for 
integration of programs to make sure that we all communicate 
with each other, that we try to act as one family looking after 
each other to make sure that everyone is secure and as safe as 
we can be.
    One of the concerns that I have about the security district 
is--if I am correct in this, Captain Diehl, help me--I don't 
believe there is replacement dollars. One of the beauties of 
this country is technology is evolving every day. That is going 
to become stale technology in short order. So we are going to 
have to start all over in the grant process to get another 
grant to upgrade the technology. So that is something that you 
all might think about as you deliberate the funding programs.
    Well, she asked me the acreage----
    Ms. Jackson Lee. It is big.
    Mr. Edmonds. Eleven thousand five hundred acres of 
developed and undeveloped property.
    Ms. Jackson Lee. It is big. Thank you.
    Mr. Edmonds. That is just the authority. There is 25 miles, 
as you know----
    Ms. Jackson Lee. Coast line.
    Mr. Edmonds. As the crow flies.
    Ms. Jackson Lee. Mr. Chairman, I just have some follow-up. 
I am trying to read that clock, but with distance and your 
generosity--I can feel your generosity as I am sitting here.
    Mr. McCaul. I didn't know you could feel that.
    Mr. Edmonds. It has been there for a long time, as you 
know.
    Ms. Jackson Lee. I want to focus on Sheriff Garcia. I 
happen to believe that personnel are key to terrorist 
prevention or terrorist acts prevention, in addition to 
technology with Mr. Edmonds. So I guess I am a fan of people 
working with technology and keeping up with the latest 
technology.
    There is a possibility--and I don't think I am giving 
anyone any ideas--that the huge cargo ships represent enormous 
targets, either by bypassing the scrutiny when the ships were 
loaded with some sort of uranium--some nuclear capacity that is 
triggered once entering this port. The port, interestingly 
enough, is located in a populated area. We should be very 
clear. We thank the port for its hugeness, but it is--and it 
has been a good neighbor, but it is in an area of residential 
communities.
    I want you to be pointed in your response about the 
difficulty of shortchanging trained personnel where you are a 
partner with Federal funding. Because my belief is that even in 
this time of debt reduction, we should be prioritizing what we 
have to spend money for, and I think homeland security is 
important. I am going to ask my last two questions of Captain 
Whitehead and retired Captain Diehl as just to say: What would 
be the most important element that you would want this hearing 
to know in terms of the prevention or the need for increased 
security at this port that we take away and back to Washington?
    But, Sheriff Garcia, if you can focus on the elements of 
preventing a cargo ship coming in or a seaman determined to 
perform a terroristic act who has managed to get through and be 
a seaman on one of the many cargo ships that are coming in from 
international waters.
    Sheriff Garcia. Congresswoman, thank you for your question 
and your leadership on this issue, because it is imperative 
that I do get the message out that I need flesh and blood to 
carry out my mission. Going back to the old adage that cops on 
patrol do prevent crime, well, the deputies on patrol on water 
and land, around the port, can prevent acts of terrorism or 
criminal operations that can lead to terrorism.
    So it is imperative, and as I have said it before at a 
Congressional testimony that you and I were at, you know, I am 
a fan of the COPS program. I am a fan of, you know, that we are 
participating in a joint Federal operation here in patrolling 
of the Port of Houston and the Houston Ship Channel. So, thus, 
I do believe that justifies the need for the Federal Government 
to support a local law enforcement agency like myself.
    But also let me be very pointed. When the Sheriff's office 
got into this relationship with the ship channel and the Port 
of Houston in regards to being the lead agency, we made 
commitments. We made commitments, and at this point because of 
current economic situations, we are not living up to those 
commitments. I want to live up to those commitments. I want to 
exceed those expectations.
    I want to be a good partner to my partners with the Coast 
Guard and the CBP and other agencies, but I want to make sure 
that we don't look back to days like today where we are making 
it clear that we do need support to provide all of the presence 
of patrol, water, land, monitoring of technologies, community 
relationship building, all those issues that would work to keep 
us safe but weren't able to do it because we didn't have the 
salary dollars to do that.
    Ms. Jackson Lee. So cutting funds would have a negative 
impact?
    Sheriff Garcia. It would have a catastrophic impact.
    Ms. Jackson Lee. On this port and its surrounding area?
    Sheriff Garcia. Yes, yes.
    Ms. Jackson Lee. Captain Whitehead, something vital we need 
to focus on.
    Captain Whitehead. I would say--I mentioned it earlier--the 
partnerships are key and that is done through people. 
Technology certainly enhances that and facilitates that, but 
the people are key, as you mentioned, Congresswoman, to 
exercise, train together, work together continuously. So those 
people and interacting together and having the ability to, you 
know, day in and day out work together I think are key to 
preventing terrorist attacks here.
    Ms. Jackson Lee. Thank you, Captain.
    Captain.
    Captain Diehl. Good morning.
    Ms. Jackson Lee. Good morning.
    Captain Diehl. If you measured how many law enforcement 
people are on the ship channel--let's say, the number is 1,000, 
if you are going across DHS and you are going across the local 
authorities and things like that. What you have the ability to 
do is gather in what Congressman Green talked about, 250,000 
people with TWIC cards, and that is the industry that works 
here, and that speaks back to what you heard earlier is the 
partnerships are key. As industry here, we realize if this 
thing isn't safe, secure, and environmentally working, we don't 
make a profit as industry. We want to keep cargo moving.
    Speaking for the Ship Channel Security District, the 
concerns that we have is we have stepped up and said, you know 
what, we are going to help, we are going to supplement, we are 
going to tell you what works without hindering our movement of 
efficiency of cargo. It is a great dovetail between industry 
and those that are protecting us, and that works.
    What the fear is in preparing for this testimony was, okay, 
with the budget cuts, they are going to start giving us less. 
They are going to say, oh, you are a good model down there; you 
guys can shoulder a little bit more of it. That wasn't really 
the plan. The plan was to work together more to support them to 
come to the table and help them.
    So if we are going to be penalized with less port security 
grants because we are actually assessing ourselves, we are 
going to lose a lot of support among the ship channel security 
industries that are saying, so we rogered up for, you know, in 
some cases, to pay $250,000 a year in assessments to support 
the security so that DHS can pull back? That is not going to go 
over very well with the people I represent.
    Thank you.
    Ms. Jackson Lee. In conclusion, let me just say that is a 
very, very important point here, you establish yourself as a 
model really for other ports to emulate, and in order to keep 
up at that level of perfection, you need the resources that 
might be missing because someone highlights and says, boy, they 
are doing great; let's let them to do great with less.
    I just want to put on the record I am constantly looking at 
ways to improve the TWIC card process, and I know the Coast 
Guard is working very hard. Captain, I am well aware of it. But 
one of the things the TWIC card is supposed to do is provide 
protection, but it also sometimes denies opportunity for work 
for people who are in no way a terrorist threat. I would like 
to see the TWIC card process streamlined, move faster, and for 
the many men and some women who have asked about why their 
process is 6 months, 1 year, sometimes we know that there is 
some concerns that we have to engage. We need resources for 
that to make sure the TWIC card----
    My last final point is cargo inspection for the inbound 
cargo carriers is crucial. We must keep the international 
connection where cargo is being inspected at a high level so 
that we can protect America as those ships are coming in, and I 
am still not comfortable at where we are on all of the 
inspections of major cargo coming into the United States, and 
certainly the Houston port is one of those recipients.
    So I think this is an important hearing, but I would offer 
to say that I am looking at legislation around this issue, and 
I would say to the Chairman that this is an important 
bipartisan effort, and I look forward to working with this 
committee as we go forward.
    Mr. McCaul. I thank the gentlelady for recognizing my 
generosity and being bipartisan. I think that we do have a debt 
crisis, but we also have an obligation under the Constitution 
to provide for a common defense as well. This committee will be 
having an authorization bill I believe coming up in the fall. 
That will give us an opportunity I think to address some of 
these funding issues.
    Sheriff, you and I have spoken about the COPS grant program 
that I fully support, and I would hope the whole Harris County 
delegation would join me in my letter supporting your efforts 
for that.
    The security district, the success of that is you moved 
from No. 3 to No. 2 on the port security grant program. I think 
that is certainly good news for Harris County.
    Then, finally, I think as my colleague Mr. Green pointed 
out, on the dredging issue--and I hope the gentlelady from 
Houston will join me on this one as well--when we send $120 
million to Washington and only get $20 million back----
    Ms. Jackson Lee. Absolutely.
    Mr. McCaul [continuing]. That is one of the largest ports 
in the world with one of the biggest risks in the world.
    When you have got the Panama Canal having 50 feet and we 
only have 40 to 45 feet, that is going to be a serious problem 
in terms of trade and the ships coming down the channel. So I 
would hope that we have an opportunity I think to work together 
on that effort as well in a bipartisan effort in the Harris 
County delegation.
    So, with that, I just want to thank all the witnesses.
    Ms. Jackson Lee. Will the gentleman yield for a moment?
    I just want to answer ``yes'' on the record to join you on 
the dredging issue and on the COPS grant, and I ask for 
bipartisan support as we come up on the appropriations for 2012 
and the zeroing out----
    There are those of us, bipartisan, by the way, Chairman 
McCaul will be submitting an amendment to restore the COPS 
funds for the upcoming fiscal year. I think if we can secure 
the bipartisan support that we have secured before, everyone 
will understand that the re-funding of the COPS grant is what 
you call a maximizing of your investment with the trained law 
enforcement officers that will benefit from it. So I would like 
to call upon your support for the restoring of those funds for 
2012.
    Mr. McCaul. Yes, I would also like to point out, let's not 
offset it with NASA.
    Ms. Jackson Lee. Not at all.
    Mr. McCaul. We have to find an offset, and we are not going 
to hurt NASA.
    Ms. Jackson Lee. Not at all.
    Mr. McCaul. I know the gentlelady agrees with that as well.
    The Chairman recognizes for a final statement the Ranking 
Member.
    Mr. Keating. Thank you, Mr. Chairman; and thanks for having 
this hearing. I learned a lot.
    We are just days away from the 10th anniversary of 9/11. 
This testimony today indicated that we are light years--we have 
moved light years in our understanding and anticipating and 
preparing for all kinds of terrorist threats.
    What this hearing also underscores, too, is that, you know, 
even with the ring of steel, even with the model programs, the 
role of security is a Government role; and so as we come away 
from this hearing, we understand our obligation, particularly 
being Members of the Homeland Security Committee, to do this, 
to protect our citizens, to make sure our commerce is clear and 
protect our economy and our jobs.
    We have an enormous obligation right here in this area, and 
I have learned a lot from being here, and I want to thank 
everyone for giving me that opportunity.
    Mr. McCaul. We certainly appreciate you coming all the way 
down from the beautiful bay area of Cape Cod and Nantucket to 
beautiful Houston and the port.
    With that, let me thank the witnesses and everybody for 
being here today. I know we have some Coast Guard vessels out 
standing, that we are going to take a little ride to the ship 
channel.
    Without objection, the hearing record will remain open for 
10 days; and so, with that, this hearing is adjourned.
    [Whereupon, at 11:51 a.m., the subcommittee was adjourned.]

                                 
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