[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
DEEPWATER HORIZON: OIL SPILL
PREVENTION AND RESPONSE
MEASURES, AND NATURAL RESOURCE IMPACTS
=======================================================================
(111-112)
HEARING
BEFORE THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
----------
May 19, 2010
----------
Printed for the use of the
Committee on Transportation and Infrastructure
DEEPWATER HORIZON: OIL SPILL PREVENTION AND RESPONSE MEASURES, AND
NATURAL RESOURCE IMPACTS
DEEPWATER HORIZON: OIL SPILL
PREVENTION AND RESPONSE
MEASURES, AND NATURAL RESOURCE IMPACTS
=======================================================================
(111-112)
HEARING
BEFORE THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
May 19, 2010
__________
Printed for the use of the
Committee on Transportation and Infrastructure
U.S. GOVERNMENT PRINTING OFFICE
56-561 WASHINGTON : 2011
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
JAMES L. OBERSTAR, Minnesota, Chairman
NICK J. RAHALL, II, West Virginia, JOHN L. MICA, Florida
Vice Chair DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of JOHN J. DUNCAN, Jr., Tennessee
Columbia VERNON J. EHLERS, Michigan
JERROLD NADLER, New York FRANK A. LoBIONDO, New Jersey
CORRINE BROWN, Florida JERRY MORAN, Kansas
BOB FILNER, California GARY G. MILLER, California
EDDIE BERNICE JOHNSON, Texas HENRY E. BROWN, Jr., South
GENE TAYLOR, Mississippi Carolina
ELIJAH E. CUMMINGS, Maryland TIMOTHY V. JOHNSON, Illinois
LEONARD L. BOSWELL, Iowa TODD RUSSELL PLATTS, Pennsylvania
TIM HOLDEN, Pennsylvania SAM GRAVES, Missouri
BRIAN BAIRD, Washington BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington JOHN BOOZMAN, Arkansas
MICHAEL E. CAPUANO, Massachusetts SHELLEY MOORE CAPITO, West
TIMOTHY H. BISHOP, New York Virginia
MICHAEL H. MICHAUD, Maine JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania JEAN SCHMIDT, Ohio
TIMOTHY J. WALZ, Minnesota CANDICE S. MILLER, Michigan
HEATH SHULER, North Carolina MARY FALLIN, Oklahoma
MICHAEL A. ARCURI, New York VERN BUCHANAN, Florida
HARRY E. MITCHELL, Arizona BRETT GUTHRIE, Kentucky
CHRISTOPHER P. CARNEY, Pennsylvania ANH ``JOSEPH'' CAO, Louisiana
JOHN J. HALL, New York AARON SCHOCK, Illinois
STEVE KAGEN, Wisconsin PETE OLSON, Texas
STEVE COHEN, Tennessee VACANCY
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
BETSY MARKEY, Colorado
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
JOHN GARAMENDI, California
HANK JOHNSON, Georgia
(ii)
CONTENTS
Page
Summary of Subject Matter........................................ v
TESTIMONY
Birnbaum, S. Elizabeth, Director, Minerals Management Service.... 74
Earle, Sylvia, Ph.D., Explorer-In-Residence, National Geographic
Society, Washington, DC........................................ 74
Gerica, Pete, Gerica Seafood, New Orleans, Louisiana............. 107
Jackson, Lisa P., Administrator, Environmental Protection Agency. 74
Kinner, Nancy E., Ph.D., Codirector, Coastal Response Research
Center, University of New Hampshire, Durham, New Hampshire..... 107
Lubchenco, Jane, Under Secretary of Commerce for Oceans and
Atmosphere, and NOAA Administrator, National Oceanic and
Atmospheric Administration..................................... 74
McKay, Lamar, President, BP PLC.................................. 12
Mitchelmore, Carys L., Ph.D., Associate Professor, University of
Maryland Center for Environmental Science, Chesapeake
Biological Laboratory, Solomons, Maryland...................... 107
Newman, Steven, President and Chief Executive Officer, Transocean
Ltd............................................................ 12
Salerno, RADM Brian, Assistant Commandant for Marine Safety,
Security, and Stewardship, U.S. Coast Guard, accompanied by
RADM Peter V. Neffenger, Deputy National Incident Commander for
the Deepwater Horizon Oil Spill Response, U.S. Coast Guard..... 74
Schweiger, Larry, President and Chief Executive Officer, National
Wildlife Federation, Reston, Virginia.......................... 107
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
Capito, Hon. Shelley Moore, of West Virginia..................... 126
Carnahan, Hon. Russ, of Missouri................................. 127
Cohen, Hon. Steve, of Tennessee.................................. 128
Johnson, Hon. Eddie Bernice, of Texas............................ 129
Larsen, Hon. Rick, of Washington................................. 142
Mitchell, Hon. Harry E., of Arizona.............................. 146
Rahall, Hon. Nick J., III, of West Virginia...................... 147
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Birnbaum, S. Elizabeth........................................... 155
Earle, Sylvia, Ph.D.............................................. 174
Gerica, Pete..................................................... 186
Jackson, Lisa P.................................................. 187
Kinner, Nancy E., Ph.D........................................... 199
Lubchenco, Jane.................................................. 215
McKay, Lamar..................................................... 229
Mitchelmore, Carys L............................................. 237
Newman, Steven................................................... 257
Salerno, RADM Brian and RADM Peter V. Neffenger.................. 267
Schweiger, Larry................................................. 275
SUBMISSIONS FOR THE RECORD
Jackson, Lisa P., Administrator, Environmental Protection Agency,
response to request for information from the Committee......... 195
Lubchenco, Jane, Under Secretary of Commerce for Oceans and
Atmosphere, and NOAA Administrator, National Oceanic and
Atmospheric Administration, response to request for information
from the Committee............................................. 224
Napolitano, Grace F., a Representative in Congress from the State
of California, letter from Professor Robert Bea of the
University of California at Berkeley........................... 150
ADDITIONS TO THE RECORD
International Association of Independent Tanker Owners
(INTERTANKO), Dr. Peter M. Swift, Managing Director, written
testimony...................................................... 291
U.S. Travel Association, written testimony....................... 296
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DEEPWATER HORIZON: OIL SPILL PREVENTION AND RESPONSE MEASURES AND
NATURAL RESOURCE IMPACTS
----------
Wednesday, May 19, 2010
House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC.
The Committee met, pursuant to call, at 10:05 a.m., in room
2167, Rayburn House Office Building, Hon. James Oberstar
[Chairman of the Committee] presiding.
Mr. Oberstar. The Committee on Transportation and
Infrastructure will come to order.
Prior to our hearing, we have pleasant Committee business
to undertake. We have a new Member assigned to a vacancy that
occurred on our Committee. And I want to welcome Hank Johnson
of Lithonia, Georgia, to the Committee on Transportation and
Infrastructure.
Glad to have you aboard.
He is a very serious-minded Member. He has wanted to serve
on the Committee since his election to Congress. The Democratic
caucus of the Committee unanimously recommends that the
gentleman from Georgia be appointed to the Subcommittee on
Economic Development, Public Buildings, and Emergency
Management and to the Subcommittee on Water Resources and
Environment. Is there objection?
Without objection, so ordered.
Mr. Johnson represents the district in Georgia previously
represented by Cynthia McKinney, a good friend of many of us.
He grew up in the District of Columbia. He earned his
degree from Clark College in Atlanta, Georgia, the Thurgood
Marshall School of Law at Texas Southern University. He
practiced law in Decatur, Georgia, for 25 years. He served for
12 years as DeKalb County magistrate judge, 5 years as county
commissioner, and 3 years as chair of the DeKalb County Budget
Committee. He also serves on the Armed Services and Judiciary
Committees.
The Chair recognizes Mr. Johnson for 30 seconds.
Mr. Johnson of Georgia. Thank you, Mr. Chairman. And, in
addition to those things, I am also a part-time aspiring
comedian.
Mr. Chairman, I am honored to join the Transportation and
Infrastructure Committee. And I look forward to working with
you, the Ranking Member, and my colleagues on this Committee.
Joining this Committee will give me an opportunity to
better help my home State of Georgia, the Fourth District, and
the city of Atlanta, home to the State's largest public
transportation system and the world's busiest airport.
We face enormous Transportation and Infrastructure
challenges as a Nation, and I look forward to working with all
of you to address them.
Thank you very much.
Mr. Oberstar. Thank you very much, Mr. Johnson.
The Chair now recognizes Mr. Mica, our senior Republican on
the Committee.
Mr. Mica. Thank you.
And, on behalf of our side of the aisle, Mr. Johnson,
Congressman Johnson, welcome. We look forward to working with
you. And we've got some important responsibilities and
jurisdiction on this Committee, and we view you now as our
newest member of the team. Welcome aboard.
Thank you. I yield back.
Mr. Johnson of Georgia. Thank you.
Mr. Oberstar. We'll have an abbreviated opening statement
procedure. I will make framing comments on the scope of the
hearing. Mr. Mica; Mr. Rahall, who is the Chair of the
Resources Committee and will have a hearing of his own--Natural
Resources Committee; used to be Interior and Insular Affairs--
and Mr. Young; Ms. Johnson; Mr. LoBiondo; Mr. Cummings; and Mr.
Cao. Mr. Mica and I for 4 minutes, and each of the others for 2
minutes.
We are meeting to consider the explosion and sinking of the
offshore drilling unit Deepwater Horizon in the Gulf of Mexico
and the loss of 11 lives and the ongoing, continuing massive
oil spill with the potential for unprecedented damage both to
the economy and to the environment.
Many of the elements of this tragedy are familiar to the
Committee. BP was in charge of the drilling in the gulf. It has
a history of prior spills from pipelines and other activities
that cast doubt on whether the company has the commitment to
the practice and the culture of safety necessary to protect the
public.
In March 2006, BP was responsible for the worst spill in
the history of oil development on Alaska's north slope, which
was the subject of discussion and inquiry in this Committee.
The spill went undetected for 5 days. BP ignored four alarms on
its system indicating that there was a leak. The Federal
investigation established that BP had not established programs
for required maintenance--that is, cleaning with pigs--or
programs for internal maintenance using smart pigs on the
pipeline. The Pipeline and Hazardous Materials Safety Agency
ordered BP to replace the lines.
Admiral Barrett, retired admiral of the Coast Guard, later
put in charge of the pipeline safety management agency said,
quote, ``I continue to find that the presence of hazardous
conditions on three of these pipelines managed by BP would
likely result in serious harm to property or the environment.''
It issued three corrective action orders to BP, which took them
quite some time to comply. And I have a complete timeline; I
won't go into that at this point.
When BP obtained its approval for safety and response plan
required for drilling in the gulf, BP claimed that, if there
was a spill, it would not have an environmental impact because
BP would rely upon, quote, ``industry-wide standards for using
proven equipment and technology to respond to the spill.''
Almost a month has passed. The response plan and its proven
equipment and technology have failed to stop most of the
continuing oil discharge or to contain most of the oil already
discharged.
BP has harnessed impressive scientific and technological
experience to drill at great depths in the sea, and you have to
wonder why they hadn't harnessed similar science and technology
to anticipate failure, to install redundancy to prevent failure
and practices to clean up after an oil spill.
On the government's side, similarly, there is a very
disturbing lack of dedication to safety, excessive reliance on
the industry to police itself, going back more than two decades
of government experience. The Minerals Management Service of
the Department of Interior, in charge of ensuring the safety of
offshore drilling, has a dual mandate: to promote and to
regulate--promote the government's financial relationship with
the drilling industry and regulate the safety of the industry.
That combination creates inevitable conflicts, and those can
undermine safety, as this Committee has found with the FAA
doing both promotion and safety, at least until the DeFazio
amendment, which terminated that practice. Secretary Salazar,
happily, has taken action to separate these functions within
the Minerals Management Service.
In regulation of offshore drilling, Minerals Management
Service has fallen way short of the commitment needed for
effective oversight of offshore drilling. They have shown a
disturbing failure to regulate blow-out preventers, a critical
part of the BP plan to contain or to prevent a spill. Minerals
Management Service was aware that, in recent years, several
failures--several blow-out preventer failures played a role in
at least 14 accidents. In 1 year, there were 114 blow-out
preventer failures. But the Minerals Management Service relied
totally on the industry to ensure effectiveness of blow-out
preventers.
At the Marine Board of Inquiry for the accident, the co-
chair of that panel reported testimony of an expert witness,
quote, ``is designed to industry standard, is manufactured by
the industry and installed by the industry, with no government
witnessing or oversight of construction or installation.''
Well, that brings back to painful memory a hearing in this
Committee in which excessive deference to a regulated industry
was called to our attention, with the Coast Guard's contract
for its Deepwater procurement program. We found that the Coast
Guard allowed a company who had the contract for major vessel
procurement and extension to also play a critical role, a major
role, in certifying the design of the vessel.
So the Coast Guard, as Minerals Management Service, as FAA
before it, were relying on industry to design the product,
build the product, certify its safety. And Chairman Cummings,
Chair of the Coast Guard Subcommittee, held an 11-hour hearing
in this Committee that established all of those facts,
resulting in legislation that has changed the practice of the
Coast Guard.
We also learned in hearings conducted by Mr. Costello,
Chair of the Aviation Subcommittee, that FAA policy was to
consider regulated airline as its customer, to go to great
lengths to keep the customer satisfied with the inspectors who
were regulating it. The result of the hearing was it caused the
FAA to significantly change its practices and to change
personnel, as well. And now we are seeing a change of culture
in the FAA on oversight of safety.
We have developed legislation as a result of those
experiences, and I expect we will do the same after we have
plumbed the total causes of this incident in the gulf.
Delegation of responsibility for the safety of the drilling
unit delegated out to the Republic of the Marshall Islands,
where that drill rig was registered. Under U.S. law, we give
considerable deference to safety regulation by the country of
registry, in aviation and in maritime. There is one reason that
ship-owners register their ships in flag-of-convenience
countries like the Marshall Islands: They want to save money by
avoiding the safety and liability standards required by
countries such as the United States.
The Coast Guard witnesses before the Marine Board of
Investigation on the Deepwater Horizon accident testified that
a Coast Guard inspection of a U.S.-flag mobile offshore
drilling unit takes 2 to 3 weeks, but the safety examination of
a foreign-flag offshore drilling unit, such as the Deepwater
Horizon, takes 4 to 8 hours--obviously, nowhere near as
thorough and detailed an investigation and certification or
recertification as we do of our own equipment.
Given the magnitude of the spill in the gulf, we need to
review the causes of the spill as well as the broader question
of the adequacy of procedures for ensuring that drilling is
safe and does not endanger the environment. This is not a
hearing about whether or not to drill but how you go about the
procedures and how you assure the public safety and how the
interest of the broader public is protected to ensure that this
type of disaster does not happen again.
About 2 weeks ago, I circulated an idea, without making it
public, that I thought that the best approach to the
fundamental causes would be a Challenger-type commission. I
served on one such commission, Pan Am 103, requested by then-
President George Bush I, which resulted in the first aviation
safety legislation enacted in this country, preceding that of
September 11, 2002--after the September 11th, 2001, passed it
in 2002.
So I think the President's initiative toward a commission
is a sound idea. And we may even have to do some--introduce
legislation to further that cause.
I look forward to the testimony of our witnesses.
And I will yield to Mr. Mica.
Mr. Mica. Well, thank you, Mr. Oberstar, for setting the
stage for this hearing and your comments and also for complying
with the request of Congressman Cao of Louisiana, who first
requested the hearing, also requested me to support his review
by this Committee, and we are doing it today.
We do have an important responsibility. As you know, this
Committee does oversee the United States Coast Guard, which is
the first responder that was there. We do have a
responsibility. Eleven people were killed in the explosion, and
we have joint jurisdiction with other Committees over
responsibility to make certain, as Mr. Oberstar said in his
opening statement, that this doesn't happen again.
What I want to do is take a minute, and I don't want to
point fingers, but I just want to review the process and what
has taken place and what didn't take place. And then we will
have questions when we have some of these witnesses before us.
First of all, I see in today's headlines, ``Salazar says
regulatory oversight of industry is lax.'' And he really didn't
want to--he said, ``It would be premature to say that watchdogs
underestimate had the risk.'' I don't know what planet he is
on, but we have had these warnings for some time.
Before he took office, the United States Department of
Interior inspector general, at the end of the Bush
administration, issued an IG report. The IG said that they had
three separate investigations by the Office of Inspector
General over the Minerals Management Service under the
Department of Interior, responsible for this.
And I would like this part of the record, because it does
show the activities that were inappropriate that were going on
between that agency and also the industry.
Mr. Oberstar. Without objection, that document will be
included in the record.
Mr. Mica. Let me also say, if you look at the way these
activities take place, you have to review, again, the whole
picture. Under the Bush administration, leases for oil
exploration and drilling were issued. And this particular lease
was under the Bush administration. However, all of the actions
to ensure that safety measures were put in place have to be
attributed to the Obama administration.
What I have done is outline--I call this the ``Obama oil
spill timeline.'' And we have to look very carefully at the way
things are done. First, the lease was given. Secondly, BP came
in in February of 2009. As you heard Mr. Oberstar say, the
industry proposes how they are going to go about--and this was
not a production well; it was an exploratory well. They
requested and had approved--and this is the copy of their
request and their safety procedures--everything that they were
going to do in exploration of this particular site.
Just a short time later, April 6, the Obama administration
issued--and I think this is the first time we have a public
copy of this. This is their approval. It's basically a carte
blanche recipe for disaster, because they did not require
extraordinary measures. There is only one sentence in here that
says--and let me be fair. It says, ``Exercise caution while
drilling due to indications of shallow gas and possible water
flow.'' This is the approval that that agency, the government
agency, gave for that.
Let me say that they failed to put in place, and even today
they fail to put in place, measures which I have been calling
for for some time and others have been asking for, particularly
in oil exploration and drilling. And it's simple, and also Mr.
Oberstar referred to it: a blow-out protection mechanism,
acoustic control, remote emergency cut-off, required in all the
European activities.
Now, let me ask you, too: Why was BP developing a dome or a
top-hat to put over this after the incident occurred? I mean,
simple prudence would say that you cover all the risks.
Now, let me tell you why this is important. This is the
Obama administration list of Deepwater sites. I don't know if
we can put that up, but they have approved almost three dozen
of these sites. This was at 5,000 feet. Almost all of these are
a quarter of a mile in depth, and some of them that have been
approved are 8,000 feet--8,000 feet--more than what we have
seen. So we've got to make certain that this doesn't happen
again, that simple protections are in place and that risks are
addressed.
Then, more disturbing is the United States Coast Guard,
which is the jurisdiction of this Committee--and I asked
Members when we found out about this. The budget came out from
the Obama administration in February. This is a copy of it. It
proposed cutting the United States Coast Guard 1,000 positions,
ships, planes, helicopters--essential to the first
responsibilities we gave them.
Then, if you look at the timeline of what we did, it was--
actually, the explosion took place on the 20th. The 21st, the
Coast Guard came on board--actually, the 20th. They were
rescuing people, trying to deal with the safety and other
results from the explosion. But from the 21st, it took until
May 1st to have the Coast Guard commandant, Thad Allen--bless
his heart and all the Coast Guard that do an incredible job--
but he wasn't appointed until May 1st as the national incident
commander pursuant to a declaration of ``spill of national
significance.''
So what happened and what is important to note on this--can
we put this up on the screen?
This is a little graph here, and it shows what happened. If
you had gotten the spill and we had gotten on top of this
immediately, you could have contained that, actually vacuumed
up and contained some of this spill. But this went on and on.
And this graph shows--of course, there is a little blue dot
where, if it had been identified and the agency that was
responsible for oversight was doing its job--again, I am
casting no aspersion on the Coast Guard. But the plan--this is
the plan they submitted--never had this backup response
mechanism in place. So it spread and it spread and it spread.
And that's the story.
Now, I share the President's desire--and the President,
before this spill, came out--this is the New York Times
article. The President says--``Obama to open offshore oil
drilling.'' I have no problem with that. I have always
supported particularly gas, but with oil, it has always been a
safety factor, that you have to make certain that you have
safety provisions, none of them required. And then you came out
with a proposal in February, before the spill, to gut the first
responders, which I think is totally inappropriate.
So we are here to get the facts. I am not going to point
fingers at BP, the private industry, when it is government's
responsibility to set the standards, to do the inspections. I
haven't gotten into the lack of inspections that they didn't
conduct and they should have conducted even with that small
warning in one sentence in the permit that they issued.
So, Mr. Chairman, I share your desire in making certain
this doesn't happen again. It shouldn't happen again, and it
must not happen again. And we will work with you in that
regard.
I yield back.
Mr. Oberstar. I thank the gentleman for his comments.
Much of the criticism he raised is what I raised, but I
think it is inflammatory to call it the ``Obama oil spill''--
and wrong. Those approvals that the gentleman cited were given
early in the Obama administration by careerists who were not
policy appointees.
The budget cuts that the gentleman cites were in our
Committee budget submission that the Republican Members of the
Committee and the gentleman himself all approved. There was
termination of 378-foot cutters that date back to the '60's and
'70's that were out-of-date and have been replaced by modern
equipment. The personnel cuts accompanied those cutters.
The helicopter terminations were aged helicopters from the
northern-tier States that would not have been available or
suitable for deployment in the gulf for this situation.
The Coast Guard, in fact, responded promptly and, the very
day of the fire, dispatched equipment to the scene. The cleanup
is the responsibility of the responsible party under law. The
government's role, Minerals Management and of the Coast Guard,
is to oversee and make sure that that work is being done
appropriately.
Mr. Rahall?
Mr. Rahall. Thank you, Mr. Chairman.
Mr. Chairman, thank you for having these hearings today.
On April 5th of this year, an explosion in the Upper Big
Branch Mine in my congressional district tragically claimed the
lives of 29 brave souls. It was worst coal mine disaster in 40
years. Just 20 days later, 11 men lost their lives as a result
of the explosion of the Deepwater Horizon rig in the Gulf of
Mexico. What has ensued is the worst oil spill from a drilling
platform in 41 years.
As we begin today's hearing, I think we must recognize the
human toll from energy development. While efforts continue to
find the cause of the blast at the Deepwater Horizon rig, to
contain the spill, and to combat an environmental disaster, it
is important that we remember, just as the President and the
House of Representatives did for our 29 fallen miners, that we
honor the 11 men who perished on April 25th, as I read their
names:
Jason Anderson, age 35, Bay City, Texas; Aaron Dale
Burkeen, age 37, Philadelphia, Mississippi; Donald Clark, age
49, Newellton, Louisiana; Stephen Curtis, age 39, Georgetown,
Louisiana; Roy Wyatt Kemp, age 27, Jonesville, Louisiana; Karl
Kleppinger, age 38, Natchez, Mississippi; Gordon Jones, age 28,
Baton Rouge, Louisiana; Blair Manuel, age 56, Eunice,
Louisiana; Dewey Revette, age 48, State Line, Mississippi;
Shane Roshto, age 22, Liberty, Mississippi; and Adam Weise, age
24, Yorktown, Texas.
Psalm 23:4 says, Mr. Chairman, ``Yea, though I walk through
the valley of the shadow of death, I will fear no evil for thou
art with me. Thy rod and thy staff, they comfort me.''
Just as we have seen that energy development has seemed
limitless, the industry has continued to push the envelope and
reach depths that have heretofore been unfathomable: 2 miles of
water in the Gulf of Mexico, 5 miles of rock in southern West
Virginia--incredible numbers and incredible barriers, all
surmounted to feed our undying thirst for more energy.
And as we continued to tackle new frontiers, we became
convinced of our own superiority over nature. After all, we
were told, there had not been an uncontrollable blow-out since
1969. Human ingenuity had triumphed, and safety was a forgone
conclusion. Nothing, it seemed, could stop us now.
But this hubris contained the seeds of our downfall like
the Greek mythological character Icarus, who made himself wings
so he might fly higher and higher, oblivious to his own
impending doom. We have dug further and further into the Earth,
convinced that nothing possibly could go wrong. In both cases,
Icarus and the Deepwater Horizon, the tragic reminder of our
own imperfections ended up littering the ocean.
Again, thank you, Mr. Chairman, for holding this hearing.
Next week, our Committee on Natural Resources will examine the
Deepwater Horizon disaster in terms of not only what happened
at this particular rig but the meaning of this disaster as it
relates to the future of oil and gas leasings off the coast of
the United States.
Mr. Oberstar. We will look forward to the transcript of the
gentleman's hearing. I might even sit in on it, if I have the
time to do so.
We will now recognize Mr. LoBiondo.
Mr. LoBiondo. Thank you, Mr. Chairman. I appreciate your
holding this hearing.
Since the Deepwater Horizon exploded and sank nearly 4
weeks ago, we have heard repeatedly how 11 crew members
tragically lost their lives, and now the Nation faces an
enormous economic and environmental disaster.
The Federal Government began its investigation into the
causes of the initial explosion and the failure of the blow-out
preventer last week. However, it is painfully clear that the
administration and industry were simply not prepared to respond
to an oil spill at this depth and of this magnitude. There was
certainly no adequate plan in place to respond to this type of
spill. And we should never be in a situation where we find
ourselves now, where we are literally testing response
technology as we try to clean up the spill. This is completely
unacceptable.
I am also concerned that the Federal Government and
particularly the Coast Guard may not have had the level of
resources and authorities to fully respond to a situation such
as this. And I would like to point out that, if we move forward
with the President's budget, that we, I think, are going to
cause enormous potential damage to the Coast Guard's ability to
respond.
Mr. Chairman, I very rarely like to disagree with you
publicly, but the ``Views and Estimates'' letters restored the
two 378-foot cutters, restored all the helicopters, restored
all of the maritime security teams. And I don't think anybody
on our side of the aisle ever gave any indication that we
approved, in any way, what the President was trying to do.
And I think, for many of us, we have seen what happened
over the years when we have asked the Coast Guard to do more
with less. And they have graciously said, ``Yes, we will, and
we will try,'' but they are tasked with an enormous
responsibility, from maritime antiterrorism, to port security,
to overseeing spills like we're seeing now, to illegal drugs,
to fisheries enforcement. How can we possibly expect them to do
their mission that we are giving them if we are going to talk
about cutting personnel?
In our Committee, Mr. Cummings has--we began discussions on
this. And I want to thank Mr. Cummings for agreeing to join
together so we can find a way to keep this from happening. I
hope, Mr. Chairman, you use your enormous position of authority
and responsibility to convince others that this is a terribly
wrong move. We look to the Coast Guard in times like this to
not only oversee but, if necessary, to take a lead role. And we
have to anticipate that the unexpected would happen and have
them in a position of readiness, both from an asset and from a
personnel standpoint.
So I hope that holding this hearing provides the Committee
with an opportunity to hear from all parties on how we respond
to this bill. And I thank you, Mr. Chairman, and hope that we
can join in with Mr. Mica and Mr. Cummings and yourself to find
a clear path forward to help solve these things in the future.
And I thank you very much.
Mr. Oberstar. I thank the gentleman for his comments.
And I take a backseat to no one in my defense of the Coast
Guard with my 35 years of service in the Congress. We have, in
our Views and Estimates, objected to the reductions. But the
terminations of those old cutters to be replaced by new cutters
is appropriate, and those replacements have been made. The
personnel cuts, we felt, were inappropriate and should be
relocated rather than terminated. And that is why our Committee
Views and Estimates is very strong.
I just wanted to make the point that those were old cutters
and that they--built in the '60's and '70's, and are being
replaced.
Ms. Johnson?
Ms. Johnson of Texas. Thank you very much, Mr. Chairman,
for holding this hearing.
If I may, Mr. Chairman, I would like to start by
recognizing the 11 victims of the Deepwater Horizon explosion
and the fire in the Gulf of Mexico last month. As we continue
this Committee's investigation into the events surrounding this
ongoing ecological disaster, we should not lose site of the
fact that 11 individuals lost their lives by simply showing up
for work on a daily basis.
I applaud the fine work of the U.S. Coast Guard and others
for their valiant efforts to locate those lost in the hours
following the initial explosion. I also wish that the outcome
was different, but the valiant efforts were worth doing.
Today's hearing focuses on the factors that led up to the
Deepwater Horizon explosion as well as ongoing response action
of both the British Petroleum and the Federal and State
resource agencies. Today, this Committee will investigate
whether actions of the previous administration to look the
other way on regulating big oil was a significant factor in
this incident.
However, today's hearing compels us to ask broader
questions about the wisdom of oil explosion policies that push
the envelope of drilling technologies without any assurance
that these exploratory wells can shut down if something goes
wrong. Every day for the past month, somewhere between 5,000
and 80,000 barrels of oil were released into the gulf.
Mr. Chairman, I ask for unanimous consent to put the rest
of my statement in the record.
However, I will close by asking the gentlemen to, please,
as they testify, to convince me that it was not greed that
caused them to ignore what it takes to control these types of
incidents and not taking into consideration the people or the
environment. Please, I hope you will tell me that this is not
true.
Thank you. I yield back.
Mr. Oberstar. The gentlewoman's statement, without
objection, will be included in full in the record.
The Chair now recognizes Mr. Cao of Louisiana.
Mr. Cao. Thank you, Mr. Chairman.
And, Mr. Chairman, today I sit here with a heavy heart just
thinking about the 11 lives that were lost and the thousands of
lives of the people in my district who are struggling to
survive as a result of the negligence that caused the explosion
and the ensuing oil spill.
It has only been 5 years since Katrina devastated New
Orleans and the Second District, and we are still struggling to
rebuild from Katrina, and now this occurs. This disaster has
threatened hundreds of miles of our shorelines, and thousands
of people along the gulf coast are wondering what we can do to
protect them and their livelihoods.
The economic, psychological, and mental impacts on the
people in the region has been devastating. I have heard from
fishermen who are even contemplating suicide. So we have a
serious problem on our hands. And what are we going to do in
order to help the people of my district and the people along
the gulf coast?
I hope that the Congress and the parties who are involved
can come up with a comprehensive plan to help those people who
are immediately impacted economically, mentally, and
psychologically. I hope that we come up with a comprehensive
plan to look into the long-term redevelopment of the fishing
industry, the seafood industry, and the economy of New Orleans
and the region.
And I hope that we will pass the legislation that I have
filed in the House to allow Louisiana and the gulf coast
regions to receive royalties in 2011. And I ask, Mr. Chairman
and all the Members of this Committee, that we hold all parties
responsible to pay for every penny that this devastation has
caused to the people of New Orleans and of the region.
Thank you. And I yield back.
Mr. Oberstar. I thank the gentleman for his statement.
Mr. Cummings, Chair of the Coast Guard and Maritime
Transportation Subcommittee.
Mr. Cummings. Thank you very much, Mr. Chairman.
And I, too, express my sympathy to those families who
suffered losses as a result of this incident.
Mr. Chairman, this is a very important hearing for a lot of
reasons. I was just down in the gulf just this past weekend and
received a briefing regarding the current situation from Rear
Admiral Mary Landry, the commander of the Coast Guard's Eighth
District and the Federal on-scene coordinator for this event.
And Chairman Corrine Brown and I are going to be going again
very shortly.
But I know that the Coast Guard, like all of the Federal
agencies responding to this event, has mobilized every possible
resource to try to protect the environment and livelihoods of
the gulf region. And I commend the Coast Guard, as well as the
leadership of the outgoing commandant, Admiral Thad Allen, who
is the national incident commander for this event.
And I would say to Ranking Member Mica that Thad Allen--he
may have been appointed at a certain point, but he has been on
the job much longer than that, addressing this issue.
I also commend all the responding agencies for their
extraordinary efforts. Mr. Chairman, we should note that there
are about 20,000 people right now working on this. And not only
are all of our appropriate government agencies working on it
with everything they have, but the private industry is, not
only BP. I understand Exxon and others are also pitching in.
The events that culminated in the loss of the Deepwater
Horizon and the subsequent oil spill are very complex, and
there are many different and interrelated issues that require
in-depth investigation, including the following: the
circumstances and conditions under which the drilling plan was
approved; the Minerals Management Service's oversight of
drilling operations in offshore areas, including the inspection
of blow-out preventers; the adequacy of BP's oil spill response
plan for the Macondo well site and, frankly, their adequacy of
all oil spill response plans for the sites in Deepwater; and
the adequacy of the response which has been conducted by BP, as
the responsible party, and overseen by the Coast Guard, and
which has involved the participation of numerous agencies.
Mr. Chairman, it is imperative that every aspect of this
situation be assessed and understood. And I applaud President
Obama's decision to create the Presidential commission to
thoroughly examine this.
Finally, let me say this: I think it is very important that
the Coast Guard play a much more significant role in the
approval of the disaster plans and not just come in at the tail
end to do the cleanup and to carry out those plans. And, in
talking to Rear Admiral Landry this weekend, one of the things
that she emphasized is that the Coast Guard needs to be
involved in this process from the very, very beginning.
And I am hoping, Mr. Chairman, that we could all work
together to make sure that that happens, because that makes
sense. You don't ask somebody to clean up something and then--
but they have never been a part of the process to make sure
that the plan was approved from the very beginning.
And so, I look forward to the testimony, and I will submit
my entire written statement for the record.
Mr. Oberstar. Without objection, the gentleman's entire
statement will be included in the record.
I had the opportunity, also, to have a review, a flyover
with the Coast Guard. Ms. Miller, as well, was part of the
Canada-U.S. Inter-Parliamentary Group meeting in New Orleans
just 2 weeks ago. And we had a briefing at the command center.
It was very instructive.
And I am hoping that we will be able to get clearance from
the Speaker to take a delegation of Members from both sides of
the aisle to Louisiana at an appropriate time when we are not
interfering with the ongoing work of recovery and response.
But, as soon as we get clearance, we will take a significant
delegation of Members to see firsthand the workings in the
gulf.
In the tradition of our Committee's longstanding experience
and practice on oversight hearings, I ask members of the panel
to stand, raise your right hand.
With regard to the testimony you provide to the Committee
on Transportation and Infrastructure today and all subsequent
Committee communications concerning the hearing, do you
solemnly swear to tell the truth, the whole truth, and nothing
but the truth, so help you God?
Thank you.
We will begin with Mr. McKay.
Thank you for being with us. We look forward to your
testimony.
TESTIMONY OF LAMAR MCKAY, PRESIDENT, BP PLC; STEVEN NEWMAN,
PRESIDENT AND CEO, TRANSOCEAN LTD.
Mr. McKay. Thank you, Chairman.
Chairman Oberstar, Ranking Member Mica, Members of the
Committee, my name is Lamar McKay, and I am president and
chairman of BP America.
We have obviously experienced a tragic series of events.
Nearly 1 month ago, 11 people were lost in an explosion and
fire aboard the Transocean Deepwater Horizon drilling rig, and
17 others were injured.
My deepest sympathies go out to the families and friends.
They have suffered a terrible loss. The gulf coast communities
are affected, thousands of people are affected by this, and
their livelihoods are being impacted.
I have seen the response firsthand. I have talked with and
met with the men and women on the front line. There is a deep
and steadfast resolve to do all we humanly can to stop this
leak, contain the spill, and to minimize the damage. As a
responsible party under the Oil Pollution Act, we will carry
out our responsibilities to mitigate the environmental and the
economic impacts of this incident.
Our efforts are part of a unified command that was
established within hours of the accident. And that provides a
structure for our work with the Departments of Homeland
Security, Interior, other Federal agencies, as well as State
and local governments. We are committed to working with
President Obama, members of his Cabinet, the Governors,
congressional Members, State agencies, local communities in
Mississippi, Alabama, Louisiana, Florida, and Texas.
I want to underscore that the global resources of BP are
committed to this effort, and they have been from the outset.
Nothing is being spared. Everyone understands the enormity of
what lies ahead and is working to deliver an effective response
at the wellhead, on the water, and on the shoreline.
Before I describe our response efforts, I want to reiterate
our commitment to find out what happened. There are two key
lines of inquiry here. First is what caused the explosion and
fire onboard Transocean's Deepwater Horizon; and, second, why
did the rig's blow-out preventer, the key failsafe mechanism,
fail to shut in the well and release the rig?
We are cooperating with the joint investigation by the
Departments of Homeland Security and Interior as well as
investigations by Congress. In addition, BP has commissioned an
internal investigation, the results of which we plan to fully
share. In the meantime, we cannot draw any conclusions before
all the facts are known.
Now, our sub-sea efforts to stop the flow of oil and secure
the well are advancing on several fronts. Our immediate focus
is on the riser insertion tube. This involves placing a tapered
riser tube into the end of the existing damaged riser and drill
pipe, and that is the primary source of the current leak. The
gas and oil then flows, under its own pressure, up the riser
tube to the Enterprise Discoverer drillship on the surface.
We are working to stabilize the system to maximize the
capture of oil and gas through the riser insertion tube. To
stop the flow of oil, we are preparing what is known as a ``top
kill.'' It uses a tube to inject drilling mud and cement
directly into the wellboard to stop the flow. It is a proven
technique, but it has never been used in 5,000 feet of water.
We've begun drilling two relief wells to intercept and seal
the original well. The latter will take an estimated 3 months.
Unified Command, as supported by the EPA, has approved the
application of dispersant directly at the leak site.
On the open water, a fleet of more than 900 response
vessels has been mobilized. In addition to using the approved
biodegradable dispersants at the leak point, we are attacking
the spill on the surface with the EPA- and Coast Guard-approved
dispersants.
To protect the shoreline, we are implementing what the U.S.
Coast Guard has called the most massive shoreline protection
effort ever mounted. We've got 1.9 million feet of boom already
deployed, with over 1 million feet available; 17 staging areas
are now in place; 15,000 volunteers have volunteered to help;
and we have about 20,000 people working on this issue.
We recognize that, beyond the environmental impacts, there
are also economic impacts. BP will pay all necessary cleanup
costs and is committed to paying all legitimate claims for
other loss and damages caused by the spill. We are expediting
interim payments to individuals and small-business owners whose
livelihoods have been affected. We have paid over 19,000 claims
so far. We have online filing 24-hour-a-day, 7-day-a-week phone
and walk-in claim offices. We are striving to be efficient and
fair. We are taking guidance from the established regulations
and other information provided by the U.S. Coast Guard, which
has handled and resolved these types of claims in the past.
Now, tragic as the accident was, we must not lose sight of
why BP and other energy companies are operating in the
offshore, including the Gulf of Mexico. The gulf provides one
in four barrels of oil produced in the country, and it is a
resource our Nation requires.
BP and the entire energy industry are under no illusions
about the challenge we face. We know that we will be judged by
our response to these events. No resource available to this
company will be spared. I can assure you that we and the entire
industry will learn from this terrible event. We will emerge
from it stronger, smarter, and safer.
I thank you for the opportunity to be here, and I will
answer any of your questions.
Mr. Oberstar. Thank you, Mr. McKay.
Mr. Newman?
Mr. Newman. Chairman Oberstar, Ranking Member Mica, other
Members of the Committee, thank you for the opportunity to
speak with you today.
My name is Steven Newman. I am the chief executive officer
of Transocean Limited. Transocean is a leading offshore
drilling contractor, with more than 18,000 employees worldwide.
I am a petroleum engineer by training, and I have spent years
working on and with drilling rigs. I have been with Transocean
for more than 15 years, and I am proud of the contributions our
company has made to the energy industry during that time.
Today, however, I sit before you with a heavy heart. The
last few weeks have been a time of great sadness and reflection
for our company and for me personally. Nothing is more
important to our company and to me than the safety of our crew
members. And our hearts ache for the widows, parents, and
children of the 11 crew members, including nine Transocean
employees, who died in the Deepwater Horizon explosion. These
were exceptional men, and we are doing everything we can to
help their families cope with this tragedy.
Over the last few weeks, we have also seen great acts of
courage and kindness in our colleagues and in our communities.
That courage and kindness was embodied by the 115 crew members
who were rescued from the Deepwater Horizon and were as focused
on the safety and wellbeing of their colleagues as they were
for themselves.
It was also embodied by the brave men and women of the U.S.
Coast Guard who provided on-scene response and search and
rescue efforts; and by the medical professionals and friends
and family who greeted the crew members as they came ashore.
And it is embodied by our friends and colleagues at Transocean
and across our industry who have rallied to help the families
of the men who were lost.
This has been a very emotional period for us at Transocean,
but it has also been a time of intense activity and effort.
Immediately after the explosion, Transocean began working with
BP, the Coast Guard, NOAA, and the Unified Command in the
effort to stop the flow of hydrocarbons from the well. Our
finest engineers and operational personnel have been working
directly with BP to identify and pursue alternatives to stop
the flow of hydrocarbons.
Two of our drilling rigs, the Development Driller II and
Development Driller III, are on scene drilling the relief
wells. Our drillship, the Discoverer Enterprise, is on scene,
conducting crude oil recovery operations. We will continue to
support BP and the Unified Command in all of these efforts.
At the same time, we have been working hard to get to the
bottom of the question to which this Committee and the American
public want and deserve an answer: What happened on the night
of April 20th, and how do we assure the American public that it
will not happen again?
Transocean has assembled an independent investigative team
to determine the cause of those tragic events, a team comprised
of Transocean and industry experts. They will be interviewing
people who have potentially helpful information and studying
the operations and the equipment involved.
Because the drilling process is a collaborative effort
among many companies, contractors, and subcontractors, the
process of understanding what led to the April 20th explosion
and how to prevent such an accident in the future must also be
collaborative. Our team is working side by side with others,
including BP and governmental agencies, to get to the bottom of
this issue. And these efforts will continue until we have
satisfactory answers.
While it is still too early to conclude exactly what
happened on April 20th, we do have some clues about the cause
of the disaster. The most significant clue is that these events
occurred after the well construction process was essentially
complete. Drilling had been finished on April 17th, and the
well had been sealed with casing and cement.
For that reason, the one thing we do know is that, on the
evening of April 20th, there was a sudden catastrophic failure
of the casing, the cement, or both. Without a failure of one of
those elements, the explosion could not have occurred. It is
also clear that the drill crew had very little, if any, time to
react. The initial indications of trouble and the subsequent
explosions were almost instantaneous.
What caused that sudden violent failure, and why weren't
the blow-out preventers able to squeeze, crush, or shear the
pipe? Those are critical questions that must be answered in the
weeks and months ahead.
Until we know exactly what happened on April 20th, we
cannot determine how best to prevent such tragedies in the
future. But, regardless of what the investigations uncover,
ours is an industry that must put safety first. We must do so
for the sake of our employees, for the sake of their families,
and for the sake of people all over the world who use, enjoy,
and rely on our oceans.
Thank you again for the opportunity to speak, and I am
happy to answer your questions.
Mr. Oberstar. Thank you also, Mr. Newman, for your
statement.
And I very much appreciate, as I am sure the families of
the victims as well as those who survived the blast, both of
you expressing your solidarity with the families, your grief at
the loss of life, and your commitment to support those
families, and your recognition of the work of the U.S. Coast
Guard, who were promptly on the scene and who have done
everything in their technical capability to address this spill,
and that the two of you seem to be working together rather than
in previous appearances seemed to be pointing fingers at one
another.
But, Mr. McKay, as I said at the outset, our Committee has
had extensive experience, under both Republican and Democratic
majorities, with BP. I cited the March 2, 2006, 5,000-barrel
oil spill on the north slope.
It's not so much the spill, which is serious in and of
itself, the worst in the history of oil development on the
north slope, but that it went undetected for 5 days, that the
company ignored four alarms on its system, that the Federal
investigation established that BP did not have maintenance or
internal inspection procedures. And, ultimately, PHMSA, the
pipeline safety administration, ordered BP to replace the pipe.
March 15, a corrective action order was issued to BP to run
cleaning pigs, perform inspections. July 20, ordered BP to
remove all crude oil from its Western Operation Area pipeline
and clean the pipe.
Admiral Barrett, retired Coast Guard admiral, made head of
PHMSA to preside over this oversight. August 10, 2006: ``I
continue to find the presence of hazardous conditions on three
pipelines that would likely result in serious harm to property
or the environment.''
April 20 of the following year, a third corrective action
order to BP. October 15 of that year, toxic spill of methanol,
2,000 gallons, at Prudhoe Bay. October 25, 2007, the Justice
Department settled with BP at $20 million in penalties and 3
years' probation, $12 million of criminal fines. That is a
sorry record.
What I want to know is: What is the state and the culture
of commitment to safety in the BP boardroom? Safety does not
begin with Coast Guard. It does not begin with the Minerals
Management Service.
It does not begin, with United Air Lines, American Airlines
and Delta Airlines, it doesn't begin with the FAA. It begins in
the corporate boardrooms of those airlines. So if there isn't a
culture of safety in the corporate boardroom, it is the role of
the government to set minimum standards and oversee that they
are followed.
I want to know, what have you changed in the corporate
culture of BP?
Mr. McKay. In 2005 and 2006 we had very serious accidents,
as you have noted. In 2007, Tony Hayward, our CEO, came in and
has made it absolutely, absolutely clear that the number one
agenda item for this company is safety and compliance.
We have changed a lot. The leadership has been almost
entirely revamped. Management has been revamped. There has been
a Safety and Environmental and Ethics Audit Committee
established at the board level and robustly utilized. There has
been what is called a group or a corporate Operational Risk
Committee that has been organized under Tony Hayward to
understand risk across the company. There has been a safety and
operational integrity organization that has been set up
separately to oversee the safety and operational integrity
issues throughout the company. We have instituted an operation
management system that is rigorous and extremely detailed that
we are implementing across every single operating business
across the company.
We have made a lot of progress. The job will never be
finished, but we are making progress.
I have got 23,000 people in the U.S. that I think are
committed to this company becoming the safest company in the
country. As far as this incident goes, we don't know what
happened yet. I can assure you, I can assure you, anything we
learn through this incident at all and can make operations
safer, ensure that we don't have any environmental problems,
will be undertaken--will be undertaken.
Mr. Oberstar. I am glad to hear you have an Operational
Risk Committee, that you have made the structural changes that
you discussed. I think those are steps in the right direction.
But in the exploration plan submitted for the Mississippi
Canyon 252 site, BP said, ``In the event of an unanticipated
blowout resulting in an oil spill, it is unlikely to have an
impact based on industry-wide standards for using proven
equipment and technology for such responses. Implementation of
BP's regional oil spill response plan which address available
equipment and personnel, techniques for containment and
recovery of oil spills,'' meaning it is not going to have
much--would you make that statement today?
Mr. McKay. What I would say, some of the bases and
assumptions that were made across the industry as well as
ourselves are partially predicated on a blowout preventer that
works, or if it doesn't work, it can be manually intervened
with with remote-operated vehicles, and if that doesn't work,
if I could explain, we have an extremely unique situation that
I have never seen in my history anywhere where we did not have
the riser release, the emergency disconnect did not work, so we
have got a marine riser package on top of the blowout preventer
with 4,300 feet of twisted riser on the end which makes this an
extremely complex operation, and we can't get on top of that
blowout preventer. So it is a very unique situation.
Those plans, if I could just expand a little bit, the plans
for the surface response are very robust. I think they were
enacted within 2 hours of the explosion. And that has proved to
be impactful, I think, effective, and the Commandant has talked
in detail about that. Under his leadership, I think that effort
is going as aggressive as it can go.
What I do think we need to acknowledge is that sub-sea
intervention, this is the first time, this is an unprecedented
event, there have been 42,000 wells drilled in the Gulf of
Mexico, we have not had an event like this, I do believe sub-
sea intervention and the planning around sub-sea intervention
and the capability will need to be looked at in light of this
event. And I think that is an industry issue, a regulatory
issue, and certainly a company issue.
Mr. Oberstar. But it does need to be looked at, revisited
and reexamined. But Transocean has considerable experience in
operating at great depths. The depth of this well, in the
briefing that I heard from the command center, is considerably
below the depth to which our Los Angeles class nuclear
submarines can dive; extremely dangerous conditions, very
risky. So every precaution should be taken.
Did you, Transocean, have knowledge of and awareness of the
14 failures of blowout preventers and the 117 that failed at
one time or another, and did you question whether they would be
able to function at that depth and in that temperature of
water, very cold water?
Mr. Newman. In response to your question, Congressman,
Transocean, as one of the leading offshore drilling
contractors, has a tremendous amount of experience in operating
and deploying blowout preventers in significant water depths.
And all of the industry's experience with respect to the
performance of those BOPs is taken into consideration in the
development of our maintenance plans, in our rigorous
inspection and testing programs, and in the performance of our
equipment.
Mr. Oberstar. The blowout preventer was produced by Cameron
Petroleum of Houston. Do you check, do you subject that blowout
preventer to operational capability at 5,000 feet depth and 30
degree temperature of water?
Mr. Newman. The BOP is tested while it is on bottom. It is
tested every week, the function of it, and every other week the
pressure containment capability of the BOP is tested. It was
tested--the pressure containment capability of the BOP was
tested and successfully passed those tests on April 10th, and
the function of the BOP was tested again on April 17th and
passed those tests as well.
Mr. Oberstar. Who supervised those tests?
Mr. Newman. Those tests are conducted by Transocean under
the watchful eye of BP, and when MMS visits the rig----
Mr. Oberstar. Not under the watchful eye of the Coast Guard
or the Marine Services of the Interior Department?
Mr. Newman. MMS visits the rig regularly. They last visited
the Deep Water Horizon on April 1st.
Mr. Oberstar. They did not supervise that test?
Mr. Newman. They are not present on the rig when those
tests are conducted.
Mr. Oberstar. Thank you.
Mr. Mica.
Mr. Mica. Well, thank you. I was reading through this
submission I put in the record from the Inspector General of
the investigations that concluded in 2008. I do not see BP
listed. I do see Chevron as one company that was involved in
that investigation.
Do either of you know of any involvement in some of the
inappropriate or potentially illegal or criminal activity with
your employees in these investigations?
Mr. McKay.
Mr. McKay. Are you referring to the MMS?
Mr. Mica. Yes.
Mr. McKay. I know of no BP involvement.
Mr. Mica. How about you, Mr. Newman, anyone with your firm?
Mr. Newman. No Transocean involvement, sir.
Mr. Mica. OK, just for the record.
I cited the Obama administration has approved nearly three
dozen deepwater rig proposals. Some have been approved, but
some are pending. Do you have others in this list, Mr. McKay?
Are you aware of the list? Do you have others that are
considered deepwater exploration proposals before----
Mr. McKay. I am sorry, I can't see that list, but we do
have other----
Mr. Mica. Just tell me if you have others.
Mr. McKay. Yes, we have other deepwater operations and
proposals
Mr. Mica. In what depths?
Mr. McKay. In deep water, anywhere from probably 3,000 to
4,000, to probably 7,000, 8,000 feet.
Mr. Mica. OK. Well, again, I wasn't aware that there were
this many approved or pending. You said in your industry
experience or experience that you know of in industry, they
have never had a situation like this occur before, a blowout
like this, is that correct?
Mr. McKay. Yes. I don't believe there has been a blowout in
5,000 feet of water. That is true.
Mr. Mica. Of course, I have cited the approval for your
exploring was approved by the Obama administration March 10th,
it is called the BP Mikado exploration plan. This is the plan
that was given. They didn't have a top hat or any kind of a
mechanism proposed in this plan that I saw. It was constructed,
being constructed after the incident. But this is basically
what you submitted.
Then I have a copy of the approval that was given to you,
the BP permit, which I just got the first copy of yesterday.
The only exception I saw or anything that looked out of the
ordinary was ``exercise caution while drilling due to
indications of shallow gas and possible water flow.'' Other
than that, they pretty much approved this plan carte blanche,
is that correct?
Mr. McKay. Yes, I believe that was right.
Mr. Mica. I am not an engineer, but how about--well, first
of all, we have never experienced anything at that depth, and
you guys have done this around the world. Are there any other
protections? The Europeans had another measure. I am not sure
if that would have made any difference.
Mr. Newman, would it make any difference?
Mr. Newman. I don't believe in this case the acoustic
control systems that you referred to would have made a
difference.
Mr. Mica. But it wasn't required--it was not required as
part of this plan?
Mr. Newman. It is not required in the U.S.
Mr. Mica. And you seem to be sort of experimenting with the
bell or the top hat. We really need to make certain that we
have--we are going to drill in the future. We have got to. Of
course, the United States is hooked on, unfortunately, on
fossil fuel, and you said 25 percent of our supply is in the
Gulf. We are so dependent now, what, 60-plus percent coming
from foreign sources.
My concern is having some protections, and this may be an
expensive lesson learned, but is it possible to develop and
have in reserve additional technologies or protections again
that we can have ready to go, so-to-speak, so this doesn't
happen again?
This is sort of a guesstimate, Mr. McKay. Do you think we
can do that, Mr. Newman?
Mr. McKay. I believe a couple of things. One, this is the
largest sub-sea response that has ever been put together in
history. You mentioned the top hat. We actually had the
cofferdam prepared. But please understand this is such a unique
situation, where we have a damaged riser on top----
Mr. Mica. Right, you described that, yes.
Mr. McKay. Laying in a trench. So it was hard--it is
impossible to predict we were going to have a riser laying in a
ditch and deal with it.
Mr. Mica. But is it possible to come up with the
technology?
Mr. McKay. To get to your point----
Mr. Mica. What we have to do is give assurance that this
isn't going to happen again. Now, you are BP North America, but
BP is the larger international corporation. Stop and think
about this. I was on C-SPAN this morning and some caller came
in and said, Mr. Mica, what about China drilling off of Cuba?
I believe they have been exploring down there, haven't
they? Are you aware?
Mr. McKay. I don't know if they have drilled anything. I
think they have been talking.
Mr. Mica. Exploring. OK, well, we will say they do that.
That is 45 miles, halfway between Cuba and the United States.
We have no control over that. I haven't seen any permits
requested by China off of the shores of Cuba. But my point is
we need to be ready and we need to have in reserve. That is not
particularly the Coast Guard's responsibility. They have
another important role and they fulfill that very well. But we
need to be ready in case something happens.
I am reminded, too, you look at the history of these
things, folks. In 1979, the worst incident took place in the
history of oil spills in the Gulf. It was off the coast of
Mexico. It wasn't anything permitted by our guys that were
asleep at the job on this particular incident. But that went
for 9 months. Nine months.
So I think we need to be prepared not only for another
incident in the deep water, and we have got a whole list, we
will put this in the record too, Mr. Chairman, this is the list
of the Obama approvals on deepwater rigs.
You are telling me you are doing it again in deep water. My
point is we have got to make certain if it is done and we give
approval that it is done right, and we also have a backup plan
for those that we can't control so we are not looking at an
entire Gulf shoreline covered in slick oil.
Would you say that is an appropriate way to go, Mr. McKay,
Mr. Newman?
Mr. McKay. I would say that we will learn a lot through
this and sub-sea intervention and capability will need to be
understood in terms of industry capacity and potentially
regulations.
Mr. Mica. Mr. Newman?
Mr. Newman. Yes. Congressman, I think it is fair to
question reevaluation of response capability in light of what
we learned as a result of this incident.
Mr. Mica. I yield back.
Mr. Oberstar. Without objection, the list requested by the
gentleman will be included in the record, along----
Mr. Mica. Mr. Chairman, I would also like to put for the
first time, I don't know if this was made public before today,
but the United States Department of Interior permit that was
granted to BP April 6th, 2009.
Mr. Oberstar. The Minerals Management Service document of
April 6th, 2009, will be included in the record. The list that
the gentleman requested be included in the record will be,
without objection, included in the record, along with a list
that we have developed of all the approvals during the 8 years
of the Bush administration which did not require any top hat or
any blowout preventer corrective action.
Mr. Rahall.
Mr. Rahall. Thank you, Mr. Chairman.
Mr. McKay, BP submitted a regional oil spill response plan
that covered the activities of this well. The plan, which
describes BP's response to a spill anywhere in the Gulf of
Mexico, has a worst case scenario that only envisions a major
spill from one particular spot in the Gulf. This plan is
supposed to cover all of BP's operations in the Gulf, from
Texas to Alabama.
My question is, what exactly is the usefulness of a worst
case scenario for the entire Gulf if it only looks at the
impacts of a spill from one particular spot?
Mr. McKay. The plan you are referring to fits under the
national contingency plan and then the one Gulf plan, and then
industry utilizes response plans as per government regulation.
That particular plan is the basis and the model for our surface
response.
That has all the equipment in the Gulf Coast noted. It has
all the organization of people that will be called. It is up-
to-date. It was utilized literally when this explosion happened
and has been the foundation by which the Coast Guard and
ourselves and the other government agencies have reacted across
the Gulf in terms of the surface response, and that has proved
to be a good foundation, that response plan.
So that particular plan is not specific to every location,
but it serves the Gulf Coast response.
Mr. Rahall. As I understand it, the plan also looks at
coastline impacts.
Mr. McKay. It does. The plan is very encompassing. It
contemplates fighting it offshore, protecting the shoreline and
cleaning up anything that gets to shore. So it is an extensive
plan. It is several hundred pages.
Mr. Rahall. But what happened in this particular disaster?
Why was it not effective?
Mr. McKay. I think it has been effective. I think the plan
is working. That is what we are exercising with the Coast Guard
under Unified Command. That is the plan. It is being obviously
flexed and deployed as things change, but that is the plan.
Mr. Rahall. The worst case scenario in your oil spill
response is 250,000 barrels a day, is that correct?
Mr. McKay. Yes.
Mr. Rahall. Do you prepare for a one-time release of
250,000 barrels, or are you prepared for that to last multiple
days, and, if so, how many days are you prepared for it to
last?
Mr. McKay. I believe the way those are put together is 30
days, I believe.
Mr. Rahall. 250,000 barrels a day for 30 days?
Mr. McKay. Yes.
Mr. Rahall. You stated that BP has already begun to provide
lost income interim payments to people who have been impacted
by this spill. Who has gotten those payments thus far?
Mr. McKay. These are fishermen, business owners along the
Gulf Coast that are directly impacted, marinas. Anyone who is
having--either not working within the effort and being paid or
having their income affected at all. We have opened, I think by
the end of this week it will be 17 claims centers.
So it is people that are being affected right now, and we
are trying to make sure people don't have any problem meeting
their payments or their needed expenses to live. So there are
thousands of people being impacted by this, and we have ramped
up a claims system that is addressing those needs.
Mr. Rahall. So BP has established these claims offices,
much like FEMA might after a flooding disaster, and you are
making the decisions on who, whether if is fishermen or hotel
owners, are receiving these payments?
Mr. McKay. Yes. What we are using, we have a structure
under the Oil Field Pollution Act that is--we have accepted,
formally accepted, we are a responsible party and we are
responsible to pay the cleanup costs and to act under the Oil
Field Pollution Act. We have accepted that responsibility. That
gives us the onus of broad responsibilities, meaning extensive.
We have accepted and we will fully fulfill that, and we are
doing that.
We have made it clear from the outset, made it very clear,
we are going to pay all legitimate claims associated with this.
And there is a natural resource damage assessment study that is
underway with NOAA as the lead Federal trustee to establish
resource damage for restoration.
Mr. Rahall. When an individual accepts payment, do they
waive any future claims against BP?
Mr. McKay. No. No. In fact, if the payment were denied or
is not big enough in someone's opinion, there is a separate
process they can go through the Coast Guard. On top of that, we
have not had anybody sign any waivers of any sort whatsoever,
so they have the potential for litigation or anything else they
need.
Mr. Rahall. They have still have that potential then?
Mr. McKay. Yes. Absolutely. I just want to be clear. We are
trying very hard to be fair, responsive and expeditious. We do
not--we want to minimize any impact we possibly can on the Gulf
Coast.
Mr. Rahall. Thank you.
Thank you, Mr. Chairman.
Mr. Oberstar. Supplemental to Mr. Rahall's comments, I
would just cite the Oil Pollution Liability Act of 1990 that
each responsible party for a vessel or facility from which oil
is discharged or poses substantial threat of discharge into or
upon navigable waters or adjoining shorelines or Exclusive
Economic Zone, is liable for removal, costs and damages that
result from such incident.''
Damages include injury to, destruction of, loss of, loss of
use of natural resources, injury to economic losses resulting
from the destruction of real or personal property, including
loss of taxes, royalties, rents, fees recoverable by the United
States, a State or political subdivision, loss of subsistence
use of natural resources, damages for net cost to governments
of providing increased or additional public services, and there
are no limits on liability if a spill is proximately caused by
willful misconduct, gross negligence or violation of Federal
safety, construction, or operating regulation.
I think that supplements very well the points the gentleman
was making and exposes BP to a very wide range of cost coverage
here.
Now I will yield to Mr. Young, former Chairman of the
Committee, who I would have recognized at the outset, but he
was just returning from Alaska, from a funeral of former
Secretary of Interior Wally Hickel. It was a noble thing to do,
to be there in tribute to him.
I will now recognize the gentleman for an opening comment
and then questions.
Mr. Young. Thank you, Mr. Chairman.
As I was sitting here deja vu, you and I helped write OPA.
I think we are the only two Members in Congress that wrote OPA.
The reason I bring that up, gentleman, and Mr. Chairman, is the
Exxon Valdez spill was a tragedy, such as this one is, the
first one we had of that magnitude, although Secretary of the
Interior Wally Hickel had the same thing occur off the coast of
Santa Barbara. But out of that, we were able to write OPA, and
I think it is a good piece of legislation, because until that
time we had no way to respond to an oil spill, and we developed
a good system with the Coast Guard, with the communities, and
it has worked very well.
We did not prepare for this type of spill, for both you
gentleman, this far offshore. I think out of this, as you
mentioned, we should learn how to in fact keep that from
happening. Under our Exxon Valdez spill, we do have the
liability clauses. We have the double tugs that take and escort
the vessels out, we have the double hull vessels, we have the
booms, we have the rescue vehicles. We have done everything I
believe to prevent a spill coming in or going out of a
petroleum product. Now we have to address this issue and solve
the problem.
I want to stress to this Committee that this is in fact to
try to find out what did happen and how do we prevent it from
happening again, because we are going to drill. We didn't shut
the pipeline down when we had the spill. We continued pumping
oil to the lower 48, not to overseas. We continued taking
tankers through the Straits. And, like anything else, we have
to go forth and learn from what occurred.
The one thing I would caution you, and I say this to
everybody in the audience and the Committee, the desire to
clean up sometimes causes more damage than you might consider.
We have cases in Prince William Sound where we used steam,
where we used Dawn soap. If you had any Palmolive Dawn Soap, or
whatever it is, any stock, you did well. But actually the
damage from that was probably more far-reaching, because we
were trying to clean something that was visually offensive to
the human eye.
So let's be very careful what dispersants we use, what type
tactics we use. The desire to do so because the media is always
looking at that dead duck, as I saw with Exxon Valdez, be very
careful. That is all I suggest to you.
One thing I would stress and I am going to go to my
questioning, Mr. Chairman, is the thing that was most unjust in
the tragedy of the Exxon Valdez spill, was not necessarily the
environment. It was the impact upon the fishermen and those
that derived income and livelihood. Twenty-two years we were in
court with the responsible party, 22 years, gentleman, and when
it finally settled, I think the amount of money received was
less than $5,000 per fisherman.
I don't want to see that in the Gulf. And I believe, Mr.
McKay, and I will ask you in a moment, that you are addressing
that issue now. Once it gets into court, my good friends, you
are creating a problem for those that should receive the
benefits from this tragedy, and when I say benefits, recovering
the loss of income because of it. That is the one issue.
The environment has recovered. Yes, some will disagree with
me. We did lose one species of fish to some degree, but not
totally, and that was the herring, because we lost the spawning
eggs on the shore. The salmon have come back, very well done,
the environment looks great. You can't hardly see it. Yes,
there is some oil under the rocks, and that has been there
before. But that is my one challenge to you, to make sure that
whatever you do in this cleanup process, make sure it does not
do more damage.
That goes back to my first question. Mr. McKay, the
fishermen. You are now settling with fishermen insofar as lost
income, and that is really created not by this spill because
the State won't allow them to fish, NOAA won't allow them to
fish?
Mr. McKay. We are settling with fishermen. Some of the
fishing areas are closed. There is about 19 percent of the Gulf
closed right now. So there are closed areas. We are
compensating those fishermen. Actually, most of these fishermen
want to work rather than just get claims. So a lot of those
fishermen are working in terms of the response.
Mr. Young. I understand that, and I commend you for that,
paying I understand a considerable amount of money for some of
their boats. I understand that. They did the same thing in
Alaska. But what happened, once the cleanup process stopped,
and then they still couldn't fish, and they lost income, I
would say, over 22 years. That is not the way I want to see
this done.
Mr. McKay. We are sticking with this. If I could just say,
the structure on the Oil Field Pollution Act is good. We plan
on fully fulfilling those obligations, and that does not mean
it stops at the end of the cleanup. And we have made it clear
we are going to pay all legitimate claims due to the impact of
this.
Mr. Young. And I do compliment you on that, because that is
the most important thing out of this, as it impacts the economy
on the coastal States. That is the important factor.
Mr. Newman, we are really trying to find out, other
Committees had other hearings, the MMS report said there was
possible cement that has been found on a nearby vessel. What do
they mean by that? Was that from an explosion? What happened?
Mr. Newman. At the time of the event, Congressman, there
was a vessel alongside the rig. They were conducting loading
operations, transferring operations between the rig and the
vessel, and the vessel reported receiving cement-like debris on
their decks.
To me, that is an indication of the magnitude of the
catastrophe that must have occurred within the well. For the
well, the cement that is in the well to have thrust upwards
from where it was installed, up through the wellbore, up to the
rig, out from the rig and onto the deck of this vessel I think
is an indication of the magnitude of this catastrophe.
Mr. Young. That leads me up to the BOP. That would have
probably caused, wouldn't it, the malfunction of the shutoff
valve?
Mr. Newman. If you have cement that has traveled all the
way up the wellbore, all the way up to the rig, and all the way
over to this supply vessel that was alongside the rig, it has
traveled through the BOP for sure.
Mr. Young. Now have you recovered the BOP?
Mr. Newman. No, the BOP is still on the seabed.
Mr. Young. Until we find that, we can't really tell what
happened to that series of valves. There are seven rams, aren't
there, in that unit?
Mr. Newman. There are five ram-type preventers and two
annular preventers, so a total of seven shutoff devices.
Mr. Young. Seven total. So the debris could have made it
malfunction.
Mr. Newman. Yes, sir.
Mr. Young. But until we find that, we wouldn't know that
will for a fact?
Mr. Newman. Until we recover the BOP and dismantle the BOP,
we won't know what sort of debris is on the inside of the BOP.
Mr. Young. It was made in Houston?
Mr. Newman. The BOP was manufactured by Cameron.
Mr. Young. It was tested?
Mr. Newman. Fully tested, most recently on April 10th and
April 17th.
Mr. Young. The comments about batteries being dead and that
type thing, has that been verified or is that just rumors?
Mr. Newman. The BOP control system has two control pods
mounted on the BOP, and these pods serve to transmit the
electronic signals that come from the rig into actual action on
the BOP. We recovered one of those pods, one of those control
pods, and under the assistance of the original manufacturer and
Transocean expertise and BP observers, we dismantled that pod
and fully tested that pod.
There is a battery contained within that control pod. That
battery was measured twice. The first time the battery was
measured it registered a voltage of 18.41 volts against the
manufacturer's minimum recommended voltage of 18. So on the
first test it satisfied the manufacturer's minimum. On the
second test, it registered 26 volts.
Mr. Young. Now, if I can recap this, now the real damage
was caused with the blowout, but then the collapse of the rig
which caused the main pipe to be laying in a trench. Is that
really the challenge here?
Mr. Newman. Well, when the rig--following the explosion,
the rig remained afloat for about 36 hours. It sunk on the
morning of April 22nd at 10 a.m. The riser, which is the pipe
that connects the BOP to the rig, the riser has remained
largely intact and connected. It is obviously badly damaged,
but it is laying on the seabed, and as Mr. McKay has indicated,
that has presented some amount of challenge in terms of
addressing the source.
Mr. Young. What I am stressing, as we go through this
engineering process, there has got to be another thing other
than the blowout valve to make sure if there was another
incident--by the way, does anybody know what the pressure of
this field was? Was that tested? There had to be a tremendous
amount of pressure to have a blowout. How do you test that?
Mr. Oberstar. At 5,000 feet it is 12,000 pounds of
pressure, but at 13,000 feet below ocean floor, below the mud
line, it has got to be in the hundred thousand pounds per
square inch.
Mr. Newman. I have done a preliminary calculation,
recalling 20-year-old academics, and based on the mud weight
that was used in drilling the well and calculating from the rig
18,000 feet down to the actual reservoir, the pressure I
calculated was somewhere between 13,000 and 14,000 PSI at the
reservoir.
Mr. Young. That is a high pressure field and you know that
when you put the mud and the cement in. Is there different
pressured fields at that depth? You don't know?
Mr. Newman. There are a wide spectrum of pressures
resulting from overburdened and poor pressure and frack
gradient. There are a number of factors that determine the
pressure in a reservoir.
Mr. Young. Mr. Chairman, we could go on all day on that. My
goal in this hearing is to make sure that we not point fingers.
We are going to drill. I know a solution to this, gentlemen,
but most of you in this room had an opportunity once and voted
against drilling on shore in ANWR. We are going to drill in the
Gulf because there is 24 percent of our oil coming, or 25
percent from there, and we must make sure we now learn from
that and have that equipment available in case this does
unfortunately happen again.
Like you say, 42,000 wells are how many have been drilled,
and this is the first major blowout we had. We had one in
Mexico. And by the way, following on Mr. Mica's comment, I have
had contact with the Chinese, because we have a huge dispute in
Alaska about drilling offshore in Alaska, at 250 feet deep, by
the way. There is a little ice involvement.
But China is already looking at the Pole. For those in the
audience, there is probably more oil at the North Pole than
there is anyplace else in the world. Just keep that in mind as
Al Gore keeps talking about climate change. We don't know where
it came from, but it is there.
If China drills off our shores and we have no equipment to
recover, because they don't really have the interest in
preventing that type of spill, we have to be prepared to also
address that. And I think we ought to do that off the coast of
Florida, have that equipment available for whoever is involved
so we can address this thing so it does not happen again.
Thank you, Mr. Chairman.
Mr. Oberstar. I thank the gentleman.
Mr. DeFazio.
Mr. DeFazio. Thank you, Mr. Chairman.
Who is ultimately responsible for the proper functioning of
the blowout preventer?
Mr. Newman. Well, because that piece of equipment is owned
by Transocean, we perform the maintenance on it and we perform
the inspections on it, and we----
Mr. DeFazio. OK. So you are ultimately responsible. So it
has to be fully functioning and capable. Was this capable of
cutting the pipe at any point? There are numerous reports
saying that probably 10 percent of the pipe being used at those
depths where it is joined, that most blowout or many blowout
preventers today cannot sever that pipe. Could this one sever
the pipe at any point? Yes or no?
Mr. Newman. Most----
Mr. DeFazio. Yes or no.
Mr. Newman. Most shear rams are not designed to sever tool
joints, which are the segments that join joints of pipe
together.
Mr. DeFazio. So 10 percent of the pipe is composed of that.
So doesn't that give us the possibility of failure, even if the
ram works?
Mr. Newman. It depends on what is across the ram.
Mr. DeFazio. Are there rams that can shear the more
reinforced areas of pipe?
Mr. Newman. Most shear rams are not designed to shear tool
joints.
Mr. DeFazio. Are there some that can do that?
Mr. Newman. I am not aware of any that are, but
Mr. DeFazio. So we are operating at these depths with these
BOPs, and there is some 10 percent of the pipe that if it
happens to be going, that is in the section of the blowout
preventer, even if everything worked, which it didn't, you
can't shear the pipe so you can't shut it off. So what good is
the blowout preventer at that point? It is not going to work,
right? And you are aware of that.
Now, BP of course is ultimately the responsible party here,
is that correct? Even though they are working for you under
Federal law you are ultimately the responsible party?
Mr. McKay. We are the leaseholder, and under that we are
the responsible party, under the oil--for cleaning up.
Mr. DeFazio. So if we have rams that are not capable on 10
percent of the pipe of cutting the pipe, and there were other
malfunctions that have been documented in other hearings, do
you think you are fulfilling all the Federal standards and you
are totally responsible by putting a blowout preventer down
there which is not capable some certain percentage of the time
of cutting the pipe?
Mr. McKay. If I can segregate two things.
Mr. DeFazio. Well, if you can answer, because I don't have
much time.
Mr. McKay. We are a responsible party for the spill cleanup
and all the damages. I think there is a question as to what
happened that has caused the explosion.
Mr. DeFazio. I know. But if you are contracting with
someone, you are contracting with a company based in the
Marshall Islands so you can get a cheaper deal on your daily
rate, now, the question to you is--OK, Transocean is
responsible for the blowout preventer. But you contracted with
them.
As you are aware, there was a report by one of your own
engineers in 2007, he was a coauthor, saying the use of higher
strength, higher toughness drill pipe has in some cases
exceeded the capacity of some BOP shear rams to successfully
and/or reliable shear drill pipe.
How can you be doing this? That means these things don't
work. At least part of the time they are never going to work.
Even if everything else goes well, it is not going to shut off
the well.
Mr. McKay. Our job and what we do is we design the well as
leaseholder. Transocean's job is to construct the well as
operator of that drilling rig. We spec out the well with the
casing design and the design of the well.
Mr. DeFazio. But ultimately you are responsible and the oil
is coming up out of your lease. This is unknown to you that
these things can't shear through this thicker section of pipe?
You never heard of this before?
Mr. McKay. It is not unknown to me.
Mr. DeFazio. Doesn't that concern you? I mean, because then
the thing can't work.
Mr. McKay. I will acknowledge I think all of this has to be
looked at during the investigations, and I think we are going
to learn----
Mr. DeFazio. Right. Because, I am concerned by your use of
the word ``legitimate.'' And I am worried about what happened
with Exxon and what happened with the folks in Alaska, and you
keep using the word ``legitimate'' claims. I am wondering, you
know, you are not claiming the cap now, but you are sort of
reserving the right maybe later?
Mr. McKay. No, I am not. I have been clear from day one
with every Committee I have testified before.
Mr. DeFazio. OK. So you would then say that having a
blowout preventer that is incapable at least part of the time
of shutting off a well would mean it is either gross negligence
or willful misconduct or you didn't meet the Federal safety
construction or operating regulations. Do the Feds require
these things work all the time, or do they say, oh, we don't
care if it doesn't work part of the time?
Mr. McKay. I think the regulations stipulate what needs to
be done.
Mr. DeFazio. And that should be capable of cutting the pipe
at any point?
Mr. McKay. Well, I don't think that is the way it is
stated, but I think that is what has got to be looked at. I do
think there are going to be some changes made. Absolutely.
Mr. DeFazio. I know, But we have a big problem here.
One other quick question about the dispersants being used.
You know, there are other dispersants, and your company said it
was availability that led you to use this particular
dispersant. There are others that EPA measures that are more
effective on this grade of oil and less toxic.
Why aren't you using those? Because I am concerned about
what is in the water column here and what we are not seeing.
Mr. McKay. We are using the preapproved dispersants. I
believe there are----
Mr. DeFazio. Well, there are 13 preapproved dispersants.
But there are some that are less toxic and more effective on
this type of oil. It comes from a company in which you don't
have anyone sitting on the board. The dispersant you are using
is coming from the company where you do have someone sitting on
the board.
Mr. McKay. I am not aware of whether there are products
that are more effective or not.
Mr. DeFazio. The EPA has graded them, actually, as to type
of oil, usage and toxicity.
Mr. McKay. Yes. We are following through Unified Command of
what dispersants Unified Command believes would be the best
dispersants to use. I know they are testing other dispersants
with this oil, and if there are better ones to use, we will
definitely use them.
Mr. DeFazio. Well, there is a list, you know, and there is
something called Dispersit, which is theoretically half as
toxic and considerably more effective on this sort of oil, this
grade of oil, and I would urge you to look at that.
Mr. McKay. I definitely will.
Mr. DeFazio. Thank you.
Thank you, Mr. Chairman.
Mr. Oberstar. Mr. Coble.
Mr. Coble. Thank you, Mr. Chairman. Thank you for having
the hearing. Gentleman, good to have you all with us. I may be
repeating some questions that may previously have been asked of
you, so bear with me.
Obviously, gentleman, everyone is focused on the blowout
preventer that failed on the Deepwater Horizon rig. Let me put
a couple questions, and either of you may answer.
Who designed the structure, who built the structure, and
was it built to spec?
Mr. Newman. If you are referring specifically to the
blowout preventer, it was designed and manufactured by Cameron,
and it was built to Cameron, Transocean and API specifications.
Mr. Coble. How about the rig itself, the deepwater rig?
Mr. Newman. The Horizon, the rig itself was designed and
built to Transocean's specifications and American Bureau of
Shipping specifications.
Mr. Coble. They built it, or designed it, or both?
Mr. Newman. Well, I don't recall exactly who designed it.
It was built in a shipyard in Korea.
Mr. Coble. All right, thank you.
Gentleman, who is responsible for calculating how much oil
is leaking?
Mr. McKay. Under Unified Command, there are government
scientists with NOAA, BP scientists and engineers, and other
industry experts that have been working on the calculations for
the flow rates, and that has come out under Unified Command,
under the Coast Guard.
Mr. Coble. Thank you, sir.
Gentleman, are there other devices that are currently
available or in use that would have performed a similar
function to the blowout preventer?
Mr. Newman. The blowout preventer's function is to seal the
wellbore, and I am not aware of any other mechanism out there
other than a blowout preventer for sealing the wellbore.
Mr. Coble. I don't know of any other. I thought you all may
be familiar with that.
Mr. McKay, you responded to the gentleman from West
Virginia regarding legitimate claims that have been paid, and
like the gentleman from Alaska, I commend you for that, for
responding in kind to that. Are there legitimate claims that
have not been paid, if any?
Mr. McKay. As of 2 days ago, I don't think any claims have
been denied. I don't know in the last day or so. None have been
denied.
Mr. Coble. I thank both you gentlemen for being here.
Mr. Chairman, I yield back.
Mr. Oberstar. I thank the gentleman.
Mr. Nadler.
Mr. Nadler. Thank you.
Mr. McKay, a moment ago in answer to Mr. DeFazio's
question, you misled this Committee. You misled it in the
following respect. But let met ask you a specific question. Mr.
DeFazio asked you about use of dispersants. You are using
Corexit. Corexit is 2.61 in toxicity, which means it is highly
toxic. It has an effectiveness of 54.7 in the south Louisiana
crude oil spill. Dispersit is 7.9 in toxicity, which means it
is a lot less toxic, but has an effectiveness rate of 100
percent.
Mare Clean 200, its toxicity rate is 42, which is much,
much better. Its effectiveness rate is 84, compared to Corexit
at 54.
Now, remember, you are under oath. Who decided--and don't
tell me the National Incident Command. They authorized the use,
as I understand, of any dispersants on this list. Who decided
which dispersant to use? BP?
Mr. McKay. I don't know----
Mr. Nadler. You don't know.
Mr. McKay. I don't know the individual who decided which--
--
Mr. Nadler. I didn't ask the individual. Was it BP who
decided or was it the government who decided or the National
Incident Command?
Mr. McKay. I don't know.
Mr. Nadler. You don't know. Could you find out for us,
please?
Mr. McKay. Yes.
Mr. Nadler. Now if I told you that it was BP who decided,
why would you use something that was much more toxic and much
less effective other than the fact that you have a corporate
relationship with the manufacturer? Is there any other reason
you can think of?
Mr. McKay. I don't understand the supply chain and how much
supply is available in either of those.
Mr. Nadler. Is there any reason you would use something
that is much more toxic and much less effective in cleaning up
the spill?
Mr. McKay. We are using quite a bit of it, so I don't have
any idea what the supply chain is for those other dispersants.
Mr. Nadler. Are you asserting perhaps that the other
dispersants are unavailable?
Mr. McKay. No.
Mr. Nadler. According to this, this is the second worst
dispersant on the list.
Mr. McKay. I am not asserting anything. I am just telling
you what I know.
Mr. Nadler. Would you please get back to the Committee with
the following information:
One, who decided to use this? I am told it was BP, not the
National Incident Command. You shouldn't lay it off on them.
Two, why was it decided?
Three, if you disagree with the assertion that it is much
more toxic and much less effective, let us know and find out
why the reason this is being used and whether it should be
changed now.
Mr. McKay. OK.
Mr. Nadler. Thank you.
Secondly, Mr. Newman, the Chairman in his opening statement
pointed out that Deepwater Horizon is flagged under a foreign
flag; namely, I think he said the Republic of the Marshall
Islands, and when the Coast Guard inspects an MODU under the
Marshall Islands it takes about 4 to 8 hours, and when it goes
under USA regulations it takes 2 to 3 weeks.
How many MODUs does Transocean have in operation in the
U.S. Or in U.S. Waters?
Mr. Newman. I believe there are 15, Congressman.
Mr. Nadler. Fifteen. How many of these are flagged in the
U.S. and how many are flagged in foreign countries?
Mr. Newman. I am not aware of the flag status of every one
of those vessels.
Mr. Nadler. Roughly.
Mr. Newman. I believe they are foreign flagged.
Mr. Nadler. Most or all of them are foreign flagged?
Mr. Newman. I believe that is correct, Congressman.
Mr. Nadler. Aside from the fact that by foreign flagging
them you get much more lenient and presumably therefore much
more dangerous to the end user--end safety regulations, you
don't have to comply with U.S. safety regulations, are there
other advantages or other reasons why you might foreign flag
them?
Mr. Newman. If I could, Congressman----
Mr. Nadler. Just answer the question, please. I have a few
more.
Mr. Newman. The vessels that are operating in the U.S. Gulf
of Mexico are subject to three sets of regulatory regimes: The
class society, the flag state, and the coastal state. And the
coastal state in the Federal waters of the U.S. Gulf of Mexico
is the Coast Guard.
Mr. Nadler. And yet the Coast Guard witnesses before the
Marine Board of Investigation of the Deepwater Horizon accident
have testified that a U.S. Coast Guard inspection of a U.S.
Flagged mobile offshore drilling unit takes 2 to 3 weeks, while
the safety examination of a foreign flagged MODU such as the
Deepwater Horizon takes 48 hours. In other words, it is much
less thorough.
Mr. Newman. If the Coast Guard is conducting both the flag
state inspection and the coastal state inspection, they will
obviously spend more time on the vessel. If they are only
conducting the coastal state----
Mr. Nadler. Which is another way of saying they are being
more thorough on the vessel.
Mr. Newman. If they are only conducting the coastal state
inspection.
Mr. Nadler. Yes, which is another way of saying they are
being more thorough if they are doing both than if they are
doing only the one, correct?
Mr. Newman. I wouldn't agree with that assumption,
Congressman, because I think part of the inspection when they
are performing the coastal state inspection is to review the
performance of the flag state inspection and the classification
society inspection. So they are relying on the thoroughness of
those other parties.
Mr. Nadler. Let me ask you, Mr. McKay, one question. I
understand and I appreciate the fact that you have said are
going to ignore the $75 million liability limit and that you
are going to pay all the damage for people who can show they
are really damaged, and I appreciate that.
Can you give one good reason why we should have any
liability limit at all, why we shouldn't simply repeal it? Now,
I understand one obvious reason would be to say, well, if we
didn't have a liability limit, there would be fewer companies
that want to drill, and maybe that should be. Then one would
say, well, why not get insurance for that? And one might say
well, insurance would be too expensive. And if that were the
answer, one might say well, isn't the market telling you in
that case that you shouldn't be doing it there or in that way.
Can you comment on all this?
Mr. McKay. We have not--I have not and we have not
addressed any sort of policy issues around liability limits. We
know in this particular case, we have accepted that we are a
responsible party. We are going to fulfill our obligations to
that. We have been very clear we are not going to----
Mr. Nadler. So you wouldn't oppose a legislative move to
remove or greatly raise liability limits?
Mr. McKay. I am sorry, I didn't hear you.
Mr. Nadler. You wouldn't object to or oppose a
congressional move to either remove or greatly raise by orders
of magnitude liability limits?
Mr. McKay. I don't think I can commit to what we would do.
We are focused on this issue right now.
Mr. Nadler. Thank you very much. My time has expired.
Mr. Oberstar. I thank the gentleman.
Mr. Duncan.
Mr. Duncan. Well, thank you, Mr. Chairman, and thank you
for the fair and even-handed way you are conducting this
hearing today.
Let me say, first of all, that this has certainly been a
terrible tragedy, most especially for those who have lost
family members, also a terrible tragedy for our environment and
our economy, and I share the desire of everyone on both sides
of the aisle on this Committee that we do everything possible
to try to determine the cause and see that it won't happen
again.
I do want to say though that sometimes in very highly
publicized situations, and this certainly has been one of the
most highly publicized ever, that there is a tendency on the
part of the Congress and the agencies to sometimes overreact,
and I hope we don't do that, because if we do that, we could
end up hurting millions of poor and lower income and working
people in this country, and we don't want to do that. We don't
want to drive gas prices to $6 or $8 a gallon or put energy
costs beyond the means of ordinary citizens.
Just yesterday in the Washington Times, Jeffrey Birnbaum,
one of their columnists, wrote this: He said, ``On one hand,
pulling back and rethinking offshore oil drilling makes perfect
sense. Certainly stricter safeguards will need to be applied.
But just saying no is exactly the wrong answer. People don't
stop flying after an airplane crash. The U.S. should not
withdraw from oil production offshore because of one major
leak.'' I share that opinion of Mr. Birnbaum.
Also I have a concern as expressed by Secretary Salazar
before a Senate Committee yesterday that raising the liability
cap to some extremely exorbitant level would hurt the small
companies a lot more than the BPs or the big companies. So I
hope that when we arrive at legislative solutions for the
problems that we are confronted with in this situation, that
possibly we consider having higher caps for some of the bigger
companies and lower caps for some of the smaller companies.
But I also want to see BP and Transocean and other
companies involved recover from this incident, because Mr.
McKay mentioned that his company has 23,000 employees in this
country, and certainly I don't want them to be harmed by this
or the thousands of stockholders that these companies have.
I know Transocean has 18,000 employees, that is what I was
told, and I don't know how many of--how many of those are in
this country, Mr. Newman?
Mr. Newman. I believe it is about 2,500.
Mr. Duncan. 2,500. Well, let me just ask one question. The
last major oil rig spill in this country was in Santa Barbara
or off the coast of Santa Barbara 41 years ago. How many oil
rigs are there--I really don't know this. How many offshore oil
rigs are operating off the coast of the United States at this
time? Anybody have a rough guess?
Mr. McKay. I know there have been about almost 43,000 wells
drilled, and there have been 7,000 production platforms of some
sort or another in the last 50 years.
Mr. Duncan. 42,000 oil wells and 7,000 production
platforms.
Mr. Oberstar. Would the gentleman yield?
Mr. Duncan. Yes.
Mr. Oberstar. At the command center briefing that we had
with our Canada-U.S. Parliamentary Group 2 weeks ago, the
number 3,800 drill rigs in the Gulf of Mexico was given.
Mr. Duncan. OK. Well, I guess the point is that this is
almost always a very safe and environmentally safe way to
produce oil, by the percentages.
I will also say this. I know that a lot of people in the
country want to punish BP and the other companies involved now,
but I am very impressed by the fact, if I heard right, Mr.
McKay, that you said a while ago that you have already paid
19,000 claims. I mean, that is just unheard of, and I commend
you for that. I can tell you, I have no connection whatsoever
to BP or any other oil company at all.
With that, Mr. Chairman, I will yield back the balance of
my time.
Mr. Oberstar. I thank the gentleman for those comments.
Ms. Brown.
Ms. Brown of Florida. Thank you, Mr. Chairman, for holding
this hearing. Let me just say I have been in Congress for 18
years and nothing has happened that has devastated my State of
Florida like this spill. We certainly have a diverse opinion on
this Committee, because I have heard people on this Committee
say ``drill, baby, drill.'' Well, that is not my opinion. And
if you are going to drill, you need to have the safeguards in
place. Florida has been devastated by this, and I want to put
the statement from the U.S. Travel Association into the record.
But let me just say also that in Florida, our tourism
generates $65 billion and we have over 1 million people working
in this industry. So we are devastated. People are canceling.
They are not coming to the hotels, they are canceling, not
coming to Florida thinking that the fish are not safe. So we
are in lockdown devastation.
I have a couple of questions.
In addition to that, let's point out that in 2006 we passed
legislation saying that you could not drill off of Florida
coasts because of the maneuvers, the military maneuvers. There
are 435 Members of Congress and it takes 218 to pass anything.
So keep in mind it is not going to be automatic drilling off of
the Florida coasts.
But I have a couple of questions for you. I am not an
engineer, but, sir, Mr. Newman, I understand that the
Norwegians or other countries have a device that costs about
$500,000 that would have prevented this. Can you give us some
insight into that?
Mr. Newman. Yes, Congresswoman. I believe you are referring
to an acoustic control system. It is required in two regulatory
regimes. It is required in Norway and Canada. Those are the
only two areas of the world where it is required.
Ms. Brown of Florida. Does it work?
Mr. Newman. Well, it is another means of activating the
BOP.
If you will allow me, I will talk about the means of
activating the BOP that existed on the Deepwater Horizon. On
the Horizon, there were three manual panels, manual activation
panels on the rig. The regulations required two, so the fact we
had three is in excess of those regulations.
In addition to manual intervention, the Deepwater Horizon
BOP was fitted with two automatic response systems, one of
which the industry refers to as a ``deadman'' and the other one
the industry refers to as an ``auto shear.'' In addition to
that, there was an ROV intervention panel. So manual
intervention, auto shear, deadman, ROV intervention. The
acoustic control would have been a fifth in addition to the
four that already existed.
Because we have had an opportunity to manually intervene on
that BOP with the remote-operated vehicle since the time of the
event and actuation of the BOP has been unsuccessful in
stopping the flow of hydrocarbons, I do not believe that
another means of activating the BOP would have made a
difference in this case.
Ms. Brown of Florida. So you are saying this procedure is
not safe then?
Mr. Newman. Which procedure?
Ms. Brown of Florida. The drilling at this depth.
Mr. Newman. I'm not sure I can make that statement until we
know exactly what happened. We know that there was a
catastrophic failure.
Ms. Brown of Florida. Mr. McKay, Florida requested $35
million for assistance. I think you approved 25. What was the
factors that went in? I think the Governor requested 35. What
went in the decision to decide on the $25 million?
Mr. McKay. I'm not sure on the difference between 25 and
35. I wasn't----
Ms. Brown of Florida. Ten. Ten.
Mr. McKay. Yes. Yes. I'm not sure what went into the
rationale between 25 and 35 as I was not directly involved in
that decision. But I can get back to the Committee.
Ms. Brown of Florida. Yes, sir. That would be great.
We are having a hearing tomorrow in my Committee, pipelines
and hazardous material. And one of the things--you all was
fined May 5th by the State of Washington for, let's see, 13
serious violations in this area.
I am just wondering about the culture. You indicated that
you thought you all had put certain safeguards and culture in
place. But if you are constantly being fined by the State for
not following your procedure, what is it we in Congress can do
to ensure--because it seems as if I am hearing from both sides
of the aisle, maybe some undercurrent, but we need more
regulations or more safeguards or, you know, trust but verify.
And I am certainly very supportive of having the Coast
Guard there when you all do the testing and maneuvers. And, of
course, I don't think the taxpayers should foot the bill.
Respond.
Mr. McKay. Could you repeat the question?
Ms. Brown of Florida. You all was fined on May 5th by the
State of Washington for 13 serious violations.
Mr. McKay. I believe you are referring to the Cherry Point
refinery.
If I could just recap, this company is dedicated to making
the safety culture at every single level as good as it can
possibly be. As I said, we have put a lot of procedures in
place and a lot of organizational capability to do that. We
have made a lot of progress. I will be the first to admit the
journey is never finished, and we must get better.
As far as this incident goes, we desperately need to
understand what happened. And it wasn't--you know, it's the
period of time where signals were there. What happened on the
rig? What happened with the equipment? That needs to be
understood so this industry, this company, and certainly the
regulatory regime can move forward to develop the resources in
a safer way.
Ms. Brown of Florida. All right.
Mr. Chairman, I yield back the balance of my time.
Mr. Oberstar. I thank the gentlewoman.
And I now recognize Mrs. Miller of Michigan.
Mrs. Miller of Michigan. Thank you very much, Mr. Chairman.
As the Chairman mentioned, he and I had an opportunity
about a week ago to be down in the gulf and go out with the
Coast Guard and take an aerial view of the spill. And we've all
seen it on TV, and we've seen it in the newspaper pictures.
But, certainly, from my perspective, when you're flying out
there, a little bit offshore, you start to at that point to see
the oil sheen and the spill and the various colors of the
rainbow that it was taking on--orange and purple and pinks and
various things. It really is unimaginable, I think, to see it
as it is emulsifying, as it is solidifying with the dispersants
and various things that are happening to the oil.
And I guess I would just--my personal feeling, I felt
physically ill looking at it, thinking about what was happening
underneath the ocean and what was going to happen as this
thing--almost like a doom, like a death is floating toward the
gulf shores and possibly now getting in the loop of the gulf
stream, et cetera.
And just one thing before I ask a question. I would just
make a general observation. We had a lot of people commenting
about the energy needs of the country, and there's no doubt we
have a tremendous amount of energy needs, and we are going to
continue to consume energy, and we should.
But, you know, coming from Michigan, where we are about to
unveil the Chevy Volt, which is an electric vehicle, and we are
trying to get off of some of the reliance that we have on
fossil fuels, I would just say that I would hope that this
Congress and as a Federal policy takes a much better look at
nuclear. We have got to get off of this oil, at some point.
The cap-and-trade, unfortunately, didn't even address,
really, nuclear energy. We are not going to build enough
windmills. We don't even have the transmission grid to have
enough electricity right now to power all of the these electric
vehicles that we are putting on. So I would just say, I hope
that we think about--we aren't going to stop having energy
consumption. We need alternative types of energy.
And in regards to the spill and the Committee hearing here
today, I would say, gentlemen, unfortunately I just cannot
believe your testimony about how you are preparing and testing
at that depth. And I think it was Mr. Newman who made a comment
saying you were going to re-evaluate the response capability in
the future. And I would say that is probably the understatement
of the year, sir.
The briefing that we had from Commander Mary Landry of the
Coast Guard--and, by the way, the Coast Guard is doing an
unbelievable job--when we saw the sombrero, as you were calling
it, they were calling it, the dome coming down, suspended on
5,000 feet of steel cable, buffeted by all of the various ocean
currents that are happening, and then you are trying to get the
dome on to the pipe there, the riser pipe, which, as you
mentioned, has been badly damaged, did sort of look like one of
those video games where, you know, you put a quarter in and
you're trying to get the--I know it sounds ridiculous, but
that's what it looked like.
And the thing is, it was mentioned at that time that the
dome was technology that has been used and has been proven to
work in the past at 300 feet of depth, not at 5,000 feet of
depth where you do have 2,300 pounds per square inch of
pressure. It has never been, apparently, we were told, never
been tried there. Keep in mind, that is at least 3,500 feet
deeper than our nuclear submarines can even go.
And then, as has been said here, I think Mr. McKay
mentioned that you have another proven technique, injecting mud
and concrete into this well. But you said it's never been used
at 5,000 feet. I don't know at what depth you use it.
Do you have laboratories where you simulate that type of
depth--we have all of these oil rigs out there--at that type of
depth? And the kinds of technologies that you have have never
been tried there. It suspends belief, to me, to think that we
are not simulating these techniques and to be prepared for what
might happen in the future.
And my last thing--I'm almost running out of time here. My
other question is: You had the best chemists in the world that
had to come--the guy from Brazil, everybody you were bringing
from all over--to develop a chemical composition of antifreeze
for the dome where the ice crystals formed, floated the thing
up, which was unexpected.
Again, have you had any success now so the next time, God
forbid, if this ever happens again, do you simulate that in a
lab? Are you prepared for this to happen again?
Mr. McKay. There is a tremendous amount of simulation that
goes on for the kill operations and the top-hat or the
cofferdam that we put down there. We knew hydrates would be a
problem. At that temperature and depth, hydrates are a massive
problem. This is a specific fluid, so you can't predict the
fluid beforehand.
All I can say is, this is unique and unprecedented. It has
not been experienced in action ever. We can model these things,
but it's at a very, very difficult depth where humans cannot
touch. So, like I mentioned earlier, I do think we will learn a
lot from this, and I do think it will have to be incorporated
into industry and sub-sea capability. I do believe that, yes.
Mrs. Miller of Michigan. Thank you very much.
Mr. Oberstar. We have a vote in progress, but there will be
time to continue the questioning.
Now, Mr. Cummings.
Mr. Cummings. Thank you very much, Mr. Chairman.
To both of you gentlemen, Transocean owns and operates the
Deepwater Horizon. It is also true that BP is Transocean's
customer, to the tune of approximately $500,000 per day.
Ultimately, it is BP who is seeking to achieve a profitable
drilling operation through the use of the Deepwater Horizon.
But we also know that complex deepwater drilling operations
require multiple specialized parties to achieve success.
On the night of April 20th, when the accident involving the
Deepwater Horizon occurred, efforts were under way that
involved personnel from BP, Transocean, and Halliburton to cap
the well that Deepwater Horizon was drilling.
I want to know, who was ultimately in control of the
drilling operation at that time? And, specifically, if there
had been a conflict among the views of Halliburton, Transocean,
and BP, how would that have been resolved?
Mr. Newman. Because it is BP's well, BP's well design, it
is ultimately BP who determines whether or not that well is
being constructed to their specifications.
Mr. Cummings. Uh-huh. And if there was a conflict on that
day--you didn't answer that piece--who makes that decision? Is
it BP?
Mr. Newman. Congressman, it depends upon the nature of the
conflict. If it is a conflict related to the design of the
well, because it's BP's design, BP are going to make the
ultimate determination about that design. If it is a conflict
with respect to safety----
Mr. Cummings. Safety.
Mr. Newman. If it is a conflict with respect to safety,
people that work for Transocean know and firmly understand that
they are obligated to stop any unsafe operation.
Mr. Cummings. Now, do you agree with that, Mr. McKay?
Mr. McKay. We--Transocean--there's normally about 120
people on the rig. We have two to three people, normally. We
are effectively designing the well and trying to make sure the
execution steps are done. Transocean operates that rig. We have
nobody qualified to operate or do anything on that rig without
Transocean doing it.
Mr. Cummings. So would it be fair to guess that--can you
tell me, were there any disagreements between those parties,
the drilling managers, in the days or hours before the blow-
out? And, if so, what disagreements might there have been? Do
you know of any, and would you know that information?
Mr. McKay. I don't know that information. The investigation
is going to get to that. I heard about some conversations on
``60 Minutes'' and other places. But we've got an investigation
under way; the government does, too. I think the decisions and
the conversations and the data, the digital data and the
physical data that was occurring before the well explosion is
critical to understand what happened.
Mr. Cummings. Very well.
You know, when I visited down at Port Fourchon and had an
opportunity to talk to a number of people involved in this
process, one of the things that they said--and these were
basically people who worked with the industry on ships and
bring out the supplies and everything to the platforms.
One of the things that they said is that the industry--that
there were, more than likely, mistakes made. Some of them may
have been human error. But one of the things that they said is
that they want to make sure that there are plans in place and
equipment in place so that, if anything like this ever happens
again, we would be able to effectively and efficiently deal
with it.
And, as I'm listening to you all, it sounds like--and
correct me if I'm wrong--you all don't have a lot of confidence
that we can do that. In other words, have we created a monster
that we cannot control? Do you follow me?
Mr. McKay. Can I just comment?
The sub-sea response, I think, is what everyone is
concerned with. We have three rigs working simultaneously, and
we are trying to stop the source at the blow-out preventer,
then trying to kill the well, and all the while trying to
contain it with sub-sea containment.
I do think the industry, as we look back on this, will
understand what sort of generic capability may be needed to be
on standby. There may be protocols for industry to immediately
be able to help and organize for that help. There are a lot of
things I think we are going to learn out of this, redundancies
and other things that I think will put us on a path to make
this safer. I really do.
Mr. Cummings. Very well.
I'm sure you heard my comments about the Coast Guard and
wanting the Coast Guard to be much more involved early on so
that--I think they can have a tremendous impact and probably
would be very helpful. Do you have an opinion on that?
Mr. McKay. Well, I think we are very fortunate with the
leadership of the Coast Guard and their ability to react and
deal with things. I think more understanding on the front end
would probably be a good thing.
Mr. Cummings. All right. Thank you very much.
Mr. Oberstar. Mr. Buchanan?
Mr. Buchanan. Thank you, Mr. Chairman.
I want to echo something my colleague said, Congresswoman
Brown. I was the past chairman of the Florida Chamber. We have
$65 billion--I think that is the number she used, so I'll go
with that--in tourism. The impact--I can just tell you, I'm
from Sarasota, I represent the southwest part of Florida--is
gigantic. People down there, just because it's so much on the
media, they hear about a tar ball down the Keys. Probably isn't
related to this, but it becomes a big story. We're coming into
our tourism season. People are telling me they're getting
cancellations.
I mean, this is so gigantic, the impact it has on the whole
region. And every State is impacted a little bit differently.
But we've just got to take into mind it's not only one of the
largest ecological disasters in our history, but when you look
at the impact it's going to have economically to a State like
Florida, where we have 12 percent unemployment, we count on
tourism, it is gigantic.
The second thing, I've been, you know, one of the
Republicans--because I represent a coast, I'm against drilling
off our beaches and stuff. Some people want it as close as 3
miles, so it hasn't been a popular thing for me, but I've taken
a strong position. And, as a result of that, I've had many,
many experts in the industry come to me and say what has
happened here at this deepwater drilling could not happen. We
have the deepwater technology, we have the preventers, we have
all these kinds of things. And I said, ``Are you saying 100
percent it can't happen?'' ``Absolutely, 100 percent.''
And I've always been--I always thought there could be a
possibility, because I was concerned about hurricanes, and when
Charlie came in, it went from a two to four and went right in
my congressional district, just south of me.
So I guess the question I'd have for both of you, quickly--
and I've got a couple of other questions--is: What is the
percentage of something like this happening? I have been told
this couldn't happen, what's happening now, that you've got 28
shutdowns and all that. I'm exaggerating that. But it just
couldn't happen. If you had a hurricane--I was worried about
hurricanes blowing a platform away.
Could you give me a brief comment on that?
Mr. McKay. Very briefly, I think it's unique and
unprecedented. There's been 42,000 wells drilled; it hasn't
happened like this. And hurricanes have come through the gulf
many times, and the safety systems have worked.
Mr. Buchanan. OK, but--I was thinking about hurricanes was
one of them, but the other thing, I never even imagined this,
the implosion, that we couldn't shut something off. I'm talking
about something like this happening again. I mean, what is the
possibility of that?
I was led to believe by a lot of experts in the industry
that this couldn't happen. I wasn't even thinking about this as
a possibility. But, just in general, anything happening.
Mr. McKay. I don't think anyone could give a guarantee that
anything couldn't happen. I think the really important thing is
to learn everything we can from this to lower that risk going
forward. And I do think I'm confident the investigations will
help us do that.
Mr. Buchanan. OK.
Let me ask you, Mr. McKay, the other thing. One of the
things you said earlier in your opening statement is that we've
got a new culture, a new environment, I think you said the CEO
said, about safety and compliance.
However, The Washington Post reported a story that they
gave special exemptions to you as it related to this--a waiver
for environmental studies and review.
Why do you say on one side that you're all into compliance,
but yet you're looking for an exemption to get around some of
the environmental requirements for drilling and the impacts of
that?
Mr. McKay. I think what you're referring to is what's
called a categorical exclusion, and exploration activity in the
gulf is categorically excluded by government process and
industry practice.
There are environmental studies that are done for the
lease, sale, and environmental impact statement, which is very
extensive. Then there are more specific environmental
assessments done, called grid assessments, that are done for
the actual lease and lease area. And then we file an
environmental plan.
The categorical exclusion then utilizes the pre-existing
government studies that have been done.
Mr. Buchanan. You've got multiple rigs in the Gulf of
Mexico now. What are you doing to make sure that they are
completely safe? Have you done anything additionally since this
has happened?
Mr. McKay. We have done some additional work, but they're
all working on this situation. We don't have any other wells
drilling in the gulf right now. But what we have done is test
the BOPs in a different way, inspect them in a different way.
And there are several things we are doing. But all of our
activity is around this, all of it, right now.
Mr. Buchanan. I know you're paying a lot of claims as it
relates to New Orleans and that. How do you look at things like
loss of business in Florida, with hotels where they had
reservations and they're getting cancelled because of the
spill? How are you going to deal with that? Or are you dealing
with that?
If you look at Pensacola--but, again, my area of Sarasota,
I have someone that says, ``I've got a bunch of places on the
beach. I had reservations. Now they're cancelling them. They're
from Virginia, and they want to go--they're going to go to
northern Michigan or something.'' Are you going to deal with
those folks, as well?
Mr. McKay. Yes, absolutely. Our claims process deals with
that. And we're guided with the Coast Guard guidelines that are
under the Oil Pollution Act, which have processes to deal with
that. And we are definitely dealing with that.
Mr. Buchanan. OK. So those claims, if you're from Florida,
Tampa Bay area or Sarasota, where would they----
Mr. McKay. We've got claims offices. I can get back to you
on where they are. And the Internet line and the claims lines,
yeah.
Mr. Buchanan. And I just wanted to ask Mr. Newman real
quick just on the whole thing about the preventers, what is
your sense of the probability of something like this happening?
They say it can't happen. It has happened. You know, you've
been in the business for a long time. I mean, what--one out of
10,000? 100,000? I mean, I was under the impression this could
never happen.
Mr. Newman. I think the fundamental question, Congressman,
is what's on the inside of the BOP. You know, BOPs, under their
design constraints, function extremely well. But if you've got
the wrong stuff inside the BOP like cement or casing or other
debris similar to what we've seen, you know, fly out of the
well and land on the deck of the supply vessel, if you've got
that kind of stuff inside the BOP, the BOP is not going to
work.
Mr. Buchanan. I yield back, Mr. Chairman.
Mr. Oberstar. Well, that last exchange raises further
questions about who is in charge and who is holding the
responsibility. And I think the gentleman's line of questioning
was very important.
We have Mr. Capuano, Mr. Cao, Mr. Hare, Mr. Teague, and Mr.
Johnson. We will come back to those Members after these four
votes, which will probably take about 20, 25 minutes.
The Committee will stand in recess.
[Recess.]
Mr. Oberstar. The Committee will resume its sitting, with
apologies to all for the interruption with the votes.
Our next Member in line for questioning is Mr. Capuano of
Massachusetts.
Mr. Capuano. Thank you, Mr. Chairman.
Mr. McKay, does BP do drilling in the North Sea?
Mr. McKay. Yes.
Mr. Capuano. Do you do drilling in Canadian waters?
Mr. McKay. We have leases in Canadian waters.
Mr. Capuano. OK.
And, Mr. Newman, do you do work in the North Sea?
Mr. Newman. Yes, sir, we do.
Mr. Capuano. And the Canadian waters?
Mr. Newman. Yes, Congressman, we have----
Mr. Capuano. So you have both chosen to do work in the two
countries that, earlier, you identified as having more strict
requirements than the United States. So, therefore, you can,
obviously, make a profit. I'm sure you are making a profit in
both those two countries, and God bless you for making that
profit.
But, basically, what you just told me--did I hear it wrong?
That you can do good business in places that have higher
requirements, more strict requirements, to safeguard our
environment. Is that a fair conclusion of the answers you just
gave me?
Mr. Newman. Transocean works in 30 countries around the
world, and the regulatory regimes in those 30 countries span
the spectrum. And the United States and----
Mr. Capuano. But you just, earlier, in response to Ms.
Brown's question, said that both Canada and Norway have higher
requirements, more stringent requirements on safety issues than
the United States does. Whether they would or would not have
worked, you had some speculation, which I respect.
But the question I basically have is, why shouldn't we hold
you to the highest international standards there are in any
country in this world in which you are doing business? Is there
any reason we should not?
I didn't think so. But thank you.
I guess my other question is that--I guess, Mr. McKay, I
get quoted in the paper all the time. Sometimes they're right,
sometimes they're wrong. So my first question is, is it an
appropriate quotation from Mr. Hayward, who I understand is the
CEO, is it an appropriate quotation, is this correct, that he
said that the spill in the Gulf of Mexico was ``relatively tiny
compared to a very big ocean''? Do you know if that is an
accurate quotation?
Mr. McKay. I've seen that reported. I can just give you my
perspective that any oil in the Gulf of Mexico is a very
serious thing.
Mr. Capuano. Oh, I think that's appropriate.
On the presumption that it's accurate--which, you know,
there are times when it's not--I really hope that you express
to Mr. Hayward our displeasure with that approach or attitude--
not so much the comments; I appreciate the honesty of them if
they're honest. If they're not honest, if they're flip, then I
would suggest that maybe he takes it a little more seriously.
Maybe if the spill was in the North Sea closer to where he
lives, there might be some other issues, but maybe not.
But either way, if that's an accurate statement, I will
tell you that it's not going to win friends and influence
people around here. And maybe Mr. Hayward should take that into
account.
Am I also correct in understanding that BP's profits in the
first quarter of this year were in the neighborhood of $6
billion?
Mr. McKay. I believe that's right, worldwide, yes.
Mr. Capuano. I appreciate that. And I would hope that it's
your intention, I assume it's your intention, then, to use that
entire profit before you come looking for any sort of
reimbursement on anything related to this spill from the United
States Government. Is that a fair assumption?
Mr. McKay. We've been very clear that we're not coming to
the U.S. Government for reimbursement. We've said we're going
to live up to our responsibility----
Mr. Capuano. I understand that, but there's been no figures
on it and everything we're responsible for. Just in this
hearing alone, I've seen the two of you do this at least two
times to different questions from Mr. Cummings and Mr. DeFazio.
And I appreciate that. I'm a lawyer. This is going to be the
lawyers full employment spill, as far as I'm concerned; I get
that. But I'm really more interested in not so much--I
understand there's going to be this, I get it--but I'm really
interested in what you are willing to do.
And if you use the entire $6 billion--if you want to chase
Mr. Newman or anybody else for it, fine, that's OK. But if
you've got $6 billion in profits, you can't really honestly
think that this government is going to pay for your
responsibilities when you're walking away with a profit.
So you should be able to have a spill, fight it out in
court--fine--and walk away with a profit as well? You think
that's a fair thing for me to ask my taxpayers to do?
Mr. McKay. I don't believe I'm saying that at all. I
haven't given any--I hope I've given no indication that we want
the U.S. Government to reimburse us for this.
Mr. Capuano. Not reimburse you, but to pay for the
fishermen who are going to lose their livelihoods----
Mr. McKay. No. Sorry. I've been clear, we are going to make
good those claims. We've been very clear since the outset.
Mr. Capuano. Excellent. So this is good news. So I can go
home and tell my taxpayers that they will not be on the hook
for any aspect of this spill, any costs related to this spill?
Mr. McKay. All costs related to the spill we will bear.
Mr. Capuano. I love that. And I hope you make a big profit.
I will tell you, though--I would like to just ask in my
last few seconds: Have either one of you used the phrase that
I've heard so often, ``Drill, baby, drill''? Did you ever use
the phrase?
Mr. Newman. No, sir. I've not been part of that particular
movement.
Mr. Capuano. I appreciate that. I would suggest that--I
would love people who used it to now come to this microphone
and tell me how they feel today. And not that I'm against--I
actually think that Mr. Duncan's earlier commentary about the
fact that the United States should not walk away from
drilling--it is a necessary part of life today. But those who
are so flip and so quick to say, ``Drill, baby, drill'' and
have parties celebrating the concept--I would suggest that the
Bush-Cheney days are over. This country is no longer run by
people with that attitude. And I don't think the American
taxpayers are going to stand for it.
And if you have never used the phrase, I appreciate that.
But I still think that the attitude inside--we're not against
providing the energy we need. We are for doing it in a
thoughtful, safe manner, held to the highest standards
possible, especially if there are other countries doing it and
especially if you're doing business in those countries. There
is no reason in the world we shouldn't be held to it.
And I look forward to you filling the requirements, Mr.
McKay. And I understand full well that there will be lawsuits
between everybody. So be it. But, either way, I do look forward
to us not having to be asked by anybody to come up with a
nickel to deal with the costs associated with this spill. And I
appreciate your commitment to that.
Thank you.
Mr. Oberstar. I thank the gentleman.
Mr. Cao, who represents----
Mr. Cao. Thank you very much, Mr. Chairman.
Mr. Oberstar. --New Orleans, a major portion of New
Orleans, who is in the direct path of the environmental
consequences, and who was there to greet us 2 weeks ago when
our delegation of Members for the Canada-U.S. Inter-
Parliamentary Group arrived for an overflight, and who has been
immersed in the issues of the spill and its consequences and
very rigorously defending his constituents.
I thank the gentleman for his constancy.
Mr. Cao. Thank you very much, Mr. Chairman.
And we have a limited time, so, if I could, I would like
you all to answer the questions very briefly, if you don't
mind.
First of all, I was not here, and I was just wondering
whether or not anyone asked for--what do you mean by the term
``legitimate''? Can you explain to me what do you mean by the
term ``legitimate'' claims? How do you decided whether a claim
is legitimate or not?
Mr. McKay. Yes. We use the Oil Pollution Act as a guide and
the Coast Guard guidelines that are within that for
``legitimate.'' And they cover things like property damage,
personal injury, cleanup costs, things like that. So there are
guidelines in the Oil Pollution Act.
Mr. Cao. How does this act affect, for example, fishermen
who are trying to file a claim, small businesses trying to file
a claim? I know that some of the documents that you asked for--
for example, tax returns. A lot of these fishermen, they might
not file tax returns. So how can they file a legitimate claim
when they cannot submit some of the documents that you request?
Mr. McKay. They would just need some substantiation.
Generally, it starts with income, tax returns, but it could be
receipts that can be provided from past catches and things like
that. Some substantiation of some sort.
Mr. Cao. In the last couple of days, I've met with a number
of your employees, including Mr.--I'm sorry, I forgot--the vice
president of BP. I conveyed to him some of my concerns in the
implementation of the Vessels of Opportunity Program as well as
some of the training programs, benefit programs, how they are
being implemented in the minority communities. Because there
are problems of language, problems concerning accessibility.
I wonder whether or not some of those concerns are being
addressed right now.
Mr. McKay. I don't know those exact concerns, but I'll be
glad to go back and check and get back to you as quickly as
possible.
Mr. Cao. What kind of plans do you have in the long term to
address the issue of economic development, to address the issue
of the seafood and fishing industry for the States along the
gulf coast?
Mr. McKay. There are several studies. One major one is a
natural resource damage assessment study that's going on now,
with the Federal lead trustee as NOAA. They're doing that
study, which is baselining things and then will evaluate the
damage to natural resources, the damage to fisheries, the
damage to any natural resources, their restoration, and their
compensation based on that.
Mr. Cao. But, obviously, that deals more with tangible
data. How do you address in the long term the issue of the
psychological impact on the area, the fact that people might
not be eating seafood from the gulf coast because they fear
that they're contaminated? How do you bring back tourism to
Florida, to Alabama, to Louisiana? Do you have a long-term plan
to address those issues?
Mr. McKay. We are working with the States. In terms of
tourism, as an example, we have given--this was announced a
couple days ago--about $70 million across the gulf coast to do
advertising and help to get the messages out that the States
want to get out as regards tourism.
As regards your other question on longer-term effects, I
don't have a specific answer for that, but I do want to let you
know that our intent is to stand behind what we're saying, and
it doesn't end when the cleanup ends.
Mr. Cao. Yesterday, in my conversation with your members,
they informed me that 16,000 boats have been approved, yet, as
of now, only 680 are active, meaning selected to work. Can you
explain to me, what process do you use to determine which boats
become active and which boats are lingering and waiting?
Mr. McKay. There are many more boats than are needed right
now for the response for those type of vessels. And I'm not
sure I know the exact details, but the area contingency plans,
the parish plans for instance, help us understand how
implementation should occur with the Unified Command structure,
in terms of deploying resources.
So the boats that are actually at work are the ones that
are needed to deploy boom or to protect certain shorelines
based under the Unified Command resource deployment priorities.
Mr. Cao. Mr. Chairman, if you will allow me one more
question?
Mr. Oberstar. Oh, by all means. And I'll come back to the
gentleman because he's the only one.
Mr. Cao. I thank you very much.
My next question is directed to Transocean.
I know that you've filed some kind of a pleading in Federal
court, trying to limit your liability to $27 billion based on,
I believe, the Limitation of Liability Act of 1851. That,
obviously, is causing a lot of consternation among my people
down there in the district.
Is it your position that the Limitation of Liability Act of
1851 overrides potential liability under the Oil Pollution Act?
Mr. Newman. The Limitation of Liability action which we've
filed only addresses non-environmental claims. OPA, I believe,
addresses environmental claims. So I think the two are separate
and distinct.
Mr. Cao. OK.
And it is your position also that you can transfer
liability stemming from operations of your own vessels through
contract with BP?
Mr. Newman. There is a commercial contract between
Transocean and BP, and that contract does have liability and
indemnity provisions in it.
Mr. Cao. OK. If you can do us a favor by providing us with
data and laws with respect to your records of inspection of the
blow-out preventer, I would really appreciate it.
Mr. Newman. Yes, sir.
Mr. Cao. Thank you very much.
I yield back, Mr. Chairman.
Mr. Oberstar. Further to the gentleman's questions, the Oil
Pollution Act provides very specifically, ``Each responsible
party for a vessel or a facility from which oil is discharged
or which poses substantial threat of the discharge of oil into
or upon navigable waters or adjoining shorelines or the
exclusive economic zone is liable for removal costs and
damages.''
Removal costs--all those incurred by the Federal
Government, the State government, an Indian tribe, the State or
a person--consistent with the national contingency plan. And
the national contingency plan--I call the gentleman's attention
to this as a guide for his constituents--was enacted in 1970
after the Torrey Canyon failure in the English Channel, and
that contingency plan is updated.
And it also covers damages that include injury to,
destruction of, loss of use of natural resources, economic
losses resulting from destruction of real or personal property,
including loss of taxes, royalties, rents, fees, loss of
subsistence use of natural resources. Losses are recoverable by
any claimant who uses the natural resources--that's your
fishermen--without regard to ownership or management and
damages for net cost to government.
It's a wide, wide area of jurisdiction and very significant
in this case because 50 percent of the fish and shellfish of
the United States are harvested in the Gulf of Mexico, from its
660,000 square miles.
Now we will go to Mrs. Napolitano. Oh, I'm sorry. I didn't
see Mr. Taylor come in here. He is next in seniority.
Mr. Taylor. Thank you, Mr. Chairman. And I very much
apologize. We're also marking up the National Defense Act of
2011 today.
My questions are for Mr. Newman.
Mr. Newman, where was the Deepwater Horizon built?
Mr. Newman. The Deepwater Horizon was built in a shipyard
in Korea.
Mr. Taylor. And under what flag did that vessel operate?
Mr. Newman. The vessel operates under the flag of the
Marshall Islands.
Mr. Taylor. How many drilling rigs or ships does Transocean
have?
Mr. Newman. A hundred and thirty nine.
Mr. Taylor. How many of those are flagged in the United
States of America?
Mr. Newman. I don't know the answer to that question.
Mr. Taylor. Are any of the sister ships of the Deepwater
Horizon flagged under the American flag?
Mr. Newman. There is one sister ship to the Deepwater
Horizon, which is the Nautilus. I don't know what flag the
Nautilus operates under.
Mr. Taylor. Would you--Mr. Newman, you are obviously aware,
as Mr. Cao pointed out, of the enormous amount of suffering the
people of the gulf coast have endured, first with the loss of
11 lives, with the enormous amount of suffering that continues
as a result of this mishap: loss of income, the uncertainty as
to whether or not the shrimp crop will ever come back, long-
term effects to the seafood industry, people's immediate loss
of paychecks. It has just devastated the tourism industry, the
seafood industry. Seafood processors being told, ``Don't send
me any American-processed shrimp. We don't know if it's got oil
on it. I want nothing but imports.'' I mean, you guys have
really messed things up.
So my question is, given the harm that this accident has
caused, how much taxes did Transocean pay to the United States
of America last year? Because you have obviously cost our
Nation a great deal of money. So I'm just curious, what was the
contribution of Transocean to our Nation tax-wise?
Mr. Newman. I don't have that number available with me
today.
Mr. Taylor. Well, let me ask you another question. There
has been a tendency for some foreign-flag operators to create a
separate entity for the work they do in the Gulf of Mexico;
it's called a corporate inversion. And they see to it that the
costs that they pay to the parent company, either through the
mortgage on the vessels or the overhead costs that the parent
company charges them, they see to it that that exceeds their
revenues or is very close to their revenues, so they end up
paying no U.S. taxes even though they're operating in the Gulf
of Mexico.
So my question to you is, is that part of your company that
operates in the Gulf of Mexico an inverted corporation?
Mr. Newman. The company that operates in the Gulf of Mexico
is a U.S. company. It's a Delaware corporation.
Mr. Taylor. OK. But is it owned by a parent corporation?
Mr. Newman. Yes, it is owned by a parent company.
Mr. Taylor. And where is the headquarters of the parent
company?
Mr. Newman. The ultimate parent company, Transocean
Limited, is a Swiss corporation.
Mr. Taylor. OK.
Mr. Chairman, the reason I ask these questions is, you
know, since the earliest days of our Republic, we've reserved
the right of coast-wide commerce for American-made, American-
crewed, and American-built vessels. Now, somebody somewhere
along the line has given these folks an exemption from that
law.
And when we go to recover the funds that the enormous
amount of money that the Air Force, the Coast Guard, all the
State governments, city governments hiring extra policeman,
extra firemen, the call-up of the National Guard--when we go to
recover those funds, I've got to believe it would be a heck of
a lot easier to recover those funds from an American company
that's got some assets here in the United States than someone
in Switzerland.
Tell me again where the ship was actually flagged. In the
Marshall Islands?
Mr. Newman. The ship was operating under a Marshall Islands
flag.
Mr. Taylor. Marshall Islands.
And, again, given what the people of Mississippi went
through just trying to get the insurance industry in America to
pay claims in Mississippi after Katrina, I have a very strong
suspicion we're going to have a heck of a time getting someone
out of the Marshall Islands or Switzerland to pay these bills.
So, Mr. Chairman, I would hope that you would give--and,
again, they're pulling American minerals out of the ground on
an American sea bottom with a foreign-flag vessel and quite
possibly a foreign crew.
Mr. Chairman, with all respect, I would certainly hope that
when we go forward from this that you would give every
consideration to extending the Jones Act to cover this sort of
vessel in this sort of circumstance.
I thank you very much.
Mr. Oberstar. The gentleman and I have had a conversation
about the application of Jones Act to this situation, and I've
asked the staff to prepare a guidance memorandum on the
applicable law and the problems of dealing with the WTO
requirements. And there are some legal obstacles that we have
to overcome on some aspects of that issue. So this is something
that the gentleman and I and others of interest on the
Committee will work our way through. But I appreciate the
gentleman raising that issue. That's of vital importance.
Ms. Johnson, you had an opening statement, but you didn't
have an opportunity for questions.
Ms. Johnson of Texas. Thank you very much, Mr. Chairman.
And I apologize for being in and out. I had another Full
Committee in hearing and a bill on the floor that I had to
respond to.
This question is for Mr. Newman.
There was some news report that indicated that, though
these people were very stressed when they came out from the
area of the work, they were asked to fill out a form releasing
your company from any liability. Is that true?
Mr. Newman. Congresswoman, I don't know if you've had an
opportunity to view that form, but there is no release or
waiver language in that form. You can appreciate that this
exercise in understanding what happened and how we can prevent
it in the future is a fact-finding exercise, and the two
questions that were posed on that form are mere statements of
fact.
Ms. Johnson of Texas. Mr. Chairman, I would like to ask
unanimous consent to make this form a part of our permanent
record.
Mr. Oberstar. Without objection, so ordered.
Ms. Johnson of Texas. Thank you very much.
What liabilities do you have, what responsibility do you
have for the employees?
Mr. Newman. With respect to our employees?
Ms. Johnson of Texas. Yes.
Mr. Newman. As I mentioned in my opening comments,
Congresswoman----
Ms. Johnson of Texas. I might have missed them. I'm sorry.
Mr. Newman. --we are doing everything we can to help the
nine Transocean families who are affected by this horrible,
tragic accident to cope with this tragedy.
Ms. Johnson of Texas. OK.
Now, Mr. McKay, why does BP feel that they are in a
position to allow or not allow Federal agencies access to the
spill site to measure the volume of the spill?
Mr. McKay. We've been working constantly with government
agencies, ranging from Coast Guard to MMS to Department of
Defense, Navy, Air Force, NOAA, EPA, all with open access to
all the data. We've been working together on everything, as far
as I know.
Ms. Johnson of Texas. Are you measuring the exact volume
itself?
Mr. McKay. The difficulty we have in this situation is it's
in 5,000 feet of water, so we have no way of measuring. It's
coming out of a broken pipe.
So we've been working with NOAA scientists and other
industry experts in trying to understand, by judging from what
it is estimated at the surface, plus what we believe the oil
will disperse in the water column, to come up with the estimate
of the flow rate. It's very difficult to come up with the flow
rate in the conditions we are in.
Ms. Johnson of Texas. Uh-huh.
In 2004, BP produced an analysis entitled, ``Thunder Horse
Drilling Riser Break--The Road to Recovery,'' that tried to
determine what had happened in a 2003 spill. BP's own
conclusions were that the company was not well-prepared for the
long-term recovery effort.
Is this still the same situation?
Mr. McKay. I believe the study you're talking about was a
riser incident where the blow-out preventer worked, sheared
everything, the riser came off, as it's supposed to. And the
spill was the drilling fluid that was in the riser, I believe,
if I'm correct.
I would say, to further your question, I think we are going
to learn a lot from what is happening here. And I think
everybody is planning, and the regulations will have to take
into account what we're learning.
Ms. Johnson of Texas. Well, is it not correct that you,
kind of, ignored your own study from 2003?
Mr. McKay. No, I don't think that's correct. I don't think
we ignored that. I think that taught us some lessons about how
risers work when the blow-out preventer shears and they're
released.
Ms. Johnson of Texas. Thank you. My time has expired.
Mr. Oberstar. As a follow-up to Ms. Johnson's question, and
it is one that I was going to pursue later: Mr. Newman, is
there any intent on the part of Transocean to use this form in
any defense against civil actions filed by any of your
employees?
Mr. Newman. Mr. Chairman, recognizing that I'm an engineer
and not a lawyer, I don't believe that form would be admissible
as a defense mechanism.
Mr. Oberstar. At the outset of the hearing, when I swore in
the witnesses, I said that the oath applies also to materials
submitted to the Committee. I will ask you to submit a
statement to the Committee in response to this question from
your legal team.
Questions have been raised by those who escaped the rig but
who, in a state of shock in the immediate aftermath, signed
this form and are confused about what its effect will be on
their ability to recover medical costs and other medical
expenses that they may incur. At the time, they didn't really
know what they were signing. At least, that's what they say.
So I want that response from your legal team.
Mr. Newman. Yes, sir.
Mr. Oberstar. Mrs. Napolitano?
Mrs. Napolitano. Thank you, Mr. Chair.
Sitting here listening to a lot of my colleagues' questions
has brought some other issues to mind about the number of wells
that are currently in operation that are either below 1,000
feet, below 2,000 feet. And how many--where are they located?
And what kind of oversight is there over their inspection for
safety purposes, and what intervals? And where are they? And do
any of them use the same equipment?
And I realize that this one was permitted back in '01--at
least that's the information I'd gotten initially--permitted in
'01. And there has been some discussion amongst some of us that
maybe no permits ought to be issued below 1,000 until there is
enough evidence to ensure that the oversight and the safety
precautions have been taken to prevent any future spills. And
while I marvel at my colleague stating that there are thousands
of them out there that have not had the incidents, all it takes
is one for a catastrophe.
So I'd like to have some information, and you may not have
it with you, but I'd like to have it, with the Chairman's
permission, reported to this Committee about how many wells are
currently in operation in deep waters and what kind of
equipment they are being handled with. What oversight--and at
what intervals are you checking for their safety? If some of
this equipment is going to be faulty, better to be proactive
than reactive.
Answers?
Mr. Newman. We will submit that information.
Mrs. Napolitano. Do you have any idea offhand? I realize
there were 7,000 platforms.
Mr. McKay. I don't know the exact numbers. There have been
about 2,300 wells drilled below 1,000--deeper than 1,000 feet
of water. There are production platforms out there that are
producing the successful wells that have been hooked up. And
then there are about 100 to 130 wells drilled in deep water
each year. So we can get that data to you, and we can explain--
--
Mrs. Napolitano. Would that report also, please, include
any incidents that they may have had where you may have had
problems with the equipment itself that might have caused
something had they not been safeguarded by some of the BOPs,
whatever you call them?
Mr. McKay. Yes, we can submit whatever--our experience,
yes.
Mrs. Napolitano. OK.
The other issue, of course, is that there's the Oil Spill
Liability Trust Fund that currently has $1.6 billion in it,
according to my staff, which covers a lot of the costs. And,
eventually, it has to be repaid by the company, I'm
understanding. Is that correct?
Mr. McKay. What we've said--and we've tried to be clear
from the start--we are a responsible party, have formally
accepted that designation. We----
Mrs. Napolitano. I understand. But this is the Oil Spill
Liability Trust Fund.
Mr. McKay. Right. We are not going to access that fund.
Mrs. Napolitano. You are not?
Mr. McKay. No. What we've said is we are going to bear
this. We will ignore the $75 million cap. And we will not be
trying to get reimbursement from the fund.
Mrs. Napolitano. OK. The----
Mr. Oberstar. If the gentlewoman would yield?
Mrs. Napolitano. Certainly.
Mr. Oberstar. Just to be clear about the Oil Spill
Liability Trust Fund, that is managed by the U.S. Coast Guard.
It has a balance of $1.6 billion. The fees were allowed to
expire in 1994 and then reinstated several years later and
updated from 5 cents to 8 cents. And that should be--it
should've been adjusted to the Consumer Price Index.
But that is an amount which the Coast Guard or any other
U.S. Government agency draws against to pay upfront costs if
the responsible party is not paying those costs and then to
collect those costs from the responsible party. So, neither
Transocean nor BP draws against the liability fund; it's a
government agency that does, just for clarification.
Mrs. Napolitano. Thank you for that clarification, Mr.
Chair.
Then one of the other areas that keeps coming up is what is
a legitimate claim, simply because--and I realize this depends
on who's asking. But, as happens in many of the other spills,
decades later there's still an impact in the communities, in
the sea life, in the tourism, in many of those areas.
Will that extend through those time frames? Because it
isn't just the impact now or in the foreseeable future; it's
the long term.
Mr. McKay. Yes, we've been clear, the legitimate claims
applies to the impacts that are caused by this spill. And we
want to be fair, responsive, and expeditious about that. And
I've also made it clear that it doesn't end when the cleanup
ends. And so, hopefully we can get this thing stopped as
quickly as possible, minimize any impact. But whatever impacts
there are--and I know that they could go longer into the
future--yes, that's what we're saying.
Mrs. Napolitano. Thank you, Mr. Chair. I may want to submit
some other questions for the record. And I yield back.
Mr. Oberstar. And those questions will be received and
transmitted to the witnesses.
Mr. Altmire?
Oh, I'm sorry. You need to move up closer, Mr. Olson, so I
can see you there. You're fading out against the background. I
apologize for passing you over. You are now recognized.
Mr. Olson. Thank you, Mr. Chairman. No apologies necessary.
And, again, thank you for having me here today.
And I appreciate the witnesses coming up, giving us your
testimony, your expertise, your perspectives on this disaster
and what we should do here in Congress.
And I think I can speak for most of us here, and probably
all as well, my focus has been, since this thing has happened,
it was, it is, and it shall be stopping that leakage, that
well, off the bottom of the gulf coast. And once we do that,
then we can worry about what happened, why it happened, and
take the steps we need to take here to make sure that it never,
ever happens again.
And I just want to make sure that I have a perspective on
how much oil is actually being discharged out of the leak right
now. I mean, we've seen reports that it's up to--the Unified
Command said 5,000 barrels a day. I've also seen some press
reports that say it may be up to 80,000 barrels a day.
And I just want to ask you--and this is mostly for Mr.
McKay: What is the best--is 5,000 barrels per day the most
accurate, or is it something more than that?
Mr. McKay. That is our best estimate.
Obviously, it's continually being looked at. As you may
know, we've gotten this riser insertion tube to work, and we're
getting increased volumes at the surface where we can actually
measure. And then, I believe there is a new small task force
that has been put together under direction of Unified Command
to get all the experts together in a room and try to
understand, with the latest available data, is there a more
accurate estimate?
But we do recognize there is a range of uncertainty around
the current estimate.
Mr. Olson. Thank you very much for that. And you kind of
read my mind there. How much is that riser tube, do you think,
taking off the discharge? I mean, can you put any numbers on
that? Is it 4,000 barrels a day? 2,000?
Mr. McKay. Last night, or yesterday, it was about 2,000,
and we've been trying to ramp it up slowly so we don't pull the
water in and get hydrates. I suspect today it's higher, but I
haven't had an update yet today.
Mr. Olson. OK. Thanks very much for that.
And I just want to get an update from you on the relief
well. I mean, it's still 2 to 3 months before that's going to
be up and running?
Mr. McKay. We've got two relief wells drilling. One's at
about roughly 9,000 feet below sea level, and the other one
spud on or began operations on Sunday, Sunday of this past--
this past Sunday. So, yes, to get to the total depth of the
well, it will take about 3 months to get there.
Mr. Olson. One final question. This is just about the
dispersants. I understand you've been using some dispersants
down at that depth, 5,000 feet, which hasn't been done in
history, as far as I've been told.
I just kind of want to get your perspectives on those
dispersants. How are they working? Are they helpful? Do you
have any concerns about the environment, post? Because they've
been put on there not so much with all the tests they need to
at that depth. But, again, we've got to stop this discharge.
And so I just wanted to get your perspectives on how the
dispersants are working.
Mr. McKay. The dispersants, in general, have worked well on
this oil. The sub-sea dispersant, it is the first time it has
been tried. It seems to work exceptionally well. One of the
benefits is it seems to need less dispersant per unit of oil
contacted, so it's efficient in that sense.
It has not been tried, so there are very, very strict
protocols that the EPA has put in place, under their direction,
to monitor and understand what happens as we go forward. It can
be stopped at any time if there's any data that would say it
should be. But it's important, and I think it's working.
Mr. Olson. Thank you very much, and I appreciate all the
hard work you all are doing. I know you are sort of writing the
book on this. This is deeper than any of these things that have
happened before, and being a Member of Congress who represents
the Johnson Space Center, it is sort of like Apollo 13. They
just had their 40th mission, and they were basically writing
the rules and figuring things out as they went.
Let's hope you all will be just as successful as we were in
getting those astronauts back home, and I look forward to
working with you to ensure that you do that.
Mr. Chairman, I yield back the balance of my time.
Mr. Oberstar. I thank the gentleman.
Mr. Olson, just further to your question about measuring
the flow, the Coast Guard is establishing a peer review panel
to bring together the best minds in the industry and academia
to agree upon the best available technology to measure flow
accurately at that depth under these conditions. That actually
is underway now.
Mr. Altmire.
Mr. Altmire. Thank you, Mr. Chairman.
The discussion we have had today has dealt with, of course,
every phase of this, the explosion, the leak, the response, the
cleanup. I am interesting and have some questions about the
spill, the leak.
It is safe to say what we know right now, the explosion
caused the spill. Is that correct?
Mr. McKay. The way we are looking at it is we had a well
control event of some sort, hydrocarbons into the wellbore,
there was a well control period, and then an explosion. Then
there is a related but separate event about the safety
equipment and whether that worked once things happened.
Mr. Altmire. That is the second issue. Thank you, Mr.
McKay. The failure of the blowout valve is what is responsible
for the situation that we find ourselves in today?
Mr. McKay. The simplest way to look at it, we had a
horrendous industrial accident due to a well control event and
an explosion. Then we have had equipment, and we don't know
why, that didn't work, that I think effectively has been
responsible for the size of the spill that we have now and the
ongoing operations.
Mr. Altmire. There are other scenarios, of course, that
exist that would cause a spill, that would cause a leak of this
sort, is that correct? Or is this the only way that a leak like
this could ever happen, is by an event like this?
Mr. McKay. I think the leak of this magnitude would take a
well control event and then a failure of a piece of equipment.
Mr. Altmire. Is there any technology that exists that you
know of that could have prevented this from happening?
Mr. McKay. I don't know of a piece of technology that could
have prevented it. I do think we will learn about how to build
in potentially more redundancy and design, testing criteria for
pieces of equipment to make it safer. I do think we will learn
from this to make it safer.
Mr. Altmire. We talked a lot earlier in the hearing about
the acoustic control, is it a $500,000 piece of equipment, is
that about right, that is accepted in Norway and Canada. Do you
wish in retrospect that BP had invested in this device?
Mr. McKay. I agree with Mr. Newman on that point. I don't
believe that particular device in this particular instance
would have made a difference in that we had multiple triggering
devices, and we physically tripped and triggered the deadman
with an ROV. So the triggering of the BOP was not the issue
evidently, or at least not the entire issue.
I do think as the studies and the post appraisals of this
go forward, the consideration of different triggering devices,
including acoustic, it is worth looking at.
Mr. Altmire. Do you think that this Congress should look at
making mandatory those types of devices moving forward?
Mr. McKay. I think the investigations and the panels that
have been assembled and are going to work through this will
come up with recommendations to change regulation or devices in
the future. So I would say mandates, I don't know. But I do
think the panels and the investigations will come up with
conclusions that can then be acted upon. But I think we don't
know what happened yet.
Mr. Altmire. Do you think that part of the reason this
happened is because of the age of the device, of the apparatus
that failed?
Mr. McKay. Perhaps that would be a better question for Mr.
Newman, since it is their blowout preventer.
Mr. Newman. I don't think the 10-year age of the BOP had
anything to do with it.
Mr. Altmire. Is there any reason to think that in any other
rigs, offshore platforms, that this is going to be a problem
that we should look into solving before something like this
happens?
Mr. Newman. I am not sure I understand your question. I
guess my response is that until we know exactly what happened
and the real sequence of events, it is difficult to speculate
about what a prevention mechanism in the future might look
like.
Mr. Altmire. I guess what I am getting at is the two
possibilities here are, one, that it was known that a scenario
like this could take place and there are devices, technologies
that exist that could have prevented it, and that was not done;
or, we don't know why this happened, we don't know how to
prevent it, there is no technology that exists to ever prevent
this from happening again, which, of course, changes the
discussion in the Congress about moving forward with these
types of endeavors.
Mr. Newman. I am not sure we can bifurcate between those
two until we know exactly what happened in this particular
case. It is entirely possible we may after the full fact-
finding and airing of exactly what happened, we may conclude
that this was a scenario that the industry should have planned
for.
Mr. McKay. Just a comment. I do believe the multiple
investigations are going to determine cause of the explosion
and the well control event as well as the issues around the
blowout preventer. It may take time. I do have confidence that
then things can be amended, adjusted and planned for and made
safer. I really do believe that.
Mr. Altmire. Thank you both.
Mr. Oberstar. There have been blowouts in shallower waters
where the blowout preventer has activated, correct, but not at
5,000 foot depth. Mr. Newman?
Mr. Newman. I am familiar with blowout events. The Ikstock
well that blew out in the 1970's was in shallow water on a
jack-up.
Mr. Oberstar. Shallow meaning roughly 350 feet.
Mr. Newman. Certainly less than that, yes. And that well
flowed for about 9 months.
Mr. Oberstar. Mr. Hall.
Mr. Hall. Thank you, Mr. Chairman, for holding this
hearing. My prayers and condolences to the families of those
who were killed and injured in this event.
Mr. McKay, I am curious about the choice of dispersant,
Corexit 9500, which is manufactured by a company called Nalco
Holding Company on which a former 11-year board member of BP
sits on the Nalco board.
Do you know approximately how much money BP has paid so far
to Nalco for this dispersant?
Mr. McKay. I am sorry, I don't.
Mr. Hall. Could you get the Committee that information,
please?
Mr. McKay. We can get that.
Mr. Hall. Why do you think Corexit would have been chosen
over, as Mr. Nadler said, a less toxic and more effective
product like Dispersit, for instance, which you would think
would be a better choice? And did BP talk to--did your company
talk to any manufacturers of the other dispersants to find out
if they were available?
Mr. McKay. I have not been personally involved in the
choices around the dispersants and what happened in terms of
talking to companies and understanding the availability, the
effectiveness or the choices that have been made. We can get
you some information on that. I just have not been involved on
that.
Mr. Hall. My understanding is that the company that
manufacturers Dispersit, just for one out of the list of 13
approved dispersants, says it could quickly produce 60,000
gallons per day, which something more than is currently being
used by BP for this spill, as I understand it. So that would be
a good conversation to have.
After Exxon Valdez, the dispersants were found to
concentrate in the organs of certain fish and other marine
life, and I assume that it would do the same thing in the
organs of human beings who consumed those fish.
As a condition for the subsurface application of Corexit,
EPA directed BP to implement a monitoring plan on the plume,
including measuring the toxic effects of the mixture of
dispersed oil and Corexit. What are the results of this
monitoring; are those results posted somewhere and available to
the public?
Mr. McKay. The monitoring is ongoing, and I believe it is
being worked through Unified Command. I don't know how much of
that has been posted or is public, but we can certainly get
back to you on when it is expected to be and as the results are
tabulated. But there is constant monitoring going on under the
direction of Unified Command and with the relevant government
agencies.
Mr. Hall. Thank you. I would appreciate a written response
to that.
The directive also orders BP to ``detect and delineate the
plume.'' Is BP doing this?
Mr. McKay. Again, with assistance from the government
agencies involved with the monitoring and the sampling programs
under Unified Command or within Unified Command, I believe that
is going on.
Mr. Hall. Could you please inform the Committee in writing
of the nature and extent of all subsurface plumes.
Mr. Hall. Do you know whether the dispersant or dispersants
you are using are harmful to human health, whether they tend to
bioaccumulate, or are they known carcinogens?
Mr. McKay. I don't know offhand. We will get that back to
the Committee.
Mr. Hall. Are you prepared to assume liability for the
human health effects, not just of the oil spilled, but also the
dispersants as well?
Mr. McKay. We have said we will honor all legitimate claims
related to the impacts of this spill.
Mr. Hall. Do you know, or Mr. Newman, do you know, what the
blowout preventer costs for the Mikado site?
Mr. Newman. I don't know what we paid for it back in 1999
or 2000 when we bought it.
Mr. Hall. What is a typical ballpark figure for the
collection of redundant blowout preventer devices?
Mr. Newman. I believe if we went out and bought one today,
I think it would cost in the range of $15 million.
Mr. Hall. Mr. McKay, do you know approximately what the
annual advertising cost was for BP for that nice unfolding
flower on TV in the ``beyond petroleum'' slogan to be broadcast
into living rooms around the country?
Mr. McKay. I know roughly. I don't know exactly. Last year
it was about $10 million to $12 million, and this year is
probably $20, something like that. I don't know. I can get the
numbers for you.
Mr. Hall. So it is roughly the same or maybe a little more
than the cost of a blowout preventer. I assume that BP is
deducting the cost of this image advertising, which does not
actually talk about your product, but just as sort of a feel-
good image ad, from the costs of doing business for tax
purposes. Do you know if that is correct?
Mr. McKay. I don't know the tax treatment of that. I
presume that is an expense and treated as such.
Mr. Hall. Well, that is an expense that I question the
validity of. It may be legal at the moment, but if one is
merely advertising what appears to be we are nice guys, we are
good to the environment, please don't regulate us, which is the
way some of us might perceive that, I would suggest that, Mr.
Chairman, we might in the future or somebody in this Congress
might look at it.
My time has expired. Thank you, Mr. Chairman.
Mr. Oberstar. The gentleman has asked some very pertinent
and very important questions, and we will pursue those further.
Mr. Teague has the responsibility for the Committee to be
on the floor and manage a bill from our Committee on the House
floor. He is also our Committee and perhaps the House resident
oil drilling practitioner.
I want to yield to the gentleman at this time.
Mr. Teague. Thank you, Mr. Chairman, for having this
meeting today.
Mr. McKay and Mr. Newman, thank you all for coming and
answering the questions here. I would just like to make a
statement to start with.
I want to separate myself from comments that were made
earlier to politicize this problem that we have. I don't think
this is the Obama oil spill. I don't think it is the Bush oil
spill. I think it is a tragedy that we are having in our
industry, and I hope we find out that it is an accident.
But at the same time, I am not trying to protect BP and I
am not trying to protect the Federal agencies like the Mineral
Management Service and companies like that. But it doesn't
matter if Mineral Management was lax in their inspections or
not. We should be doing the best that we can do, because our
first obligation is to our employees, that we furnish them a
safe environment to work in.
So I would think that we wouldn't use the fact that Mineral
Management or whoever does the inspections did a poor job of
inspecting. We would want to have a clean environment and a
safe work site and everything, and I am convinced that BP and
Transocean both are those type of companies. I think that there
is going to be plenty of time for criticism and compliments
both at a later time.
But I do have a couple of questions that I wanted to ask.
One of them is about the BOP, and actually I have rented BOPs
and dressed BOPs. So the way that you test them, have you had
to make a change with any of the rams or seals or O rings or
anything at that depth?
Mr. Newman. In terms of the testing?
Mr. Teague. Yes. When you test the BOPs, at different times
have the rams leaked and you needed to change maybe the seals
on the rams or the O rings in the shaft or anything like that?
Mr. Newman. Because these are pass-fail tests, when the
equipment fails the test, we have no choice other than to
repair the equipment. That is the right thing to do.
Mr. Teague. Right. And you have done that at this depth
before, and you just tested these BOPs a few days before this
happened?
Mr. Newman. The BOP on the Horizon was tested on the 10th
and the 17th. Let's just be clear, Congressman: When the BOP
fails the test, you have to isolate the well, make the well
safe, and then recover the BOP up to the rig. This is not
equipment that you can repair at 5,000 foot water depth. So you
bring it up to the rig, repair it and run it back down.
Mr. Teague. Do you all have a----
Mr. Oberstar. Will the gentleman yield? The witness is not
answering the gentleman's question. He asked specifically did
you test it at depth. I asked that question earlier in the
hearing. Your response was no. You need to answer Mr. Teague's
question.
Mr. Newman. On April 10th and on April 17th, the BOP was on
the seabed in 5,000 feet of water. It was tested at depth and
it passed those tests.
Mr. Oberstar. That was not the answer you gave earlier
today.
Mr. Teague. OK, thank you.
Now, do you all have a kill line below the BOP on the
wellhead and are you tied on to the kill valve?
Mr. Newman. I am trying to remember the exact configuration
of the BOP. There is a choke line and a kill line. I don't
remember where those outlets are with respect to the rams.
Mr. Teague. OK. So at this time, are you tied on to it and
can you pump into the wellbore or somewhere?
Mr. Newman. We are in the process of preparing to pump into
the BOP, using either the top kill method or the junk shot
method.
Mr. Teague. OK. As you know, I think one of the things,
like any time that we have an issue like this that is a
situation, there is a lot of information and a lot of
misinformation out there. And I think what one of the problems
is the information that is out there about the positive test
and the negative test. I was wondering if you might be able to
explain that a little bit so that maybe everybody could
understand what is the difference between a positive test and a
negative test?
Mr. Newman. A positive test is a test in which you apply
pressure to the casing and the cement, so you increase the
pressure to make sure that the casing and the cement can
withstand that pressure. A negative test is when you lower the
pressure to ensure that nothing flows out of the casing and
cement.
Mr. Teague. When you all performed the negative test on
this liner, did you displace the hole with seawater or did it
still have the drilling fluid in the hole?
Mr. Newman. I do not have the details as to how they
actually went about performing that task, so I can't tell you
which portion of the hole had mud in it and which portion of
the hole had seawater.
Mr. Teague. This is for Mr. McKay. I know that there is
going to be definitely a root cause analysis and the
information that is acquired from there. Will you share it with
the industry and how soon will you share it with the industry
so we can keep something like this from happening again?
Mr. McKay. Yes, our internal investigation, we are going to
share everything with the industry as well as Committees and
the government. I don't know exactly how long yet. We are
obviously trying to piece things together. It will go as fast
as it can possibly go. But we are right in the middle of it
right now. But, yes, we will definitely share it. Absolutely.
Mr. Teague. Thank you. It is a bad problem and I don't know
how it is going. It looks like it could go for a while.
One other question I wanted to ask you. At what depth are
you going to plan to intersect the well with the alternate
wells?
Mr. McKay. Roughly right at reservoir depth.
Mr. Teague. OK. I was just curious. The sooner that we
could intersect it, the quicker we can stop the flow.
Mr. McKay. Yes. We have looked at a model. It is going to
need to be right at reservoir depth.
Mr. Teague. OK, very good. Thank you all for being here
today and for answering these questions, and we will stay in
touch.
Thank you.
Mr. Oberstar. Mr. Kagen.
Mr. Kagen. Thank you, Mr. Chairman, for holding this very
important meeting, and thank you for being here today. I have
heard a great deal of your testimony earlier in your other
Committee appearances, and I appreciate the fact that you are
taking full and complete responsibility for cleaning up this
mess and for recompensing everyone who may have a claim, be it
legitimate or, as somebody else may decide, a really legitimate
claim.
I would like to put a little frame around this and then ask
a few questions.
From where I am sitting, it really looks like the financial
collapse that we had, because during our financial collapse we
had to clean up the mess, we had to catch and punish all the
crooks, we had to make sure we rewrote the legislative language
and the regulations to make sure that it would never happen
again. This CCR approach looks like we are having to come in
here with this big leak in the Gulf.
Let me just review, and correct me where I am wrong. Is it
not true that a foreign corporation bought foreign steel, built
some ships, foreign flagged, came in, and now as a consequence
all of your economic investments, we have lost jobs in my
shipbuilding State of northeast Wisconsin. We have got steel
mills that could be hiring more people. But you chose to hire
people overseas and spend the money overseas.
Is that true or false?
Mr. Newman. The Deepwater Horizon was built in a shipyard
in Korea.
Mr. Kagen. So the answer is true, correct?
Mr. Newman. The Deepwater Horizon was built in a shipyard
in Korea.
Mr. Kagen. So it is true that you took our money from the
oil revenues and invested it overseas and hired people overseas
and not in our great United States of America, and now we are
suffering the consequences of it.
With regard to your commitment to responsibility, this is
your BP regional response plan, the oil spill response plan
right here, and right on the front page you say that upon
receiving indication of an oil spill or other chemical release
that may threaten the waters of the United States, the
following actions are critical to initiating or sustaining an
effective response.
One of them is to locate the spill. And the second thing
you mention is to determine the size and volume of the spill.
Yet according to the press reports, you refused, and here your
testimony this morning, you are refusing to measure the rate of
spillage that is coming through this leak, knowing, according
to published reports and other newspaper articles, that there
are other facilities that could help you to do it that, such as
the National Deep Submergence Facility at Woods Hole. They are
able to assist you.
Would you be willing, yes or no, to contact the people at
Woods Hole and begin to monitor and measure the extent of the
leak you created?
Mr. McKay. May I correct something you said, or at least
disagree with it?
Mr. Kagen. You may.
Mr. McKay. We are not refusing to measure the leak. This
leak is not measurable in terms of technology that we know and
have seen with industry experts as well as other government
agencies.
Mr. Kagen. Well, reclaiming my time back, ``You can use
this type of technique to determine the velocity of the
particles, and if you know what the area is, it is relatively
straightforward mathematics to determine what the volume is.''
That is Andy Bowen, who is Director at Woods Hole of such a
facility. I urge you to contact him.
With regard to your decision and the acquiescence of the
EPA to use some dispersants, some chemical dispersants, you are
using Corexit, correct?
Mr. McKay. Yes, two different types.
Mr. Kagen. All right. And on page 3 of one of the MSDS
sheets, environmental precautions: Do not contaminate surface
water. So another MSDS for Corexit, this would be for EC7664A,
there is arsenic. Are you aware that there is arsenic in these
compounds?
Mr. McKay. I was not specifically aware of arsenic in the
compounds.
Mr. Kagen. Are you aware that arsenic is a known human
carcinogen?
Mr. McKay. I do know that.
Mr. Kagen. All right. So you are aware that this carcinogen
is being put into our Gulf Stream into our food web now, are
you not?
Mr. McKay. I am aware we were using these dispersants in an
approved by way by the EPA and other government agencies.
Mr. Kagen. All right. And to follow up on your intention to
be a very responsible corporate entity and responsible
personally, would you here this morning, or this afternoon now,
commit to funding any and all studies to look at the long-term
consequences of the dispersal agents you are now using within
the Gulf?
Mr. McKay. I cannot commit to fund any and all studies. No,
I cannot.
Mr. Kagen. Which studies would you fund? Or is that a
hypothetical question?
Mr. McKay. It is.
Mr. Kagen. But you would agree that it might be necessary
to do some studies of the Gulf life consequences of your
dispersal agent being distributed, is that correct?
Mr. McKay. I believe we are doing that through the
protocols and monitoring, as well as the natural resource
damage.
Mr. Kagen. You would also agree with me there might be some
long-term studies that might become necessary, is that correct?
Mr. McKay. That may be true.
Mr. Kagen. These long-term studies might run into the
hundreds of billions of dollars, is that possible?
Mr. McKay. I have no way of knowing.
Mr. Kagen. But it is possible. Would you agree to that?
Mr. McKay. I have no way of knowing.
Mr. Kagen. All right, so you have no way of knowing how
much it would cost. Therefore, isn't it incumbent upon this
Congress and possibly the administration to ask you to set
aside, for this government perhaps to freeze some of your
current assets? Your corporation is worth $142.5 billion. So
would it be agreeable with you if the United States Government
would freeze, let's just start with a number of $25 billion for
future studies and corrective actions that may become
necessary?
Mr. McKay. We have been very clear from day one that we are
going to fulfill our responsibilities as a responsible party
under the Oil Protection Act.
Mr. Kagen. I will take that as a yes that you would agree
that $25 billion set aside and frozen might be a good idea.
Mr. McKay. I did not say yes to that.
Mr. Kagen. All right. So then I will take a that as a no.
Is that correct? Is that a no?
Mr. McKay. I am not agreeing to that, is all I can say.
Mr. Kagen. OK. Can you tell me if anyone in either of your
corporations, yourselves personally, are you two personally
aware of anyone within your corporation having changed the
records or falsified any records within your corporation at any
time?
Mr. McKay. I am not aware of that.
Mr. Newman. I am not aware of any instance of that.
Mr. Kagen. Do you feel that anyone within your corporation
would be criminally negligent because of the loss of life that
has taken place in this accident?
Mr. McKay. I have no way of knowing that.
Mr. Kagen. All right. Well, thank you for being here. I see
my time has expired, and I will submit written questions that I
would appreciate your complete and full and honest and
responsible answers to. Thank you.
I yield back my time, Mr. Chairman.
Mr. DeFazio. [presiding.] Representative Johnson.
Mr. Johnson of Georgia. Thank you, Mr. Chairman.
Mr. McKay, you are the President of BP Plc, is that
correct?
Mr. McKay. No, it is BP America.
Mr. Johnson of Georgia. OK. And in connection with your job
duties, you are aware of the fact that BP is a habitual
violator of health and safety regulations?
Mr. McKay. As I mentioned earlier, we have had some tragic
accidents in the past. We are making improvements in the
company.
Mr. Johnson of Georgia. And those violations, some of your
violations have actually resulted in criminal charges being
brought against the company, is that correct?
Mr. McKay. That is true.
Mr. Johnson of Georgia. Actually, at this time you stand or
you sit as president of a convicted felon operation, is that
correct?
Mr. McKay. We have pled guilty to a felony in relation to
Texas City, that is true.
Mr. Johnson of Georgia. So that makes you a convicted felon
then, is that correct?
Mr. McKay. I don't know the nuance of the word, but we have
pled guilty to a felony as regards Texas City.
Mr. Johnson of Georgia. Well, let me ask you this question
also, Mr. McKay. Do you have any idea, can you give us any
indication as to how BP intends to respond to Secretary
Napolitano's and Secretary Salazar's May 14th letter requesting
clarification on BP's intentions regarding the $75 million
statutory cap on damages?
Mr. McKay. Yes, we have responded in writing to that and we
have said we will not--excuse me, that cap will not apply. We
have responded in writing to that. I can provide that to the
Committee.
Mr. Johnson of Georgia. In that connection I would like to
ask you about the expedited claim process that BP has put in
place which features claims offices that are easily accessible,
and you have handled about 19,000 claims thus far. Is that
correct?
Mr. McKay. Yes. It is 19,000 claims have been made, that is
right.
Mr. Johnson of Georgia. Now, is it true that----
Mr. McKay. I am sorry, can I correct one thing? I think I
used the word ``paid'' earlier. 19,000 claims have been made. I
don't know the exact number. Something like 4,000 have been
actually physically paid.
Mr. Johnson of Georgia. OK. And is it true that these
claims that were filed came largely from fishermen?
Mr. McKay. I don't have a breakdown, but I think a lot of
them are fishermen and folks earning a living right on the Gulf
Coast, marinas, small businesses on the Gulf Coast that have
been immediately impacted.
Mr. Johnson of Georgia. And it is also fair to say that the
full measure of harm to that industry will not be known for
years, is that correct?
Mr. McKay. I don't know. We will have to see what the
impacts are.
Mr. Johnson of Georgia. We don't know what the impacts are
now, and the 4,000 who have signed I guess documentation in
return for receiving some money, nobody knows at this time what
the effects of this oil spill will bring to their industry,
correct?
Mr. McKay. That is right.
Mr. Johnson of Georgia. Let me ask you something, because
we have talked about releases and that kind of thing with Mr.
Newman, but we haven't done so with Gulf. Has Gulf Oil, its
claims process, tendered and required the signatures of the
claimants on any form that would preclude them from asserting
claims for damages thereafter?
Mr. McKay. We as BP have had no one sign those type of
forms.
Mr. Johnson of Georgia. Now, you do have forms that they
have signed though, the 4,000 who have received payment, is
that correct?
Mr. McKay. Yes.
Mr. Johnson of Georgia. And if you would forward to my
attention a complete package of forms that these claimants have
signed, I would greatly appreciate it. Will you do that?
Mr. McKay. Yes. Absolutely.
Mr. Johnson of Georgia. And last but not least, we have
talked about the blowout preventer. Has it or has it not been
tested at 5,000 feet or below?
Mr. Newman. The blowout preventer that was in use on this
particular well was deployed in the early days of February and
since that time it has been at 5,000 foot water depths and it
has been tested every 7 days at 5,000 foot water depths.
Mr. Johnson of Georgia. Has that make and model of blowout
preventer ever been tested prior to its deployment on the sea
bottom for the Deepwater Horizon vessel?
Mr. Blumenauer. That BOP has been in use since 2002, so it
has 8 years of testing data.
Mr. Johnson of Georgia. That is not my question. Yes or no:
Has that particular make and model been tested at depths of
5,000 feet or more prior to this explosion?
Mr. Newman. Yes.
Mr. Johnson of Georgia. What were the dates and times of
those, and would you provide me with copies of the reports and
findings on the testing?
Mr. Newman. Congressman, part of the exercise we are going
through is a full and thorough understanding of the history of
the BOP, and we will make that available to the Committee.
Mr. Johnson of Georgia. So you don't have that information
for review at this time?
Mr. Newman. I don't have it with me, no.
Mr. Johnson of Georgia. Have you reviewed any such
documentation?
Mr. Newman. I have looked at some of the test data for the
BOP.
Mr. Johnson of Georgia. And you have seen test data that
indicates testing at a depth of 5,000 feet or below prior to
this catastrophe?
Mr. Newman. I looked at the well operations report from
April 17th, which indicates that a test was conducted on that
date and that the BOP passed the test on that date.
Mr. Johnson of Georgia. But no information about prior
dates, before it was installed?
Mr. Newman. I have not personally gone back through the
history of the BOP, but that is certainly part of the
investigation that we are conducting.
Mr. Johnson of Georgia. Thank you, sir.
Mr. DeFazio. I thank the gentleman.
Just to follow up, because I am a bit confused. Since there
had previously been another rig there that was damaged in the
hurricane and you brought this rig in, was the blowout
preventer the same, or was it replaced?
Mr. Newman. Each rig has its own blowout protector. So when
the Marianas was on that well last year, it was using the
Marianas' BOP. When the rig was damaged in the hurricane and
left that location, the Marianas took the Marianas' BOP with
it. When the Horizon arrived on that location, she arrived on
location with her BOP.
Mr. DeFazio. And then if this accident hadn't happened and
a permanent drilling rig had been put in place, yet another--
then BP would bring in, you would bring in your own BOP at that
point?
Mr. McKay. When you complete the well and install a
production platform, you don't have any use for BOPs any more.
The wells are piped solid to the surface to be controlled off
the platform.
Mr. DeFazio. At that point you wouldn't----
Mr. McKay. No BOPs.
Mr. DeFazio. All right.
Ms. Richardson.
Ms. Richardson. Thank you, Mr. Chairman. It has been
reported that there were difficulties with the blowout
preventers prior to this accident, something about some of the
workers noticed some rubber or something that had come up. Is
that correct?
Mr. Newman. I believe you are referring to the 60 Minutes
segment that aired on Sunday?
Ms. Richardson. I am.
Mr. Newman. Mr. Williams in that report does make reference
to having seen rubber material, a handful of rubber material
come across the shale shakers, which is a piece of equipment on
the rig. But I would just inform the Committee that the piece
of material that we are talking about is about 3 feet in
diameter, it is about 18 inches tall and it weighs about 2,000
pounds. So a handful of small chunks in relation to that large
piece of rubber I would characterize as almost immaterial.
Ms. Richardson. I am going to repeat the question. My
question was, it was reported that this had occurred. Were you
aware that it was reported?
Mr. Newman. The first indication I had of it being reported
was having watched the 60 Minutes segment myself.
Ms. Richardson. OK. And are you aware of any of your other
staff that might have been advised of this issue?
Mr. Newman. I am not aware of anyone else having been
informed.
Ms. Richardson. It has been also reported that there was a
disagreement between BP and Transocean at the commencement of
you guys beginning this in February and there was a staff
meeting and there was a disagreement on whether to move
forward. Did that occur?
Mr. Newman. I am not aware of any disagreement at the
commencement of the operation in February.
Ms. Richardson. OK. I am going back to the 60 Minutes
report that was this Sunday. They said that there was a meeting
and there was a disagreement of how and when to move forward.
Mr. Newman. I believe the disagreement that Mr. Williams
was referring to took place on April 20th.
Ms. Richardson. OK. So you aware that a disagreement did
occur?
Mr. Newman. The only indication I have of it is having
watched Mr. Williams' segments on 60 Minutes.
Ms. Richardson. Are you aware of whether a disagreement
occurred or not, other than what you saw on 60 Minutes?
Mr. Newman. That has been the only direct firsthand account
I have seen of a disagreement.
Ms. Richardson. And no one has said to you that this
occurred?
Mr. Newman. That is the only firsthand account I have.
Ms. Richardson. No one else has said to you that this has
occurred? First account, second account?
Mr. Newman. I have hearsay references to it, but Mr.
Williams' account on----
Ms. Richardson. Have you heard other references, other than
Mr. Williams?
Mr. Newman. Anecdotal hearsay evidence of a disagreement.
Ms. Richardson. Thank you. You have talked about, talking
about BP now, you talked about a commitment for damages. One of
the things that has been said in prior hearings was there was a
little back and forth going on. Are you committed to paying for
the damages, regardless of what independent disagreements you
might have with some of the other companies that you work with?
Mr. McKay. Yes. I have testified and would like to make it
clear again today, we are a responsible party under the Oil
Pollution Act. We will fulfill our obligations. Blame,
liability, those kind of things, whether it is between
companies or whatever, we will figure that out. But we are a
responsible party in that regard. So what I am saying is we are
going to take care of it and we will deal with other things
later.
Ms. Richardson. Thank you, sir. Is it true that some of the
cleanup workers are being required to sign a waiver?
Mr. McKay. No, I don't think so. Early on in the first few
days when we were signing up boats a standard contract was used
and it had some waiver language, and that was brought to our
attention and we tore it up and there are no waiver
stipulations in any of the things we are doing.
Ms. Richardson. Have you notified those workers that that
has been torn up and that is no longer----
Mr. McKay. I think it is obvious. I think that was fixed
early on, I do.
Ms. Richardson. Will you go back and make sure?
Mr. McKay. I will. I will.
Ms. Richardson. Thank you. Why is there a disagreement
between the total amount of oil that is leaking? BP has said
5,000, other reports are saying otherwise. Why do you think
there is a disagreement, and do you stand by your point that it
is only 5,000?
Mr. McKay. I think there are a range of estimates and it is
impossible to measure. That is the reality. What we have been
doing with government officials, government experts, industry
experts, is trying to come up with the best estimate, and that
has been done essentially by understanding what is happening at
the surface and trying to understand volume there, adding to it
what we believe the oil properties, how it would disperse in a
water column as it moves to the surface. And those two added
together is the estimated volume. It has been clear from day
one there is a large uncertainty range around that.
Ms. Richardson. Is it possible it could possibly be the
larger number that has been reported?
Mr. McKay. It is theoretically possible. I don't think
anyone believes it is quite that high that has been working on
this. I believe the uncertainty range is around that 5,000
number, and it could be higher. But if the number you are
talking about is 70,000 barrels a day, I don't know this, but I
don't think people that are working with it believe that that
is a possibility.
Ms. Richardson. Mr. Chairman, could I ask my last question,
please? Thank you, sir.
My last question, I have BP facilities in my district. I am
in Carson, California. We also have offshore drilling right
outside of my district. So this is an important issue. Let me
just say, first of all, I appreciate you coming. I haven't
heard you take the fifth, either one of you, and you very
candidly answered the questions, and that is what we need.
My last question is what honest lessons could you say to
us, to this Committee, that we could consider to do, whether it
is legislation or regulation, to ensure that this never happens
again?
Mr. McKay. I am sorry, I think it is early, but what I
would say is the redundancy in the systems that are deployed,
the capability of being able to intervene in a sub-sea
environment, we are learning a lot. We are learning a lot. We
have got to parlay those learnings as quickly as we can into
whatever regulations should be and whatever industry
capabilities should be. So I think it is early, but we are
learning very quickly.
Ms. Richardson. So you are not required to know that prior
to having the ability to drill?
Mr. McKay. The response plans so far over the last 50 years
have been, quite frankly, concentrated on surface response. As
we have gone through this, we predicate a lot of the
assumptions in the deep water around a blowout preventer that
is working, or at least accessible, that you can get on top of
it with another one, and that is not the case in this unique
situation. I think we have to learn from that.
Ms. Richardson. Thank you for being candid.
Thank you, Mr. Chairman.
Mr. Oberstar. [Presiding.] I thank the gentlelady.
The Chair is confused as to whether Ms. Edwards or Mr.
Cohen was first.
Ms. Edwards.
Ms. Edwards. Thank you, Mr. Chairman, and thank you,
gentlemen, for being here today. I just have a couple of
questions that I want to center actually around the response
plan, because I think it is actually related to the flow rate.
If your response plan is designed for kind of a worst case
scenario of 250,000 barrels per day and if you go with what I
think are conservative estimates of 5,000 barrels a day, you
are probably at about 2 percent of your worst case scenario. So
in fully implementing your response plan, is this the full
implementation of your response plan for the Deepwater Horizon
spill?
Mr. McKay. The subsurface and surface response plans are
very aggressive. The response plans on the surface encompass
and utilize plans that go all the way from aggressive treatment
offshore, to shoreline protection, skimming and things like
that, booming, and then go on to land as to how to clean up and
how to deal with issues. So the response plan is aggressive. It
is being flexed and deployed based on the characteristics of
this oil and where the oil is going.
Ms. Edwards. But in this response plan, if you are fully
implementing an aggressive response plan and we are only at 2
percent of a worst case scenario, what if the estimates are
wrong and we are working at 5,000 barrels a day and they are
closer to 70,000 to 80,000 barrels a day or more. What more can
you do under the response plan that you have implemented?
Mr. McKay. Yes. Well, I think the response plan, the plan
itself and what is being done is roughly the same, but it has
to be deployed in different ways based on what the oil is going
to do. The priorities would shift, obviously. The Unified
Command, I think the Unified Command has made it clear that the
response plan has considered worst case scenarios. In other
words, it is not a response plan solely designed for 5,000
barrels a day. It is considered a wide range of uncertainty.
Ms. Edwards. I know. I guess I am just saying if you are
implementing a full response plan at 5,000 barrels a day, which
is 2 percent of your worst case scenario, I can't even envision
what else could be done or deployed if we were seeing a greater
spill than what you estimate.
Let me just ask you about the estimate and the calculation.
Are you familiar with Professor Steven Worley at Purdue
University?
Mr. McKay. I am only familiar through news reports in the
last week or so.
Ms. Edwards. So I listened to him this morning and he saw
the visual film that you all have now released at BP, and he
said that originally he thought that it might be around 70,000
to 80,000 barrels a day. But upon looking at your film, which I
can't figure out, and maybe you can tell us why if hadn't been
released until now, he said he doesn't know what else the
calculation could be, but it is considerably greater than what
he had estimated, which is considerably greater than your 5,000
barrels a day.
Do you have any response to that?
Mr. McKay. I don't know the nature of his calculations. As
the Chairman said earlier, there has been a task force put
together to bring the best experts in the field to re-look at
all the data, all the evidence, all the video, and come up with
what is an independent, so-to-speak, look with all the experts.
All I can tell you is that our folks, the government folks
and the independent industry experts have looked at this and
have come up with the Unified Command estimate. In technology,
there is a range around that and there is uncertainty.
Ms. Edwards. But I mean a range from 5,000 to 80,000 or
more, if that was a leak at my house, I would say that is a
pretty hefty range.
Let me just ask you this with respect to your liability.
Are you saying that you are willing to pay whatever the
liability is, even to the extent that it exceeds the $75
million cap?
Mr. McKay. Yes.
Ms. Edwards. Then, Mr. Newman, in your testimony you spoke
earlier that where the explosion occurred, you pointed out that
it wasn't in the casings, that it was after the drilling was
complete. I can't remember whether that was Mr. McKay or Mr.
Newman. But were you doing that because you are trying to draw
a line as to where your liability might be?
Mr. Newman. No, Congresswoman. I am just trying to help the
Committee understand to the fullest extent possible right now
the facts as we know them and how those facts might lead at
least to a preliminary conclusion about what might have
happened.
Ms. Edwards. Do the two of you agree that you are both
jointly and severally liable for this spill?
Mr. Newman. Under the framework that is established with
the Oil Pollution Act, BP are the designated party, the
responsible party, with respect to the hydrocarbon spill, and
they have in the face of repeated questioning, they have
asserted that responsibility, and they have acknowledged that.
Ms. Edwards. Then lastly, Mr. Chairman, if you would not
mind, going back to the assessment, if you could just clarify
for this Committee how you came to the assessment that the
spill that is taking place is 5,000 barrels a day and how off
or not you think you might be?
Mr. McKay. We will with provide that assessment.
Ms. Edwards. Thank you.
Thank you, Mr. Chairman.
Mr. Oberstar. Mr. Cohen.
Mr. Cohen. Thank you, Mr. Chairman. I apologize for missing
part of the earlier part of the hearing. I am very interested
and concerned as the citizens in my district and constituents
all throughout the country on this issue and what it is doing
to the flora and the fauna of the Gulf region. The entire
United States of America will be affected by this, but
particularly the Gulf States region, which borders my City of
Memphis. New Orleans is like a sister city and we consider the
Gulf Coast as part of our world, as part of all of our worlds.
We need to be concerned. So if I ask any questions that have
been asked before, I apologize.
First, I would like to ask, I guess, Mr. McKay, and Mr.
Newman, if you know the answer, help me with it. This dome that
you all came up with that you brought down after about 3 or 4
weeks and failed, when did you all come up with that concept?
Mr. McKay. That particular cofferdam, that particular one
that has been modified was used in prior spills in shallow
water.
Mr. Cohen. So it was not a unique process. It was just at
the depth----
Mr. McKay. The depth is different, and the issue with it in
terms of why it didn't work on first try was that hydrates
formed.
Mr. Cohen. It froze. Right. Water got in there. Why didn't
you have some study done on if that would have worked or done
some research to see that it would have worked or precautions
that would have made that work at depths of 5,000 feet, since
you have wells at that depth and many more deeper? What was
done before to make sure that would work?
Mr. McKay. Well, of course we don't know the specific fluid
until the well is drilled, and we are still learning about the
fluid. So that particular fluid is a very unique fluid in that
it has very high gas and it has a propensity for forming
hydrates at that depth.
Mr. Cohen. When you say fluid, you mean what is coming out
of the Earth right now and polluting the Gulf Mexico?
Mr. McKay. Yes.
Mr. Cohen. Why didn't you try something--you took that
fluid out of the Earth and you put it in your boats and you
sold it. Couldn't you have used that fluid? Maybe I am wrong
because I am not a chemist, but couldn't you have used that to
test it and find out if it would work?
Mr. McKay. This particular well is the first well drilled
on that structure ever. And what I am really trying to say is
the fluid was unique, the technology was used in shallow water,
it has not been used offshore in 5,000 feet of water. It was
difficult to predict what hydrate formation with that fluid at
that depth----
Mr. Cohen. There was no way to simulate it?
Mr. McKay. We did simulate it. In fact, we said we were
worried about hydrates.
Mr. Cohen. And so you worried, but you didn't simulate it
enough to know that there was a way to get around it. Let me
ask you this.
You right now have a hose that you stuck in there and it is
siphoning off whatever, 1,000, 2,000, whatever. When did you
come up with that concept?
Mr. McKay. Within the first couple of weeks in terms of an
idea.
Mr. Cohen. Why didn't you have this idea 2 years ago?
Mr. McKay. Well, we have a unique situation here. I don't
think anybody could have predicted that we have a blowout
preventer that didn't work, a lower marine riser package on top
of it, 4,300 feet of riser that is damaged and trenched in the
Gulf Mexico.
So what we had to devise was a system, we had to fabricate
it and build it, that can fit inside that pipe with drill pipe
inside it and rubber diaphragms that can help keep the water
out. That is an entirely unique situation with where this leak
is happening.
Mr. Cohen. Don't you think you should have envisioned the
worst possible case scenario when you are dealing with an
ecosystem that is unique and special and so important to the
people, let alone the flora and the fauna, and shouldn't you
have thought of the worst possible case scenario and prepared
for it and had this type of technology on day one going down
there? Why did you have to wait for a calamity to occur to come
up with, oh, what should we do now?
Mr. McKay. Well, respectfully, I don't think we have been
doing that. We have been working parallel paths since the first
moments this happened, first to actuate the blowout preventer,
if we could possibly do it. We worked for 10 days trying to do
that. Parallel to that, and simultaneous----
Mr. Cohen. Mr. McKay, understand this. I am talking about a
year ago. Why didn't you envision the worst possible case
scenario, that all this stuff would happen and what do we do if
there is a gap 5,000 feet down and this oil is just going out?
Mr. McKay. As I have said, we predicate that a blowout
preventer is either going to work, can be manually intervened
with if not, or can be approached if not. We have got a unique
situation where we have had this thing on top of it that was
supposed to release and it didn't. So therefore, we are having
to engineering solutions that are in a very unique situation, a
very unique situation, and I don't believe that could be
predicted by anyone.
Now, what I would say is we are learning a lot through
this, and I think the sub-sea capability and the generic and
some of the specific capability the industry needs to put in
place and the regulators need to look at, I believe we will
learn through this and I believe we are going to need to do
some of that.
Mr. Cohen. Can you assure me that the Atlantis rig that
some think may be questionable and an exert engineer, I don't
know if he used to work for you all or not, has questioned that
it is secure and doesn't need some type of review?
Mr. McKay. The Atlantis is a production platform. There
have been some allegations made that all the drawings weren't
there. We did an internal study, and I understand, I haven't
reviewed it in detail, but I understand all the drawings were
there to safely start up and operate that platform, as well as
meeting regulations.
The MMS is looking into that. We have done an internal
investigation, an ombudsman's investigation, and the MMS is
going to look into it, which we welcome and we will fully
cooperate.
Mr. Cohen. Senator Inhofe said that if we increase from $75
million to $10 billion the liability of the major oil
companies, that this would be a mistake because it would cause
small oil companies not to be able to afford to do this type of
work and he was concerned about them.
Are you also concerned about them and think it is a bad
idea?
Mr. McKay. I have not had time nor have we talked
internally about policy and limits. What we have said is in
this incident, for us, we are going to fulfill our
responsibilities as a responsible party. We believe that means
in this case waiving that $75 million and standing behind all
legitimate claims due to this that will impact the environment
and the economy of the folks that are affected. So we have--I
can't comment on specific legislation or specific caps.
Mr. Cohen. Thank you. I appreciate your attitude. You
advertise BP and you have come before the Judiciary Committee
and others at other times and talked about your green
perspectives. I would hope you put more emphasis on your green
work. It is obvious when we only use--we use 25 percent of the
Earth's fossil fuels, and yet we only have the capacity to have
2 percent of them here. There is no way we can use fossil fuels
to serve our energy needs in the future and do it safely. We
need to look at wind and we need to look at solar, and we need
to have BP be a leader in emphasizing that and moving on, where
you won't have these types of catastrophes, you won't have
these types of issues.
And God forbid something like this happens in the Arctic. I
want to see your hose and I want to see your dome. It ain't
going to work up there, and they are not going to be able to do
things to preserve that environment. You have already ruined
the Gulf. I don't want to see you ruin the rest of the world's
oceans.
Come up with the worst possible case scenario and figure
out a way to do it. And if you have to put a man in a tube and
stick him down there, or a polar bear and teach him how to do
it, you ought to do it.
Thank you, Mr. Chairman.
Mr. Oberstar. I thank the gentleman, and Mr. DeFazio has a
few further questions.
Mr. DeFazio. Yes, a few quick follow-ups. There have been
press accounts, and this is directed to either of you, but
probably particularly to BP, and the allegation was that since
you are paying $500,000 a day for the rig, it is sort of at
this changeover time when you are cementing the well that there
is a lot of pressure to get it done with and move on, and there
were questions raised about the curing of the cement.
Who made the final call that the well was stable, the
cement was cured, and you could start with basically shutting
down the drilling, removing the drilling, those sort of things?
Who makes that call? Is it Halliburton, is it BP or is it Mr.
Newman's company? I assume it is either Halliburton or BP, but
I am not sure.
Mr. McKay. What I would say is in terms of the procedure
and when the procedure steps are done, the procedure is written
by BP and the execution of that is generally by Transocean and
other contractors. Many of these decisions are collaborative. I
think it is going to be really important in the investigations
to understand the timeline and every single step between when
the positive and negative pressure tests were done, what
happened after that, who was involved, what conversations were
made, what information was available, how was it utilized. I
think all of that has to be put together to put what is going
to be a complicated jigsaw together.
I believe it can be, and I believe that is what has to
happen.
Mr. DeFazio. Anything to disagree with there, Mr. Newman?
Mr. Newman. As I said in my opening comments, Congressman,
the process of drilling a well is a collaborative process that
requires the expertise of a number of companies. Specifically
with respect to the cement and the design of the cement, the
formulation of the cement, the placement of the cement would
have relied on the expertise of the cementing contractor.
Mr. DeFazio. [presiding.] That is something we will have to
get to later.
Two other quick points. To Mr. Newman, there was on the 60
Minutes show we have heard a lot of, and you said you had seen
it--there was apparently an employee from the rig who was on
the show, appeared to be injured, and I was curious on this
form where it says they were not a witness and I was not
injured, was that individual required to sign this form since
he was clearly injured? Because there is an allegation that
basically people were kind of held hostage until they signed
the form.
Mr. Newman. Nobody was required to sign the form. There was
no coercion. There was no force. I don't know whether Mr.
Williams has signed one of those or not.
Mr. DeFazio. So there was no coercion whatsoever.
And finally, just an observation on Mr. Cohen, I think in
looking at the--I don't think there are any small act, little
mom-and-pop companies out there doing deepwater drilling. So we
could have a liability cap which is more risk-oriented as
opposed to one that is just a cap, which would mean the larger
companies are doing perhaps more risky deepwater exploration
and extraction, they have more resources, and they may be
subject to a higher cap. So that may solve a mystery--I don't
know how Mr. McKay would feel about that, but just a sort of a
risk basis in terms of a cap.
Mr. McKay. To be frank, we are concentrating on dealing
with this and trying to get this stopped.
Mr. Oberstar. [Presiding.] This will be your last series of
questions. Thank you for your patience and for your capacity to
endure this long without much of a break.
Mr. Newman, is the rig insured? Do you have hull insurance
for construction costs?
Mr. Newman. The company carries a comprehensive program of
hull and marine insurance, yes. The rig was insured.
Mr. Oberstar. At something comparable to its $350 million
construction cost?
Mr. Newman. No. Similar to the kind of decision you and I
would make about insuring a home. We don't insure our homes at
the original construction cost; we ensure our homes at the
market value. And the rig was insured at the market value.
Mr. Oberstar. And what was that market value?
Mr. Newman. Five hundred sixty million.
Mr. Oberstar. Five hundred sixty million.
Can you explain to us why you are now in district court
seeking to limit your liability under an 1851 law to $27
million?
Mr. Newman. Two reasons behind the company's filing of the
limitation of liability action. First and foremost, we were
instructed to file by our insurance underwriters. In the
immediate aftermath of this event, they instructed us to file
that limitation of liability action, and so we did that to
respond to their request and preserve the company's insurance
program.
And secondly, with the number of lawsuits that have been
filed against the company in various jurisdictions at the
Federal level, at the State level, the limitation of liability
action serves to consolidate all of those actions into one
venue.
Mr. Oberstar. I will say it is appalling, having been in
New Orleans over a 3-day period and seen the number of ads on
TV, about every 20 minutes there is an ad from a law firm. Mr.
Cao said there are numbers moving into Louisiana to file and
pay people to sign up for legal services. So I can understand
you are willing. But on the one hand, you have insured your rig
to cover the company's costs; on the other hand you move to
protect yourself against those who wouldn't be compensated
anywhere near what the company would be under its insurance.
Mr. Newman. Believe me, Chairman, if I could have the rig
back and the 11 people back, that is clearly the decision I
would make.
Mr. Oberstar. I understand. I understand. I just want to
make that clear.
Mr. McKay, you said we couldn't have predicted--that is not
exactly your words--the gas would escape, that the blowout
preventer would fail, and we will learn from this, and we want
you to learn from this. But in aviation, when an aircraft is
operating at 5, 7 miles altitude, there is no curb to pull
over, look under the hood and see what is wrong. It has to be
right before it leaves the ground. At 5,000-foot depth, it's a
comparable situation. You don't have the ability to send
someone down in a rig to look at what is going wrong and fix
it. You operate it with remote vehicles. You know that. You had
the experience.
The Norwegians operate in similar depths. Their rigs are
verified by a third-party entity that makes sure that all those
safeguards are put in place. When an aircraft comes down from
35,000 feet to land at an airport, it is operating at roughly
165 miles per hour, very little margin for error. That is why
the flaps are deployed, and the thrust reverser is activated,
and then the brakes are applied. And if any one of those fails,
or two of the three fail, the other is supposed to protect that
aircraft and bring that aircraft to a halt.
It seems to me from my years of experience in safety
investigations that there is not this kind of backup and
redundancy at those depths in the ocean with those enormous
pressures, with the temperature at roughly 30 degrees, which at
freshwater would freeze, but saltwater can sustain that kind of
temperature; that there is not the kind of safety mindset in
underwater drilling that there is in aviation. Now, if you have
a takeaway from this experience is that there needs to be, you
need to have redundancy in those operations.
There is, I said it earlier, half of the seafood shellfish
production of the United States in these 660,000 square miles
of gulf. There are wave actions on the surface that I observed
in the overflight. I have photos that were taken of it. There
are underwater currents that often go in the opposite direction
of the air currents. There is movement of the dispersant and of
the oil, and its contamination of the sea life. It may be--in
some cases it may be irreversible.
If you had, and your industry, and the American Petroleum
Institute, and the Minerals Management Services and the Coast
Guard had all been thinking about constructively how we operate
safely at those depths under those pressures at those
temperatures, we might have installed the protections.
Those are photos on the screen there that I took from Coast
Guard aircraft. This is sobering and stunning, and, as Mrs.
Miller said, takes your breath away to see the effects.
So I want to understand--I will just ask this one
question--whether you have, you and Transocean together, have
worked out a scenario of the redundancy of the blowout
preventers at that depth and those temperatures, and if not,
why not? And if you did and rejected it, why?
Mr. McKay. We have recommended or at least provided some
ideas to the Department of the Interior Minerals Management
Service that we would suggest: to recertify blowout preventers;
to test in some additional ways and different ways; to relook
at the design and see if redundancy, extra redundancy, should
be built in. And a fourth thing is subsea capability and
intervention capability for the industry and how that should be
assembled. And that is what I would say that we think, right
now, are improvement areas that could be looked at quickly.
Mr. Oberstar. Mr. Newman.
Mr. Newman. I agree with Mr. McKay's assessment of actions
that can be taken in the interim, but the real answer to the
question is only going to be discovered when we complete all of
the investigations.
Mr. Oberstar. We will leave it at that.
Those photos you saw passing on the screen were in the
impact area in the gulf. Quite sobering.
Thank you very much for your testimony. Members will have
follow-up questions. We expect your responses to them. Thank
you.
Mr. Oberstar. Our next panel includes Lisa Jackson,
Administrator of the Environmental Protection Agency; Dr. Jane
Lubchenco, Under Secretary of Commerce for Oceans and
Atmospheric and NOAA Administrator; Elizabeth Birnbaum,
Director of Minerals Management Service; Rear Admiral Brian
Salerno, Assistant Commandant for Marine Safety, Security and
Stewardship, accompanied by Rear Admiral Peter Neffenger; and
Dr. Sylvia Earle, Explorer-in-Residence at the National
Geographic Society. I have added her to this panel because she
has a plane to catch, and I want to be sure we have her
testimony.
Dr. Earle, you may take your seat at the end of the table.
I will ask this panel, as the previous panel, to rise.
With regard to the testimony that you provide to the
Committee on Transportation and Infrastructure today and all
subsequent Committee communications regarding this hearing, do
you solemnly swear to tell the truth, the whole truth, and
nothing but the truth, so help you God?
You're sworn in.
I will begin with Dr. Earle in recognition of her
longstanding commitment to another event, and then she has to
catch a flight, which is hard to do these days in Washington.
Dr. Earle, your testimony--I read all the testimony last
night--is positively lyrical. I recall your presentation at an
Aspen Institute Conference 12 years ago. I was enthralled by
your love of the ocean environment, your grasp, your
understanding, your intimate understanding, of it all. And
there is a portion of your testimony that reminds me of Lord
Byron's epic poetry in which he describes the ocean as deep,
dark, heaving, mysterious and endless. Deep and dark it is;
heaving when there is a powerful storm.Mysterious, we are
beginning to understand the mysteries of the ocean thanks to
your work and that of others. We are understanding that a calf
sperm whale born at the same time of discovery of these oil
wells can outlive them only if we let it. But endless, in
Byron's words, it is not. You're going to describe for us the
ends, the limitations. Please begin.
TESTIMONY OF LISA P. JACKSON, ADMINISTRATOR, ENVIRONMENTAL
PROTECTION AGENCY; JANE LUBCHENCO, UNDER SECRETARY OF COMMERCE
FOR OCEANS AND ATMOSPHERE, AND NOAA ADMINISTRATOR, NATIONAL
OCEANIC AND ATMOSPHERIC ADMINISTRATION; S. ELIZABETH BIRNBAUM,
DIRECTOR, MINERALS MANAGEMENT SERVICE; RADM BRIAN SALERNO,
ASSISTANT COMMANDANT FOR MARINE SAFETY, SECURITY, AND
STEWARDSHIP, U.S. COAST GUARD, ACCOMPANIED BY RADM PETER V.
NEFFENGER, DEPUTY NATIONAL INCIDENT COMMANDER FOR THE DEEPWATER
HORIZON OIL SPILL RESPONSE, U.S. COAST GUARD; AND SYLVIA EARLE,
Ph.D., EXPLORER-IN-RESIDENCE, NATIONAL GEOGRAPHIC SOCIETY,
WASHINGTON, DC.
Ms. Earle. Thank you, Chairman Oberstar, Members of the
Committee, all assembled here.
We have seen plenty of bad news, bad news images relating
to the Deepwater Horizon oil spill. With some images that will
be shown while I speak, I want to illustrate that the Gulf of
Mexico is not, as some believe, an industrial wasteland
primarily valuable as a source of petrochemicals, a few species
of ocean wildlife that humans exploit for food, for commodities
and recreational fishing. There are other assets, and I hope we
will soon be seeing some of them. They were documented during a
5-year project with the National Geographic, with NOAA and the
Goldman Foundation, and a partnership, too, with members of
about 50 organizations, industry and private institutions and
others, dozens of scientists from around the country, who
explored the coastline of this country from 1998 through 2003.
For more than 50 years, I have had experience on, around,
under and over the Gulf of Mexico as a marine scientist and an
explorer. I have started and led engineering companies devoted
to the development of equipment for access to the deep sea. And
I have served on a number of corporate and dozens of nonprofit
boards, and, from 1990 to '92, served as the chief scientist of
the National Oceanic and Atmospheric Administration and had an
up-close and personal experience with the Exxon Valdez, Mega
Borg spills, as well as extensive involvement with the
evaluation of the environmental consequences of the 1990-'91
Persian Gulf spill. So, I really come to speak for the ocean.
The Gulf of Mexico, as a big blue body of water, is a
trinational treasure better known perhaps for yielding
hurricanes, petrochemicals, shrimp, and in recent years
notorious dead zones than for its vital role in generating
oxygen, taking and holding carbon, distributing nutrients,
stabilizing temperature, yielding freshwater to the sky that
returns as rain, contributing to the ocean's planetary role as
Earth's life support system.
As with the ocean as a whole, the Gulf of Mexico is most
valuable for those things that we tend to take for granted. At
least we could take them for granted until recently. We now
understand that there are limits to what we can put into or
take out of this or any other part of the ocean without
unfavorable consequences back to us.
Ironically fossil fuels have powered civilization to new
heights of understanding, including awareness that the future
of humankind depends on shifting to energy alternatives that
don't generate carbon dioxide and otherwise cause planet-
threatening problems. Think about it. Fossil fuels have taken
us to the moon and to the universe beyond, made it possible for
us to see ourselves in ways that no generation before this time
could fathom, provided a backbone of the extraordinary progress
we enjoyed in the 20th century and now into the 21st. But we
now know that those of us alive have participated in the
greatest era of discovery and technological achievement in the
history of humankind largely owing to the capacity to draw on
what seemed to be a cheap but by no means endless source of
energy.
At the same time that we have learned more, though, we have
lost more. Cheap energy, it turns out, is costing the Earth.
Despite the enormous advances in knowledge, the greatest
problem that we face now with respect to the Deepwater Horizon
oil spill is ignorance, and with it complacency. It seems
baffling that we don't know how much oil is actually being
spilled. We don't know where the oil is in the water column. We
can see from the surface. We don't know what is below the
surface.
We haven't seen what it's actually like on the bottom at
5,000 feet in the Gulf of Mexico. We have glimpses. Some of the
glimpses of what is in as much as 2,000 feet of water are being
shown on the screens as I speak. But our access to the sea at
this critical point in history is sorely limited.
I only have a few minutes for my remarks, so I'm going to
skip through some of the testimony that I'm submitting for the
written record and dive into some of the key issues that I want
to focus on.
Many questions have been raised, and I will raise them
again, about the use of the dispersants that really are more
cosmetic than helpful in terms of solving the real problems. If
I could speak for the ocean, I would say halt the use of
subsurface--subsurface use of dispersants and limit surface use
to strategic sites where other methods cannot safeguard
critically important coastal habitats.
The headlines lament oiled birds; oiled beaches and
marshes; oiled turtles, dolphins and whales, as they should.
But where is the constituency concerned about oiled copepods,
poisoned coccolithophorids, prochlorococcus, some of those
creatures that are heavy lifters with respect to generating
oxygen and driving food webs in the ocean, the diatoms, the
jellies, the tetrapods, the squid, larval urchins, the eggs and
the young of this year's vital offspring of tuna, shrimp and
menhaden?
Not only is the unruly flow of millions of gallons of oil
an issue, but also the thousands of gallons of toxic
dispersants that may make the ocean look a little better on the
surface where most of the people are, but make circumstances a
lot worse under the surface where most of the life in the ocean
actually is. Cosmetic clearers do not solve the problem. They
are almost certainly making matters worse for life in the
ocean.
Another issue, we should be prepared, and I gather that
NOAA and others are responding to the need to deploy available
subsurface technologies and sensors, as well as those at the
surface, to evaluate the fate of the underwater plumes of oil
as well as the finely dispersed oil and chemicals and their
impact on floating surface forests of sargassum communities,
life in the water column and on the sea floor.
There needs to be immediate gathering of baseline data,
both broad and detailed, to measure impacts and recovery.
There must be salvage operations to restore the 40 or so
species of affected large wildlife creatures and their
habitats.
But perhaps at least as significantly, there must be
initiatives to create large reserves in the gulf to facilitate
recovery and ongoing health of the thousands of less
conspicuous species and the marine ecosystems from the deepest
areas to the shallow shores. It's urgent that large,
permanently established areas in the Gulf of Mexico be
designated for full protection from extractive activities.
There are deep coral reefs as well as those such as the Flower
Garden Banks, the closest shallow coral reef to where the
present spill is taking place.
Protected areas are critically needed to safeguard
important spawning areas for bluefin tuna, for groupers,
snappers, sharks and even the wily species of shallow and
deepwater shrimp. Aside from the importance of such areas for
healthy ecosystems to survive, they are essential if fishing is
to survive to continue as a way of life in the Gulf of Mexico.
After all, is if there are no fish, there are no fisherman. And
already owing to the heavy fishing pressure in the Gulf of
Mexico, as in other parts of the world, the populations of fish
that were around when I was a kid exploring the Gulf of Mexico
are now depleted by as much as 80 percent, groupers, snappers;
some species by 90 percent, such as the sharks, bluefin tuna
and others.
Implementing and expanding a proposal called Islands in the
Stream, a concept long ago proposed by NOAA for a network of
marine protection in the gulf, would be a great place to begin.
There need to be better assessments of the economic impacts
and the modes of compensation for the present oil spill and for
future problems. The Harte Research Institute at Texas A&M at
Corpus Christi has put a figure of known economic consequences
at about $1.6 billion. That does not take into account the free
services that are being affected, but for which compensation is
not being proposed. But perhaps by suggesting that there be
protected areas in the Gulf of Mexico as a way to restore and
enable the ocean itself and life in the ocean to recover
unimpeded by other impacts would be a good place to, in a
sense, compensate the ocean for the problems that have
occurred.
Surely we must make substantial investments in the
development of technologies that can help solve the problems
and assess the problems, investments in human-occupied, robotic
and autonomous systems that go in the water, under the ocean,
not just at the surface. There must be sensors and stations for
exploration, research, monitoring and safeguarding the living
ocean. When you think about it, the U.S. Coast Guard, NOAA, the
EPA, and the Navy, they all have aircraft, they all have ships.
But what is in the national fleet that will take us under the
sea? We have already this year seen the loss of two underwater
systems that are not being supported any longer by the Harbor
Branch Oceanographic Institution, the Johnson-Sea-Links, that
for years have provided access down to 1,000 meters, 3,000 feet
or so, since the 1970's. The Alvin submersible, the workhorse
of the submersibiles for scientific exploration since 1964, is
about to be retired. It will be retired before its replacement
is ready to go.
Meanwhile, Japan, Russia, China and France have systems,
manned systems, that can go and make observations to at least
half the ocean's depth. And no nation has a system that can go
back to full ocean depth, a visit there to a place only once in
1960, 50 years ago, for about half an hour in the Mariana
Trench.
How many systems can go to 5,000 feet with human observers?
Right now it's a handful, and only the Alvin in this country
really qualifies. The Pisces subs have been in that league, but
we are woefully unprepared to send anybody down to just take a
look to be able to evaluate with more than just a camera
system, as good as they are.
And where are the facilities that you can pull off the
shelf for the Coast Guard to go down, for example, to evaluate
on their own, not necessarily relying on industry-provided
systems? Industry does have a fleet of remotely operating
systems. They need them for inspection, for monitoring, for
maintenance and repair. But the ocean itself needs to have an
understanding that is currently lacking for lack of the
technology investment.
We put billions into what takes us into the skies above,
and it is paying off handsomely. We have neglected the ocean,
and it is costing us dearly. So perhaps this is a wake-up call,
the mighty two-by-four, to alert us to the needs to seriously
commit to the technologies for going deep into the sea.
We need to embark on expeditions to explore deepwater as
well as the near shore and shallow water systems in the Gulf of
Mexico and elsewhere in our coastal waters. If you look at the
Nation's exclusive economic zone, it's larger than all of the
rest of the United States put together. There is another whole
country out there underwater, and a lot of it is in deepwater,
presently inaccessible by means that we have at our disposal.
Consider back to the Coast Guard, and there is an agency
that we call upon when there is an emergency, but it is not
only not being provided with adequate technologies to deal with
what goes on under the surface of the sea, but to see a budget
cut this year, while the other agencies in the military have
received boosts. It doesn't seem reasonable, especially in
light of the needs that are growing.
Speaking like an ocean, speaking for the gulf, we need to
encourage trinational support and collaboration among
scientists and institutions around the gulf; to invest the good
minds that are there; to come up with solutions that are not
just divided by national borders, Mexico, Cuba and the United
States, but really take into account the entire system. We need
to mobilize those good minds to address solutions such as the
Gulf of Mexico summit that took place 5 years ago to help
launch a regional governance body of U.S. and Mexican States. A
new summit is being planned by the Harte Research Institute to
take place later this year to address next steps to ensure that
an economically and ecologically healthy Gulf of Mexico can be
developed in future years.
Cuba is a country that some of us have been worrying about
with respect to the possibility of oil spills heading north as
exploration and drilling are picking up in that country, and
now they are faced with worries about the consequences of this
major spill from the United States heading south.
And while we are investing in rapid expansion of safe
energy alternatives that do not result in the release of carbon
dioxide, new standards of care need to be implemented for
industries extracting oil and gas from the Gulf and elsewhere
in U.S. waters. Think about it. The public needs to know what
actually it is like out there in the deep waters of the gulf
where activities are taking place. Thorough documentation of
the nature of the sea floor showing those deep coral reefs,
showing the nature of life in the water column, in the whole
area around where operations are taking place should be made
public before operations such as drilling, establishing
platforms, and laying pipeline and so on take place, and the
changes in the environment measured and made publicly
available. It's not that we shouldn't be doing these things,
but we should know what the costs really are. The environmental
issues need to be taken into account and be the basis, when
necessary, for excluding operations in order to protect vital
environmental concerns.
Mr. Oberstar. Dr. Earle, I'm going to have to limit you to
1 minute, in your own interest. So you can----
Ms. Earle. Well, it's not enough time to touch on all the
concerns, but the biggest problem boils down to complacency
that comes from ignorance. We are pointing to BP, Transocean,
to Cameron, to government agencies, anywhere we can for blame.
But actually the blame for this and other catastrophes or costs
related to our demand for cheap energy is something that all of
us need to bear. We all must share the cost of those who demand
cheap oil at any price.
The loss of human lives, the destruction of the life-giving
gulf simply cannot be justified as an acceptable cost of doing
business. But if we really do go forward with a commitment to
do things differently henceforth, we will have gained something
of enduring value.
We must do better about thinking like an ocean and thinking
on behalf of those who will benefit or suffer from the
consequences of our actions. Cheap energy is not only costly in
terms of human lives lost, it's also costing the Earth, so to
speak. It's clearly costing the ocean.
Thank you.
Mr. Oberstar. Thank you very much for a very moving and
compelling testimony, the only voice for the ocean that we will
hear. And I am so in harmony with your views about looking in
outer space for life and water. I frequently refer to that. We
spend several billion dollars looking for water on Mars. We
started out looking for water on the moon, and recently I
watched a Science Channel project on Europa, one of Jupiter's
moons, where it is speculated to be water below the surface,
and finding some sort of space vehicle that will go down and
plunge into that, into that subsurface, and find there is
water.
And that raises the next question of whether there is life
in that water. We have got it right here on Earth. It's right
in front of us, right at our doorstep in the gulf, 660,000
square miles of it, and you illuminated the bacteria,
phytoplankton, zooplankton, microorganisms that make a rich
life environment, but yet within that ecosystem we have lost
numerous species.
What will be the effect of this spill? Much of it will be
beyond our vision, beyond the human eye or even ability to
detect, as you have so well described it. And your reference
corrects it, the dispersant approved by EPA to make the ocean
look better, but as you say, it warns--there is a warning that
it's a skin and eye irritant, and it's harmful if you inhale
it. It will cause injury to red blood cells, kidney or liver.
There are 15 of these dispersants approved by the National
Contingency Plan. To the best of your knowledge, has any of
these dispersants been tested on the flora or fauna of the gulf
waters?
Ms. Earle. I'm not aware that they have or have not.
Mr. Oberstar. What is your best scientific guess that if
these--if the organisms, those upon which higher life depends,
are exposed to this substance, what happens to them?
Ms. Earle. That is a question that should be addressed. The
kinds of tests that are typically done are on specific kinds of
animals. I have not seen the reports of the very list that is
now been approved, but the reports on the dispersants used for
the Exxon Valdez suggest that it's not good for contact with
humans; it's not good for contact with creatures that live in
the sea.
Mr. Oberstar. At the briefing in the command center, we
were told that it takes roughly 4 hours for the oil to make the
journey from the bottom, from the mud at the bottom of the sea
floor to the surface. The dispersants are being injected at the
spewing point of the well. But the dispersants take only 2
hours to get to the surface, and there is speculation by
Admiral Landry and others in the command center whether the
dispersants really are having an effect upon the oil column as
it rises to the top if it's getting up there faster than the
oil.
Ms. Earle. I think the problem is that we are dealing with
speculation. We need some real answers. And not to know is not
acceptable. We need to be able to access the water column, to
go out and see for ourselves both with remote systems, with
cameras, if you will, and ideally to be able to go in small
submersibles, go out to where the action is, go into the water
column, observe what's happening, sample what's there. Right
now, because of the ignorance factor, it's easy to gloss over
what actually may be happening.
Mr. Oberstar. Very sobering thoughts. And there are other
questions I would like to explore with you, but I know you have
to catch a flight. I'm going the ask Mr. Cao for any comments
or questions he might have.
Mr. Cao. Dr. Earle, really my concern, like yours, centers
on the effect of the dispersants on the wildlife as well as on
some of the species, as you said in your report. But as of
right now, the only data that you actually have are the ones
from the Exxon Valdez and none other?
Ms. Earle. Other information is available. It's not
available to me as I speak here, but the role of dispersants
across the board is to break the oil up into smaller pieces.
Some of the chemicals used for this are more toxic than others,
but none of them are exactly a recipe for good health for
creatures who live in the sea.
Mr. Cao. You mentioned that we have to invest in creating,
inventing new deepwater submersibles.
How far are we if we were to invest money to develop such a
vehicle that can go down to the deepest part of the ocean
floor?
Ms. Earle. The technology exists. Woods Hole Oceanographic
Institution deployed this past year, in 2009, a remotely
operated system that went to full ocean depth, 7 miles down, on
nine different occasions. The cost of deploying it is
expensive, and it is the only one in the world that exists. So
the technology is there. There are no human-occupied systems
that can go to full ocean depth, although the technology
exists. It did exist 50 years ago.
Consider where we were with aviation and space technologies
50 years ago as compared to where we are today with access to
the sea for us and for our instruments, for our sensors. We've
come a long way. But when an issue of this nature comes up, why
do we not have off-the-shelf capability for the Coast Guard,
for NOAA, and for others who might be able to not just go out
and help with the evaluation of what is happening, how can we
not know how much oil is being released? How can we not know
the size of the problem? We are dealing from the surface to try
to assess what is largely a subsurface issue. And what about
tracking and following the aftermath, and where is the before
evidence?
Actually, investment has been made by scientists over the
last half century in trying to understand how many kinds of
creatures live and where they live in the Gulf of Mexico and
elsewhere. A new volume just came out in 2009 that was the
result of efforts by more than 100 scientists. They found well
over 15,000 species of organisms living in the Gulf of Mexico.
These were in a volume that is about 5 inches thick, and that
has just been published by Texas A&M, and it is evidence of
what's there. But we need some baseline data that very
specifically looks at what was it like before the spill? What
is it like now? What will it be like this time next year? This
time 10 years from now? What can we learn from it? And what
actions can be taken to restore health to the areas that have
been affected? Not just compensation for the fishermen or for
the loss of revenues to today's business operations throughout
the Gulf of Mexico, but what about the loss to the gulf itself?
That will be paid far down the line for future generations as
well as present ones.
Mr. Cao. Thank you, and I yield back.
Mr. Oberstar. Mr. Cummings.
Mr. Cummings. Mr. Chairman, I will be very brief.
Dr. Earle, thank you very much for your--all of your
efforts and for your work over the many years. And I'm sure as
I listen to you, I couldn't help but think that when you hear
about these plumes and you think about this 5,000 to 70,000
barrels of oil going into the ocean on a daily basis, that must
make your heart ache, I'm sure. And as I saw the pictures
there, I just--I guess there is absolutely no doubt in your
mind that substantial damage probably already has been done. Do
you think so?
Ms. Earle. What is amazing to me is that the gulf is as
resilient as it has been in the face of thousands of wells that
have been drilled, and that operations, the shipping on the
surface, the heavy, large-scale fishing operations that have
taken place, there is still plenty of reason for hope. The
ocean is still resilient. And the Gulf of Mexico is almost a
laboratory of resilience to show how some of these
sophisticated operations can take place side by side with the
productive kind of ocean system, not what it was 1,000 years
ago or even 100 years ago, but still a viable productive
system.
But there are limits to what we can get away with and still
have fish prospering, still have the spawning area for the
western Atlantic, in the western Gulf of Mexico. There are such
things as going too far. We killed the last of the monk seals
that once prospered as far north as Galveston, Texas, all gone
from the Gulf of Mexico and Caribbean Sea. They were killed
largely for their oil and for their meat, treated as
commodities.
Mr. Cummings. One other thing, and then I will be finished,
Mr. Chairman.
You had spoken about the Coast Guard, and I'm Chairman of
the Subcommittee that oversees the Coast Guard. And you are
absolutely right. At this critical moment, there's no way that
we should be cutting the Coast Guard budget, and the Chairman
has been very adamant about that. And on a bipartisan basis, we
have been advocating to make sure that we have those funds.
But.
We are also--and I have been just pushing to try to make
sure that the Coast Guard is even more a part of the process of
overseeing some of these situations so that hopefully they
will--this kind of thing will--if it happens, we can address it
more effectively and efficiently and quickly. But I really
appreciate, and I'm sure the Coast Guard appreciates, your
comments.
And with that, Mr. Chairman, I will yield back.
Mr. Oberstar. Thank you.
Mr. Coble.
Mr. Coble. No questions, Mr. Chairman.
Mr. Oberstar. Mr. Duncan.
Mr. Duncan. No, thank you, Mr. Chairman, but I know we need
to get on to the other witnesses, so I'm fine. Thank you.
Mr. Oberstar. And Mr. Shuler passes.
Dr. Earle, we thank you very much for your insights, for
your understanding, for your love of the ocean and for the
lyricism of your presentation. You may be excused.
Ms. Earle. Thank you.
Mr. Oberstar. Administrator Jackson, it is great to have
you with us. Thank you for your leadership in so many arenas,
the EPA, and restoring its voice and its compass in leading us
toward a clean environment.
Ms. Jackson. Thank you, Mr. Chairman. To Chairman Oberstar,
Ranking Member Mica and Members of the Committee, thank you for
inviting me to testify about EPA's role in responding to the BP
Deepwater Horizon rig explosion.
But first let me express my condolences to the families of
those who lost their lives in that explosion. We owe them our
very best efforts, whether it be in the response or in the
investigation.
While there is no perfect solution to the environmental
disaster that the Gulf of Mexico is facing right now, EPA is
committed to protecting our communities, the natural
environment and human health. That commitment covers both the
risks from the spill itself as well as any concerns resulting
from the response to the spill.
In the last 3 weeks, EPA has dispatched more than 120
staff, scientists, engineers and contractors to Alabama,
Florida, Louisiana and Mississippi to perform rigorous testing
and monitoring of air and water quality. We are tracking any
possible adverse impacts stemming from controlled burning of
surface oil, possible chemicals rising from the oil itself and
issues caused by the use of dispersants. We are working with
State officials, with local university scientists and other
Federal agencies to get the best available data, share that
data in a timely fashion, and to ensure proper response for the
Gulf Coast people and their environment.
At the President's direction I have personally traveled to
the region, the region I grew up in and still consider home,
twice over the past weeks to personally oversee EPA's efforts
and to meet with the local community to ensure their questions
and concerns are addressed.
For weeks EPA responders have been monitoring air
pollutants, including particulate matter, hydrogen sulfide, and
total volatile organic compounds, or VOCs, from the oil in the
gulf as well as the controlled burning of that oil. These
pollutants could pose a health risk to local communities, and
this monitoring is essential to ensure that communities are
protected as BP takes direct response actions.
EPA is also monitoring water quality by conducting surface
water testing along the Gulf Coast, both in areas that have
been impacted and those not yet affected. All of this
information is being made public as quickly as we can compile
it. We have been posting regular updates to our Web page,
www.epa.gov/bpspill, which has been a critical resource since
the beginning of this event.
Our primary concern is to ensure the safe application of
chemical dispersants, oil dispersants or chemicals applied to
the spilled oil to break down the oil into small drops below
the surface. Ideally, dispersed oil mixes into the water column
and is rapidly diluted. Bacteria and other microscopic
organisms then act to degrade the oil within the droplets.
However, in the use of dispersants, we are faced with
environmental trade-offs. We know that surface use of
dispersants decreases the environmental risk to shorelines and
organisms at the surface. And we know that dispersants break
down over weeks rather than remaining for several years as
untreated oil might. But we are also deeply concerned about the
things we do not know. The long-term effects on aquatic life
are still unknown, and we must make sure that the dispersants
that are used are as nontoxic as possible. We are working with
manufacturers, with BP and with others to get less toxic
dispersants to the response site as quickly as possible.
EPA has previously authorized use of several dispersant
chemicals under the National Contingency Plan. In order to be
placed on this list, each dispersing chemical must undergo a
toxicity and effectiveness test. However, I am increasingly
concerned that EPA can and should do more.
As we emerge from this immediate response, I commit to
reviewing the regulations regarding dispersant registration and
listing and sharing the results of that work with this
Committee.
On Friday, EPA and the on-scene coordinator authorized the
application of dispersant underwater at the source of the leak.
The goal of this novel approach is to break up and degrade the
oil before it reaches the water's surface and comes closer to
our shorelines, our estuaries and our fish nurseries. Based on
our testing, this can be done by using less dispersant than is
necessary on the surface.
But let me be clear that EPA reserves the right to halt the
usage of subsea dispersant if we conclude that at any time the
impact to the environment outweighs the benefit of dispersing
the oil.
As with our other monitoring initiatives, EPA and the Coast
Guard have instituted a publicly available monitoring plan for
the subsurface dispersant application to understand impacts to
the environment. This data is coming to EPA once a day. And if
the levels in the samples are elevated, EPA will reconsider the
authorization of dispersants.
EPA is also preparing to support any necessary shoreline
assessment and cleanup by identifying and prioritizing
sensitive resources and recommending cleanup methods. EPA, in
coordination with the States, will continue to provide
information to both workers and the public about test results,
as well as assisting communities with potential debris
disposable and hazardous waste issues.
Chairman, as a native of New Orleans, I know firsthand the
importance of the national environment to the health, economy
and culture of the Gulf Coast. As I mentioned, since the
accident I have been to the region twice. I have listened to
people in numerous town halls from Venice, Louisiana, to
Waveland, Mississippi, and other communities in between. I have
learned in those meetings that the people of the Gulf Coast are
eager to be part of this response. They want to be informed
and, where possible, empowered to improve their own situation
on their own.
We have a great deal of rebuilding to do both in material
terms and in terms of restoring this community's trust that
government can and will protect them in a time of need. This is
one of those times. I urge that we do everything within our
power to ensure a strong recovery and future for the Gulf Coat.
EPA will continue to fully support the U.S. Coast Guard and
play a robust role in monitoring and responding to potential
public health and environmental concerns. As local communities
assess the impact on their economies, EPA, in partnership with
other Federal, State and local agencies, will provide all
assets to assist in the recovery.
At this time I will welcome any questions you have.
Mr. Oberstar. Thank you very much for your presentation.
And, Administrator Lubchenco, I compliment you on your
presentation on the News Hour the other evening. I thought you
answered the questions exceedingly well with great balance and
apparent command of the subject matter. You may proceed.
Ms. Lubchenco. Thank you, Mr. Chairman, and thank you for
the opportunity to testify before this Committee on the
Department of Commerce's National Oceanic and Atmospheric
Administration's role in the response to the BP Deepwater
Horizon oil spill. I especially want to focus on the critical
roles that NOAA serves during oil spills and the importance of
maximizing our contributions to protect and restore the
resources, communities and economies affected by the tragic
event.
I would like to begin by expressing my condolences to the
families of the 11 people who lost their lives in the explosion
and sinking of the Deepwater Horizon. This is indeed a
difficult time, and our thoughts are with them.
NOAA's mission is to understand and predict changes in the
Earth's environment; to conserve and manage coastal and marine
resources to meet our Nation's economic, social and
environmental needs. NOAA is also a natural resource trustee
and is one of the Federal agencies responsible for protecting
and restoring the public's coastal natural resources when they
are affected by oil spills or other hazardous substance
releases. As such, the entire agency is deeply concerned about
the immediate and long-term environmental, economic and social
impacts to the Gulf Coast and the Nation as a whole as a result
of the BP Deepwater Horizon oil spill.
NOAA's experts have been assisting with the response from
the beginning of this spill, providing coordinated scientific,
weather and biological response services. Offices throughout
the agency have been mobilized, and hundreds of NOAA personnel
are dedicating themselves to assist. Over the past few weeks,
NOAA has provided 24/7 scientific support to the U.S. Coast
Guard in its role as Federal on-scene coordinator, both on
scene and through our Seattle operations center.
This NOAA-wide support includes twice-daily trajectories of
spilled oil, information management, overflight observations
and mapping, weather and river flow forecasts, shoreline and
resource risk assessment and oceanographic modeling support.
NOAA has also been supporting the Unified Command in
planning for open-water and shoreline remediation and analyses
of various techniques for handling the spill, including open-
water burning and surface and deepwater application of
dispersants. Hundreds of miles of coastal shoreline were
surveyed to support cleanup activities. NOAA's National Marine
Fisheries Service is addressing issues related to marine
mammals, sea turtles, seafood safety and fishery resources,
which includes the closure of commercial and recreational
fishing in oil-affected portions of the Federal waters in the
Gulf, and updating the dimensions of the closed area as
necessary to ensure fisher and consumer safety without
needlessly restricting productive fisheries in areas that are
not affected by the spill.
As the lead Federal trustee for many of the Nation's
coastal and marine resources, the Secretary of Commerce, acting
through NOAA, is authorized, pursuant to the Oil Pollution Act
of 1990, to recover damages on behalf of the public to address
injuries to natural resources resulting from an oil spill. The
Oil Pollution Act encourages compensation in the form of
restoration, and this is accomplished through the Natural
Resource Damage Assessment process by assessing injury and
service loss, then developing a restoration plan that
appropriately compensates the public for the injured resources.
NOAA is coordinating the damage assessment effort with the
Department of the Interior as a Federal co-trustee, as well as
the co-trustees in five States and representatives for at least
one responsible party, BP.
The event is a grave reminder that spills of national
significance can occur despite the many improvements that have
been put in place since the passage of the Oil Pollution Act.
Although the best remedy is prevention, oil spills remain a
grave concern given the offshore and onshore oil
infrastructure, pipes and vessels that move huge volumes of oil
through our waterways. To mitigate environmental effects of
future spills, responders must be equipped with sufficient
capacity and capabilities to address the challenge. Response
training and exercises are essential to maintain capability.
Continuous training, improvement of our capabilities,
maintenance of our capacity, and investments in high-priority,
response-related research and development efforts will ensure
that the Nation's response to these events remains effective.
Training and coordination with other Federal, State, and local
agencies that might have response and restoration
responsibilities is critical to success in mitigating efforts
of future spills.
There are a number of improvements to our ability to
quickly respond to and mitigate damage from future spills that
would benefit the Nation. One such activity is increasing our
response capacity. If another large spill was to occur
simultaneously at another location in the U.S., NOAA would have
difficulty providing the level of response expected. We would
be happy to identify specific activities in research and
development that would increase the effectiveness of oil spill
response.
From the outset, our efforts have been aggressive,
strategic, and science-based, and I would like to assure you
that we will not relent in our efforts to protect the
livelihoods of Gulf Coast residents and mitigate the
environmental impacts of this bill.
Thank you for allowing me to testify on NOAA's response
efforts, and I'm happy to answer any questions.
Mr. Oberstar. We really appreciate your testimony. Thank
you very, very much.
Ms. Birnbaum, Minerals Management.
Ms. Birnbaum. Thank you, Mr. Chairman, and Members of the
Committee, for the opportunity to testify about the Minerals
Management Service requirements regarding oil spill response
plans.
Before I begin my testimony, I want to express how saddened
I and all MMS staff are over the tragedy that began with the
loss of life on April 22 on board the Deepwater Horizon and
continues with the oil spill as we speak.
Many of MMS's employees have worked their entire careers in
an effort to prevent this kind of thing from happening, and we
will not rest until we determine the causes so we can do
everything possible to reduce the risk of its happening again.
All leasing operations on the Federal offshore are governed
by laws and regulations designed to ensure safe and
environmentally sound operations. The authority for MMS to
regulate oil spill planning for offshore facilities is derived
from the Oil Pollution Act of 1990 and Executive Order 1277.
MMS regulations require that all ocean operators of oil's
handling, storage or transportation facilities submit an Oil
Spill Response Plan, or OSRP, to MMS for approval. Under the
regulations, an offshore lessee is required to submit an OSRP
to the MMS for approval before or at the same time as
submitting an exploration plan or development plan for review.
The OSRP must outline the availability of spill containment
and cleanup equipment and trained personnel. It must assure
that full response capacity can be deployed during an oil spill
emergency. It must also include provisions for varying degrees
of response effort, depending on the severity of the spill.
MMS reviews and approves these plans every 2 years unless
there is a significant change that requires that the plan be
revised immediately. Changes that would trigger a review
include a change to the plan that significantly reduces the
ability to respond, or a change in the worst case discharge
scenario.
BP's regional OSRP that covered the Deepwater Horizon was
first issued in December, 2000 and last revised on June 30,
2009. This regional OSRP anticipated a worst case discharge
scenario of 250,000 barrels per day. BP's estimate for the
worst case discharge in the exploration plan for the well being
drilled by the Deepwater Horizon was up to 162,000 barrels per
day. Because that worst case discharge estimate for this
particular facility fell below the levels indicated in BP's
regional OSRP, BP was not required to submit a site-specific
OSRP.
MMS also requires training on OSRPs to make sure that spill
management team members, oil spill removal organizations, spill
response operating teams and other contractors are familiar
with the plan. Training includes annual training on spill
reporting procedures, deployment strategies for response
equipment, oil spill trajectory analysis, and any other skills
needed to respond to a spill.
To test an operator's preparedness, MMS conducts
unannounced exercises. MMS prepares a spill scenario using data
from the operator's approved plan and then, without
notification, initiates the drill by contacting the
predesignated point of contact. The operator must fully
mobilize its emergency response staff, making all required
notifications and taking simulated real-time actions as if it
were an actual event taking place.
MMS may also require the deployment and operation of major
spill response equipment, such as ocean-going spill vessels or
dispersion aircraft. In the Gulf of Mexico region, MMS conducts
12 to 15 such exercises annually. Since 1994, MMS has conducted
six unannounced oil spill drills involving BP. The most recent
drill on November 20, 2008 included deployment of a skimming
vessel that is currently deployed to respond to the current
spill.
MMS also maintains Ohmsett, the National Oil Spill
Response, research and Renewable Energy test facility in
Leonardo, New Jersey, where operators may train in oil spill
recovery under varying conditions. Ohmsett is the only facility
in the world where full-scale oil spill response equipment
testing, research and training can be conducted ina marine
environment with oil under a controlled array of wave and oil
conditions. The facility provides an environmentally safe place
to conduct objective testing and to develop devices and
techniques for the control of oil spills.
Mr. Chairman, this concludes my prepared statement. I would
be happy to respond to any questions.
Mr. Rahall. [presiding.] Thank you for your testimony.
I understand our next two witnesses are going to split
their time; is that correct?
Admiral Salerno. We will go quickly, sir.
Mr. Rahall. All right, Admiral. You may proceed.
Admiral Salerno. Thank you, Mr. Chairman and distinguished
Members of the Committee. I appreciate the chance to appear
before you, together with my colleague, Rear Admiral Neffenger,
who is the Deputy National Incident Commander. The two of us
will discuss the loss of a mobile offshore drilling unit,
Deepwater Horizon, and the ongoing response to the spill.
In my role at Coast Guard headquarters, I oversee the
strategic integration of operational missions and the
development of policy for mission execution, so it is from that
perspective that I appear before you today.
This event, of course, began with a fire and explosion
onboard the Deepwater Horizon. The Coast Guard is, among many
other things, a life-saving service. Saving lives is at the
core of who we are. And so on behalf of the Coast Guard, I
would like to also express our sincere condolences to the
families of the 11 workers who did not survive the event.
I would also like to acknowledge, in grateful appreciation,
the swift response of the crews of the offshore supply vessels
who were operating in the immediate area; in particular, the
motor vessel Damon B. Bankston, an offshore supply vessel
operated by Tidewater Marine who recovered the bulk of the
survivors that evening.
Coast Guard aircraft and cutters conducted searches of the
area lasting several days, and despite our best efforts, none
of the missing crew members were recovered.
The Deepwater Horizon itself was a foreign flag mobile
offshore drilling unit; however, the crew was compromised of
U.S. citizens as is required for operations on the Outer
Continental Shelf. It was also required to have a Certificate
of Compliance issued by the Coast Guard before it was allowed
to operate. The most recent Certificate of Compliance was in
2009 and was due to remain in effect until 2011, and there were
no outstanding safety deficiencies.
The Coast Guard shares jurisdiction with the Minerals
Management Service in the regulation of offshore activities. In
essence, the Coast Guard has the lead for the rig, the vessel
part of the system itself, whereas the Minerals Management
Service focuses on the drilling portion and the vital equipment
associated with drilling.
We have yet to establish the reasons for the casualty. To
understand what has happened, the Coast Guard and MMS are
jointly conducting a Marine Board of Investigation. The
investigation will look into the adequacy of Federal
regulations as they pertain to mobile offshore drilling units
and Outer Continental Shelf activities.
With respect to the oil response, this is a spill of
national significance. Since the mid-1990's, the Coast Guard
and other Federal agencies have conducted exercises every 3
years based on spill-of-national-significance scenarios to make
sure we have the right framework and capabilities to manage a
spill that requires a whole-of-government approach.
Coincidentally, the most recent exercise occurred one month
prior to the Deepwater Horizon casualty. Many of the Coast
Guard and interagency personnel who participated in that
exercise are now engaged in the actual response.
Nevertheless, there is much to learn from this casualty.
The Coast Guard intends to charter an incident-specific
preparedness review to focus on the adequacy of the contingency
plans and response efforts. Such a review is common after a
major incident and is used to improve preparedness for future
events.
Thank you, Mr. Chairman. I look forward to your questions.
Admiral Neffenger. Good afternoon, Mr. Chairman, Chairman
Cummings, and distinguished Members of the Committee.
As Admiral Salerno said, I am the Deputy National Incident
Commander for the Deepwater Horizon Gulf oil spill to Admiral
Thad Allen, who is the National Incident Commander and was
appointed as such following Secretary Napolitano's designation
of this as a spill of national significance.
The role of the National Incident Commander, under SONS
declaration, is to coordinate national policy, ensure the
provision of necessary resources, facilitate collaboration
between Federal, State and local governments, and to coordinate
strategic communications throughout the whole-of-government.
I have a written statement which I will submit for the
record, and I will keep my comments brief in the interest of
our split time.
When the Deepwater Horizon sank on April 22, it generated
an ongoing event of unprecedented complexity. With the spill
emanating at a depth of 5,000 feet of water, we are operating
where there is no human access, and where we must depend upon
remotely operated vehicles and tools for extensive efforts to
stem the flow and source of the spill.
As you have heard, to meet this challenge there is a very
large organization, Unified Command, which has been stood up at
the local, regional and national level, and all of these
initiated a massive response to this spill. That is led
regionally by the Federal on-scene coordinator, Rear Admiral
Mary Landry, and, as I mentioned, nationally by Admiral Thad
Allen as the National Incident Commander.
The Unified Command implements the area contingency plans,
which include response strategies, organizational
responsibilities previously agreed upon by stakeholders, and
prioritized cleanup sites and protection areas for booming and
prestaging of other resources. And these resources are directed
to appropriate areas, depending upon projections of the spill.
Trajectory is based on forecasted winds, currents, and sea
states. And of course it requires modeling and monitoring on
scene, which we do with our colleagues from NOAA and the EPA.
BP is the responsible party, and they are responsible to
respond with sufficient oil spill response capability. As
noted, they are responsible for cleaning up the oil,
remediating the damages, and restoring impacted natural
resources. As the Federal on-scene coordinator, the Coast Guard
ensures that BP meets their obligations by providing constant
oversight and direction, and in addition, we will continue to
monitor the BP claims process to ensure it is robust and fair.
The efforts on this response have been extensive and
without precedent. As of today, we have recovered over 7.8
million gallons of oil-water mix, applied, as you've heard,
nearly 600,000 gallons of surface dispersants, over 53,000
gallons of sub-sea dispersants, deployed nearly 1.4 million
feet of boom, staged another 382,000 feet of boom, and there is
another 1.4 million feet on order and arriving shortly, with
over 20,000 people and some 1,000 vessels responding.
We understand the impacts of this spill on the Nation and
the local communities. I have personally visited the Gulf
region and spent many days over the past few weeks overflying
the spill sites, meeting with local officials and local
affected populations, and observing firsthand the efforts being
undertaken in the various command posts to protect
environmentally sensitive areas and local communities.
Through the National Incident Command we will continue
coordinating the aggressive whole-of-government response to
this spill while ensuring that BP meets their obligations. This
includes the recent establishment of a working group of
scientists and experts to determine accurately the flow rate
and total volume of oil that has been spilled both to date and
expected, and that will be guided by a peer review process as
well.
Mr. Chairman, thank you for this opportunity, and I welcome
any questions you may have.
Mr. Rahall. The Chair wishes to thank the panel for their
testimony. In a bit of housekeeping, we do have a series of
votes on the House floor, but I understand you, Administrator
Jackson, have to leave, so I would like to ask--you do too, Dr.
Lubchenco? OK. Well, then, maybe we can do this very quickly,
and then ask the other three if they would come back for
Members that have left to vote but I know are coming back to
ask questions.
Administrator Jackson first, thank you for having your top
staff in Charles Town, West Virginia last night on the Spruce
mining permit. I'm not going to ask you anything on that. I
couldn't tell who they disliked more, EPA or me, but I
appreciate that. It was a chance for people to have their voice
heard.
Let me ask you, many of the response actions taken to date,
such as the use of dispersants and surface skimming, which you
have testified to already, and the placement of floating booms
are essentially the same techniques that were deployed during
the response to the Exxon Valdez spill over 20 years ago. We
certainly don't expect our military to fight wars with weapons
that are outdated and designed 20 to 30 years ago, so why
should we expect our Federal agencies to respond to oil spills
that use outdated techniques and equipment?
Ms. Jackson. I couldn't agree more with the sentiment, Mr.
Chairman, which is that we, as I've been putting it, our
ability to extract this oil and use it has far outpaced the
investments that we've made in dealing with response and
preparedness.
Mr. Rahall. Any of the panel wish to answer that question?
Ms. Lubchenco. Mr. Chairman, I would wholeheartedly agree
with what Administrator Jackson said; it's clear that the
techniques that we are using today have really not advanced
significantly, and it would be well worth an investment to
bring those into the modern age.
Mr. Rahall. All right. You know, it doesn't take a rocket
scientist to tell us that something went drastically wrong here
in this situation. Now it may take a rocket scientist to tell
us how to plug this well, but obviously something went terribly
wrong. So I guess I would ask a general question to the panel:
Has deepwater exploration for oil gotten too big too fast for
its safety britches? How can we ensure that an oil spill of
this scale and magnitude never happens again?
Ms. Birnbaum. I'll try responding to that. I don't think
that we'll know for sure what happened here until we can
actually pull the BOP stack and determine--the end of the
investigation is going to rely on an engineering review of that
as well as the review of witnesses, and so on, that has already
begun. And until we know that, we won't really understand
what's gone wrong here. We are conducting a massive safety
review. The President asked Secretary Salazar to spend 30 days
looking on what are interim safety measures that we can
institute in order to make deepwater drilling safer. We are in
the process of working on that. The Secretary will get that
report to the President on May 28. In the meantime, the
Secretary has suspended the issuance of new drilling permits
for new wells in deep water pending the completion of that
report.
And so we are examining that safety question. We believe it
can be made safe. We know that the Nation relies on the oil
that we get from the Gulf of Mexico. We are going to do
everything possible to make it safe and reduce the risk.
Mr. Rahall. As you know, my other hat is Chairman of the
Natural Resources Committee, which we will be having our
hearings next week and the Secretary will be our lead-off
witness. I've requested numerous documents from you and from
the Secretary and still awaiting a response from those requests
as well. But that's another issue before our Committee on
Natural Resources, so we'll wait until then.
As time is short, let me ask--yes, Mr. Cummings.
Mr. Cummings. Mr. Chairman, I will be very brief.
First of all, thank you all for being here.
Ms. Jackson, thank you very much. I was just down in New
Orleans and Port Fourchon over the weekend, and they were very
complimentary of your agency's efforts. You don't usually hear
those kinds of things, but I just wanted you to know that.
I completely agree with your statement that the people of
the Gulf Coast want to be informed of the impact of the spill,
and I applaud the commitment of the administration about
openness with regard to this spill. On the last panel,
questions were asked of BP on its commitment to openness, which
is a real key question.
Can you provide the Committee with the assurance that you
will provide and compel, as to the extent that you can, BP to
provide all tests and monitoring results taken in relation to
this spill?
Ms. Jackson. Sir, I'ma bsolutely happy to. And I also
suggest maybe you want to hear from the National Incident
Command. Any data that EPA has, whether we compile it ourselves
or it comes into our possession because we've directed BP to
compile it, I've directed my staff that we are going to put it
up on the Web site and make it available. We can't always do
that as timely as people would like because we have to go
through lab analysis and whatever, but that is our commitment.
And I have also said and believe that one of the things BP
can and must do is make all of the data that it is being
compelled to take publicly available. That is data it is taking
as part of the response and will need to be made available.
Mr. Cummings. Just one other quick question. My colleague
from Maryland, Ms. Edwards, and a number of Members have asked
questions about the amount of oil being spilled. And it struck
me that it seems that you all have to rely to a degree on what
BP is telling you. I'm just trying to figure out, I mean, do
you feel like you are getting the necessary information that
you have to get from BP to do your job? Because I can easily
see how they could underestimate various things and go to the
lower end as opposed to a higher end. And I just want to know,
are you all satisfied with the kind of information you are
getting from them?
Ms. Jackson. I would say, in general--let me just say to
start, EPA and estimating the flow of oil, that's not within
our area of expertise. There are people on the panel who can
speak to that specific issue.
I think that one of the lessons learned from this is that,
in this idea of a unified command, we are directing them to do
things and we are working to get a job done, but we have a
different responsibility, as government agencies, to make sure
we do that with transparency and that people have a right to
know and understand what we know as we can give it to them.
So I don't direct BP directly, that happens through the
Commander. And I have an infinite amount of respect for Admiral
Neffenger and Commander Thad Allen, but I do think that we need
to understand that structure better because people turn to the
government and want to understand that structure.
Mr. Cummings. Mr. Chairman, thank you very much. I will
direct that to our other witnesses later on.
Mr. Rahall. Mrs. Napolitano.
Mrs. Napolitano. Thank you, Mr. Chairman. And it's good to
see some of the people that we've met before. Thank you very
much, Mr. Chair.
One of the questions that I brought up to the prior panel
is something that is very bothering to me, and I understand
there may be some information that you might have, Ms.
Birnbaum, in regard to the number of wells that are in deep
ocean, how many permits have been issued, whether they are
being reviewed, checked out for any possible leaks. Have there
been any incidents? How deep are they? Where are they? So that
there is an ability to be able to understand much more of
what's happening in the oceans that we may or may not know
could have a catastrophe in the future.
Ms. Birnbaum. Thank you, Mrs. Napolitano.
We define deep water as anything over 1,000 feet below sea
level. There are nearly 2,000 total wells in deep water at this
time; I have 1,988 as of yesterday. Not all of those are
exploration wells of this type. Many of those are production
wells which are producing oil, which have a very different set
of risks. Exploration wells are inherently a little more risky
than production wells.
We have conducted, at the direction of the Secretary of the
Interior, an emergency inspection of all of the drilling rigs
working in deep water. We did that within 2 weeks after the
Deepwater Horizon incident.
Mrs. Napolitano. How deep?
Ms. Birnbaum. I don't know what the deepest one is drilling
at; I have to say I do not know.
Mrs. Napolitano. Can we get that information for the
Committee?
Ms. Birnbaum. We will get that for you.
Our inspectors found a couple of incidents of
noncompliance, which is not unusual on an inspection. We've
corrected those. We have now begun a separate sweep of all the
deepwater production platforms, which take longer because
they're more complicated facilities and there are more of them.
We expect that that will be completed in July, and we will have
done a full sweep of everything operating in deep water.
Mrs. Napolitano. Deep water up to--do you have any others
going beyond the 5,000 range?
Ms. Birnbaum. Yes. They do operate deeper than 5,000.
Again, I don't know the deepest facility that there is.
Mrs. Napolitano. Would there be an ability to be able to
identify them, where they are at and what their status is?
Ms. Birnbaum. Absolutely. We have huge databases of that.
We'd be happy to provide that to you.
Mrs. Napolitano. Well, Mr. Chair, I would certainly want to
find out where they're at and what condition they're in and
who's responsible for them in case anything were to happen, and
then of course what we can do to be able to ensure their safety
to protect our coasts and coastlines.
The Coast Guard has done a great job, and I know that for
years you have operated under very difficult circumstances.
I've been a number of times looking at the age of your--I want
to say a yacht, but I'm not a seagoing person. To me, anything
other than a rowboat is a big boat. But somehow we may be
failing to ensure that our Coast Guard has the sufficient
infrastructure to deal with the many issues. Is this going to
be deterring from your delivery of the services for the rest of
the needs that you cover?
Admiral Salerno. Ma'am, as you mentioned correctly, a lot
of our ships and aircraft are quite old, and the Coast Guard
has embarked on a very aggressive recapitalization program to
replace those older vessels, as alluded to by Chairman Oberstar
earlier. There are new ships being built. Two new ones have
joined the fleet within the last 2 years; additional ones are
on the way now being built. We will go through a period of time
where some capacity is coming offline and it's not a one-for-
one replacement. But it is part of an overall program to
replace that aging infrastructure.
The capabilities that we are using in the Gulf right now,
we feel we do have the right capabilities in place to manage
the current spill.
Mrs. Napolitano. Is that for certain?
Admiral Neffenger. What I would add is that if this spill--
when you surge the number of people you have to surge for a
major event like this, it challenges any agency over an
extended period of time. So the challenge for us would be, if
this were to go for an extended period of time, is the long-
term sustainability and the capacity to sustain this over a
long period of time.
Mrs. Napolitano. Certainly we want to hear about if there
is a need for additional assistance. And Ms. Jackson, I want to
thank you personally for the great work that your district in
the West does for us in other areas.
So thank you, Mr. Chairman, I yield back.
Mr. Rahall. Mr. Johnson, do you have any questions of Dr.
Lubchenco or Administrator Jackson?
Mr. Johnson of Georgia. Yes, Mr. Chairman. May I be
recognized?
Mr. Rahall. Yes. We are out of time on the floor, but we
still have 152 that have not voted.
Mr. Johnson of Georgia. Thank you.
Administrator Jackson, what is the EPA's role in
understanding the deepwater oil slicks that news reports
indicate may be an enormous environmental problem? And how
complete is the EPA's understanding of the size and number of
these oil slicks as well as their potential effect on the
environment?
Ms. Jackson. Sir, in the interest of time, I will defer to
Administrator Lubchenco because EPA has a very small role in
marine environments. If this spill had happened on land, EPA
would actually be running the response unless the President
appointed a commander, as he has done here with the Coast
Guard. But in terms of the science, they are science advisers,
especially on issues of where the oil is or where it might go.
Ms. Lubchenco. Congressman, would you like me to respond?
Mr. Johnson of Georgia. Yes.
Ms. Lubchenco. I think it's fair to say that we've
mobilized all of our resources to track all of the oil and
understand where it is. It's much easier to do that at the
surface than it is to understand where the oil is below the
surface. And this is an unprecedented event in that regard.
There is much less of the oil at the surface. So it's a
challenging issue. And what we are doing is tackling it in
three different ways. We are running a series of oceanographic
models of how the water moves at different depths in the Gulf
to understand where the oil is likely to go at different
depths, both when it comes up from the leak as well as the oil
that might have been submerged with dispersants. So models to
understand where it's likely to go, number one.
Number two, we've been deploying aircraft, our P-3 NOAA
aircraft to drop instruments into the ocean that take data on
the way down to give us a better sense of what's happening at
different depths.
And three, we've been mobilizing research ships to go out
and physically take data, deploy instruments, and get a better
sense. We're in the early stages of doing that, and we do not
have a comprehensive understanding as yet of the full extent of
where that oil is, but we are devoting all possible resources
to understanding not only where it is, but what its impact
might be.
Mr. Johnson of Georgia. Does the amount of oil flowing from
the breaches affect your analysis of the oil beneath the
surface?
Ms. Lubchenco. No, Congressman, they don't. It is important
for us to understand what the total volume of flow is, but both
the mitigation efforts as well as our efforts to analyze where
it is are not contingent upon a precise estimate. From the
outset, we've assumed that the spill is significantly large,
and without specific, really concrete precise estimates, we've
made every effort to hope for the best, but deploy resources
assuming it's a lot larger.
Mr. Johnson of Georgia. Thank you.
Mr. Rahall. Thank you, Administrator Jackson and Dr.
Lubchenco. We appreciate you being with us.
Ms. Birnbaum and Admirals, we understand you will be back.
You will hold with us, and Chairman Oberstar will be back after
these votes.
The Committee stands in recess. Thank you.
[Recess.]
Mr. Rahall. The Committee on Transportation and
Infrastructure will resume its sitting. And the gentleman from
North Carolina, Mr. Coble, is recognized.
Mr. Coble. Thank you, Mr. Chairman. Good to have you all
with us today.
Admiral Salerno, you are the Assistant Commandant for
Marine Safety, Security, and Stewardship. This, as you know,
was a position created by the Commandant in 2007 to integrate
marine safety and security into everyday actions of the Coast
Guard's day-to-day activity. How has this position helped, if
it has helped, to facilitate the response to the incident
before us?
Admiral Salerno. Good afternoon, Congressman Coble.
I would say, sir, that when we moved away from our previous
organizational construct where we had a Chief of Operations and
Chief of Marine Safety, we really broke down some longstanding
stovepipes within our organization. We now have better mission
integration, and I think one of the tangible results of that is
our ability to manage large incidents. We have really spread
out knowledge and awareness of the incident command system
throughout the Coast Guard. We have people from different
specialties within the Coast Guard who can contribute in a
coordinated way to a large whole-of-government approach which
10 years ago would have been far more difficult to do. So I
think there has been a tangible increase in our competency to
do that as a result of this reorganization.
Mr. Coble. And I don't believe, Admiral, I elevated you to
your proper standing. I think you have been promoted since I
last talked to you, were you not?
Admiral Salerno. Actually, my position has changed, sir. I
still have the same rank, but as of last week I moved out of
the Assistant Commandant for Marine Safety, Security, and
Stewardship; I am now the Deputy Commandant for Operations.
Mr. Coble. Congratulations to you.
Admiral Salerno. Thank you, sir.
Mr. Coble. Admiral, is the Coast Guard adequately funded
through the Oil Spill Liability Trust Fund to conduct oil spill
response, research and development?
Admiral Salerno. Well, sir, we do receive some funding on
an annual basis from the Oil Spill Liability Trust Fund. For
2010, that amount--I have the number here--was $500,000. That
is a reduction of what has been appropriated and passed.
However, we are not limited by that amount; we can use other
sources of funding from internal sources to help fund oil spill
research.
In addition, we do chair an interagency Committee on oil
spill research, and there are 13 other Federal agencies that
participate in that Committee. It's called ICCOPR, the
Interagency Coordinating Committee on Oil Pollution Research.
And so some funding is available from other agencies.
Mr. Coble. I got you.
Rear Admiral Neffenger, I'm not meaning to omit you, you
feel free to weigh into this as well.
I have two more questions, Mr. Chairman, if I may.
Admiral, when do you expect the original $100 million
transfer from the trust fund to be exhausted?
Admiral Neffenger. Well, as you know, speaking of the
emergency fund provisions, we had $50 million that was
originally available to us, we asked for the one-time
authorization for the $100 million transfer, we received that.
At the current burn rate, we expect to exhaust that in the next
16 days.
Mr. Coble. Sixteen days?
Admiral Neffenger. Yes, sir.
Mr. Coble. Finally, do you have financial resources in
place to adequately carry out the Federal response?
Admiral Neffenger. Well, I think we have a legislative
proposal that the administration has submitted to the Hill
which would seek to allow for additional $100 million transfers
for purposes of Federal response operations during an oil
spill. Barring that being approved or barring the legislation
allowing for that, we would have to turn to our operating
expenses for our own costs.
Mr. Coble. I thank you, gentlemen. Ms. Birnbaum, I didn't
mean to ignore you, I had the Coast Guard questions in mind.
Thank you, Mr. Chairman. I yield back.
Mr. Rahall. The gentleman from North Carolina, Mr. Shuler.
Mr. Shuler. Thank you, Mr. Chairman.
Director Birnbaum, under NEPA, if you look at how it's
structured, and specific to the oversight and the challenges we
now face in the Gulf, should we revisit some of the drilling
permits that maybe coming forth in the Arctic based upon the
disaster that has happened in the Gulf?
Ms. Birnbaum. Under the National Environmental Policy Act,
we are required to examine the environmental impacts of any
major Federal action; certainly, oil and gas leasing is a major
Federal action. We have conducted many environmental impact
statements before we get to the point of an individual well
drilling decision. We conducted an EIS on the full 5-year plan
for oil and gas drilling; we have conducted EIS on lease sales
in the Gulf and then separately in Alaska. We also conducted
some separate environmental impact reviews on drilling in a
particular area--the Mississippi Canyon here in the Gulf.
When we get to the point of deciding on an exploration plan
for a particular permit, we are under a statutory obligation,
under the Outer Continental Shelf Land Act, to make a decision
within 30 days. That very much limits our ability to conduct
environmental reviews. Many of our environmental reviews are
categorical exclusions. We review that to determine whether
there is some trigger for us to do a full environmental
assessment, which we did, actually, on exploration plans for
Arctic drilling. But we are still limited to that 30-day
decision, and we have to still make a decision on whether or
not to go forward with an exploration plan within 30 days,
which limits the amount of environmental review we can conduct.
In the package that the administration sent up to provide
additional appropriations, we also asked to lift that limit in
the Outer Continental Shelf Lands Act to allow 90 days or more
to provide a more full analysis of exploration plans before
drilling.
Mr. Shuler. Considering what has happened in the Gulf and
the mistakes that were made, will that impact your decision to
allow the permitted drilling in the Arctic to continue, do you
feel?
Ms. Birnbaum. The administration, at this point, is not
issuing any permits to drill new wells while we reexamine
safety overall in light of this accident and provide a report
to the President, actually, on what additional safety measures
might be required.
Conditions in the Arctic are different from the Gulf in
many different ways, but we certainly will be looking at all of
that before making any decisions on further permits to drill.
Mr. Shuler. Commandant, do you feel that because of what
has happened in the Gulf, and obviously having the services of
the Coast Guard readily available, if this would have happened
in the Arctic, the Alaska region, would you be able to have the
same type of response time and the manpower that is needed to
be able to take care of a disaster such as this one in the
Gulf?
Admiral Salerno. Well, sir, the Arctic poses some unique
challenges. It logistically would be far more difficult to
mount a response on this scale. Also, some of the techniques
that are being used in the Gulf really need to be evaluated for
their effectiveness in the Arctic. That is in fact one of the
focal points of our interagency R&D effort.
We have been in consultations with the Arctic Council on
that, and this summer we intend to deploy our icebreaker, the
Polar Sea, for a joint pollution response exercise with Canada
to test equipment and command and control capabilities in the
Arctic. But the bottom line, it would be extremely difficult
and far more challenging than in the Gulf of Mexico, where a
lot of that oil field capability and response capability
already resides.
Mr. Shuler. Thank you.
Mr. Chairman, I will yield back.
Mr. Rahall. Ms. Birnbaum, may I ask you a couple of
questions? The MMS policy is to inspect an oil rig at least
once per month?
Ms. Birnbaum. That is correct.
Mr. Rahall. And according to press reports, the MMS
conducted 16 fewer inspections since January, 2005 than that
policy requires?
Ms. Birnbaum. I believe that that's a report that was
describing the number of inspections we've conducted on the
Deepwater Horizon itself since 2005. Inspections don't take
place when a rig is not on a well, if they are moving between
or if they are constructing maintenance, or whatever. So you
wouldn't expect to see monthly inspections at those times.
In addition, it's a policy, but we occasionally don't
manage to make a monthly inspection because of weather. Our
inspectors have to fly out to rigs in helicopters, and weather
can prevent that if you're up to the end of the month and there
is bad weather for a week. And I believe that actually last
winter there may have been one or two inspections missed
because of bad weather during the winter.
Mr. Rahall. So there are rigs that are not being inspected
by MMS, and you're saying because they're not on a well?
Ms. Birnbaum. There are times when they're not on a well,
and there are times, again, on occasional inspection, although
we certainly get people out to them as soon as we can when
weather clears.
Mr. Rahall. Do you have information as to how many are not
being inspected?
Ms. Birnbaum. It depends on whether or not they're
currently drilling. We know at all times what rigs are
currently drilling wells. At the time when they are currently
drilling a well, we will inspect them once a month. At any
given time, there may be more than one rig that is not. For
example, right now, actually, there are a couple of them tied
up with the support for the response to Deepwater Horizon that
wouldn't be inspected until they were there.
Now, we have definitely inspected the DD2, which is going
to begin drilling the next relief well, but while it was
moving, that would not be.
Mr. Rahall. But for those rigs that are on wells in which
inspections are not conducted due to weather, as you've just
suggested, you would have account of that.
Ms. Birnbaum. We would have account of that, and we would
get out to them as soon as we could when weather cleared.
Mr. Rahall. OK. According to the International Regulators
Forum, a group of offshore regulatory bodies, the U.S. reported
five major loss of well control incidents in 2007 and 2008.
Five other countries--Great Britain, Norway, Australia, Canada
and the Netherlands--had no such incidents. What is different
about their method of regulating safety of offshore drilling
than the way safety is conducted by MMS?
Ms. Birnbaum. We work with other countries and we consult
on safety measures on offshore drilling. We have established
MOUs with several other countries, including Norway, to discuss
safety methodology. I don't know the particular incidents and I
can't describe what happened in them, so it's very difficult
for me to say, but we are currently reviewing all of our safety
policies. We're determined to make the United States the safest
place in the world in offshore drilling. And we will be
reviewing all such incidents to determine what we can do to
prevent such things from happening in the future.
Mr. Rahall. Over the past 5 years, for example, an offshore
oil well worker in the United States has been four times more
likely to be killed than a worker in Europe and 23 percent more
likely to beinjured. Why is this, and what more needs to be
done to protect workers?
Ms. Birnbaum. We actually conducted an extensive analysis
of all offshore accidents, including loss of well control,
including, actually, all the incidents of noncompliance we
found with our regulations, and so on, for the last 10 years.
That work culminated in the draft of a new safety management
rule that we published as a draft rule last June. What we
discovered was that most of the accidents were not the result
of technological shortfalls in our regulations but actually
were the result of accidents and sort of human process safety
practices.
So this is a new regulation that will require all offshore
drilling to have safety and environmental management systems in
place that would be audited that would ensure that those kinds
of human errors were less likely to occur because of safety
systems. That rule was published in draft last June. Comment
period closed in September. We believe that that rule, once it
was in place, would eliminate, we estimated, approximately two-
thirds of all accidents offshore.
Mr. Rahall. Just before I recognize Mr. Taylor, you see
what we're trying to do here, as I'm sure you would agree, we
all recognize that all forms of energy production, such as coal
mining in my area, where we just lost 29 coal miners, has
inherent risk, but that does not mean we're going to cut off
mining coal any more than it means we're going to cut off
drilling for oil, nor does it mean we're going to be 1,000
percent effective in stopping any accidents in the future--
that's impossible--just as we're not going to be 1,000 percent
effective in stopping all terrorist attacks--but we must do a
better job, bottom line.
Ms. Birnbaum. I agree with you completely, Mr. Chairman.
Mr. Rahall. And we must do the best we can to protect life.
Ms. Birnbaum. We are determined to find every way we can to
reduce risk offshore.
Mr. Rahall. Thank you.
The gentleman from Louisiana.
Mr. Cao. Thank you very much, Mr. Chairman.
Ms. Birnbaum, a couple weeks ago the President said he
wants to stop the cozy relationship between Federal agencies
and the oil industry. Was there a cozy relationship between MMS
and the oil industry?
Ms. Birnbaum. There was a report from the last year of the
Bush administration that indicated that there had been some
serious ethical breaches at the Minerals Management Service
Royalty Management Group, not actually the group that does
offshore regulation. We have taken every step to improve ethics
at MMS since then. The people who were found to have an ethics
problem were disciplined and dismissed. We've established
stronger ethics standards at MMS. We require every employee to
take ethics training now. And we are determined to find any
other problems out there.
The Secretary, however, has also identified what I think is
an inherent tension in the Outer Continental Shelf Lands Act
which requires us both to promote the orderly development of
our offshore oil and gas resources and at the same time
guarantee environmental and safety systems. And so he has
determined that a proper way to avoid the problems that might
be created by that tension in the law is to split the
organization. Actually, this afternoon he just announced that
he will be splitting the offshore management into two separate
bureaus in order to eliminate any potential for conflict there.
So I believe that we have addressed this potential
conflict, although I have to say that I believe that almost all
of MMS's 1,700 employees are in fact ethical.
Mr. Cao. Were any of the ethical issues related to the
Deepwater Horizon?
Ms. Birnbaum. No. None of the ethical issues that were
found were related to Deepwater Horizon. They were all related
to the royalty-in-kind program, which is part of the royalty
management system which collects funds from both offshore and
onshore oil and gas. The Secretary also completely eliminated
the royalty-in-kind program due in part to the excessive
involvement with industry practices that were involved in the
operations of the royalty-in-kind program.
Mr. Cao. What procedures have you implemented since the
Deepwater Horizon to better inspect oil rigs in the Gulf and
other areas?
Ms. Birnbaum. The Secretary immediately ordered us to
conduct a full safety inspection of all deepwater drilling rigs
with a special emphasis on inspection of the blowout
preventers. We conducted that inspection within about 2 weeks
after the incident. At this time, we are now conducting a
further full inspection of all deepwater production platforms.
That will take us longer because they are more complicated and
there are more of them. So we anticipate that that full
inspection will be completed in July.
Mr. Cao. I know that a moratorium was put on new permits
for leases for 30 days, and that has negatively impacted the
people who are not involved in deepwater drilling. Is there any
way to revisit the moratorium?
Ms. Birnbaum. The Secretary has ordered that we not issue
any further permits to drill new wells pending the delivery to
the President of his interim report on additional safety
measures that might be taken. That will be completed on May 28.
In the meantime, I believe there may be some minor disruptions,
but that is for a short period until we determine what the
right path forward is at this time.
Mr. Cao. I know that many of the oil companies who drill in
shallow waters where they are using different equipment, where
they can access the blowout preventer are saying that the
moratorium is putting them out of business.
Ms. Birnbaum. I'm sorry, I haven't heard that. I'm sorry to
hear that.
Mr. Cao. Can you look into that issue, if you don't mind?
Ms. Birnbaum. Certainly will. It's a short-term measure
then to simply put a pause button until we can figure out what
the right next steps are, but I will certainly look into that.
Mr. Cao. Because what they were telling me is that they
have to drill wells in order to keep the cash flow going. And
if they cannot do that because of the moratorium, that
obviously going to put them into a tremendous economic risk.
Not to say that they should not be also--to do it very safely.
Ms. Birnbaum. I will look into it.
Mr. Cao. My question to the admirals is, you were here when
Dr. Earle from National Geographic was talking about deep sea
submersibles. Do you believe that the Coast Guard needs deep
sea submersibles to address future oil spills?
Admiral Salerno. Sir, just as a general statement, I think
the capabilities that are really needed for a spill of this
magnitude and this depth really reside within the private
sector. We have nothing in our inventory that would allow us to
do anything differently or better than what the private sector
can bring to bear.
As to the use of ROVs, we do have some limited ROV
capability within the Coast Guard inventory. We have used them
for forensic evidence.
Mr. Cao. Let me ask you a quick question; if, based on
retrospect, based on the oil spill in the Gulf that occurred
from the Deepwater Horizon, was there a time when you said,
gosh, I wish I had this, I wish I had that because if we were
to have it, we would have been able to do something about it?
What would be your wish list?
Admiral Salerno. Well, I think that's something we really
need to delve into. I will tell you, sir, that in looking
throughout the Federal inventory, we are in direct
communications with the Department of Defense and looked at
what capabilities they may bring to bear. And quite honestly,
they did not have anything with the unique characteristics
necessary to address this spill that would have been better
than what was resident within the private sector. So we did
look far and wide for what was in the private sector. If there
were a capability within the Federal Government, we certainly
would have used it.
Mr. Cao. And I'm sorry, my time is up, but if you would
allow me just one very quick question.
What would be that capability? What is that capability you
are looking for?
Admiral Salerno. Well, again, in this case, sir, we needed
a capability that could perform operations on a blowout
preventer. The Federal Government isn't in the business of
drilling. We don't operate blowout preventers. We really needed
to rely on the private sector for that very precise capability
in this case.
Mr. Cao. Thank you, and I yield back.
Mr. Rahall. The gentleman from Mississippi, Mr. Taylor.
Mr. Taylor. Thank you, Mr. Chairman. And thank you all for
sticking around. We've had the Armed Services markup today.
Admiral, it really struck me--number one, let me commend
Captain Ed Stanton for the work that he has done in trying to
make the best of a terrible situation, between the booms, the
disbursements--he was handed a really bad situation and has
tried to make something that's really terrible less bad. But
one of the things that the average citizen would really be
surprised at--and has been surprised at--is they thought of
booms, both the containment booms, the assortment booms, and
even the collection booms, it took a while for it to sink into
the general public that they're only good to about one knot of
current and about three-foot seas. Going back to 1971, that
technology really hasn't changed much in 40 years. I think
those were the same numbers 40 years ago when you ran me
through Yorktown.
So my question is, I realize that the Oil Pollution Act of
1990 was passed and a lot of things that were in place then, a
lot of the technologies that were in place then are still being
used. What I think is missing--and I understand that there will
always be those who said if we forced you to upgrade the booms
in the absence of a spill, somebody would scream foul, that why
are you making them spend money in the absence of a spill? But
now that it has happened, has the Coast Guard looked around to
NOAA or the Navy or anyone in the private sector and identified
a better boom? Because, again, you can't collect--less than one
knot of current with three-foot seas, you can't collect it and
burn it unless you have less than one knot of current and
three-foot seas. And you can't contain it unless it's one knot
of current and three-foot seas. And all of those things are not
the norm in the Gulf of Mexico, nor would they be the norm off
the Atlantic or Pacific Coast.
So have there been advances in boom technology that we have
not taken advantage of or mandated to those companies that are
in the business of responding to a spill?
Admiral Salerno. Sir, I am not aware of any technology that
hasn't been taken advantage of. I would agree with you that the
technology really hasn't changed all that much. There is, as
Ms. Birnbaum indicated, a test facility in Leonardo, New Jersey
that looks at new capabilities. I think there may have been
some minor, incremental changes, but nothing of an order of
magnitude that we would all like to see.
Mr. Taylor. Ms. Birnbaum, at the hearing in New Orleans
Captain Wynn had a really profound statement when he said,
referring to the blowout preventer, it was designed to
industry, manufactured by the industry, and installed by the
industry, with no government witnessing or oversight of the
construction or installation. I don't mind the private sector
designing it, I have no problem with the private sector
building it, I have no problem with the private sector
installing it. What I do have a problem with, if that is true,
is that no one from your agency really has the expertise to see
if it's going to work. Is that true? Because Captain Wynn sure
implied that in his statement.
Ms. Birnbaum. I do not believe that that is correct.
Mr. Taylor. OK. Why don't you correct it for the record?
Ms. Birnbaum. We have more than five pages of regulations
actually covering what a blowout preventer must do. In
addition, we do inspect them. We don't inspect them at every
time that the operator tests them--we require them to test them
every 14 days when they are in operation--but we do inspect
them when they are visible on the rig deck, and we do have
people with capacity to inspect them and determine whether
they're in working order. Our inspectors also review the logs
of the tests that go on in between their visits to the rigs.
Mr. Taylor. The questions that were raised by Congressman
Stupak as far as either the dead or missing battery, the
leaking hydraulics, would you address those at this time?
Because it doesn't sound to me, if that is true, that you folks
were doing your job.
Ms. Birnbaum. I really cannot speak to those matters
because those are matters that are subject to the current
investigation. There are a lot of rumors going on. There is
that information, there is the information that everybody saw
on 60 Minutes, or I read the transcript of. All of that
information is part of the ongoing investigation, and we don't
yet know what happened. We don't yet know exactly what was
wrong with the blowout preventer. And I have to say that I have
personally stayed away from the details of the outcome of the
investigation because it is required to be an independent
investigation.
So I can't tell you what has been discovered and what is
determined to be true or false. We won't really know until that
stack is pulled and is basically reverse engineered, is
examined to determine what's going on with it.
Mr. Taylor. Ma'am, for the record, if you can't do it now,
how do you check a battery being there or being alive or dead
when it's 5,000 feet down? And I appreciate that all hydraulics
leak a little bit, so it's the degree of the leak and how much
it affected the ram. How do you test that at 5,000 feet down?
Ms. Birnbaum. We do require testing, as I said, every 14
days while it's on the sea floor, and they are required to
pressure it up. That should indicate if it's operational.
However, we are also looking at the question of whether there
ought to be additional test procedures that we would require,
and we are examining all of that, as I said, in addition to
safety precautions that we will consider, and the Secretary may
recommend further testing as part of his recommendations to the
President. We are looking at all of that.
Mr. Taylor. Do any countries require two blow-out
preventers? Do any mandate a redundancy?
Ms. Birnbaum. Not that I know of.
There has actually been some information about what other
countries require, and just to clarify, we don't know of any
nation that actually requires an acoustic trigger, which a lot
of people have suggested that Norway or Brazil or Canada
requires. We've inquired with their regulatory bodies because
we didn't think that they did, and the regulatory bodies have
informed us that their policies are very similar to ours, that
they do require a secondary backup mechanism. That may be an
acoustic trigger. That may be a backup trigger using an ROV, as
it was tried in this case, which was the backup mechanism for
this blowout preventer. But we are looking at everything that
might serve as more safety measures to require on blowout
preventers. I don't know of anybody who requires two.
Mr. Taylor. Mr. Chairman, you have been very generous.
Admiral, for the record, because I know Mr. Cummings
deserves his turn--for the record, I would like you, side by
side, to compare what sort of inspections you had on that
foreign-flagged drill ship as opposed to had that been an
American-flagged vessel.
Admiral Salerno. Sir, this is a foreign flag--it is flagged
in the Marshall Islands--and so what we do is essentially is a
Port State Control-type inspection, although it is very
extensive. We seek to--just as a general statement, we look for
parity. We want to make sure that that rig, when it's operating
on our Outer Continental Shelf, meets a level of safety and
equipment standards and environmental protection equivalent to
a U.S.-flagged rig of the same type.
For a U.S.-flagged rig, of course, it's Coast Guard-
inspected. We go through it from the design phase all the way
through its life cycle. There are periodic inspections that are
required. The Coast Guard people go out and visit it. We visit
the rig to perform structural examinations as well, or drydock
surveys. Typically they're done while the rig is floating. We
make sure that it's adequately manned. All of the safety
systems are checked on a regular basis, including drills for
firefighting, lifesaving. We take very close attention to
hazardous conditions.
On a foreign rig, we look at all of that same equipment,
but we also--there are some differences because, on a foreign
rig, a lot of the work--for example, the hull structural
surveys--would be performed by a recognized organization,
authorized by the flagged state. Typically it's a
classification society. We would make sure that they are
current, in compliance with all international requirements and
with our requirements for operations on the Outer Continental
Shelf. We also pay--firsthand, look at all of their
firefighting, lifesaving, and hazardous conditions on a rig,
just as we would on a U.S. rig, to make sure that there are no
obvious safety hazards for that ship operating.
So we approach it somewhat differently between U.S. and
foreign, but we make sure that all of the same types of checks
have been performed, either directly by us or by a recognized
authority for a foreign-flagged vessel, and so that there is
parity for the safety levels whether it's U.S. or foreign, if
that answers your question.
Mr. Taylor. No, but my time is up. I'll get back to you.
Mr. Rahall. The gentleman from Maryland.
Mr. Cummings. I want to follow up on what the gentleman was
just asking you.
So you would rely--therefore, on a foreign-flagged vessel,
you would rely on an agency like the American Bureau of
Shipping; is that right?
Admiral Salerno. The recognized organization empowered by
the flag state for certain things, yes, sir, but not entirely.
We perform our own checks as well, and we satisfy ourselves
that that rig is in full compliance.
Mr. Cummings. Well, you just said--I'm getting confused.
You just said a moment ago that there were certain things that
you--and correct me if I'm wrong--you went to, I guess, an
agency like the American Bureau of Shipping, and they would do
certain things, and then, because they are bona fide and up to
date, and their licenses, I guess, are up to date, then you
say, OK, we're fine. They've done that piece. That is the
impression I got. Then you go on and do some other types of
things, and that differs from an American ship, an American
vessel, where you would just do everything. You wouldn't
necessarily rely on the American Bureau of Shipping, a similar
agency; is that accurate? Is that pretty close?
Admiral Salerno. It's close, sir. It's the difference
between our responsibilities as a flag state for vessels flying
our flag and our responsibilities as a port state and coastal
state. We're looking at another country's vessel, but verifying
that it complies with international standards and with our
requirements for operation on----
Mr. Cummings. So you're trying to tell us that the
inspection for a foreign-flagged ship would be--the vessel--
would be just as rigorous as for an American?
Admiral Salerno. Well, I would say that the time that we
spend on a U.S.-flagged rig or ship would be far greater than
on a foreign-flagged vessel because we're relying on an
international system for some of the--for the foreign vessels
to demonstrate compliance. We will satisfy ourselves that there
is meat behind those certifications, that it's not just a
paperwork exercise. We'll spend enough time to be sure that
everything is functioning. But there is a difference. We do
spend more time on a U.S. flag than on a foreign flag.
Mr. Cummings. So you're familiar with Captain Vern Gifford?
Admiral Salerno. Yes, sir.
Mr. Cummings. And when he--the Houston Chronicle summarized
some of his testimony by stating that Captain Gifford indicated
that inspections conducted of foreign-flagged MODUs by the
Coast Guard are less rigorous than those conducted by U.S.-
flagged MODUs. He reportedly said that the Coast Guard
inspections of foreign-flagged vessels can last for 4 to 8
hours and are intended to verify more thorough inspections by
nongovernmental certification societies; whereas, inspections
of U.S.-flagged vessels can take several weeks.
Is that an accurate statement?
Admiral Salerno. The ``several weeks'' would imply some
things--for example, a full hull exam or an initial exam. A 2-
year recertification typically would not take that long, but
the difference is, for a U.S.-flagged vessel, we are providing
the certification that it meets all requirements. For a
foreign-flagged vessel, it's already been inspected by the flag
government. We are verifying that inspection has been done
properly.
Mr. Cummings. I've got it. OK. I'll follow up with some
written questions, but I really want to get to this.
Does the Coast Guard personnel review the oil spill
response plans for offshore facilities approved by the MMS?
Admiral Salerno. Not necessarily, no, sir.
There is a requirement for that oil spill plan. It's an MMS
requirement. It's by agreement with MMS. That plan is designed
to be compatible with our area contingency plans that are
developed through our Captain of the Ports.
Mr. Cummings. And is that happening?
Admiral Salerno. We know that--it's a requirement. I cannot
say that they are cross-checked, and, in fact, I think that may
be something----
Mr. Cummings. No. I want you to hear my question. I'm
asking you--you just said something is required. I'm asking
you: Does that happen the way it's supposed to happen, and did
it happen in this instance?
Admiral Salerno. The requirement is that they submit a plan
to MMS for operations on the Outer Continental Shelf. That is
happening.
Mr. Cummings. OK. Now, c'mon. C'mon now. You know exactly
what I'm asking you.
Admiral Salerno. What I think--there is a disconnect, and
that's what I'm trying to get to.
Mr. Cummings. Yes. Tell us what the disconnect is, because
maybe that disconnect is what we need to connect.
Admiral Salerno. The disconnect is there is no formal
mechanism to reconcile the plans submitted to MMS and the plans
held by the Coast Guard. They are supposed to be compatible,
but there is no built-in verification process to make sure that
they are compatible, and I think that is emerging as something
that needs to be addressed.
Mr. Cummings. That is exactly right, and that's what--I
just need 30 seconds, Mr. Chairman.
That is what I was talking about earlier in my opening
statement, that we have got to get the Coast Guard more
involved in this process. I mean, MMS is fine, but I have a lot
of faith in the Coast Guard, and I think that--you know, I
don't think that you should be at the tail end of something. I
think you need to be at the beginning so that if something goes
wrong, you've already been an intricate part of what was going
on before, and you can follow through.
Is that a reasonable--does that make sense?
Admiral Salerno. Yes, sir. I think there is a lot of room
for improvement in reconciling----
Mr. Cummings. Well, I hope that you'll work with us to try
to make those improvements.
Admiral Salerno. Yes, sir.
Mr. Cummings. Thank you.
Thank you, Mr. Chairman.
Mr. Rahall. Ms. Birnbaum, let me ask you about OMB's
requirements that exhaustive cost-benefit ratios be done before
safety regulations can be prescribed, and, of course, that
affects not only your agency, but many others as well. However,
this review process may fail to adequately consider the type of
situation we face today: low-probability events that produce
high consequences. In other words, the chance that such a major
disaster is going to happen is low, but yet when it does, the
consequences are tremendous, as we are seeing this very day.
What challenges do MMS and the Coast Guard as well face
when trying to get safety regulations through the regulatory
review process and the cost-benefit test that is imposed by
OMB?
Ms. Birnbaum. I, personally, don't know an occasion where
OMB has interfered with our ability to adopt a safety
regulation.
Mr. Rahall. Really?
Ms. Birnbaum. Not in my experience. I've been here for 10
months, but not in my experience.
Mr. Rahall. All right. Coast Guard.
Admiral Salerno. Well, sir, we do have the obligation to
conduct that cost-benefit analysis, part of an overall economic
analysis, and that's very challenging and very rigorous. I
would not say that they have held up regulations. I'm sure we
can cite an example of that. I can't think of one offhand, but
it does require a lot of in-depth analysis. It is a very time-
consuming part of the process, yes, sir.
Mr. Rahall. Ms. Birnbaum, let me ask you--granted, you've
only been there 10 months. What's your knowledge of the
previous administration or your previous--your predecessors?
Ms. Birnbaum. I am actually not familiar with any occasion
when OMB has held up safety regulations, but I do not know
whether that might have occurred in a previous administration.
I simply don't know.
Mr. Rahall. OK. Although the Deepwater Horizon was
registered in the Republic of the Marshall Islands, Captain
Thomas Heinan, the Deputy Commissioner of Maritime Affairs with
the Republic of the Marshall Islands, is reported to have
testified before the joint MMS-Coast Guard panel examining this
accident that the RMI, as the flag state, did not inspect the
drilling equipment and systems--I believe we've gone over
this--on the Deepwater Horizon. He reportedly indicated that
such inspections are left up to MMS.
How often does MMS inspect these drilling operations on
MODUs? How long do such inspections take? How many MMS
personnel are involved?
Ms. Birnbaum. MMS conducts inspections on drilling rigs on
a monthly basis. There's generally two inspectors on an
inspection. The inspections take several hours. They first
conduct a flyover. Then they review, as I mentioned previously,
all the documentation of tests and practices that are required
to go on on the rigs in between inspections, and then they
conduct a physical inspection of the rig to determine if there
are any dangerous conditions. If there is at that time, one of
the tests--whether it's a safety drill or whether it's a test
of the blowout preventer, they will observe that as well.
Mr. Rahall. OK. That concludes my questions.
Does the gentleman from Maryland have further questions?
Mr. Cummings. I don't have anything else, Mr. Chairman.
Mr. Rahall. OK. Well, except for one last--maybe this is a
comment, but I'll ask you anyway, Ms. Birnbaum.
Given this disaster in the gulf--and we're all aware of the
Secretary's recommendations--actually, the Executive Order as
of this afternoon--to break up your agency, is it a legitimate
question to ask whether leasing and safety policing are kind of
like oil and water; they just simply don't go together?
Ms. Birnbaum. As I said previously, I think the Secretary
has identified a real tension within the Outer Continental
Shelf Lands Act, and his conclusion that they should be split
up seems to be an appropriate one to avoid that problem.
Mr. Rahall. I'm sure we'll be going into that more next
week before my Committee.
Ms. Birnbaum. Thank you.
Admiral Neffenger. Mr. Chairman, may I make one correction
to an earlier statement?
Mr. Rahall. Sure.
Admiral Neffenger. I was asked by Mr. Coble how much longer
the emergency fund would last. It's actually 17 June at our
current rate of expenditure, so it's approximately 30 days, not
the 16 days I mentioned earlier.
Mr. Rahall. We appreciate that correction.
Mr. Cummings, do you have any further questions or
comments?
Mr. Cummings. I have nothing else. Thank you, Mr. Chairman.
Mr. Rahall. All right. If not, we thank you for your
patience and for the long afternoon with us.
Mr. Rahall. The Chair will call panel number 3 forward: Mr.
Larry Schweiger, president and CEO, National Wildlife
Federation, Reston, Virginia; Mr. Peter Gerica, Gerica Seafood,
New Orleans, Louisiana; Ms. Carys L. Mitchelmore, Ph.D.,
associate professor at the University of Maryland Center for
Environmental Science, Chesapeake Biological Laboratory,
Solomons, Maryland; and Ms. Nancy E. Kinner, Ph.D., codirector,
Coastal Response Research Center, University of New Hampshire,
Durham, New Hampshire.
Ladies and gentlemen, we do have your prepared testimony,
and it will be made part of the record as if actually read, and
you may proceed as you desire under Chairman Oberstar now.
Mr. Oberstar. [presiding.] Thank you, Chairman Rahall, for
substituting and carrying on the hearing while I was conducting
other Committee business.
I ask the witnesses to rise. Raise your right hand.
With regard to the testimony that you provide to the
Committee on Transportation and Infrastructure today and all
subsequent Committee communications regarding this hearing, do
you solemnly swear that you will tell the truth, the whole
truth and nothing but the truth, so help you God?
Thank you. You are sworn in.
We will now, as Mr. Rahall said, take your testimony, and
except for one witness for this panel who had to leave, that
testimony will be included in the record in full.
TESTIMONY OF LARRY SCHWEIGER, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, NATIONAL WILDLIFE FEDERATION, RESTON, VIRGINIA; PETE
GERICA, GERICA SEAFOOD, NEW ORLEANS, LOUISIANA; CARYS L.
MITCHELMORE, Ph.D., ASSOCIATE PROFESSOR, UNIVERSITY OF MARYLAND
CENTER FOR ENVIRONMENTAL SCIENCE, CHESAPEAKE BIOLOGICAL
LABORATORY, SOLOMONS, MARYLAND; AND NANCY E. KINNER, Ph.D.,
CODIRECTOR, COASTAL RESPONSE RESEARCH CENTER, UNIVERSITY OF NEW
HAMPSHIRE, DURHAM, NEW HAMPSHIRE
Mr. Schweiger. Thank you, Mr. Chairman, and a very special
thanks for the opportunity to speak today on behalf of the 4
million members and supporters of the National Wildlife
Federation.
First, let me extend my condolences to the families who
have lost loved ones and to those affected by this disaster.
Our thoughts and prayers are with them this day.
I recently spent 9 days in Venice, Louisiana, observing the
spill from the air and also from the water and visiting with
local fishermen and others. Last summer I visited the site of
the Exxon Valdez spill, and spent time in Prince William Sound
with scientists there.
I want to point out that today's circumstances show that
the spill in the Exxon Valdez continues to haunt the Prince
William Sound. About two-thirds of the species that were
monitored after the spill have not fully recovered, including
orca whales and the once abundant herring populations in the
Prince William Sound area.
By some scientific estimates today, BP has already spewed
more than twice the crude spilled by the Exxon Valdez. Yet BP
is treating the public estate with, I think, a cavalier
attitude by refusing to do proper testing to determine the size
of the underwater spread of the spill.
We appreciate today Lisa Jackson's comments, taking steps
to get better information to the public, and would urge more of
that approach in the days ahead.
The Gulf of Mexico is a crime scene, and the perpetrator
cannot be left to be in charge of assessing the damage or
controlling the data that flows to the public. In contrast to
the sudden impacts of the Exxon spill, the BP blowout is a
slow-motion catastrophe, gushing oil from the very depths of
the ocean floor beyond view of most cameras.
Make no mistake about this. This spill has the potential to
be far more devastating. The BP spill has created a toxic stew
that is spreading rapidly, and robbing the life-giving oxygen
from one of the world's most abundant fisheries, and
contaminating the home for an amazing array of marine life. Yet
yesterday Mr. Hayward claimed the overall environmental impact
of this will be very, very modest. I, frankly, believe that
Tony Hayward's grasp of the truth is very, very modest on this
point. He is choosing sound bites over sound science.
The gulf has more than 400 marine and coastal fisheries and
wildlife species at risk. An example of the threat they face:
Five species of sea turtles found in the gulf are federally
listed as endangered or threatened. Sea turtles are currently
encountering polluted waters. Oil imperils these turtles at
every stage of their life cycle. The Gulf Coast communities
will also be impacted for years to come. Crabs, oysters and
other seafood pump about $2.4 billion a year into the Gulf
Coast economy.
Already Federal authorities have temporarily banned
commercial and recreational fishing to 19 percent of the gulf
waters most affected by the spill, citing health concerns. In
Hopedale, Louisiana, where people are normally making their
living from the bounty of the sea, they are now standing in
unemployment lines.
The most significant damage will be to the ocean depths. To
date, BP has used nearly a half million gallons of chemical
dispersants that commingle and distribute throughout the water
column.
Birds are affected by this toxic stew because it
accumulates over time; it moves through the entire food chain,
and has an impact starting with the phytoplankton and
zooplankton to the top-level predators, such as fish-eating
birds.
Some laboratory studies have shown that dispersed oil is
more dangerous to marine life than is untreated oil. The
National Academy of Sciences warned 5 years ago that we don't
know the impact of mixing oil with chemical dispersants on a
wide scale, but testing that the Academy has suggested at the
time has never been completed. Now one of America's greatest
marine ecosystems has been turned into a vast chemical
experiment.
Today, the National Wildlife Federation joins with 10 other
conservation groups in writing President Obama to urge that the
Federal Government immediately take over environmental
monitoring, testing and public safety protection from BP. Too
much information is now in the hands of BP's many lawyers, and
too little is being disclosed to the affected public.
Congress, too, must act. The $75 million cap on liability
and the cap on punitive damages should be lifted. The
government must ensure that BP and other liable parties fulfill
their full legal and financial obligations to both the
ecosystem and to the communities damaged by this spill.
The BP spill is jeopardizing a region already on the brink
of collapse. The 3.4 million acres of marsh, swamps, forests,
and barrier islands in coastal Louisiana constitute the largest
wetland complex in the continental United States. However,
neglect and poor management by the Federal Government and
channels dug for oil and gas extraction have devastated the
Mississippi River Delta. We must invest in the restoration of
the Mississippi River Delta to restore the resilience to this
damaged fishery.
America is taking a greater and greater ecological risk and
is getting less and less oil. This disaster should make it
clear that Congress must pass real energy reform now that will
cut our dependence on oil in half. We must hold oil companies
and other corporations accountable for spills and also for
their carbon pollution, and create a path that takes us truly
beyond petroleum. This crisis in the gulf is not just about
making offshore oil platforms safer; it's about creating a
safer energy platform for America.
Thank you.
Mr. Oberstar. Thank you very much. I think your last
comment of making a safer energy platform really characterizes
what we are in pursuit of in this hearing, among other things.
Dr. Mitchelmore.
Ms. Mitchelmore. Good afternoon, Chairman Oberstar and
Members of the Committee.
I am Carys Mitchelmore. Thank you for inviting me to
discuss scientific issues concerning dispersant use. I am an
aquatic toxicologist, and have been researching the impacts of
pollutants, including oil and dispersants, on organisms for
over 15 years.
Unfortunate recent events in the gulf have brought to the
forefront issues pertaining to the impacts of oil. My testimony
today will focus on some effects and uncertainties regarding
dispersant use. Related to this, I'd like to stress two major
points: First, significant data gaps in understanding the
toxicity, the fate of dispersants and chemically dispersed oil
exist. Second, there are numerous reasons why the impact of
chemically dispersed oil in the environment may be
underestimated.
Dispersants containing solvents, surfactants and other
additives are used to redirect an oil slick. They do not remove
oil; they simply alter its chemical and physical properties,
changing where it goes, where it ends up and its potential
effects. They are used to protect organisms which contact the
surface slick and to protect sensitive shorelines from the
slick coming ashore. This protection is at the expense of
organisms residing in the water column and potentially those on
the sea floor. Dispersants break up oil into small droplets
that move down into the water, spreading in three dimensions
instead of two. Water column organisms normally exposed to only
dissolved oil constituents now face additional exposure to
dispersant and dispersed oil droplets.
Toxicological data feeds into the complex decisions
regarding the application of dispersants; however, limited
toxicological information exists to fully assess the risks to
organisms. Toxicity data, based on short-duration exposures and
the risk of death to organisms, are those that are most often
used to assess how toxic a chemical is and which species are
most at risk. Even using these simple tests, there is
conflicting scientific evidence on whether chemically dispersed
oil is more, equally or less toxic than oil.
Organisms can also be affected in ways other than death.
Dispersants and chemically dispersed oil can cause many
sublethal impacts, including reduced growth, reduced
reproduction, cardiac and metabolic problems, developmental
deformities, cancer, and changes in behavior. These subtle
endpoints can have huge consequences for populations, and
delayed effects may occur long after brief exposures. Some
species, like corals, are more sensitive than others.
Trade-off decisions between species are difficult if
toxicity data is not available for these or closely related
species. Data may also not be available for the vulnerable
early life stages of organisms. This is of concern as larval
life stages often inhabit the near-surface waters during
reproductive seasons where dispersed plumes are at their
highest concentration. Furthermore, traditional laboratory
tests can underestimate the toxicity of fish larvae and other
translucent organisms like corals. Natural sunlight can
interact with the oil taken up into organisms, thereby
increasing toxicity up to 50,000 times. This photo-enhanced
toxicity mechanism will increase the footprint of dispersed oil
effects.
Dispersants change how organisms are exposed to oil and may
facilitate the outtake and bioaccumulation of oil. It is what
dispersants do to the oil that often drives toxicity rather
than the inherent toxicity of the dispersant itself. Small oil
droplets are taken up by suspension feeders, such as mussels
and oysters. Zooplankton can mistake oil droplets for food.
Current models that predict oil spill effects often do not
take into account droplet exposure pathways. Phytoplankton and
zooplankton reside in surface waters where the plume is most
concentrated. These are essential components at the very base
of the food web. If these organisms are impacted, then higher
trophic-level organisms simply will not have enough food, and
will suffer reduced growth, reproductive output and eventually
death.
Little is known about the impact of dispersant application
near coral reefs. My recent experiments demonstrated that
corals were sensitive to low levels of dispersant and dispersed
oil. They displayed sublethal behavioral effects. There was a
narcotic response, resulting in the cessation of coral pulsing.
The corals bleached; ulcers were formed, and the tissues simply
started to break down. A month after low-dose, short-term
exposures, delayed effects and significant reductions in growth
were seen. They accumulated large amounts of oil, including
from the droplet phase.
In summary, Chairman Oberstar and fellow Representatives,
we face huge challenges to protect the health of our coastal
and oceanic ecosystems. With oil spills, this involves making
difficult trade-off decisions on what species to protect at the
expense of others. By using dispersants, we change how
organisms are exposed to oil; yet we do not fully understand
the implications of this. How are organisms exposed, and how do
we identify sensitive species sublethal effects and its impact
to the food webs?
The recent spill in the gulf has brought us into uncharted
territories, given the sheer volumes and duration of dispersant
used and its novel application of the seabed. Are the shoreline
habitats still the most at risk? With more information, we can
be better prepared to deal with such disasters. Increased
knowledge translates to better solutions. We need that
knowledge now.
Thank you.
Mr. Oberstar. Thank you very, very much--a very thoughtful,
well-prepared presentation.
Dr. Kinner.
Ms. Kinner. Thank you.
Chairman Oberstar and distinguished Members of the
Transportation and Infrastructure Committee, thank you for
giving me the opportunity to appear before you today. My name
is Nancy E. Kinner, and I am a professor of civil and
environmental engineering at the University of New Hampshire,
and am the UNH codirector of the Coastal Response Research
Center.
The center is a partnership between NOAA's Office of
Response and Restoration and the University of New Hampshire,
and acts as an independent, honest broker to oversee research
on oil spill response and restoration. It serves as a hub for
the oil spill response community, and educates the next
generation of oil spill researchers.
The center has developed several tools that are currently
being used in the Deepwater Horizon spill. One of those is the
Environmental Response Management Application, or ERMA, which
is being used to brief out all of the different parties
affiliated with the spill about the oil spill trajectories, the
realtime data, et cetera.
It is well documented that, throughout history, accidents
and failures lead to significant changes in engineering design
and public policy. The Exxon Valdez oil spill in 1989 was no
exception. It resulted in tough regulations aimed at reducing
the frequency and impact of oil spills, and prompted Congress
to pass the landmark Oil Pollution Act of 1990. Despite
advances in spill response made since the Exxon Valdez, a major
gap in our knowledge is understanding the link between the fate
of the oil and its biological and ecological effects.
The overarching goal of any oil spill response is to
protect organisms and to minimize damage to habitats and the
human activities associated with them. When oil surfaced after
the Deepwater Horizon blowout, many experts predicted that when
it reached the salt marshes, there would be an unprecedented
environmental disaster. The goal of the response became keeping
the oil offshore, using booms, skimmers and in situ burning.
However, wind and waves have necessitated the use of greater
than 600,000 gallons of dispersant on the water's surface and
now at a depth of 5,000 feet. That is four times the amount of
dispersant ever used in past history.
This response has prevented the images associated with the
Exxon Valdez spill of oiled animals and blackened shorelines;
however, questions abound about the impact of this approach. I
do not believe that anyone knows the answers to those
questions. There have been some scientific studies about
dispersant use, but there is relatively limited data, and some
of that does not withstand the rigors of peer review. None of
it addresses the magnitude and exposure of the Deepwater
Horizon spill.
Further compounding this is our incomplete knowledge of
deepwater ecosystems. Without this information it is impossible
to predict the potential recovery and how to do adequate
restoration. Only time and research will tell what the impacts
are to the natural resources, and how long it will take for the
gulf to recover.
When an oil spill occurs, we must be able to make difficult
decisions and trade-offs in a timely fashion to minimize the
impact. My fear is that, as in the wake of the Exxon Valdez,
the Deepwater Horizon spill will prompt a flurry of Federal
authorizations of research and oversight committees with little
actual funding appropriated to answer the fundamental questions
associated with response and restoration.
To accomplish this, I recommend first that we not neglect
funding fundamental scientific research. It is tempting to
direct all of the funds towards offshore drilling regulation
and improved oil spill clean-up technologies as if more
regulation and engineering will prevent all accidents and human
error. History tells us it will not. Therefore, it is
imperative that funding also be directed towards research that
helps us understand the fate and effects of the oil and how to
do more effective response and restoration.
Second, we must fund scientific research that is peer-
reviewed, transparent, scientifically robust, and
environmentally realistic. It should be carried out in
consultation with responders to ensure that it fits their
needs. Independent academic centers are the vehicles that can
best oversee the needed research so that results will be
respected by all stakeholders. NOAA realized this when it
created the Coastal Response Research Center, an example of the
type of independent academic research center needed to address
these questions.
Only by making science-based research a priority will we
have a better understanding of the fate and effects of oil
spills and how to respond and restore the environment to
minimize damage when--not if, but when--the next oil spill
occurs.
Thank you for giving me this opportunity to speak before
you today. I would be happy to answer any questions.
Mr. Oberstar. Very, very fine, splendid testimony. It seems
like we've saved the best for last.
Mr. Cummings.
Mr. Cummings. I'll be very brief, Mr. Chairman.
Mr. Oberstar. Take your time. We've got plenty of time
here. They've stayed all this time. I assume they want to
answer questions.
Mr. Cummings. The Environmental Protection Agency has made
a statement that dispersants generally are less toxic than oil,
and I was wondering, Dr. Mitchelmore, what does your research
show on that issue? In other words, the--do you understand the
question?
Ms. Mitchelmore. Yes.
Mr. Cummings. Oh, OK.
Ms. Mitchelmore. Yes, thank you, Representative.
That's a very interesting question, and currently the
scientific data that is out there right now is very
conflicting. There are studies out there that show that the
chemically dispersed oil is more, less or even equally toxic.
But one thing to keep in mind is the question you asked, which
is the toxicity of dispersant versus the toxicity of oil. Well,
dispersants aren't put out there.You know, they're not out
there by themselves.
Mr. Cummings. Right.
Ms. Mitchelmore. I mean, they're there to put on the oil,
so the question should be: Is the chemically dispersed oil more
toxic than the oil?
Mr. Cummings. Well, then answer that one.
Ms. Mitchelmore. OK. Well, again, there is a lot of
conflicting scientific evidence out there, and it depends on
the dispersant. It depends on the species that you're looking
at.
Mr. Cummings. I see.
Ms. Mitchelmore. It also depends on the life stage of the
species. To top all of that, it depends how long you've--the
concentration and the duration that those species have had from
exposure.
Mr. Cummings. Dr. Kinner.
Ms. Kinner. Yes, sir.
If I might add to that, I think one of the things that you
have to realize is that these studies are conflicting sometimes
because they are not done on an equal basis, so one of the
things that happens is that sometimes the actual concentrations
will not be measured during the exposure. It's what we call a
nominal exposure. You know what the concentration was at the
beginning of the experiment; you don't know whether that
concentration was maintained over the full, for instance, 48 to
96 hours. So that is the difficulty. When you start comparing
these studies, you are not comparing apples to apples. You are
comparing different concentrations over time, and you don't
even know it just because of the way these studies have been
conducted.
Mr. Cummings. Yes, Dr. Mitchelmore.
Ms. Mitchelmore. Yes, I'd like to add to that.
I concur with that. This is one of the difficulties in the
comparisons is that often experiments--they are carried out in
different ways, and there's two main types.
For example, there are ones that are comparing based on the
same amount of oil between your dispersed oil test and your oil
test, and then there's others that will put in an equal loading
of oil. So, of course, there's going to be more oil in the
chemically dispersed test because it's taking that oil up from
the surface into the--so the question is which should we be
comparing in terms of environmental relevance.
Mr. Cummings. Well, speaking of environmental relevance,
the standard premise for using chemical dispersants is to
reduce the likelihood that oil slicks will impact the
shoreline. However, it appears that oil has begun to make
landfall at numerous places in Louisiana. As a matter of fact,
when I was down there this weekend, they were talking about
some problems that they were beginning to see.
How does this fact impact the decisionmaking on the use of
dispersants? In other words, if chemically dispersed oil makes
landfall, would it have the same ecological impact as
nondispersant oil? I'm just curious.
Mr. Schweiger, you are welcome to kick in if you can.
Mr. Schweiger. Well, let me say, having spent 9 days on the
water there--and our staff are still there, monitoring things
as much as we can--that there is oil coming ashore at certain
places, but certainly, if there were no dispersants used at
all, we would see a lot more oil. I think, for example, on the
days that I was down there, we were getting 25- and 35-knot
winds off the water, and it would have pushed a lot of that oil
ashore had that dispersant not been used.
It really is a tough call. It's--you know, what do you want
to give up, your left arm or your right leg? Neither answer is
a particularly good one.
I think the scientists have pointed out accurately that we
don't have the kind of research, and that research was, in
fact, recommended several years ago, and it's not been properly
conducted. We don't have the information we need to have to
make a more informed and scientifically sound decision.
Mr. Cummings. Dr. Kinner.
Ms. Kinner. Yes, sir.
Back when the NRC released its report in 2005 questioning
the efficacy and effects of oil, we convened a group of
scientists representing a broad spectrum of the community, both
people from the NGOs, people from the oil companies, academia,
and State and Federal agencies, all primarily scientists, and
we actually put together and put out, which is available on our
Web site--and I have a copy here--of a whole research and
development needs document for looking at dispersed oil. We
also, subsequent to that, formed a dispersants working group,
and we've been trying to coordinate the research that has been
conducted to look at those various research topics.
About half of those topics have been looked at. Primarily
they've been looked at with respect to the efficacy of
dispersants; in other words, how much energy do you have to put
in to get them mixed in? How do you spray them on better? And
much less has gone into the issues of effects of those
dispersants, and that's primarily because the agencies that
would be interested in those kinds of questions don't have the
R&D funding.
Mr. Cummings. Mr. Chairman, just one last question.
Mr. Oberstar. Just go right ahead, please, please.
Mr. Cummings. You know, one of the things that struck me
down in Louisiana was I saw all the fishing boats--a lot of
fishing boats and shrimp boats tied up, which meant that folks
weren't doing their normal occupation, and I was saying to
myself, how does--I don't know whether this is in your
purview--how do folks determine when it's safe to fish; in
other words, to eat the fish? Does that come within your-all's
kind of research?
Ms. Kinner. We don't do research specifically on that. NOAA
does have a whole list of seafood safety guidelines that are
available.
Mr. Cummings. I see. OK. Because it seems to me--you know,
I would venture to guess that there are people who--you know,
they want to work. They want to make sure that they--they want
people to be safe who get the food, but at the same time,
they--you know, they want to work, and so--and they're used to
working, and so they may look out there, and they may not even
see any kind of sheen, because one of the things that they were
telling me is that it's not unusual for them to see tar balls
from time to time in normal circumstances. So I was just
wondering.
Ms. Kinner. Yes, sir. That is a really difficult question
even to judge how clean is clean----
Mr. Cummings. Yes.
Ms. Kinner. --just on a normal basis.
So, for example, there is a mussel watch program that has
been funded for many years, and one of the things they're
looking at when this question has come up about baseline data,
they are looking at the mussels now to see if the
concentrations of some of these contaminants have changed. But
you have to document that those contaminant concentrations have
changed in reference to this spill, and there is a lot of
baseline contamination there normally, so it is very difficult
to do, sir.
Mr. Cummings. Thank you very much, Mr. Chairman, for your
indulgence.
Mr. Oberstar. Very, very thoughtful questions, as always.
You always come well prepared.
Ms. Brown has arrived.
If you're ready, I'll acknowledge you at this time unless
you want to wait and gather your thoughts a little bit.
Ms. Brown of Florida. That's all right. I'm waiting for
someone.
Mr. Oberstar. I have a number of questions.
First, Dr. Kinner, I am in full agreement with your point--
several points about the funding of fundamental scientific
research, research that helps us understand the fate, behavior
and effects of emulsified, dispersed and submerged oil, and to
better predict spill models. Those things we need to do. It's
exactly right on; peer-reviewed, transparent, scientific
research and consultation with responders, developing--what we
need, I think, is a baseline of natural resource damage
information.
The real question is: How do you collect it? Who should be
the entities that collect this information?
I harken back to Exxon Valdez. A good deal of information
was, indeed, collected, gathered in house, and not shared with
the scientific community, so I don't want to see that situation
repeated. I think we could create a scientific panel--we, that
is, the responsible Federal Government agencies--and fund it
out of the Oil Spill Liability Trust Fund, which then could be
billed back to BP, and they would--under the law, they'd be
required to cover that cost by paying into the trust fund.
How would you envision creating--or what type of
commission--what would be its constituents and its mission?
Ms. Kinner. Yes, sir.
Let me just tell you what I was doing when this spill
occurred. Our center was hosting a workshop in Anchorage,
Alaska, and that workshop, which had been in the planning for
many months, was actually a workshop to look at how natural
resource damage assessment should be conducted in the Arctic,
because we know, again, that it's when a spill occurs, not if
it's going to occur.
So what we did, sir, is typical of the way we approach
these things. The University of New Hampshire does not actually
conduct the research. We are basically an honest broker. So if
money is given to us, we run a National Science Foundation-
like, open research type of process, and then we hold these
working groups and workshops, and what we try to do is bring
all the stakeholders together, because when you have an NRDA, a
Natural Resource Damage Assessment, you've got to have all the
parties at the table. By law you have to have the responsible
party. You have to have the States. You have to have the
Federal agencies.
So what we did was we had this workshop up there where we
had breakout groups, et cetera, thinking about what kind of
data is it that we need to collect to have a successful NRDA.
Of course, the problem is legion in the Arctic, because we
don't even understand the basic ecosystems there, and it's very
difficult to collect the data, but we are thinking about how to
do it and came up with a bunch of guidelines that would help us
try to form that initial database.
One of the things you can do, sir, if I might just add one
other thing, is that if you don't have a baseline, you can try
and get--though it's not the best, you can try and get a
background site that you can use as a control--OK--versus the
site where the contamination exists. That's not desirable, but
in some cases it's the method that has to be approached.
Fortunately, in the case of the gulf, we have a lot of data
that has been ongoing and being taken there by many of the
existing universities and agencies.
Mr. Oberstar. Well, thank you for those thoughts.
Dr. Mitchelmore and Mr. Schweiger, could you comment on
that approach and on the general question of how to create such
a scientific panel and of whom it would be composed?
Ms. Mitchelmore. I think Dr. Kinner eloquently explained
it. I would agree with all of those comments.
The main issue is we are lacking a lot of basic knowledge
on the fate and the effects of oil and oil spill dispersants.
Mr. Schweiger. Let me say that last summer I was in Cordova
and witnessed the loss of the canneries now 20-plus years after
that spill. We need to determine adequately the actual damage
done to the natural resources and its impact on existing
communities and find a way to properly quantify that over time
so that the responsible parties might actually help reimburse
that loss.
I think one of the great lessons out of the Exxon Valdez
spill is that the fishermen there were paid 7 to, I think, 12
percent on the dollar that they lost, and their lives were
ruined, their communities were disrupted. And we should not
have that happen again, particularly to the people in the gulf
and whatever other places this might eventually affect before
it's over.
Mr. Oberstar. Congressman Young was very forceful in
stating that very case, that the fishermen in the end got very
little out of the settlement.
Mr. Schweiger. Exactly. Part of it was we did not have the
information to make the stronger case that they needed. So I
think the scientific information that underpins any case going
forward to create a clear painting of what they are actually
responsible for--we heard today that they are willing to pay
for legitimate claims, but if you don't have scientific
documentation, you can't have a legitimate claim.
Mr. Oberstar. A ``legitimate claim'' is a matter that I
felt the BP and Transocean didn't adequately define, so I
spelled it out from the provisions of the act.
Is there any information on whether the oil is better left,
from an environmental standpoint, in the open water than
washing ashore in the marshlands where there might be
ecosystems there and microorganisms, bacteria, that could work
on it and devour it? Is there any information in the scientific
literature on that?
Associated with it, will oil in time, after it agglomerates
with other particles in the ocean water--will it settle to the
bottom? Will it just continue to float?
I remember in that context Thor Heyerdahl testifying in
this Committee room--that seems like 40 years ago--about
crossing the Pacific in Ra II and noting that they were going
at about 3 to 4 miles an hour on that raft to imitate or to
replicate what the Polynesians might have done to move from one
place in the Pacific to another. He said, we were moving just
slightly ahead of the tar balls from oil discharge and diesel
discharges from oceangoing vessels.
So, one, does this eventually settle to the ground? Does it
float interminably in the ocean? Are we better off in the
water, or at some point does it all come ashore? Does it settle
to the bottom?
Ms. Kinner. Mr. Chairman, I think, in answer to your first
question, the difference here that we are seeing is that the
flow keeps coming. So, when one makes an assessment about
dispersant use and the trade-off of dispersant use versus
impacting a salt marsh, one is usually making a finite
decision. In other words, there is a finite amount of oil
coming out of a ship. It's going to be stopped, et cetera.
We're trying to keep it off the shoreline.
I think the difference here is that we are talking about a
very large amount of oil coming continuously out of the source,
and so we have added--or in this particular case there has been
a very large amount of dispersant added. We have never seen
this not only in the U.S., but worldwide, in a very restricted
area.
So, if you look, for instance, at the loop current that is
supposed to come up in there, and you look at what's happening
to the currents in that general area, a lot of material is
potentially staying in that area. That makes for a very
different kind of a long-term potential risk to those organisms
that I don't think anybody can assess.
Mr. Schweiger. The other side of that, if I might add--the
coastal wetlands of the Mississippi Delta are rather unique in
that they are very young. They are continuing to settle over
time. Added to that is the sea-level rise that we are
experiencing from climate change. These systems are in a race
for survival, and that race for survival involves two factors.
One is the sedimentation load that comes down the Mississippi
River that is deposited in these coastal areas, and the other
is the vegetative growth each year from the plant material that
is in those wetlands.
If we would allow--or if the oil would be allowed to flow
into these marshes and kill off the vegetative growth, I
suspect that you would see the loss of large numbers of
wetlands, and they would not reoccur because that loss of
vegetative growth may, in fact, cause the collapse of the
systems as we've seen in so many other areas throughout the
gulf region. So this is a different kind of thing because of
the need for the continual growth and rebuilding of those
wetlands in order to stay paced with the changes that are going
on in that region. So I'll just point that out as one of the
factors involved here.
Mr. Oberstar. Thank you.
Dr. Mitchelmore.
Ms. Mitchelmore. Mr. Chairman, as a toxicologist, the
things that we would need to know to assess risk would be the
basic concept of concentration. How much of the oil is there?
And the other factor would be duration. How long and how
concentrated is that, and for how big a spatial area?
The decision to use dispersants on an open ocean spill to
protect coastal shorelines, as Dr. Kinner mentioned, is
normally a surface oil slick. It's normally a one-time event,
and the dispersed oil plume does move down into three
dimensions, and at depths and at distances it dilutes to very
low concentrations. So immediately underneath that spill,
there's going to be pretty high concentrations which are
detrimental to those organisms, but that's a relatively
constrained area.
The issue with this is it's a continued plume. It's a
continued application of dispersants. We don't know the sheer
area, the concentration and duration the organisms are being
exposed to.
We also need to keep into mind that protecting the
shoreline organisms from oil by having these dispersants, we
could indirectly be affecting those organisms because we are
removing the food sources. I mean, there is a lot of
zooplankton, phytoplankton, a lot of food sources, out there in
the coastal and oceanic systems. If you are impacting a great
proportion of those, that is potentially reducing the food
sources for the coastal environment.
Thank you.
Mr. Oberstar. This thing gets more complicated and more
mystifying as we dig deeper.
The loop current, are there models of the movement of the
loop current? Has it been studied sufficiently so that we know
what it does? Does it move constantly in a direction? Does it
reverse course? And in that context, I just wonder whether any
studies are done, any attention is paid by the MMS and the
Coast Guard in licensing, permitting, approving these drill
rigs and the effect of a leak underwater that would get into
this current and where the current would take that oil. There
is no evidence that anyone has ever studied this issue.
Can you respond to that?
Mr. Schweiger. I am not aware of any study that would give
us any sense at this moment where this is going. I think there
is a lot of conjecture, how far it is going to reach and what
impacts it may have, for example, in Florida and other places.
It certainly is a huge concern for those of us who care about
nature.
Mr. Oberstar. The concern would be can it reach to the Gulf
Stream?
Mr. Schweiger. That is the expectation at this moment. But
I don't think that is based on any particular study or science,
it is based on what currently is unfolding before our eyes.
Mr. Oberstar. If so, then it becomes an international
global tragedy or disaster, whatever it comes out to be. The
Gulf Stream is going to take whatever is in it at three to four
miles an hour all the way to Iceland.
Ms. Kinner. Mr. Chairman, I think actually there is quite a
bit of modeling that goes on with respect to the loop current,
and actually the Gulf is one of the areas in the U.S. that we
have a lot of buoys that are out there giving information,
real-time information, as to what the currents are at different
depths, et cetera. Now, it isn't completely instrumented, but
there are quite a number of those, and there are three-
dimensional models that have been set up.
So there is the loop current. And if you have actually been
monitoring it, sir, you can actually see that the loop current
has been moving. And so there are some people that actually
study this quite a bit.
So the question I think is genuine about when will the oil
and how does the oil interact with the loop current. But there
are the modelers that are looking at this. I think what we need
are better and three-dimensional models that actually go right
from the physical oceanography concepts to the biological
endpoints. You have got to link those up, because that is where
the rubber hits the road, sir.
Mr. Oberstar. That is right on. There is an underlying
assumption that the oil comes from the pipe and it all surges
to the surface, but in our overflight of the spill area with
the Coast Guard aircraft, it seemed to me that there is a
stratification at various levels. There is oil contained at
various levels within the water column, and given the
temperature, 30 degrees or so at 5,000-foot depth, it is
entirely reasonable that that cold water would retain oil in
some fashion at some stratification, although if it then gets
caught in the loop current then who knows where its ultimate
distribution will be. There has been no research on it. We just
don't know those things.
Ms. Kinner. Yes, sir, I think that is a problem. When you
look at the water column, there is basically an upper layer,
which the distance of that upper mixed layer is a function of
wind and all sorts of things, and that can go anywhere from
maybe 400 to 900 feet down. Below that, from about 900 or 1,000
feet down to the bottom, that is an area that is very, very
different in its nature, as you pointed out, sir, and there is
evidence to suggest that not all that oil is rising to the
surface. And its fate in that deepwater ecosystem is something
that we don't understand the deepwater ecosystems all that
well, and its fate at the colder temperatures, et cetera, is
problematic. We don't really know, sir. And we certainly don't
know when we are adding dispersants to it.
Mr. Oberstar. And further, and then I will call on Ms.
Brown, the dispersants, there are at least 15 different types
that are listed with the Environmental Protection Agency.
Corexit, which I discussed with Dr. Earle, is a kerosene-based
substance, and Dispersit, a different commercial name, is
water-based.
The Dispersit, from information provided by EPA, is less
toxic, more effective in its absorbency and is lower cost,
whereas the kerosene-based is considerably higher cost and has
less effect on the oil. There are three columns; average crude
oil, South Louisiana crude, and the third is Prudhoe Bay crude
oil. It is less effective compared to Dispersit.
Further questions: Have there been any toxicological
studies, Dr. Mitchelmore, on ocean organisms, microorganisms, a
higher level of biota and fauna? What are the known effects of
these dispersants? And one of those I cited earlier was toxic
to your skin, to your breathing, to red blood cells in humans.
What is the effect on water-borne organisms?
Ms. Mitchelmore. Yes, Mr. Chairman, you just brought up a
huge can of worms there for a toxicologist.
One of the first points I would like to make is that in the
table that you are referring to there, dispersants, I mean the
first thing you look at with a dispersant is its effectiveness.
You are not going to put it out there if it is not effective to
some extent. And you brought up that Dispersit is 100 percent
effective, compared to the Corexits, which are less effective.
The question is though for the sub-surface plume is that
this is a different temperature than the temperatures that you
would test its effectiveness at. I am not sure what that table
is, but it is probably around 20 degrees. If you were to test
that at 4 degrees, you might get a different answer.
Indeed, for the Corexit 9500 formulation, that was
formulated to be able to work much more better than its
predecessor, the 9527, at these low temperatures because of the
Exxon Valdez.
So getting back to your question on toxicity, also keep in
mind these are just two standard test organisms that are used
in toxicity test. There is the lava fish and there is the mysid
shrimp. Even looking in that table you can see there are a lot
of differences with the dispersants.
For example, with the Corexit 9500, it is indeed the most
toxic on that list to the fish, but it is the seventh toxic to
the shrimp. And then if you look at the Corexit 9527, it is
fourth for the fish and 10th for the shrimp. And, again, these
are just two species. It is an acute toxicity test, you get
very limited data with that.
The question is, the Corexits are the most studied, and
there is even limited information with those when you are
looking at chronic sublethal effects. And the Dispersit
literature is even more limited. There is very little data out
there looking at the sublethal effects through a range of
species and also their life stages to these dispersants.
Mr. Oberstar. Well, thank you very much. That is very
thorough, and I am sure much more could be added to your
answer.
Ms. Brown.
Ms. Brown of Florida. Mr. Chairman, I want to thank you so
much for having this timely hearing, and I am looking forward
to the field hearings, because I think this is a situation
where we need to take our Committee on the road.
I don't think in the 18 years I have been in Congress that
a situation, and would you please put back up my beautiful
State of Florida, the map. I want to see it up there.
I don't think that anything has happened--yes, that is
Florida--that will deal with destroying our sensitive
environment, our economy. Just a shift in the wind could
devastate not only Florida, but the entire United States, just
a shift in the wind.
Florida tourism, I just recently met with the people from
the fishing industry and they are very concerned about not just
the fish, the oysters, and this is the spawning season.
Can you give me some input, Mr. Schweiger, as to what is
our plan of action, what can we do at this point?
Recently, as late as yesterday, British Petroleum released
the following statement saying that wildlife activity, one
additional report of impact on wildlife was received, bringing
the total to 36. I think that is ludicrous. Can you respond to
that?
Mr. Schweiger. Yes. Unfortunately, if much more serious
prior planning was conducted about the potential of a spill, I
think there was a general assumption that such large spills
were so low in their probability that there wasn't a lot of
prior planning. For example, having 1 million feet of boom
material that frankly doesn't do the job is not adequate for a
spill of this magnitude.
I witnessed BP trying to train fishermen to go out and
place boom and to clean up toxic materials 2 weeks after the
spill had occurred. It is like having your house on fire and
organizing a volunteer fire department while your house is
burning. This is not good planning, and I think it is a pattern
of what has happened in this region. So, at this stage there is
not a lot of clear answers because we don't have good
underpinning, we don't have a good plan in place. So we are
more or less going to have to deal with the circumstances as we
know them.
I would also suggest that the more we know about how much
oil is actually coming out of that pipe today and how much has
come out over the last many days, the better handle we will
have on knowing what we are going to have to deal with in the
future. We don't have a good number right now. I don't trust
the numbers we have.
Ms. Brown of Florida. The numbers, they are saying between
5,000 and maybe 100,000 per day, five times as much in 5 days
as what happened until Alaska. So we don't have a handle on how
much oil, we don't have a handle on what it is going to cost
the wildlife, the ecosystem.
Mr. Schweiger. We also don't know, to my knowledge, at this
point how dispersed this oil is and its possible course, how
much of it is going to get, for example, into the Keys. I think
there are some projections coming out today about where it
might land.
But I think a lot of this information should have been
thought out in the past, you know, what happens if oil gets
into the loop current, how does that play over time. We are
just learning that as we go, I think. While the modeling is
there for the loop itself, it is not there for oil of this
scale and scope. And we are going to have to make some
decisions--I mean, I think the government has to make some
decisions on the fly. I would urge them to be more in control,
and not depend on BP for calling the shots in some of these
decisions that are being made, and to take whatever corrective
action that we possibly can.
Ms. Brown of Florida. I guess the Congress has a
responsibility, and obviously we have not had the leadership in
this area as far as ensuring that the system was in place. I
understand that Norway and some of the other European
countries, Canada, have other systems that would have had
another device that would have cost a little bit more, but it
would have been another safety mechanism.
Mr. Schweiger. Can I respond to that? I think that one of
the most important things Congress can do is take the cap off
the liability. By doing that, you are going to bring the full
effect of the problem back to the company that caused it, and I
think you see put in place more effective prevention measures,
more effective response measures. Because if you don't have a
limit, you are going to understand the cost in a very different
framework than you do today. I suspect that by capping the
liability we are allowing activities and decisions to be made
in a very different way.
Ms. Brown of Florida. I agree with you. I understand the
cap is what, $79 million. But, of course, they made $3 billion
in the first quarter. So I just know that we as Members of
Congress are not going to let the taxpayers get stuck with this
bill. So I do know that regardless of what we need to do,
whether making it retroactive, but the taxpayers should not
have to foot this bill. There is no question in my mind.
Anyone else want to respond?
Ms. Kinner. Yes, Representative Brown. I think it is
important to understand that if we went back just 3 months ago
and you were considering your budget priorities, I suspect that
your budget priorities would not have been to support the Coast
Guard any more in its budget for oil spill response than they
had had in the past. And I suspect that the reason that you
wouldn't have done that is because we haven't had a major spill
in this country of this magnitude in 20 years, and in fact you
have to go back even further to find a blowout.
So I know that it is a difficult climate for finances, and
I am not trying to justify whether BP should be doing more or
less. But I think that there is some complicity in all of this
on all of our parts for lulling ourselves into thinking that
this couldn't happen. But I submit to you that it can happen,
and that it will happen again, because it is impossible to make
it not happen with human error, et cetera.
Ms. Brown of Florida. Well, I have been one of the
advocates in the past of not--you know, the Coast Guard was the
first agency to respond after 9/11, and they are on the ground.
I have a problem that we have not given them the resources they
need to do the job. But it shouldn't be the resources
afterwards, you are correct. It should be the resources not
just to, for example, when they explain how they were doing the
testing, there was no one there to verify. So you say you test,
but who is there for verification? If you are the person that
is responsible and then there is no one checking you, then the
checks and balances is not there.
Ronald Reagan said trust but verify. So I would agree with
former President Reagan on that. But we definitely made need to
make sure that the Coast Guard has the resources not just to
verify, but also we need more supervision. We cannot leave it
just to the industry.
And I agree, we need to take the cap off. In this one case,
I am sure that this company will have to pay the entire cost.
But the cost for how long? Because this cleanup will go on for
years and regardless of what the Congressman said earlier
today, Alaska has not been cleaned up 20-plus years later. The
last time I went there it was not cleaned up. And, you know, it
seems to be like a foregone conclusion that we are going to
drill, baby, drill.
Well, this has been a disaster, but it has also been a
wake-up call for Members of Congress and for the public. They
have an opportunity to weigh in.
Mr. Chairman, I want to thank you again for this hearing,
and I am looking forward to the field hearing, because so much
of my beautiful State is at risk as we speak here today.
Mr. Oberstar. Thank you very much for your passionate,
engaged, committed participation, as always. We are grateful
for your contribution to the work of the Committee in a very
forceful way.
You said, Dr. Kinner, that there was sort of a lulling
effect. I find that that happens when we have agencies in the
private sector that are doing permitting and have
responsibility for oversight and we leave it to them and expect
them to do their job. In this case, they clearly weren't doing
their job.
We allowed the private sector to establish standards by the
Petroleum Institute, to build to those standards, to certify
that they have done the right job, and then to operate the
systems without intervening oversight. We found that was a
mistake in aviation, we found it was a mistake in the Coast
Guard contracting program, and it is a mistake in this oil
production sector. That is a structural failure of our
governmental system.
We found that there was much too cozy a relationship
between the FAA and the airlines whose maintenance it is
charged with overseeing. We found that it was a failure of the
Coast Guard to oversee the construction of vessels to contract
specifications, to the designs of naval architects. They did
not do it. They allowed the private sector to self-certify, and
on the first vessel put out to sea, the Matagorda, of these
extended Coast Guard cutters, it cracked in exactly the three
places that a naval architect of the U.S. Navy said it would
crack.
So, we have had to go back and refocus the FAA on its
safety responsibility, refocus the Coast Guard on its safety
responsibility. Now the Mineral Management Service, they have
to separate promotion and regulation. And then we have to find
a way to join the Coast Guard and Minerals Management Service
so that they are either together doing the above-water rig and
the below water drilling operation, or one or the other is
doing it. But you can't have it bifurcated and nobody
overseeing the process.
There are a great many lessons to be learned, and high on
that list of lessons to be learned are those about the water
environment. So we don't know, as Dr. Earle said earlier, what
is happening on the bottom of the Gulf. There hasn't been any
exploration of it. We know more about what is happening on the
Moon and on Mars than in the Challenger Deep in the Marianas
Trench. That is unacceptable.
Ms. Kinner. Mr. Chairman, I agree with you 100 percent.
What I was referring to with Representative Brown is the amount
of funding that is put into research and development with
respect to oil spill response, sir, not with response to
regulation and the relationship----
Mr. Oberstar. That too.
Ms. Kinner. That has been sorely lacking. So the reason we
don't know much about dispersants is NOAA has had virtually no
money to put into that research.
Ms. Mitchelmore. I would like to add to that. I was one of
the coauthors on the NLC 2005 oil spill, I think it is the FX
book, and that was funded by many of the agencies that you have
been talking about.
What was interesting in carrying out the review of the
available literature in dispersant efficacy and effects, was
many of the recommendations we came up with were those
recommendations that were made in the previous NLC report in
1989. Within 16 years, still very little progress had been made
to address some of those basic, fundamental questions that were
missing concerning the fate and effects of dispersants. Many of
those recommendations have been made again and again, very
limited information has come out since that report, and it is
simply the lack of resources available to look at some of these
fundamental and basic questions regarding dispersant effects
and efficacy and its fate.
Mr. Oberstar. Thank you. Complimentary thoughts. Our
Committee colleague, Congressman Young, asks whether this panel
would support legislation to set aside an annual amount from
the Oil Spill Liability Trust Fund to support research under
the Oil Pollution Act. Do you think that would be a good idea?
Mr. Schweiger. We would certainly support that. I think
that is absolutely appropriate. The lack of basic science in
this matter is just quite disturbing to all of us who are
looking at these questions and trying to understand today what
we may be facing tomorrow. We just simply don't have enough
factual information to make prudent decisions.
Mr. Oberstar. I think the idea is a very intriguing one. We
have a dedicated revenue stream to apply to the research, which
gets its funding by fits and starts, by this year's budget
cutbacks or next year's budget largesse, and a continuing
revenue stream, as we have with the Highway Trust Fund and the
Aviation Trust Fund would be--let me ask the other members of
the panel, Dr. Mitchelmore, Dr. Kinner.
Ms. Mitchelmore. Mr. Chairman, I think that would be very
appropriate. Resources do need to be made available to
understand some of these very basic fundamental questions. Some
of the decisions that dispersant application revolve around are
some that really conflicting scientific data still exists for.
For example, is the dispersed oil droplets, those droplets
with the increased surface volume ratio are said to be more
biodegradable. But there is research out there, and again this
could be experimentally designed differences as well, but there
are some showing that dispersants are toxic to bacteria, some
that are showing that it doesn't biodegrade as fast. Then some
other basic concepts are we are protecting the birds from going
through the oil slick. Well, there were some studies suggesting
that dispersed oil can also affect the wetability of fur and
feathers. So, again, we are basing some of these just very
basic concepts on areas that still lack adequate research.
Ms. Kinner. Yes, Mr. Chairman, I think that is a great
idea. Of course, MMS and Coast Guard already get money out of
the Oil Spill Liability Trust Fund, some of which does go to
research. NOAA does not get any money out of the Liability
Trust Fund, so that is problematic.
But I do think, sir, that if that happens, one of the
issues that has to be clear to OMB is they don't get scored on
that money. So, in other words, if that money comes in for R&D,
does their regular budget at OR&R, for example, get cut back to
actually have responders.
Mr. Oberstar. Very good thoughts. Very important. Well,
there are a number of issues which this panel raised on which
we need further information, the duration of dispersants in the
water column, their toxicity on the biota of the Gulf, the
longevity of those dispersants in the water column, the effect
of oil on the marshlands, the water column, the ocean bottom
itself.
If you think of other things, send those in to us, and we
will be sure that they are entered into the record and into the
further deliberations that will continue on this issue.
This will conclude our hearing. I want to thank this panel
and all of the preceding panelists for their contributions, for
the enlightenment, but also for the further questions raised.
There is so much yet to be known, more that we do not know and
do not understand. With your guidance, we will continue this
inquiry.
Thank you very much. The Committee is adjourned.
[Whereupon, at 7:00 p.m., the committee was adjourned.]
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