Skip to main content

tv   Today in Washington  CSPAN  June 3, 2011 6:00am-9:00am EDT

6:00 am
consent that the staff report entitled the bp oil spill recovery effort, the legacy of choices made by the obama administration be entered into the record. without objection, so ordered. i would also note for the minority that after the break, it's my intention to have a committee vote to make this a committee report. so, during this intervening period, the minority has comments, questions, anything to add, the final report will reflect comments by the minority so that it is, in fact, a bipartisan report. the gentleman is recognized. >> it's my understanding, according to the committee rules, we have to have three days before committee vote. >> that's correct. i'm giving you more than 10 days notice. >> i thought you said today? >> no, no. what i'm doing is i asked and got permission to enter this
6:01 am
into the record. i'm going to elevate it to the committee report after the minority has entered their comments and any suggestions are made. right now it's the basis for a committee report. it is to make sure that your staff working on the same set of facts, edit, make changes, suggest changes, make any other comments so that it becomes a joint report. and i wanted to reflect both majority and minority opinion. >> when will that vote be? >> it will be after the break at the earliest. so it is more than 10 days. i'm just noticing it for the future. >> okay. >> and with that i would like to recognize the former chairman of both committee, the general from indiana, mr. burton, for his i've been opening, or five minute questions. >> welcome, governor barbour, it's great to see you again. it looks like you have a good looking articulate young man to
6:02 am
congress. >> it won't take them long to get greater. >> that will come in time if he sticks around this place. first of all, let me say i have been to the gulf coast, not mississippi, but i will come, and i walked on the beach is down there. and also on beaches i believe on the east coast of florida. and i saw these tarballs. this was when there was no oilwell problem. and so, when you just said that 1.4 million of barrels of oil leak out natural feature, i hope everybody in the country knows that. because that amount coming out naturally doesn't cause any kind of problem. and that ought to be included in the discussion when we talk about deepwater drilling in the gulf. you also said that 85%, there's been an 85% loss in drilling
6:03 am
permits. that is tragic, especially in view of the fact that we just sent $2 billion down to brazil so that they can go in deepwater. and we can't. and it really surprise me but i think you said there were 31,000 wells in the last 50 years down there, and it's been done, drilled without any real big problems. and yet, right now this administration is stopping us from doing here and we're sending billions and billions and billions of dollars over to the middle east, to countries that don't like us very much, and that really, really bothers me. and i hope that you are able to benefit go on a crusade to tell the story that you told us today, because i think the american people need to know that. we have the ability to move rapidly towards energy independence over the next decade, if we use natural gas and oil and she'll call and be
6:04 am
converted into coal. we are not doing any of it. and as a result, this country is really suffering. and i really, sympathize with you on the impact, the fiscal impact that was going on that took place down in the gulf during the terrible crisis. and i want to say one more thing about the media. i really sympathize with you in this drumbeat that went on and on and on over a month or two months showing the problems that were created down there, which obviously had a devastating impact on you and your economy. and i hope that any future when these kinds of tragedies occur, the media will not sensationalize it to the degree that it hurts economies like that in the gulf states. i just had a couple of questions. you said that the stafford act could have been handled -- could've been handled much better under the stafford act. can you elaborate -- you may
6:05 am
have mentioned it in your opening remarks, but what could have been done that would've been better to help manage the problem in the gulf if you as governor and the and the governor of louisiana did have the control that you wanted? >> two big reasons the stafford act being preferable to state a local governments, we are used to it. we deal with it all the time. i think when you have some of the local officials later today, we've all had to work on the stafford act because that's what we do hurricanes, tornadoes, floods, et cetera. for me specifically as governor, the stafford act expressly says that the efforts of the federal government of the stafford act are to supplement the state efforts are under the oil pollution act there was an impression that the federal government was in charge of the unified command, and they told everybody what to do. and that not only is contrary to the u.s. constitution, bad law, but it also didn't work. i mean, our people were much better able to do things than
6:06 am
the federal people were able to do. >> let me just speak the stafford act is a purpose -- perfect adult. >> have the federal government recognize your jurisdiction under the stafford act, tell me how that would have been more of a positive situation or solution for your. >> where it really became very apparent, we have a defense plan to defend our shores from oil. different from louisiana because we are 100 miles away. we recruited 1100 quote vessels of opportunity of those are people who rated their boats to, to put them out of session for picket lines to try to stop the oil south of the barrier islands, in the same. so we had actually a five layered defense. we found out weeks into that the coast guard had no way of managing that. they had approved the plan.
6:07 am
they had no way of managing that. we literally sent people to wal-mart to buy radios. we had a situation where our air national guard, starting 4:00 every morning, flew infrared photography of the whole sound and south of the sound to find the oil. the coast guard had no way to tell the vessels of opportunity where to go. we had to set up a whole communication system, and command-and-control system, which we did not do for weeks because we thought the coast guard knew more about this than we did. but it turned out that we had to set up the comedic haitian system. we had to set up the command-and-control system. and frankly, they were cooperative when it got to it. but should american to that. we were lucky that this disaster was manageable enough that you
6:08 am
could make those kinds of mistakes and still clean them up. >> thank you, mr. chairman. thank you, governor. >> would the gentleman yield his remaining time? >> i would be happy to. >> i'm sorry, i was over. >> we do not yield the other side of the remaining time. without i recognize the gentlelady from new york for five minutes. >> i thank the chairman for recognizing me, and welcome, governor. welcome representative. it's very good to see you again. thank you for being here. governor, the government accountability office, the nonpartisan bipartisan unit issued, and i believe they will be testifying later on today on panel, they issued several reports warning that taxpayers are not receiving a just or fair return for oil and gas in the gulf of mexico.
6:09 am
specifically, the gao reports the fault of these so-called royalties released granted by congress is a mid 1990s when gas and oil companies were not doing as well as they are today, but they encourage additional exploration of the time when oil and gas were lower. and under some of these leases, oil companies pay absolutely no royalties at all to the american people when they drill on federal land. and this is oil that is owned by the american people. it is on federal land. usually there's a royalty paid back to the government to the taxpayers, but here they pay absolutely nothing back. and i would like to quote from the report. special lower royalty rates referred to as royalty relief granted on leases issued in the deep water areas north of mexico
6:10 am
from 1996 to 2000, appeared in which oil and gas prices and industry profit were much lower than they are today, could result in between 21 billion, and $53 billion in lost revenue to the american people. to the federal government, compared to what they would have received without these provisions. end quote. our chairman in a rare expression of bipartisan support, i want to compliment you, mr. ice, for the significant work that you've done in this area. and on this issue. you had call to an end to this october 7, 2009, chairman issa issued a staff report warning that actual shortfalls to u.s. taxpayers could be much, much larger, and this is what his report said, and i quote,
6:11 am
depending upon the market price of oil and natural gas, the total cost of forgoing royalties could total nearly $80 billion. oil and gas royalty payments represent one of the countries largest nontax sources of revenue. taxpayers must get every cent that is owed to them, end quote. and i agree completely with chairman issa. and governor, do you agree with chairman issa on this state of? >> man, i can say that we are very familiar with this in that for more than 50 years the rest of the country has been sucking the gulf drive and we get nothing. the period of time to talk about in the late '90s, all this production of the gulf of mexico and the states were paid nothing, zero, nothing. when you drill on government land in wyoming, wyoming gets some of the money.
6:12 am
but fortunately in the last administration, this was changed, and we're going to start on a little stairstep basis getting a little bit of the royalty, and ultimately may be about 2017 or something, the states will get a legitimate fair share of the royalty. so i am very sympathetic to the royalty owner, because we feel like we should be considered royalty owners, too. and that the federal taxpayer and the taxpayer of mississippi, both ought to be getting a fair royalty for the production of oil and gas. or if it's cold, on land or whatever, i think that is absolutely the case. but i hope you all will please understand we are only five states in the country that allow offshore towing, the other 45 ought to let us, five, to allow it. they ought to allow us
6:13 am
participate in royalty owners, to. >> the real royalty owner is the american taxpayer. so do you believe the taxpayer has a right to every cent that is owed to them under these leases, and that they should be completely corrected as the chairman said? >> and i believe the mississippi taxpayer should share in that when we are dealing in the waters that are mississippi waters and are part of the outer continental shelf that is recognized as mississippi. so i'm not arguing with your point about the federal taxpayers. i just want to make sure that the state taxpayers get treated as royalty owners in the five states that allow this. it's not fair for the other 45 states that burned the oil that we have taken out of our outer continental shelf and they get treated the same way we do. >> well, i must speak that was a yes. >> i must state for the record though when chairman markey are
6:14 am
ranking member markie has a bill on this that would corrected, and what came before congress early this year as an amendment, and several other amendments regretfully, chairman issa voted against it. and i feel the same as governor barbour, that they should be corrected, that the american taxpayer is entitled to the royalties for oil extracted from taxpayer owned federal and state owned property. and i hope that you will join with us in a bipartisan way to correct this going forward so that there is fair treatment to the states into the government, and basically to the american taxpayer. >> we now recognize the gentleman from oklahoma. >> i would like to yield my time back to the chairman. >> i thank the gentleman. congressman, you don't have to remain -- you are welcome to stay. you look good with the governor.
6:15 am
you always look good next to governor. that will look good. >> i thank you. governor, congresswoman maloney did make a valid point but i want to follow-up on your point too. today you're going to have an economic loss that will be unreimbursed as result of the bp oil spill, correct? >> no question of that. >> and so for the foreseeable future, if there were to be another one, would you potentially have another oil loss in which federal government was able to get fines, the federal government -- i don't think we collect royalties on what is built into the goal, but short of that, we will continue from that particular day, that's not a relief one, it's not covered by the clinton era contract failures. the fact is, you stand at risk without an ability to get any
6:16 am
premium on that risk in the gulf, is that correct? if it is outside -- welcome to. >> we are not compensated for what we do. >> so let me ask a straightforward question. to you believe that from this side, that we should look at legislation that provides sooner and more specific revenue sharing, based on the potential risk, in other words, effectively an insurance policy where you would have revenue, not for current expenditure, but for future expenditure, if you have another economic event like this? >> two things. there is legislation which pass i think in 2006 that is going to stairstep up, going to give the states a share and stairstep it up, and maybe by 2017 we -- >> i think you get 10% of the royalties. >> it will go up to maybe 35% or
6:17 am
something. but until that goes into effect, and i would urge y'all, put it into effect community, you know, that's what we would like to see. put into effect immediately. then we would have some compensation for the risk we take. right now the only way that i see that we can reasonably be compensated for the damage done to us is if you take the clean water act fines, and they're going to be clean water act fines potentially in the billions, and that the states that were affected be given a share of that, with enough flexibility that they can spend it to help their economy. that day not have to get the money and say, we're going to use all this money to clean up from the bp oil spill. bp has already paid the clip for the bp oil spill. our damage is economic damage, to tourism, to the seafood
6:18 am
industry, not that the seafood was hurt, just that nobody would buy it. they wouldn't let us finish fourth and and for the people work in the oil and gas industry, somebody mentioned a very sad thing that 11 people died on this oil rig. four of them were from mississippi. and this will, that gives you an idea of sort of a reference. we have a lot of people to work in this industry, and right now you know where they are? i went and visited the oil rigs 80 miles west of israel. i met two guys from mississippi who were working in that oil well in israel you have been working in the gulf of mexico the year before, and they had to leave because of the moratorium. >> we certainly have seen a lot of those rigs sail loft. let me ask you a follow-up question. you mentioned the immediate following, too much control by federal government in bp, but governor, doesn't that continue
6:19 am
-- doesn't that continue until today? is a bp still in the driver seat on compensation? arch on the backend ability to help your people? >> regardless -- i'm a recovering warrior, so i know that a judge has ruled that the gulf coast compensation facility, whatever it is called, that that is not true independent of bp. and that may legally be technically be right but i think they're trying to do a good job. we don't get many complaints in mississippi. they're doing something that is complicated. and i will say this about it. it is sure better than having to litigate all this where people wouldn't get their money for years and years and years, and the trial lawyers would get half the money. so, it is a long way from perfect, just like what i do a long way from perfect. but i think it is better than the alternative of litigation. and as i say, we have cases that
6:20 am
are typical cases where people are not satisfied, but we really don't get complaints that we've been paid mississippi counties, people have been paid about 340, $350 million. >> and a gentlelady from new york is left but i might note for the record that i still am trying to find a constitutional way to suggest for those flawed contracts that were signed, this committee held hearings much earlier on it, found that the oil companies thought they were going to be paying royalties were actually surprised when they found out in the contracts allow them not to. with that i would recognize the gentleman from maryland, the ranking member for five minutes. >> thank you, mr. chairman. governor barbour, there is in the animal kingdom down in disney world there is a saying over the animal kingdom that says this, it says we did not
6:21 am
inherit our environment from our ancestors. we borrow it from our children. and in that light, you know, i was reading a statement on a written statement, and it said, and i quote, the other major economic impact resulted from the moratorium. and i want to step away from broad generalities and focus on specific measures to prevent this kind of massive oil spill from ever happening again. everyone remembers bp's repeated failures to cap the well. it became clear to me that bp had no idea how to end this disaster. every week they would try a new strategy. but it was a complete trial and error fiasco. they tried to top it. i was down there when they're trying to build a top hat. i watch them doing it. .. is called nsl
6:22 am
2010 and are you familiar with that requirement? >> i'm not familiar with that specific requirement.
6:23 am
>> all right. well, let me read exactly what it says. it says each oil company must demonstrate -- and i quote this. that it has access to and can deploy surface and subsea containment resources that would be adequate to promptly respond to a blowout, end of quote. is that -- and so, governor, here's my question, do you think this specific safety measure should be repealed? >> congressman, superficially, that's a reasonable statement that you have just made. how it's enforced and regulated is something of which i'm ignorant. but what i do know is, we've had more than 31,000 wells drilled in the gulf of mexico in my life. this is the only time anything like this -- anything vaguely like this has ever happened. and when you consider the amount
6:24 am
of our domestic oil production that comes out of the gulf, and comes from offshore drilling elsewhere, when you consider the fact that we have an energy security, a military security and a national security issue in this country because we import way too much foreign oil including a lot from people who are not our friends, then i would not be in favor of anything that reduces the production of domestic oil. i think the risks are way too small compared to what you give up. >> so in other words, if this were to happen again, if we had 87 days of oil spewing out into our waters, you're saying that the risk of that far outweighs the economic situation? and i'm not trying to put words in our mouth. i want to understand you. >> i understand.
6:25 am
>> i'll tell you i saw what you're talking about. i saw the pelican. i saw -- i talked to the fishermen. i talked to the tourism people. i even talked to the industry people, a lot of them. and do you know what they said? and this is before we knew the full impact of it. they said you know what? we agree that we ought to have some kind of -- we should have the ability to -- and it should be proven ability to cap something like this before we even continue. >> and i think beyond that, congressman, it's very clear that this well blew out because normal standard procedures and protocols weren't followed. i don't think there's any question that corners were cut. i don't know whose fault it was. i don't know who the specific responsible party is. but i don't think there's any question that that was the cause of all this and that is why i say the risk in 1 out of 31,000 is worth taking when you're talking about something that's
6:26 am
so important to the economy of the united states of america. that's why i have that view. >> i understand. thank you. >> the gentleman from tennessee is recognized for five minutes >> thank you, mr. chairman. thank you governor barbour for being here. along the lines of the negative effects of stricter drilling regulations on the offshore industry, why don't we take a minute and have you expound on the effects that the bureau of ocean energy management revenue and enforcement has been issuing -- well, let me back up. the bureau of ocean energy management revenue enforcement has been issuing a great deal of new regulations affecting offshore drilling. have your constituents been in touch with you about these new rules? >> yes. >> and did they find them problematic? >> well, the people that talked to us don't know all the details
6:27 am
of the rules. all they know is that the regulatory efforts of the government are shutting down the gulf. have shut down the gulf. i mentioned earlier, i was in israel this winter, like in february, our offshore drilling rig -- two of the guys who were working on the rig were from mississippi. almost every american on that rig had been working in the gulf of mexico a year before. they had got run out of the gulf because of the moratorium and because of the belief, the perception, that the -- that it was going to be a long time before there was going to be drilling again in the gulf of mexico. that's what we get. people who have lost their jobs, kids who have lost their jobs, who are worried about -- who are worried about this. the service -- we have people who work offshore, but we also have significant service industries in our state that repair rigs that build service
6:28 am
boats, that work on boats and that. so it is a big industry in the gulf south. >> okay. let's talk a little bit about bp's actions during this spill and recovery. there were many officials and citizens that said bp played too large of a role in the spill response and the federal government should not have let him play that large of a role and that was a common criticism that we heard in the media of the spill. at any point during the disaster during the recovery phase did bp have too much of a say in the response? >> well, no question, bp add big say in their response. and they were paying for it. but i have to tell you, congressman, sometimes bp was easier to deal with than the government. that's just a fact of life that we learn. that sometimes the federal government is not the easiest business to deal with. everything we were asking for, they had to pay for. everything that we asked them to
6:29 am
do, they considered and almost every time they did it, where many times we would ask the federal government for something, like skimmers -- when we were trying to get skimmers, we thought the federal government was going to have to -- was supposed to have skimmers for us when the oil got close enough. it turns out we had to go get bp to give us the money to get some shipyards in mississippi to build the skimmers. so we'd have enough skimmers. so i'm not going to berate that part of the oil pollution act. what we didn't like was this state sovereignty by the federal government. >> if you want to put on your teachers hat for a moment and grade the response efforts of bp, the coast guard and the obama administration, what grade would you give each of them? >> you know, when you have been through the worst natural disaster in american history, as governor of mississippi, you
6:30 am
learn not to criticize people too harshly for unprecedented, unforeseen disasters, natural or otherwise. but they had a hard time. they seemed slow to try to get in charge. we had the problems i'm talking about with command and control. but i don't want to be overly critical because when stuff like this happens, you make mistakes. and so that's why i'm -- i try not to assess blame. let's just figure out how to do it better. >> and i think that's very diplomatic and reasonable because no one can fully prepare for these. we always learn and we try to make improvements, and i think -- i agree with your statement. one last thing on the seafood. you said in your opening statements. the seafood is safe to eat and what the reproduction or is it too early to tell. >> we have had no evidence whatsoever or finding of
6:31 am
anything from the oil spill that got into the reproductive chain. i mean, we're not seeing fish with four eyes or anything like that. but for a variety of reasons, we had a really great fall, but with the freshwater that's being allowed into the mississippi sound because of flood control in the river and the open of the bonnie carath through the lake pontchartrain and we're getting a lot of water that's going to kill the oysters. we're going to have to rebuild the oysters bed. the oysters can't get away the shrimp and the fin fish they get away from the freshwater and it shouldn't affect them. we have had some losses in dolphins, sea turtles that are more than normal. the peculiar thing about it is,
6:32 am
we started seeing it before the oil spill. just a little bit before the oil spill this started happening. so nobody has been able to tie it but that is something we've got our antenna up about. is it we have seen mortality rates among sea mammals and sea turtles, for some reason, have been rising since last march or so. >> thank you, governor. >> thank you, sir. >> the gentleman's time has expired. we now go to the gentlelady from the district of columbia, ms. norton for five minutes. >> thank you very much, mr. chairman. governor, i appreciate your coming. i've listened to what you've had to say. much of it is reasonable. you say it's better than to litigate. i also agree you have blessings and curses in your part of the
6:33 am
economy. the united states depends on your economy and the seafood there and sometimes they are at odds with each other. there are certain kinds of risks that have to be taken. i take it you would agree, therefore, that the best way to handle those risks is to prevent them. >> well, ma'am, if you mean -- >> quit -- >> no, ma'am. >> i mean, obviously, governor, an oil -- i mean, from preventing an oil spill. >> that's right. follow the right protocols and procedures so you don't have one to start with. >> yes, sir, it's what is hearing is all about. it's about the oil spill. now, the administration has focused on how to prevent it from happening again. but it has been severely criticized for regulations that
6:34 am
would apparently accomplish and increase regulations and it's been burdensome and it's been criticized because the regulations would cost jobs. therefore, i was intrigued by what some of the -- from the very opposite top of the oil industry is saying and i would like your view on this. let's take john watkin who's the chairman and ceo of chevron. he indicates that he himself -- they themselves have a burden here. but he says, and i'm quoting now, far from resisting are those rules, he means the regulations that are coming out, our industry is helping to strengthen them. the proactive and uncompromising approach of safety is the test we should all apply to any company starting with our own. in an industry that is always edging up against the frontiers
6:35 am
of the biology and engineering. the best practices should be the only practices, corporate responsibility does not end with meeting market demands. would you agree with mr. watson, the chairman and ceo and his statement. >> with the statement i would. because i think what he's saying is the chairman of a big oil company, his incentive, among others, is he doesn't want his stockholders to be out $20 billion like the bp stockholders are. and that he's going to make sure they do it right the first time. >> and you're saying -- and what is -- what is -- what is really interesting in what he's saying is that the company not only supports the administration's new safety measures but they are working with the administration to make them stronger. he does not appear to be fighting the regulations for
6:36 am
which the administration has been criticized. i want to give you another example from the top of the industry, the president of shell, marvin odom. again, shouldering his own responsibility but he says additional safeguards beyond what he himself would do must be strengthened across the industry to develop the capacity to quickly respond and resolve a deep water well blowout in the gulf of mexico. regardless of how unlikely it is that this situation will occur. and it didn't come from members of congress, that comes from the top of the oil industry and i just want to know if you would agree with mr. odum as well? >> i certainly don't take any issue with what you said. >> because i agree with you
6:37 am
about the importance of preventing rather than litigating as you said, do you hold the industry accountable, here you have another oil executive arguing for more robust requirements to demonstrate the capacity to cap a well if there's a blowout. i just think it's important to bring out how the industry, instead of fighting regulations is working with the administration for tougher regulations? i think their concern, governor, is that these regulations would be across-the-board. so some of them are not engaged in spending more money to be more safe than others. so if there are regulations saying all of you are held to the highest standard given this blowout, then everybody, it seems to me, in the marketplace will be on an even playing field. >> the gentlelady's time has expired. >> i'll just simply say, ma'am,
6:38 am
these companies have huge incentives to self-regulate. we went from -- for 50 years with one -- well, no occasions in 31,000 wells before bp. it's the only time it's ever happened and i think what the ceo of chevron is saying and the ceo of shell are saying is, yeah, we want to work with the government. we want to make sure there's rational regulation. that's not saying every regulation anybody can think of is something that we're for. in fact, mr. watson has been very, very public in saying that the moratorium was terrible. and was a huge mistake. >> and the difference between a moratorium and new regulation. >> well, it's a form of regulation. we're going to shut you down and while we're writing new regulations. while everything that you said i am very comfortable with, there are connotations there that i
6:39 am
don't think we should take too far. if the idea is that no risk is too small and no cost is too high, i don't think any of -- any company in any industry would agree with that. >> and, of course, governor, that's a -- >> the gentleman from pennsylvania is recognized, mr. kelly. >> thank you, mr. chairman. i would like to yield my time back to the chair. >> i thank the gentleman. governor, that means he's given me the time. >> i couldn't see him. i'm sorry. >> i have no shortage of questions in responses. governor are you familiar with the containment -- >> no, ma'am -- nost. i was thinking of ms. norton. >> they are the group that's basically overseeing billion dollars of funds that were put together by the various oil
6:40 am
companies so that would happen that one of in the-1,000 times they would have a whole different category of response. did that refresh your memory. >> i didn't know it by that time. but it's the industry effort for post-oil spill, yeah, i'm familiar with the program not with the name. >> and wasn't that billion dollars spent by the companies that had never had significant spills in the gulf. exxon, chevron, and conoco. i wanted to make sure we got that in the record. another thing i wanted to get in the record, as you know, governor, when you and i first met i was a businessman and you were a recovering businessman. it takes a long time to recover. the number you gave earlier was meaningful enough to repeat it. 1.4 million barrels per year seep into the gulf approximately automatically, right? >> yes, sir. that is what the usgis says. >> and for aeons, the gulf has
6:41 am
absorbed that. it diffuses it. it ultimately is part of the ecosystem. let's go matter as a businessman and i want to get through it as quickly as possible. the federal government estimates that approximately 25% of that 4. -- or the federal government estimates 4.9 million barrels came out of the well into the gulf. approximately 25% or a little over 1.2 million were recovered. that leaves us 3.4 million barrels that got into the gulf in this disaster. i'm not reducing this for a minute but let's just do the numbers. so of that, approximately another 25% was burned off and another 25% was estimated to be dispersed using disbursement and we all understand there's some controversy about whether disbursement and if you take
6:42 am
that was dispersed or burned off you're down to half, 2 million nearly 3 million barrels, no matter how you look at it whether you take the whole amount or the reduced amount, you got less than three years worth of oil went in, in one short quarter of the year period and you got about two years, if you give credit for these efforts to mitigate. is it any surprise to you that the gulf fish, shellfish and so on is doing just fine when, in fact, this is essentially, including the natural amount that's still coming in the gulf, this is about three year's worth maybe total that went into the gulf in one year. that this is not such a big thing even though it's a big thing to us individually and big a-big thing when it gets to your shores? >> congressman, right after the oil spill happened, in the first month or so, we had professors and experts who told us that the
6:43 am
gulf for lack of a better term would digest this. that there are microorganisms in the gulf of mexico, and i think in other places where you have oil seeps that eat the oil. >> including santa barbara, california. >> that's right. i think probably the first place in the country that it was ever talked about was santa barbara. that they have oil that seeps through the floor there. but there were scientists who predicted that the gulf would essentially eat this up. and that's organisms would eat it up and there's millions and they would multiply. if you're in the job as the head of the disaster management you don't assume that's true. so we never assumed it was true. but it looks like to the layman from afar that that is, in fact, what happened. that the microorganisms were able to manage this and maybe
6:44 am
that wasn't totally unforeseeable because they do eat up so much oil every year. two other thing i would mention, unlike exxon valdez, this was light oil. and secondly, the water was warm. exxon valdez, the water was very, very cold. the water here is pretty dang warm and the light touch, the benzines, the toluenes, they all evaporate faster in that warm water. >> i thank the gentleman. the time has expired. i recognize mr. clay for five minutes. >> thank you, mr. chairman. and thank you, governor, for coming today to the hearing. >> thank you, sir. >> governor, the national commission report noted something that may seem obvious which is that offshore oil and gas industry is inherently dangerous. but the commission also reported the accident are surprisingly
6:45 am
comment that involved loss of well control. here's what the report said. drilling rigs are themselves dangerous places to work. hence, heavy work, chemicals flammable oil and gas all surrounded by the open sea environment far from shore. where weather and water conditions can change rapidly and dramatically. the seriousness of these risks to worker safety and the environment are underscored by the sheer number of accidents. governor, the commission report then says that there have been 76 accidents in the gulf between 1996 and 2009 that involve loss of well control accidents. and many of these accidents occurred very close to your state. were you aware of these figures? 76 accidents? >> of course, if my state is an oil and gas state, not just
6:46 am
offshore and a drilling rig is dangerous. i mean, you see a lot of people who worked in the oil fields who lost fingers. got hurt. you know, got hurt one way or the other and got burned. it's a dangerous thing. the accidents you're talking about, though, all turned out to be -- were managed. they were manageable and managed. the bp macondo well spill is unique. but yes, sir, it's a dangerous industry and there are accidents that happen onshore and off. >> but do you think these numbers indicate the new safety measures were long overdue well before the deepwater oil spill? >> i think the industry tries very hard to protect their people 'cause it's very expensive when they don't. and so rational regulation is something we all ought to be for.
6:47 am
we need to be careful of the excessive unnecessary and harmful regulations is my point. >> fair enough. some have suggested that new safety measures should apply only to deepwater wells because that's where bp's rig was when it exploded. do you believe that shallow water drilling should be exempt from new safety measures the administration is implementing? >> well, again, if you're talking about safety measures, to try to prevent injuries i don't think that's what you're talking about. treating the -- my only i would deepwater wells off the shelf as well. >> thank you for the answer. governor, doctor harriet perry of the university of southern mississippi's gulf coast research lab identified oil
6:48 am
droplets in blue crab larvae last summer. this was the first time she had seen anything like that in 42 years of studying the species. do you think those oil droplets would do to the moratorium or the bp disaster. >> if they had shown up in any samples that we ever took out of the gulf, i would have been concerned about them. the seafood samples and we're very proud of the gulf laboratory of the usm but that finding was never replicated or we didn't have any similar findings in any samples that came out of the catch. and that's why it hasn't -- that hasn't bothered me. we just have had no seafood sample and neither has the federal government according to what they've reported to us that had any kind of evidence of oil
6:49 am
pollution on it. >> governor, here, there are a number of reports of red snapper showing up with legions on the gulf. louisiana university professor is fairly confident that these legions are consistent with the toxic oil exposure. and i can share it with you, but here's a photo of the lesion of the red snapper. do you think that was a result of the oil spill. >> again, congressman, if there was showing up in any samples of seafood taken by the federal government or state government, i would be more concerned about it than when a college professor finds it in some anomalous place. >> but would you be concerned about -- >> if it were showing up in seafood samples that we're
6:50 am
sampling by the thousands between the federal government and the state government, then that would give me real pause, but we're not. the fact that we're not finding it, means that i'm really not -- i don't know what the professors are finding or reporting to the news media. >> the gentleman's time has expired. the question has been asked and answered. we now go to the gentleman from texas. and please do not get into this texas versus mississippi oil, okay? you're recognized for five minutes. >> texas and mississippi share a common bond. we're both bordered by the gulf of mexico and both deeply affected by what happens in the gulf of mexico both environmentally and economically. i think you alluded in the answer to the -- one of your answers to the previous questions, governor, there are other countries that are drilling in the gulf of mexico
6:51 am
and whose oil and gas rigs -- if there were to be an accident similar to bp or even smaller would affect our coast, is that not correct? >> particularly florida. >> so -- >> sure. >> absolutely. you got the brazilians looking at drilling. cuba is offering leases. just immediately nearby in florida, mexico for a long time. i know you're a recovering attorney. i'm a recovering attorney too. the u.s. doesn't have any jurisdiction over any of those -- any of those drilling operations. we can enact every imaginable regulation, and cuba and mexico could say, no. >> that's correct. >> don't you think it might be a better use of our resources rather than crippling our domestic companies and our domestic exploration 25% of our domestic oil supply that we might be focusing on how to respond in the event one of these accidents -- or any sort
6:52 am
of accident occurs again? >> i do. i do think it's more -- i think it's appropriate the oil industry is doing it itself. they know more about it than anybody else. it looks to me we ought to be using our resources to have more american energy. that we need to get ourselves off of foreign energy and the best way to do that is to increase the supply of american industry. this has hurt that because this is a big source of domestic oil and the number of permits for new deepwater wells, about a fourth of all our oil is down 85% 85% the first year. and whether it's coal or oil or gas or hydraulic fracturing, we need to produce more american energy. >> and no -- in your opinion, no amount of government regulation will protect us from what other countries are doing?
6:53 am
>> well, if we have rash regulation, that is good. but to have excessive regulation, unnecessary regulation, that's bad. >> and regulations like -- and slowdowns in issuing permits i think you would consider to be a problem, too? >> of course it is. >> and like texas, i assume mississippi has seen significant job loss as a result of that? >> we have, though, most of the guys have just left. >> and are you seeing assets that have been based in your state moving into other areas of the world, drilling platforms and -- >> what we saw happen after the moratorium, some of the big rigs to come for maintenance. it's good because you can't work but after the maintenance was done, they left. the way the industry works, those big rigs, they go work on big jobs. they're very expensive to move, not only in cost of moving but
6:54 am
opportunity costs. they get paid huge amounts of money a day to operate them. whether they come back i assume they will come back is a serious issue. we saw not only the jobs move but we saw the drilling rigs that produced the jobs go to australia, go to angola, brazil. so that's a big damage to us not just to jobs on the platforms but jobs in the service industry. >> all right. and i appreciate you coming up and taking the time to share your experiences with us. i know your time is valuable so i'll yield back. thank you. >> would the gentleman yield? >> oh, yes, sir. >> thank you. >> governor, 250,000 barrels a day less are going to be taken out of the gulf. if more than a quarter of that is mississippi-related economic-related, what does that do to your economy relative to oil in the foreseeable future? that's the estimate.
6:55 am
it's undenied at this point for the next two years. >> we get so little of it. >> i'm not talking about the royalty revenues. i'm talking about the jobs. >> well, it does have an effect on jobs. we have a lot of people who work offshore. as i said, i don't mean this as precision, but 4 of the 11 people killed on the rig were killed from mississippi which gives you a sense of the number of people that we have working in the industry on rigs, in the service industries. we have companies in my state that manufacture drilling rigs. that build service boats. so it ripples all through the economy. >> governor, last question, isn't it -- isn't it really a question of do we get it in america or do we get it somewhere else? isn't that really the gulf question today? >> well, if you look at when is the united states had reduced use of oil, it's every time been
6:56 am
a recession. and so i don't want a recession. if we're going to keep a strong economy, we have got to produce more energy in the united states including oil. and to go shoot the best goose we've got laying golden eggs, the gulf of mexico, where we're getting 30% of our oil, or we were, and that production is going down now. and it's going to keep going down. remember, oil production today is based on decisions that were made in the past. normally, several years in the past. a moratorium is one of the few things that has an immediate impact. when we see -- what we're seeing right now with high energy prices, the speculators are speculating the u.s. is going to be producing less and less oil because they think the administration's policies will result in that. so they're betting the price of oil is going to go up. and then you take that with the
6:57 am
value of the dollar which oil prices are denominated as dollars as the value of the dollar goes down, then that's a double whammy for the people who are paying $4 for gasoline. and the people that think you're going to deal with that by raising taxes on oil companies forget that they won't pay those taxes. they're just going to pass it on to the guy who pumps gas in his pickup truck. and so that's why they produced the best oil, and that's the best thing to keep oil prices reasonable. >> thank you, governor. mr. davis is recognized for 5 minutes. >> thank you very much, mr. chairman. thank you, governor, for being here. >> thank you, sir. >> i've listened intently to your testimony. of course, i grew up in the mississippi delta. >> did you really? >> on the other side of the river near greenville, mississippi, just a few miles. as dick gregory knows in chicago
6:58 am
we fondly say that the only place where you will find more african-americans from mississippi is in mississippi. >> amen. >> and so we have a tremendous relationship with the state itself and we watch there closely what takes place and what goes on. i know that we're talking about the worse environmental disaster in the history of our country. but as you indicated in your testimony, it also has massive economic impact, particularly, in the fishing and tourism industries. and i want to focus a little bit there. according to the noaa, the total amount of shrimp caught commercially in the gulf decreased 27% from 2009 to 2010.
6:59 am
the amount of shrimp caught commercially in mississippi was down 60% last year from the year before. could you share, and you've done it eloquently, a bit more of the economic impact that has occurred as a result of the oil spill? >> the fish industry hurt very badly because waters were closed, federal waters were closed first. mississippi waters were closed once we had encroachment. louisiana, because they were closer to the well, their waters were closed very early as well. and this is -- this is the principal fisheries for us for shrimp. now, we have big shrimp boats that will go all the way down the texas coast and come all the way back around the florida coast but there are not that many of them that are that big that go that far. so we have a lot of fishermen in
7:00 am
the shrimp industry who's waters were closed to them. their losses were mitigated by the fact that bp was willing to hire their boats to be part of this vessels of opportunity program, about 1100 boats participated. and most days we'd have 5, 6, 700 boats out there and they would be getting paid -- some of them made fishing but the processors got clobbered. and nowhere if they don't have processors. and so while they were getting a chance to be helped, there was nobody who was helping the processors. and without the processor there's no fishermen. and so fishing was hurt that way. recreational fishing which is a real industry in my state. there are people in chicago who come down there and boat captains take them out fishing. shut out. shut down.
7:01 am
again, they got some relief from the program but hurt very badly. so just in that -- just in that little small segment, we don't even talk about motels, restaurants. louisiana, to their great credit, they have new orleans. and if there's oil on the beach in venice, tourists still come to new orleans. >> are you confident that our food and drug administration and environmental protection agency that the agencies that we rely upon to determine the safety in many instances of especially the things that we consume that they are equipped, really give us information that we need to know to feel comfortable and secure? >> i have no reason not to be, e us the information that we need to know to feel comfortable and secure. >> i have no reason not to be, congressman, and so i am. it is -- it's a team.
7:02 am
by state and federal. yes, sir. >> let me ask you, other than perhaps the lifting of any moratorium, what else can the federal government do that might assist with the economy? we know that the economy, obviously, was hurt badly. we know what the economy was even before the spiel. what can the federal government do to add further -- >> the federal government is -- is able to collect enormous fines under the clean water act. now, the federal government could assess those fines and through whatever process, either by agreement or by litigation say bp is going to may x billions. they t-might cover a day or two worth of deficit, but we think
7:03 am
the best thing the federal government could do is let some of the fine money, and there's legislation in the senate, i believe, to let most of the fine money go to the states, let the states use the money for -- with flexibility for economic growth there. maybe that -- and it has to be related to the gulf and the gulf economy, but we're going to have people who were fishermen two years ago that are not fishermen today and they're going to be fishermen because of the capital investment and the cost. we need to create jobs for them on the coast, maybe at the part, maybe in alabama they've got something totally different. maybe in florida there's a whole different concept. but we would like to see a significant part of the fine money being given to the states and the states allowed the flexibility to use the money to
7:04 am
produce the maximum economic growth in the coastal areas for that state. >> thank you very much. >> thank you, congressman, for asking. >> i thank the gentleman. we now go to the gentleman from idaho, mr. labrador, for 5 minutes. >> hi, governor. in idaho, obviously, we don't have an oil industry so i don't spend a lot of time thinking about this. but i think about commonsense. and it seems like there's a lot of commonsense just lacking here. i'm going to just give you an example. you've had a col key with several people here on the panel -- i mean, on this side. and sometimes commonsense just seems to lack in washington, d.c. a couple of weeks ago or maybe a month ago, the first lady -- her plane was close -- they claim that it was close to an accident. and apparently she was within thee miles of another plane. and the regulations said that all planes should be within 5
7:05 am
miles of each other and apparently the first lady was within 3 miles and i'll get to my point and you'll understand it in just a second. so the response in washington, d.c., was not hey, jeez, somebody failed to comply with the regulation. they should have been 5 miles instead of 3 miles. the response in washington was, we need new regulations and it seems like that's all i ever hear about in washington, d.c. when somebody screws up and when somebody makes a mistake, we don't say, hey, that idiot didn't follow the regulations. what we say is, we need new regulations. and it's just to me incomprehensible that all we can ever think about is adding regulation upon regulation when the regulators are not doing their job. they already have regulations that should actually be enforced and instead, all we ever talk about is making it more
7:06 am
difficult for industries, for private enterprise, for private individuals to live to survive. so can you explain to me -- and i think you mentioned this earlier. i think you mentioned the macondo industry occurred because regulations were not nod i think your word was things were cut. >> can i cite the regulatory regime but in the normal standards and protocols of shutting in a well, it was clear from the reports at the time and nobody has denied it that they didn't follow the standards and protocols that the industry had -- had been using, settled on and had worked with great result for a long, long, long time. this was widely reported and so it always seemed to me pretty clear why the well blew out.
7:07 am
and this was, reportedly, with -- again, with nobody arguing. this was a pretty tough well. they had trouble with this well. it had -- it had hickops. it had bell etches of natural gas that they had trouble with. they had to shut the well down at least during this. this wasn't a well to cut corners on. this was a big elephant well but they did cut the corners, and you're right. when you say the issue is followingling the regulations we got now, i can't improve on your statement. >> so why is it here in washington we don't seem to understand this? why is it that we can't understand that we have regulations that can -- i think you used the number, we've done this in the gulf over 30,000 times and this is the first time something like this happens. can you repeat that again? >> yeah, it's been -- there have been modern 31,000 oil wells
7:08 am
drilled in the gulf of mexico in the last 50 years or since they opened the gulf, in our four states. and there's never been anything like this vaguely to happen. >> okay, i think i will yield the rest of my time to the chairman. for the life of me i cannot understand why we cannot in washington, d.c. just understand. if we enforce the regulations we will be able to have a good environment, we will be able to have good water and we will have jobs and the economy will improve. thank you very much. >> thank you. >> i'm going to follow up on the gentleman's line of questioning because i think it was excellent. governor, on the day that the oil well blew 100 miles off your shore, there were two mms officials, a father and son team -- they came on, reviewed, passed and left. isn't that so as far as you know? >> i don't know that. >> it wouldn't surprise you. >> i assume it would be true if we had it.
7:09 am
>> we're going to have the administrator of the organization mms and that's going to be one of our questions, why is it that what failed before won't fail again. and that's going to be a line of questioning is not just other new regulations but an agency that failed to ensure safety, what has changed there. so hopefully they'll be as candid as you have been. >> i have to say that i accepted that because of the 31,000 whales i got from janet napolitano so i accept people in authority's statement in fact. your opening statement. but it was interesting to see using imported words. >> thank you. thank you, mr. chairman. where i come from, chutzpah is a very common word. and i want to welcome governor haley barbour to this committee. and just speaking for myself, i regret very much you're not running for president.
7:10 am
i think you would have added a good political sense and humor so we're sorry we're not going to see your candidacy. >> thank you very much, congressman. that's very gracious. >> and thank you for your service. governor, i was listening to your explaining with congressman burton and explaining about the negative media attention as somebody who ran a very large county with 1.1 million people i can sympathize but on the other hand, was it the bad media that caused a hit to the mississippi economy or was it the devastation of the oil spill itself? >> congressman, we didn't have devastation. i mean, the problem was the news media took the very, very, very worst areas in louisiana and they repeatedly showed that over and over and over. and it gave people the impression, that's the way it was all over the gulf coast. they would actually have stories about mississippi and pictures from louisiana. >> hmmm. >> and you may not have been in
7:11 am
here, literally, on our 80-mile shoreline, we never closed 1 foot of beach for one day except on one occasion. we had a high tide, either right before or right after a hurricane missed us, and it pushed some water over the highway and through a culvert and it pushed some oil patties up there and we closed that beach for more than -- we actually closed that beach overnight. that's the only time, but if you watched tv in virginia, you saw louisiana and you thought mississippi and florida and alabama for that matter and texas were all the same way. and that's what killed our tourist season. >> yes. common problem with the media sometimes in terms of -- >> amen. that's bipartisan. >> yep, absolutely.
7:12 am
when you look back now and if someone gave you a truth serum, do you think in retrospect that the process for permitting and improving deepwater horizon oil rig was flawed? for example, it got a categorical exclusion under the process because the process allowed for that? in retrospect, was that a mistake? the nepa and one other aspect, governor, and then please respond -- the nepa process predicted under the nepa review, which was truncated that under the worst case scenario we were looking at 4300 barrels of oil spilled and it would never reach the shore? >> congressman, in answer to your question, i think that what we had done for 50 years with more than 31,000 oil wells, with very positive results, in fact,
7:13 am
nothing like this ever having happened, i would not take issue with that. i mean, regardless of what we do, occasionally you're going to have the bad outcome. but we're not going to make people quit taking left hand turns. we're not going to outlaw left hand turns. this happened one time, does that mean we have to turn the world upside down and i think the answer is no. >> governor, i would agree with you. i don't think we have to send the world upside down. really, my question is not that. that's not my only choice. the question is, could we in retrospect have tightened up regulation and been more
7:14 am
rigorous in the review process such that and the enforcement, for example, get the blowout protection equipment that might have stemmed the spill or contained it? i mean, you know, i take your point that the devastation wasn't what was presented visually on television. fully respect and understand that. on the other hand, at one point the extent of the spill on the surface of the water would have gone from my district in northern virginia all the way to new york city if it were super imposed on the map here. that's eye-popping. and that's a deep concern to all of us. and so all i'm asking is don't turn the world upside down, could we not on a bipartisan basis agree that in light of that experience, it only requires one to create such environmental havoc. this is in the category it seems of a nuclear disaster. it only requires one to, you know -- turning left hand and having an accident god forbid
7:15 am
this is a terrible thing if someone is hurt but it's a very contained thing. these things are not. >> if chairman is correct that there were two government regulators on the rig that day, and if the reports that have been written over and over and over without contradiction, they did not follow the normal protocols and they did not follow the standards and these two regulators were on the well that day, i think the congressman from idaho's point is the right point. it's not that we need more regulation. it's that we need to actually enforce the regulations in real life. if that is factually accurate, i have no reason to think it's not. >> mr. chairman, would you indulge me -- >> the gentleman is recognized for one more question. >> just a clarification, mr. chairman. thank you. do you mean by that, let's have
7:16 am
the full regulatory process that's on the books right now, no more exclusions? >> yeah, i couldn't go that far because of my lack of information. there may be some exclusions that are well-founded that are like we see in many, many other processes, regulatory and otherwise, you know, like you fill out the form. if the answer to c and skip down to f and i don't know that exclusions are that type. >> thank you, governor. >> i thank the gentleman. governor, this may come as a surprise to you, but i haven't had my round of questions yet. i'm going last. oh, there may be another minority member coming and i'm going now and i recognize myself for five minutes. governor, i'm going to put up on the board a quote from secretary salazar for your comment. and i'll read it. there is no question that the
7:17 am
suspension of deepwater drilling will have a significant negative economic impact on direct and indirect employment in the oil and gas industry as well as other secondary economic consequences. >> that's correct. >> but he did it anyway. >> that's correct. >> can you explain why somebody would know that it was going to hurt economically and by the way, he follows that up, which isn't on this book -- he follows up by noting that there's an extremely good history of safety in the oil industry. >> mr. chairman, my own view is that the policy of the administration is to increase the cost of energy so that people will use less of it. and, therefore, there'll be less
7:18 am
pollution. and alternative forms of energy will become more economically competitive. i said that publicly thousands of times. i might as well say it here. when they did the moratorium, that was my assumption. that this was consistent with this policy. and look, it's one policy. it works. we got $4 gasoline. and gasoline in january of 2009 was 1.80-something. but that's what i took to be the rationale for that. is to make these other alternatives economically competitive, you had to increase the price of oil and other traditional -- >> well, it's certainly done that. by the way, the quote that wasn't on the screen is i'm also aware that as a general matter the safety record for deepwater drilling has been good. i'm going to go to one more very -- a very interesting quote
7:19 am
because the next panel is going to be dealing with this. last week, or two weeks ago, as it was, secretary hays was here and told us there was no connection between high oil prices and domestic production, meaning he was quite sure if we drilled more here it wouldn't change the global price. i'm going to take you to page 23 of an mms report, mms -- it's titled mms economic impact assessment. at the time, they were assessing -- and i'll just read it 'cause it's a little hard to read that one. they were assessing at $75 a barrel, which is where we were, not where we are, unfortunately, that if production went down by 84,000 barrels a day, .84 million barrels a day, that we would have an increase of about 47 cents a barrel. now, it went down by three times that. now, you're not an oil speculator, neither am i. but it would not surprise you that if you went down -- if you
7:20 am
got a half a dollar increase for such a minor one and if you decrease by three times that amount, wouldn't you guess it would go up a whole lot more than that, 10, $15 a barrel could certainly happen if you took that much out of a limited economy? and particularly, if the market believes that this is going to be policy for a while, that you're going to have a moratorium in the gulf. that you're going to reduce production in the gulf. that your going to issue 85% fewer new deepwater drilling permits, that the market sees that as there's going to be less u.s. oil production. and while whoever said you can't affect the price of oil overnight, well, of course, that is absolutely true. but if there is a belief that the u.s. is going to produce less and less oil going forward, particularly, because of government policy, then the price of oil is going to go up.
7:21 am
>> one more thing i wanted to get into the record. governor, you're one of the many states that are a right to work states, aren't you? >> yes, sir. >> in fact, every state in the gulf of mexico, every oil state is a right to work state? >> i think all the states in the gulf of mexico -- i don't know if every oil state is -- >> i'm sorry. california is a oil state and we're not right to work. every gulf oil state is a right to work. >> it's my belief. >> does it surprise you that the policies of this administration seem to be targeting the economic well-being of your area? and i'm not trying to say it's a big plot or anything else. but it does seem like if 9/11 aircraft fly into the pentagon, fly into the twin towers, the next day we're figuring how to get airplanes back in the air. and yet, the economy, the seafood economy, the tourism economy and the oil economy of your states -- when you're
7:22 am
suffering, it seems like there's no limit to how long this administration will take to have a moratorium to think about whether or not they can let you do something that's so vital to your economy? >> well, the moratorium was a mistake. it was very harmful, not only to our state but i think more importantly very harmful to the country. i can't read what's in people's hearts or what's inside their heads. but i have noted -- and i haven't said it here but i think it's appropriate to say, there has been an effort to raise taxes on the oil industry because it's a very profitable industry. but -- >> every day here, governor. >> it's interesting in the senate bill to raise taxes on oil industries, the idea was deficit reduction, to raise the taxes $2 billion a day. i mean, $2 billion, in a year. the problem is that's half of one day's deficit.
7:23 am
you know, you'd to have raise the taxes on an oil industry by a factor of 700 times more than that because $2 billion tax increase on the oil industry is equal to one-half of one day's deficit. i mention that because it says to me, that can't be the real reason. i mean, the real reason can't be to touch the deficit 'cause it doesn't even touch the deficit. and, of course, as we know, the guy who's going to pay it is the one who pumps gas in his truck. so do i think there are some people who don't like the oil industry or think it's a good whipping boy politically? i suspect that. but i can't say what's inside people's hearts or minds and don't pretend to. but i do know it wouldn't do anything about the deficit. >> governor, i couldn't agree with you more that we can't be sure of somebody's motives, although i can be sure that if wall street were to cause an economic meltdown, that this administration would allow it to
7:24 am
be up and running the next day because they did. the last administration did, this administration did. we've had great disasters and great impacts in other areas of the economy but amazingly, the reforms came after everyone was back up and running, not before they were allowed to go back up and run. governor, you've been very kind with your time. we appreciate your being here. you're probably the most welcomed relief to us in congress to see somebody who's doing the right things, who's making the right decisions, who's steering a course for your state and we appreciate your taking your valuable time to be up here today. >> thank you, mr. chairman. thank you, congressman. >> we'll now take a five-minute recess to set up the next panel. ..
7:25 am
[inaudible conversations] [inaudible conversations] [inaudible conversations]
7:26 am
[inaudible conversations]
7:27 am
[inaudible conversations] >> we now the second panel with us. [inaudible] >> try that again. the president of the st. bernard parish in the state of louisiana. mr. bill williams, commissioner of the gulf county district b state of florida. mr. frank rusco is the director of energy and science issues and the government accountability office. mr. cory kief is president of
7:28 am
offshore -- and mr. michael bromwich is and very welcomed director of ocean energy management regulation and enforcement, previously referred to as mms but now reformed. with that, as you saw on the first panel i'd ask all the witnesses to rise and take the oath. do you solemnly swear or affirm that the testimony you're about to give will be the truth, the whole truth and nothing but the truth? let the record reflect that all witnesses answered in the affirmative. gentlemen the first panel is 1. you are 5. i will ask you to please, summarize your opening statements and stay within the 5 minutes for each other's and our
7:29 am
side. i apologize the first panel for going long but it set up questions for the second panel. >> thank you, mr. chairman, committee members, ranking member cummings. i appreciate the opportunity to speak with you today. while there have been numerous reports and studies completed in the -- in relation to the bp oil spill disaster, the reality continues to unfold and the intermediate and long-term obstacles and effects are just coming into focus. the experiences and lessons learned through the first year of the oil spill of the remaining years of the oil spill recovery. [inaudible] >> instances of those directly or indirectly impacted by the spill are directed by insights. my hope that the message delivered is not lost in the corporate world of spin marketing or the exposes
7:30 am
designed to essentiallialize the event and without the attention it is warranted. insight 1 hold the responsible people more responsible. theories some things in our social disaster, if you make a mess, clean it up. there's been an ever present allowing in this disaster that allowing bp to make it right on their own terms not on the impact of states, communities, businesses and individuals. unlike the natural disaster that is we continue to respond to as a nation, this disaster has an identified responsible party. there is no value in talking about the disaster in terms of responsibility if there are loopholes and justifications that allow the agent that created the mess to define the terms of the response. added to this axiom referenced here's the understood message about the mess versus the
7:31 am
mess-maker. we go as s-bp bad or deepwater good or bad instead of who is responsible for the mess and has it been cleaned up quickly, comprehensive and does it make a mess and cleaning up a mess that is created as much immunity and spin to the mess maker as any spin marketing campaign could accomplish. the second insight is to remove the response and restoration authority from the responsible party. this insight must not confuse the term's authority and responsibility. the responsible party being responsible should translate into doing what is deemed what is required to complete the actions involved in addressing the environmental, coastal, social, economic, medical and emotional impacts of the given disaster. removing the authority to decide what those interventions that shall be required from the
7:32 am
responsible party protects the impacted states, communities, businesses and individuals from further victimization. in an oversimplification illustration, when we're involved in a car accident, the person who caused the accident doesn't get to dictate how and what treatment or repair is dictated. insight number 3, legislate for the disaster that will happen instead of what has happened. there's a need to address current legislation in a way that transcends the most recent disaster. while the need to know causal information in any disaster is important, the framework of legislation that allows flexibility in accomplishing the overarching mission of effective and expedient response and the ability to require action by a responsible party must be examined. while new legislation will not correct any of the ills of the bp deepwater horizon's spill we can implement language that authorizes broader oversight and
7:33 am
intervention authority, stiffer penalties for a lack of cooperation including language that rerevokes a company's ability to operate under other permits if it has not been compliant. while in all terms, making sure that production is not mutually exclusive with safety. unfortunately, we as a collective unit of citizens, government officials and industry leaders cannot predict the next disaster but we can predict the next response. we can't response the worst case scenario and the appropriate flexibility and force is enacted to protect the interests of all citizens and finally the last insight is to localize the response process to better serve the impacted victims. the shortest distance between two lines is a straight line. or the shortest distance between two points is a straight line. no one argues that but we continue to set aside this
7:34 am
scientific law as well as we develop and local needs at a nationalized approach. while impacted citizens of st. bernard parish continue to have less than 25% of their claims settled the monthly payment to mr. feinberg continues unfettered. while i have no problem with the -- with an honor's day's pay for an honor's day's work i do question an assignment of claims processing and the payment thereof without a performance clause. we're told the claims process was independent. it's not true. we were told that the claims would be easier to process at the local level in the feinberg plan. it's not true. we were told that the feinberg planned greater flexibility and was implemented to address the victims regardless of the impact to pm. we have found this is also not true. i've met mr. feinberg and have no personal problem with him as an individual. i do not claim to know his business. but i do -- i do know that
7:35 am
because of the lack of the ability to resolve claims at the local level, his program and process has been ineffective. st. bernard has offered at no cost to the feinberg plan to assist him in identifying claimants that are likely to be questionable versus those whose local work history provides that need for assistance. a common tenet in the disaster response industry is that disasters are local. this is supported because the impact of disasters is most real for the individuals living or moving through it. we would ask that the local government continue to be involved not only in the compensation process but equally in the response and restoration phase of all disasters. thank you for allowing me to share my thoughts and thank you for keeping this issue at the forefront of your agenda. >> thank you. mr. williams? >> thank you, mr. chairman on behalf of florida's 67 counties
7:36 am
and more important our coastal communities of northwest florida i would like to thank the chairman to address the house oversight and government this morning before i begin my presentation to the committee i would like to take the opportunity and tell the chairman thank you for sending down two great staff members that saw firsthand the things within my community and the state of florida. mr. tyler graham and mr. ryan hamilton. their presence provided a special opportunity for our entire community to share their experiences and tell their story firsthand to members of this committee. i'm here to speak about the struggle that the florida counties that our constituents faced in the days and months following the deepwater horizon oil spill. it is clear in hindsight that even in the face of these struggles we cannot ignore the efforts by the federal and response state teams. and even the responsible party that tried to do their best while facing this unique and global strategy. however, as a lifelong florida resident and survivor of more than 20 hurricanes, best efforts and good intentions are not
7:37 am
enough. we must learn from our mistakes so that the disaster response is not just swift but clear, organized, and collaborative for the communities impacted. there is no question that florida has the foremost disaster response team in our country and arguably the world. with hurricane season the last six months and can boast up to 20-named storms, florida can ill afford anything but to be the best. yet in the immediate aftermath of the deepwater horizon oil spill, our expert response teams were forced under oil pollution act of 1990 rather than the tried and true federal stafford act. our traditional emergency management system was turned upside down and on its head leaving the florida counties at the mercy of a -- excuse me, a unified command structure that was established outside of florida all together. for example, during the first critical weeks of the oil spill, individuals based in alabama who had never stepped foot in gulf county or panhandle florida that
7:38 am
were using 10-year-old acp or area contingency maps were making final decisions how gulf beaches and florida's beaches would be protected. local expertise and resources were ignored as strangers decided whether to place oil protection booms near county beaches, inland water bodies and sensitive environmental resources. to compound matters unified command was limited and consistent day-to-day. leaving my county and all the of florida's counties in the dark and concerned that any preparation in response effort would be too little too late. with little information coming from unified command local communities were forced to expend significant financial resources, gearing up and preparing for potential events that could be quantified or predicted. these financial commitments came as you well know at a time when florida's counties and most governments were laying off employees and facing extreme budget shortfalls due to the economy. yet, it took more than four months to begin seeing
7:39 am
reimbursement for the emergency expenditures. faced with these challenges our coastal counties under the umbrella of florida association of counties to address a ray of concerns as we respond to emergencies. as while county continued to reach with state and emergency officials but the local of the local community was organized and recommendations regarding what type of recovery structure would meet our needs and the communities directly impacted was never sought. this story and experience has produced a short list of priorities that i would like to call lessons learned and i share this with you in hopes congress will take these concepts, review them and develop them so any future disasters are with clear collaboration, focused on the local community, individuals, and the businesses directly impacted. we strongly encourage congress to review and evaluate opa florida's emergency response act. it doesn't ask us work but it's an example to be followed.
7:40 am
why not use the best teams to use them as the foundation of the disaster. the stafford act works because the local communities are the first responders and the state government responding to our local needs and the federal government responding to the state needs. opa failed because it was a top-down approach that looked to the responsible party rather than to utilize local expertise and resource. it created duplication and triplication of all efforts. in regards to the claims in general, it would be our recommendation that congress provided greater clarity, direction to the process. probably the greatest frustration for everyone involved both public and private were constant changes in the claims process. there were eight different policies, procedures, processes and applications within the first two months. the summer was almost over before our businesses and individuals finally had a solid process. asfer our public and government claims, it would be our recommendation that costs associated with first responder exceptions such as protection, prevention, strategies, mitigation strategies and
7:41 am
cleanup should be laid out to the stafford act and not held hostage by the responsible party. in preparation for the next potential event, a separate funding process should be established with state of emergency operations and local first responders plan are not abrogated or delayed because of claims of financial capacity or whether the responsible party will approve the specific cost. in addition, loss of revenue claims by public entities should be included in a process that incorporates an independent third-party review. the parties should not have leverage over the states and local communities concerning economic issues, determining methodologies for management and potential veto over certain claims. any independent process should be established in over a year as by the loss robber claims. we also asked congress to establish and approve the gulf coast recovery fund with 80% going to the -- directly to the environment restoration and recovery of the gulf coast region. i personally support and ask
7:42 am
congress to support the recommendations of secretary of navy mavis report published in september of last year. mr. chairman, like you we are committed to working with our federal and state partners and we appreciate the opportunity to be before you today. >> thank you. mr. kief? >> good morning, and thank you for the opportunity to testify on behalf of offshore towing and how we have been impacted in the gulf of mexico as a result of the bp disaster, the moratorium and related issues. offshore towing is a partnership with three smaller marine towing companies who collectively who compete for the gulf of mexico. providing service in the oil and gas sector primarily towing drilling rigs to and from various locations in shallow water. we are located along the gulf coast of louisiana and collectively employ approximately 110 people. although the moratorium has been lifted and the shallow water sector was not to be impacted as
7:43 am
the deepwater sector, substantially negative negative impacts have been felt. this company used to move 25 to 30 rigs a month and now we move 10 or less. due to the lack of drilling permits being issued. on top of that, auto rigs are leaving the gulf as well due to the challenges with issuing of drilling permits. we do not have term contracts. and work on the job to job on the spot market. bp will not compensate companies like ours because they claim that our economic losses are a result of the moratorium, not the spill. i was present when mr. bromwich's testimony in march before the house natural resources committee and heard his testimony. he testified that he felt as though the government was responsible as well for the blowout but this administration continues to reflect as much light as they can on bp or
7:44 am
anyone else that they can blame. $20 billion sounds good but grants us no relief and an unforgiving agency do not provide much help for us when it comes to addressing our economic issues. we had had few layoffs because of this crisis because we maintain an optimistic view relative to industry rebounding in a timely fashion. we have used capital blended with lines of credit to offset the short comings that normal earnings would support but even that exercise has its thresholds. the beginning of the tolerance levels that have been established have been met now. expectations for a timely recovery are lower than ever. our confidence in this administration, government and its agencies are not what they used to be and we do not believe in any reasonable solutions or in our near future. we have recently reduced wages on employees and have started a plan to begin releasing employees. we can no longer afford to
7:45 am
subsidize unemployment and must enforce these unpopular but necessary exercises. our maintenance schedules have also been modified and changed to later dates because the necessity to replace and/or overhaul machinery will no longer be necessary due to the lack of use. factories such as caterpillar, general motors and john deere who produce our engines and replacement parts will guilty plea to be impacted as well. therefore, states such as michigan, illinois will be feeling this slowdown along with the rest of us. there could be a different items that could be identified but this is the biggest example that i could describe. we understand that precious lives were lost and that an environmental disaster that was some years in the making should not be ignored. however, there was a governmental agency along with this and others. environmentally the american government and several administrations over the past 60
7:46 am
years have ignored our environmental needs in this region. the louisiana coast, marshes and wetlands are disappearing at astonishing rates so our government has ignored more environmental issues including macondo including anyone else. mr. bromwich claims to be offended by the term permit torium. but he doesn't understand that millions of people are offended by the actions or lack of actions of this administration the government and its agencies. the administration, the government's agencies, the media and the press have done a good job of separating american people by creating political boundaries to satisfy political agendas. the truth of the matter is america is more interwoven than what is being credit for. we need our brothers and sisters in michigan and nile and they need us. americans all over this country rely on us for a different resources. our leader should focus on this.
7:47 am
this government is so broken and is beginning to virally affect the people. it is our -- it is your duty as stewards of the public to fix this. please do your best for the american people. put this nation back to work. thank you again for the opportunity to be here. >> thank you. mr. rusco? >> thank you. chairman issa, ranking member cummings and members of the committee, i'm pleased to speak to you today about the department of the interior's challenges of managing federal oil and gas in the aftermath of the macondo oil spill. interior leases federal leanses federal lath land for government and production. these activities provide a domestic source of energy, create jobs and raise revenues that are shared between federal, state and tribal governments. revenue generated from oil and gas on federal lands and waters is one of the largest nontaxed
7:48 am
sources of federal government funds totaling billions of dollars annually. the deadly explosion on board the deepwater horizon and resulting oil spill emphasize the permit processes to ensure operational and environmental of safety. as found on the bp deepwater horizon bill and offshore drilling, this disaster was a product of several individual missteps and backups, haliburton and transocean which government regulators lacked the authority, the resources and the technical expertise to prevent. in recent years, gao has evaluated many aspects of interior's management of federal oil and gas resources. we have found material weaknesses in three broad areas and as a result, 2011, gao placed interior's management of federal oil and gas on the high risk list. first, interior has been unable
7:49 am
to complete production inspections maintain royalty and production data and provide reasonable assurance that the public is receiving its fair share of oil and gas revenues. in recent years, interior has not consistently met its statutory or agency goals for verifying that companies accurately report volumes of oil and gas on federal leases. interior has lacked consistent reliable data from the sale of oil and gas on federal lands and has been unable to provide reasonable assurance that it was appropriately assessing and collecting royalties. secondly, interior faces long-standing challenges in hiring, training, and retaining staff in key oil and gas inspection and engineering positions. in addition to hampering production verification efforts, these human capital challenges have resulted in delays in issuing leases, and caused interior to be unable to meet its statutory and agency goals for performing safety and environmental inspections of oil
7:50 am
and gas facilities. finally, in may, 2010, secretary salazar announced plans to reorganize the minerals emergency management service under three beers. offshore leasing, planning and permitting will be done in the bureau of ocean and energy management. offshore inspections and enforcement by the bureau of safety and environmental enforcement and revenue collection by the newly created office of natural resources revenue. organizational transformations are complex endeavors. requiring concerted and sustained efforts of management and aff interior's reorganization will be challenging because it is happening at a time when agency is working to implement dozens of recommendations by gao, interiors, inspector generals and other entities. and because interior is still that responding to the after-effects of the macondo oil spill, these efforts include implementing new practices and procedures for planning, permit inspections and enforcement. in addition, interior has stated
7:51 am
that its reorganization will require additional funding. it is essential that interior gets this reorganization right. the agency must provide congress and the public with reasonable assurance that billions of dollars of revenues owed the public are properly assessed and collected and that oversight of oil and gas activities on federal lands and waters maintains an appropriate balance between efficiency and timeliness in on one hand and protection of the environment and operational safety on the other. while interior has already come a long way toward implementing organizational change and has responded to many recommendations, it may require congressional attention to fully accomplish its goal of restructuring and improving the management of public oil and gas resources. this ends my oral statement. thank you. i'll be happy to respond to any questions that you may have. >> thank you, mr. bromwich? >> thank you, chairman issa, ranking member cummings and
7:52 am
members to the committee i'm happy to be here in response to your invitation and to discuss the activities of the bureau of ocean energy management regulation and enforcement following the deepwater horizon oil spill in the gulf of mexico. these activities include putting in place strengthened safety measures and regulatory reforms relating to reviewing and approving exploration and development plans and applications for permits to drill. those measures and the many other steps we have taken over the past year have been part of our response to deepwater horizon and its aftermath. but as you know, aside from one grant program my agency is not directly involved in gulf coast recovery efforts nor do we work with bp on its recovery efforts. to the extent that the issues, the committee is exploring today extends beyond my agency's jurisdiction, i will take those questions back to the department of the interior to other agencies. at boemer we have devoted enormous efforts over the past year to put in place a new and necessary set of rigorous standards for safety and responsibility in our offshore development program. our aggressive reforms to offshore oil and gas oversight
7:53 am
are the most extensive in the united states's' they strengthened everything from work design and workplace safety to corporate accountability and are helping to ensure that the u.s. can safely and responsibly expand development of our energy resources. over the past year, multiple reviews and investigations have produced reports advocating the need for change in our agency. the president's commission on deepwater horizon, the department of the interior's inspector general, the department's own safety oversight board and multiple committees in the house and the senate including this one show the need of reform the way the business does business and the way oil and gas operations are carried out offshore. many of these reports have validated the administrative actions and reforms we have been undertaking at the department to promote safety and science in offshore oil and gas operations. these changes were necessary to ensure that industry and government worked to help prevent an accident like deepwater horizon from happening again.
7:54 am
we have issued new regulations to bolster safety and to enhance the evaluation and mitigation of environmental risking. our new drilling safety rule put in place tough new standards for well design, casing, cementing and blowout preventers including the requirement that the drilling process be certified by a professional engineer. our performance-based sims rule requires operators to have a safety and management program that identifies the potential hazards and the risk reduction strategies for all faces of activity. boemer has also issued noise to lessees on that provide additional regulations. e dischae scenario that provides the calculations behind those. we have clarified that operates must certify they will conduct their drilling operation in appliance with all applicable agency recommendations, including the new drilling safety rule and we have clarified we will assess whether each operator has submitted
7:55 am
adequate information that it has access to and can employ the deepwater blowout. in addition to the enhancing drilling and workplace safety, we have worked on reorganization of the mms and independent entities with distinction missions. they are releases development, regulation of drilling, and election of rev nighs from federal energy development. having these three conflicting functions reside within the same bureau enhance the potential for internal conflicts of interest within the agency. instead of one with multiple missions, we will have three new entities, they are beom, bsee, and honor. we are on track to complete the organization by october 1 of this year. boemre continues to issue permits, we have in every case
7:56 am
that the application reaches the standards. when new safety and environmental standards went into effect last june, seven permits are pending, returned for more information. deepwater falls into two category, deepw there are permits that were barred by the deepwater moratorium. we approve 40 of these permits worth 15 unique wells and demonstrated in february that developed containment capabilities. 25 permits are pending and 25 have been returned to the operator. there is a category that ignores the discussion. water injection wells, and the completion that work overs. and 40 of these permits have been approved. only one is currently passed. power permitting of drilling activities is moving ahead
7:57 am
steadily there are good reasons it is slower than in the past. their applications fully comply with new requirements, they ensure compliance rather than these. this process may frustrate many in the industry, they are completely appropriate in the best interest of education. in closing we have made significant strides reforming the way offshore oil and gas programs carry out the department of the interior on the continental shelf. we have raised standards and promoted safety and science in offshore oil and gas operations and because of hard work of the industry we have been improving and issuing plans and permits and getting people back to work. that concludes my statement. i am happy to answer any questions. >> thank you. we go to the gentleman for five minutes.
7:58 am
mr farenthold. >> i would like to thank you guys for coming up and sharing your thoughts and concerns. if i ignore you and talk to the government regulator i may be giving you some of the problems. if i could ask, you went through a lot of numbers pretty quick. i want to make sure i have an adequate handle on those. and the pace we're looking at. you say there have been permits on 15 projects that have been issued since the moratorium was issued. >> for activities that were prohibited under the moratorium we have permitted 15 unique wells. there are multiple permits recently for individual unique wells that have a larger number. >> how many were in the process before they went into effect? >> depends on what you mean.
7:59 am
clarify what you mean. >> you have been working on an stuck on the shelf. >> we have stuck any on the shelf. a number were ongoing. >> the number i have is four or five are actually new ones. they weren't already in the works. >> that is about right. it may be slower but those are projects that are ongoing to put people back to work. the distinction between prospect that were previously submitted it is quite relevant. >> if i have done a lead i wanted to drill a well how long under the current process would it typically take assuming i reasonable about my paperwork? >> that is the big assumption.
8:00 am
one of the challenges industry has faced and they fully acknowledge it is they have frequently committed plans that are incomplete and compliant. [talking over each other] >> permit applications that are incomplete. we are looking with industry every day to try to eliminate the number of times we have to process the improvement. >> is this a result of the fact that there are new regulations, not even sure what needs to be done. the complaint i am hearing from my friends in the industry, pretty big in gulf drilling. they don't know what they need to do to satisfy your criteria. i understand these things were getting out in two weeks prior to deepwater horizon. >> before the environment
8:01 am
regulations. they were turned out quickly and the new safety and environmental rules made the process lower. >> are we talking two months or six months? you only have four new ones since february, we were looking at much longer. >> if a fully compliant exploration plan, and a fully compliant to drill was submitted we are talking about a few weeks. not a large number of months. that has not been our experience of farm. i think they didn't fully understand them at the beginning and they do now. if you talk to them today they would acknowledge them. >> would you say that months ago when the moratorium officially was lifted that you had full and complete guidance available to those oil companies on that day?
8:02 am
>> i don't think we had full and complete guidance. >> that is all i really wanted. [talking over each other] >> the new rule i focused on issued on october 15th, three days after the moratorium was lifted and that is what began the adjusted time and cost for industry and to some extent i want to clarify the time line. >> what is happening with 33 previously permitted deepwater wells? >> a number of them have not resubmitted their applications and we can't do anything about that. we can only act on the applications we have. >> they were permitted and the rules change and move the goalposts. >> that is not the way i put it at all. one of the main obstacles to companies getting their permits approved is they have to demonstrate access to to deploy containment.
8:03 am
i don't think you or i want anybody drilling in deep water that can show that. >> i am out of time. i do have a couple more. thank you very much. >> gentleman from maryland, ranking member for five minutes. >> i want to thank you for your testimony. it is really helpful. one of the things i say to my constituents is this is our watch. we have a duty to pass a better environment than the one we found when we came upon this earth and i truly believe that. i was listening to governor barber, said something that was very interesting.
8:04 am
when i asked him about the department of interior drilling requirement as it is called, what it says is, talking about the moratorium, they have to show that it has access to deploy surface and subsidy resources that would be adequate to respond to a blowout. it is interesting, its surprise to me when governor barbara said he felt the risk of what happened to deepwater horizon was worth it when he considered the cost. justifies with people being out of work. i have done everything i know how to make sure they get
8:05 am
compensated for this. do you have an opinion on the baseline, what you have been doing? >> i want to take issue with something else governor barbara said which is the deepwater horizon blowout was the first of its kind closed with in the history of deepwater drilling. the president's commission says that is not so. based on 79 incidents and loss of well control which is what this was. loss of well controlled between 1996, and 2009. another way to describe that was 79 near misses. seventy-nine almost deepwater horizons. that is what the president's commission found. to say that the risk is one and a million or x thousand of deepwater horizons drilled is
8:06 am
not accurate. we will never be able to reduce the risk to zero. we know that and you know that but we have to work constructively to diminished those risks and unbalanced way so that we don't impose an appropriately high cost on industry and yet we raise the bar on safety. we have done that. we have lowered the risk. my risk threshold may be different from governor barbara's. i would not be comfortable going forward without strengthening safety rules that we put in place. >> the requirement that all companies have a formal contract that if service is needed. let me quote new requirements. to evaluate whether each operator has submitted adequate information demonstrating it has access to deploy surface and subsidy containment resources
8:07 am
that would be adequate, deal with the blowout? can you explain in wayman's terms why you require all companies to demonstrate why they do that before the new ones are issued? >> for the same reason you and others said. we are sickened by the fact that for 87 days the oil float in the gulf with the trial and error process that was used to try to cap the well and after 87 days it was capped. we don't want that to happen again. we want industry to be prepared. talking about the period of the moratorium with both issues because containment requirement is critically important and industry admits it was not ready with containment until the middle of february this year. >> so the temporary moratorium was lifted but you didn't issue the first deepwater drilling
8:08 am
permit until february. >> there were not the containment systems and resources that were ready until february. the first panel we talked about, there is another group but neither of those groups was ready, had its equipment or tested its equipment until the middle of february this year. >> my time is expired. thank you. >> the gentleman from new hampshire for five minutes. >> i have one question for you and i want to get this to the other panels. considering plans or permits, the loss of economic activity, considering the process the agency goes through? >> the individual permits are reviewed by skilled personnel in the gulf of mexico. i have no role in that.
8:09 am
i don't think it was appropriate to scrutinize plan application or permit application for any other reason other than determining if they were complying with the applicable regulations. they do not and should not. they do not and should not. plans and permits should not do that. >> i want to move to mr. kief. thank you for coming. can you describe to me very quickly the type of companies the average employee that you have, the individual you represent? >> we are in the tugboat business. 80% of our employees, ordinary
8:10 am
engineers, the other 20% our staff, maintenance people to personal. >> how many people employed? >> possibly 110. >> has that number changed since the moratorium? >> we had a few layoffs but had to adjust our employees and have thresholds' where we know we have to lay off people. >> not only are you going to have to lay off people in the future but he reduced salaries? >> yes. >> for almost everyone in the company? >> about 50%. >> these are families that depend on that source of income? >> yes. as a matter of fact three of the companies we have, this company
8:11 am
doing the partnership of three cos, one of them was founded by my grandfather. and my aunt owns it now. i run that company as well. >> it is safe to say you would like to see the economy grow, come back as quick as possible and you would like to see the government participate in a positive way to make that happen? >> yes, i would. >> thank you very much. mr. taffaro, thank you for being here. i wanted to ask you about the economic impact. it seems to me in washington we are focused on the regulatory side. there is good reason to be concerned about the regulatory environment. i don't think anybody disagrees we want to have safety.
8:12 am
that makes good sense. good public policy. thousands of people who are negatively impacted for the long term, decisions that have been made by the administration, my heart goes out to each individual who no longer has a job or is waiting desperately to have the possibility of getting back to work. we ought to consider that as we move forward. just about every public policy decision that we do. it doesn't mean that you provide a permit that is not appropriate or that you provide a permit to someone who is not capable of handling it but i do think we have a responsibility to consider the negative impact that have occurred to regular everyday people who are desperately looking for employment. could you talk a little bit
8:13 am
about how that is impacting people you represent? >> the main issue is we have to keep in mind part of what happens is there is a trickle-down effect. the rig not being permitted doesn't just perfect of those men and women on their rig. affects every other spinoff company and agency that provides support for those businesses or that operation. that is where we feel the effects in st. bernard parish and across coast louisiana and beyond as you heard. the main issue is the comprehensive impact is reviewed. we want safety and we don't want another impact or another disaster such as the one we experienced. we definitely don't want to exacerbate that call to safety
8:14 am
by undermining the economics of the region. >> thank you. mr clay for five minute. >> let me thank the witnesses for being here. people who have long been concerned about the public welfare have raised some important questions about the aftermath of the bp oil spill disaster. some disturbing information has come to light regarding money during efforts to recover from the spill. for example from my home town, mr. dick gregory who is here today, he and others brought to my attention some investigative articles written by the washington post. these articles are worrying. those are some who profited from
8:15 am
the bp oil spill disaster. these people apparently aimed the system to take so much money inappropriately that they earned the nickname is billionaires'. two of those named in these investigative articles testifying today, as a politician, i know what it is like to read a newspaper article about the issues, i had the experience of reading articles when i cannot recognize the events as they have been described by the reporters. i know how it can be for others in similar circumstances and we don't always have an opportunity to respond to those articles and perhaps set the record straight. therefore i feel duty bound, mr.
8:16 am
taffaro and mr. williams, to respond to those articles, what they have alleged about your conduct in the wake of the bp oil spill disaster. >> if you could give me a specific question i will be glad to answer. >> in both articles of the washington post and pro publicthey, they talk about contractors, and talk about you implementing a 30 day emergency which allowed you to pick contractors outside a normal
8:17 am
government procedure. leasing land at $1,700 a month and asking to lease the land back for $1.1 million. is that accurate? >> i am glad to respond to that. you are under oath, you are required to speak truthfully. you are not required to answer questions outside the scope of this hearing. you may choose to answer but that would be true of any of our witnesses. if something is outside the scope of this hearing including any impugning of individuals who came to testify there's no obligation to respond. >> i would be glad to. this is exactly the concern that
8:18 am
has been raised, excuse my frankness, a hatchet job by miss barker. if your staff researches that information there is no factual data to substantiate your comments. the idea is we were under a state of emergency. i did declare a disaster. everyone who had any involvement in the process would see that as justifiable. as far as ending our contract, me as the chief elected official, signed one contract regarding operations of the bp oil spill disaster. >> to the company owned by the st. bernard parish. >> that is not accurate. >> the charge $1 million a month for land it was leasing. >> what you point out is exactly
8:19 am
the problem with the way the operations were run. bp executives authorized representatives on the ground to initiator and negotiate land deals, use of resources and then changed those personal out and didn't pay them what they were owed. that is the true economic impact of what we have going on. >> the selection of certain fishermen to help with the cleanup and some didn't get big. >> every selection process that we used to employee the exact individuals who were impacted by the spill whose livelihood overnight were ripped from them. is generational cultural identity overnight was ripped from them.
8:20 am
every selection process that was implemented was done in a public forum and was continuously reviewed and modified to make sure those individuals who were most impacted were those people who were being put to work to respond to the disaster of note doing of their own. >> mr. williams, you may respond. >> i appreciate that question and it is sherri critical. of come from a county in northwest florida with less than 20,000 people. we are small county with an operating budget based on $9 million. you are going to run into family folks. i felt i am glad we are here in an office of oversight and reform because not that i take offense, appreciate the question but i feel it is a red herring for the issues we're here to address today. we were under a tremendous
8:21 am
amount of pressure. i have two people in the emergency management department. we had no resources or guidance from the state or the federal government. we were put under tremendous strain at the article you are referring to, the author of that never came to my county. never set foot in our county. you are indicating a girlfriend worked as a public information officer and she volunteered in that period of time tremendously through the process. with all due respect my scenario would be you have to understand i am proud of what we did trying to put people to work together, amassing what we had legally militia of people trying to fight what was coming on our shores. it is very misleading to the ultimate goal i would like to do and present from the federal government what you can do to help at the local level. >> i am glad you have both responded in a way that you
8:22 am
have. did you clear that action? >> actually, before that was done the board of county commissioners did not approve any of the contract as my colleague indicated. this was done through the county administrator. we went through legal counsel. we went to the state of florida's ethics commission and the governor's taskforce and asked for permission to make sure it was there. the media certainly exploited this scenario to make it look bad for a lot of folks who were doing the best they could and proud to work for their communities but i appreciate giving you the opportunity because we did it right. we stopped profiteering and serve, governor's task force. we saw companies coming in and asking for several hundred thousand dollars to man these counties and we refused to do that. we asked the governor for assistance. the department of mercy management, we worked under the guidelines of the premise and
8:23 am
did the best we could under the circumstance. >> i think the gentleman. unrecognizable self for five minutes. i am just old enough to remember the 60s but mark mclormac who wrote among other things the terrible truth about lawyers and what they don't teach you at the harvard business school and i don't take every quote from those books but are take away one which is a problem is something money can't solve. if money was not the problem and i presume money was available weathered is the $20 billion from bp or the billion dollars for the industry to perform a quick bond for future potential spills, why did it take not just six months moratorium but
8:24 am
essentially it another many months before you had guidance so that we could begin having new oil wells drilled again? >> it is fair to say that deepwater horizon was an earthquake through the industry. they acknowledged that and through the government. [talking over each other] >> let's put it in perspective. two battery packs not active. this had repeated the steps. this oil was like a drunken driver swerving, crossing the line repeatedly and did nothing. there was a study in 2003 that questions the blowout preventer but did nothing but say pick
8:25 am
one. all of these things that occurred prior to that day is was it an earthquake in the organization or the oil industry, that bp was a backer on this well or in the gulf but in fact there was a reason their actions were not consistent with other drillers in the golf. which earthquake was that? was it in the oil drilling industry or within your agency? >> it allows bp as the only bad actor here. that report which was based on after a investigation pointed out that halliburton was at fault and transocean was at fault. halliburton and transocean who provided services and acute percentage -- [talking over each other]
8:26 am
>> i will go to -- mr. rusco. the delay to get america working again, isn't that what the study finds? a distracted agency because it is reorganizing? >> it is a complicating factor. i can say that -- i take the point that once they decided companies needed to demonstrate the ability to contain a blowout, that that was the binding constraint. >> when was that request made? when was the starting date for that? >> i have to defer to mr. bromwich. >> one was the date for the demonstration requirement? >> two different things. if the blowout preventer failed, when did you say they must prove
8:27 am
-- >> clarify what was cleared of any. we clarified in writing on november 8th. >> how long was that after the moratorium began? >> less than a month. >> after it began? the first moratorium was put in place in may. several months after. >> you have a six month moratorium and a month later basically then you say you have to do that. isn't this taking six or seven months to decide to add one more way to stop the oil industry from starting again? wasn't that reckless to go seven months to discover that you had something as basic as that? [talking over each other] >> nobody said that. [talking over each other] >> formed the marine well containment company in july.
8:28 am
they knew that that would be an obstacle to getting the deepwater permit until they could put together the resources. it took them and it took later -- in number of months, close to seven months from the time they recognize that it needed to be done and they announced that until they were ready to go. the mere fact that we clarified what was required in november did start -- doesn't reflect any recklessness at all. >> are you still clarifying various things for the industry? >> of course. that is what regulator does. >> when will it be clear? >> it is clear to 95% of the operators now. the others ask questions of us. we will clarify for them. we meet all the time with operators. we met this week with a group of gulf area operators, a delegation from the natural resources of louisiana. they have been a forum for
8:29 am
asking for questions and clarification and getting them. >> mr. kief, i am sorry we can't do more for you today but we won't give up on any of your testimony here today. you said you would take something back. i want to make sure you take this back today. there is pending litigation or current litigation in the eastern district of louisiana challenging seismic surveys in the gulf of mexico by the infamous nrdc. our information is the secretary has worked out that case and discussing a settlement. the question for the department of the interior is if you settle one more time with a radical environmental group that gets settlements leading to regulatory changes or areas off-limits don't you have a conflict of interest?
8:30 am
shouldn't this be a case in which those with a vested interest, the states and the oil companies should have a seat at the table rather than a settlement issued a round what they would call their interests along with the gentleman here today? >> i am involved in that matter. the characterization as a radical environmental organization -- [talking over each other] >> we have to make litigation judgments whether to settle cases or not without going into the details. there are subtle and discussions on going and one of the goals of such discussions is to prevent more radical injunctions or actions being taken by the court. as far as the oil companies they
8:31 am
are intervenors in that case. >> they are locked out if you settle. the nrdc has on there website the litigation, motives and methods as part of their way of doing business. you may not consider them radical but an organization that basically litigates in order to legislate and agency that settles in order to effectively create legislation is exactly what this committee is concerned about. you may not turn them radicals or your settlement around the intervenors as somehow un-american or you have a conflict but disorganization here is finding that conflict more so. i want to thank you. thank you for your continued testimony. we recognize the gentleman from north carolina the purchase of mr. mchenry. .. chairman, and i think the witnesses for being here. mr. bromwich, i've got a question about the marine
8:32 am
archaeologist, the new rule that your organization has promulgated. so is it true that operators -- in order to comply with this? >> what? >> pardon the? >> is it true they have to what? i couldn't hear what you said. >> i will repeat what i said. in context of the new archaeological assessment repo report, is it to the operators will have to employ a marine archaeologist by with this will? >> they will have to of his survey conducted what about hiring someone, contracting or whatever. we don't mandate that that they'll have to get an article logical survey, yes. >> why is that necessary? >> it's because a number of discoveries have been made in recent years, shipwrecks, and other structures that are protected by various federal law, including the national environmental policy act. and as we have eliminated the
8:33 am
categorical exclusions with which used to do exploration plan, and now are doing environmental site-specific assessments, the way to process works is where different subject matter expert who have to look at the issues. and our archaeologist subject matter experts simply do not sign off on exploration plan without the kind of survey. so that's the reason. >> okay. well so, in terms of what your organization does, does that have anything to do with safety speak was it has to do with protecting the environment which is part of our mandate. >> was there a cost-benefit analysis in context with this regulation? >> i'm not sure whether there was or wasn't. >> would you be willing to follow up with the committee? >> sure. >> and give us your assessment of the cost and benefits of this regulation? >> i would be happy to. >> thank you.
8:34 am
mr. williams, thank you for being here today. certainly an interesting process to testify before congress. but in context with your experience, there's a difference between the opa and the stafford act in terms of responsibilities and everything else. do you think that operating under opa was reasonable, proper, good? was it a better outcome than operating under stafford? >> will you turn on your microphone? >> i'm sorry. that paralyzed us at the local level. i think opponents of opa come we're not trying to basically supplant opa with the stafford act. but we are trained to go in a state of florida. we have tested models. we have put everything through over and over case studies, and because we are so impacted by our storms, we were unable at the local level to make decisions firsthand. it has always been at the local level and worked that up. under the unified command, the
8:35 am
responsible party hijack the entire process. we were basically at their mercy, their decision-making. we were disconnected from our state partners, and idly from our federal partners in the process. we called it unidentified command. we would wait for weeks and weeks trying to get things done. we wasted incredible amounts of time looking at boom strategies and national contingency plans in every contingency plans that were extremely dysfunctional. they were antiquated. there was no span of control. there was no unified command. the state of florida in my area, the panhandle was being controlled from mobile. it was a breakdown as the governor indicated earlier, from communications and processes, methodologies. it was completely broken. so the answer your question emphatically no. opa did not work on the ground level. it did not work at the state level and i think it failed the folks of our country. >> this is a management problem? >> yes, sir,. >> clearly. and your expense with storms is
8:36 am
what? >> primarily living in florida and i guess growing up originally i was start i guess when i was four in mississippi. but with florida i've been elected since 2004 in 2005. you know the history where we crisscrossed our state for hurricanes in one year. had heavy damage. and as an elected official i have watched a process, and obvious he florida i think has mastered mr. fugate now being head of fema coming from florida. we know how to do it at the ground level. we make good decisions. we work with our partners but we work with our state partners to make those critical online decisions. this process was dysfunctional and broken. >> and stafford is clearly better? >> yes, sir. it gives the local government the ability to pull in the resources as necessary but to make on the ground feel decisions that we can intimate immediately. we had to go through and approval process to give a very poor analogy, like go ask your mom, go ask your debt. and i never could get a straight answer. it is a system that i think this
8:37 am
group particularly in congress has to look at. there are lessons in homeland security. there are lessons as the governor indicated earlier. if we go off of cuba, china, et cetera, as bad as that was without a responsible party, where would we be? multi-jurisdictional lines has to be charge. one point i would like to me, i came a few months ago during the national association of counties, and met with intergovernmental affairs and requested the ability for intergovernmental affairs from the administration to work with the directors of emergency management within the five affected states so that we could go back and look at case examples and studies and what do we do better. that i think is a critical and i want to ask that the chairman and his commission review that so we can get down to our emergency management people at the state and county level so this never happens again. >> i thank the gentleman. we will not do a cigarette butt to be a couple of quick comments. one from the german from texas
8:38 am
and one from the ranking member. please go ahead. >> i just wanted -- mr. bromwich, do you think that what is going on now is an increase process in the time and called is driving up the price of gasoline? >> no, i don't. >> you don't think there is a concerted effort going on to do that, float down the gulf of mexico which is a quarter of our domestic supply -- >> an effort by whom? >> i think this administration, i'm not a black helicopters guy but if you look at what is going on. if i were expected i would be buying oil futures. we've got a slow down in the gulf, a slow down of land leases, the epa talking about fracking regulation. we got another court of the production in the basin of texas. it's like we're trying to run these gas prices up. >> i can speak for the issues i am aware of which is offshore,
8:39 am
there is no such effort. there has never been such an effort. >> would the gentleman yield? if the gentleman can respond to the mms finding up on the board which we cited earlier, that might clarify it. in a mess down there was a correlation between a reduction in the gulf an increase in price. that's your own study. >> i have never seen that before. i don't like to comment on things i just been introduced. i have read very knowledge for commentators including economists who say it is a world market, and a minor of relatively minor slow down in permitting here has virtually no impact on prices. in addition to that as you know -- >> okay. >> there have been no delays in production. production has continued all on. there was never a moratorium on production. >> i do want to reclaim my time for a second that historically speaking, you have seen a spike in prices of oil, whether it is driven by speculators or the market. even when there's a hurricane, delays production in the gulf just over a couple of days.
8:40 am
how can you rationally say that a long-term slow down in the permitting process isn't going to affect the price of oil? >> because you asked me whether it was causing a rise in the price of oil now. my understanding of world market conditions is that production has continued a pace, the projections or the declining projections are not for the present. they are for the future. and, therefore, i thought the question was about the present and i don't think it is having an affect. >> real quickly. there have been reports, record oil production in 2010. do you think domestic production, do you think the record is going to continue through 2012? we start to see the results of some of these changes and policy? >> the eia which is considered the most reliable sources of energy production does predict a decline in 2011 and in 2012. i don't have a crystal ball but --
8:41 am
>> so decrease in production, typical under supply and demand would probably result in an increase of price of oil, corollary price of gasoline at the pump? >> that present will have -- which we don't. >> thank you very much. >> we have enjoyed -- i thank the gentleman. we have been joined -- wait a second would the gentleman yield for just a second? >> yes. >> mr. bromwich, i would just like you -- will give you a copy, that study that said they would be a rise based on less reduction in the gulf and actually occurred or is occurring. that was a deliberate under our request on your organization. you gave it to us. so hopefully you will take it back, look at the information that we received pursuant to our request from you, and figure out whether or not you should have seen that document or your agency. >> i don't review every document that you ask for and receive, just to be clear.
8:42 am
>> i understand, but since this one said just the opposite of what you are saying, i think it's a good one for you to review. you can comment back about what you think it was accurate since it was an internal documents. >> be happy to do it spent we have been joined again by mr. connolly for five minutes. >> thank you, mr. chairman. and i have another hearing so that's why been going back and forth and i think the chairs intelligence. mr. bromwich, during the first panel, you probably heard what i heard from governor barbour state that simply enforcing the rules would prevent future oil spills. when the national commission of the gulf oil spill issued its report, dated say that simply enforcing these regulations would be sufficient? >> no. >> what did it's a? >> it pointed to a series of contributing causes to the oil spill, a variety of primary human errors committed by personnel from bp, transocean, halliburton and so forth.
8:43 am
and it specifically said that, i believe, as i recall that enforcement of existing regulations would not have prevented it. >> would not? >> would not have prevented the oil spill. [inaudible] that could be helpful to? >> yes and we've already taken many of the steps. our drilling safety rule which is addressed to well design, well casing, cementing and blowout preventers. we think substantially reduces the risks of another still like deepwater horizon. as i said before i'm not sure you here, will never be able to reduce it to zero. we won't. but we have reduced it already substantially, and i think over time as industry wants to go into deeper and deeper water and the regulatory process needs to keep up, i hope that we can further reduce that risk. but it will never be reduced to zero. >> one of the arguments made by governor barbour and others is
8:44 am
that you have 31,000 oil rig's, the safety record is fine. one bad apple shouldn't cause us to turn everything on its head. my point to governor barbour was, well, but one blowout of this magnitude is pretty significant, and can we -- should we be doing everything on our part to try to minimize that from happening. and the fact that it happens once is wants to me given the severity and 92 of the disaster. what is the view of the administration with respect to sort of rolling the dice and taking our chances on a blowout? >> we don't want to roll the dice and take a chance on a major blowout again. the risk will never be reduced to zero, but we think we can do and have already done many commonsense things to reduce that risk. and for the measure whether you here at the time, but this is
8:45 am
not unprecedented in the sense of losses of well control that nearly led to blowout. this was the only actual blowout, but the president's commission found that there were 79 instances of loss of well control between 1996-2009. so another way to put it is, 79 almost deepwater horizon's. >> so the idea, this really partly an act of god or something like that is misleading? >> thankfully it was unique in terms of the fact that the well totally blue angel at 4.9 million barrels of oil spill into the gulf, but in terms of the problems that arise, particularly in deep water, with high pressures and so on, no, it's not so far out of the norm that it begs to be dismissed. >> one of the things that the obama administration did that some might view as prudent after such a high magnitude accident
8:46 am
was a temporary moratorium on additional permitting, until we had our arms around the causes and prevention and so forth. in listening to some of the rhetoric and even reading some signs, we seem to favor around your, one would have the impression that moratorium has led to significant plummet in domestic production. is that the gay? >> no, that it had no impact on production because production was never stopped or delayed. >> is it not true that domestic oil production in the obama administration is actually higher than that of the bush administration? >> yes, as of the end of 2010 that is exactly right. >> is also to the application for permit to drill actually increased in the obama administration over the bush administration? >> i believe that is ripe. >> is it also true that production on outer continental shelf actually also increased in the obama administration over the bush administration?
8:47 am
>> it has. >> thank you very much. .. additional week to allow you to add additional information. plus opening statements of members who were not able to be here. with that we stands adjourned. [inaudible conversations] [inaudible conversations] >> we're going live now to the senate floor new faith and freedom coalition conference here in washington. we are covering two parts today. this session which will go into the afternoon features a number of notable republicans including house speaker john boehner, house budget committee chair paul right, congressman allen west and michele bachmann. live coverage you on c-span2.
8:48 am
>> are you ready to send a message to president barack obama? well, you're in the right place. this is the right place to change america. we will have a great weekend and without further ado without more special music from ffc's very own joy creasman. [applause] ♪ a note under in ♪ ♪ ♪
8:49 am
♪ ♪ ♪
8:50 am
♪ ♪ ♪ ♪
8:51 am
♪ ♪ ♪
8:52 am
♪ ♪ ♪
8:53 am
[applause] [applause] ♪ ♪ ♪ ♪
8:54 am
♪ ♪ ♪
8:55 am
♪ ♪ ♪ ♪
8:56 am
♪ [applause] [applause] >> thank you. i'll introduced the one of our superstar activists at the grassroots level in virginia, a future, future amazing young conservative leader, isaac is here to do our pledge of allegiance. >> please stand for the pledge. i pledge allegiance to the flag of the united states of america, and to the republic for which it
8:57 am
stands: one nation under god, indivisible, with liberty and justice for all. >> please welcome the senior pastor, benny tate of rock springs church in milner, georgia. [applause] >> let us pray. our most kind gracious heavenly father as we bow our heads and our hearts in your presence we thank you for this day. we are reminded god your mercy is renewed upon us every day and we are grateful for that fact today. lord, we thank you for this land. we thank you for a nation that was founded of the glory of god and the advancement of the
8:58 am
christian faith. our forefathers didn't come here in search of gold, but they came here in search of god. we thank you for the freedom that we have. we thank you for our men and women that are serving on foreign fields to protect us and preserve the freedoms that we enjoy as americans. and god, i ask you to bless america, but i ask americans to bless you. you said my people which are called by my name shall humble themselves to pray and seek my face and turn from their wicked ways. then will i hear from heaven i will forgive their sins and i will fill the land. thank you god, thank you for freedom, but you bless us and keep us, make your face to shine upon us, lift, may we experienced your peace. we pray this prayer respect in all faith, we pray this prayer in the name of our lord and savior jesus christ, and tell you, we pray, amen.
8:59 am
>> amen. >> please join me in the singing of the national anthem. ♪ oh, say, can you see ♪ by the dawn's early light ♪ what so proudly we hailed ♪ at the twilight's last gleaming? ♪ ♪ whose broad stripes and bright stars ♪ ♪ thro' the perilous fight


info Stream Only

Uploaded by TV Archive on