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tv   Federal Oversight of Abandoned Offshore Oil Gas Infrastructure  CSPAN  January 4, 2022 9:05pm-10:47pm EST

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committed to providing eligible families access to affordable internet bridging the digital divide one connection at a time. >> cox supporting c-span as a public service along with other providers giving you a front row seat to democracy. next a hearing on abandoned platforms into pipelines environmental experts believe more federal oversight is needed to require the gas companies to plug walls and fix other infrastructure no longer in use. in late august, hurricane ida were through the gulf, knocking out power, water and communications. residents are still recovering today, but ida also caused
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multiple offshore oil spills. active lines were the sources of some spills while abandoned the ones with no identifiable party to take responsibility with a source of others. according to reports, ida created the most gulf oil spills identified from space following a weather event since the government started tracking links into spills using satellites almost a decade ago. we shouldn't view this as a one-off event or a freak accident. there are thousands of oil and gas structures in the gulf, including rigs, platforms, power cables and thousands of miles of pipeline all potentially posing
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environmental and safety risks. some of this infrastructure is active, and some is abandoned. but it's all aging and a growing concern for communities and wildlife impacted by spills and also taxpayers that may be forced to pay for its eventual removal. climate change supercharges storms in the gulf, more powerful windows raise currency and mudslides will be a growing threat capable of moving pipelines and destroying structures. strong federal regulations to
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reduce other spills and shouldering the cleanup cost. this isn't a just a huge and growing problem in the gulf of mexico. in california, as we recently experienced, there was also a crisis in the pacific. on october 1, around huntington beach and newport beach reported in oil smile and the response received reports of being unknown machine on the water surface. the coast guard confirmed this bill the next day and since then, local, state and federal officials and volunteers had organized a robust response to containing a cleanup the oil spill and begin to investigate the causes. over the past two weeks, we have
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learned considerable details about the pipeline amplified energies response and the timeline of events that led to the rupture. months ago a ship's anchor hooked and dragged the pipeline over 100 feet causing what led to the release of tens of thousands of gallons of oil. but this begs several questions and raises issues for us in the recent years is required and whether indications of issues and was there a delay when
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amplified initiated with emergency response. these and other questions must be answered but in the interim we need to learn about the impacts of the spill because there are many. recently some have begun to be reopened. local businesses and restaurants see customers vanish. lands that serve as a refuge for other wildlife have been inundated. as a part of the investigation, we need to hear from residency s into the surrounding communities on the ground. that's precisely why congresswoman porter and i are
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having a joint hearing this coming monday conditions will eventually improve and it's critical we don't wait for the next accident to occur. offshore oil and gas infrastructure in the gulf and in the pacific is the ticking time bomb. congress has known offshore infrastructure poses risks to the environment and taxpayers. 2015 the government accountability office alerted us that taxpayers are on the hook for billions of dollars in the decommissioning costs and in
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april the gao released a scathing report detailing the extensive failures of the interior department's oversight of offshore pipelines in the gulf of mexico. the recent offshore spill needs to be a wake-up call for congress because without stronger regulations, things will get worse in coastal communities and taxpayers will pay a steep price. looking forward to the testimony of the witnesses, and by now recognize the ranking member for his remarks. >> thank you, chairman. the biden administration policies have created crisis after crisis. they died in afghanistan due to
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a poorly planned extrication. the flood of orders with any democrat in the presidential election asked if they would support healthcare and targeting parents with the audacity to disagree with elected officials and of the inflation, weakening supply chains it is more extensive than the prior day and the self-imposed energy crisis fortunately the administration is something that my children aren't familiar with. he seems [inaudible] on day
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number one of the administration within five hours of the inauguration, joe biden elected to hold the construction of the pipeline and shortly thereafter issued an unlawful ban on oil and gas development. the prices went up and were going up now. it isn't that hard to comprehend. after taking months to realize the mistake, the national security advisor jake sullivan to big opec to pump more oil and this was back in august. joe biden doesn't believe our workforce is good enough to produce energy for our citizens, but he thinks opec is.
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believe it or not, the member countries that included saudi arabia, venezuela, washington and other adversaries will not cover for biden's mistakes. so what is he doing? he's finally started to discuss how they can help gas prices. although we can't be clear on exactly what is discussed, i can provide a summary that will help keep energy prices down. onshore and offshore resales reinstate the permit for the keystone xl pipeline and the commitment to exporting american energy instead of importing and
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reform a broken process and stop burdening domestic producers. a joint letter asking to withdraw the revision or to end the master leasing program. there is not a single republican here that is not a conservation analyst. funding the national parks and public lands to offshore and gas revenues passing the traditional [inaudible] the offshore production habitat and holding
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those that are accountable. working closely with industry to continue safety just this past year the government accountability office removed offshore oil and gas do to strides made in safety. however it placed hard-working americans [inaudible] with today's hearing i recognize the recent events to argue for banning oil and gas nickel and diming folks in the industry. so far we know the u.s. coast
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guard is the most likely cause at this moment and the supply chains to anchor for too long instead why the evil oil and gas sector is to blame. the policies proposed will only make this crisis worse. in closing i do look forward to a constructive dialogue on how we can escape another self-imposed crisis. it's responsible policymaking in the sector. mr. chair, i will yield back.
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professor of marine science and president emeritus of the university of maryland center for environmental science. also a former member of the national commission on the deepwater horizon oil spill and offshore drilling. the north american executive director of the carbon tracker initiative. jacqueline is the chief policy officer for north america at oceana and the endowed chair for fishery and ocean help at the harvard research institute for gulf of mexico studies.
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under the committee rules they must limit statements to five minutes, but their entire statements will appear in the hearing record. when you begin, the timing will begin and it will return when you have one minute remaining. i recommend members and witnesses joining remotely use the quote stage view so they may pin the timer on their screen. when the testimony is complete, please remember to mute your self to avoid any inadvertent background noise. i will allow the entire panel to testify before questioning the witnesses. the chair now recognizes doctor bosch for five minutes. >> thank you very much. from the time i was first
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conducting research on environmental effects in the gulf of mexico back in the 1980s to today, expiration production and transportation in the outer continental shelf has shifted quite dramatically. oil and gas production to less than a thousand declined its views discovered in the 80s and relatively shallow waters declined by over 90% and off southern california. natural gas production from the shallow water wells declined by 80%. offshore production has now dominated in the deepwater of the gulf of mexico up to 7500 feet deep. it grew by 38% just over the
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last ten years since the disaster. during the last ten years in the domestic production of the oil and gas through the hydro factoring has greatly expanded and in fact since the lifting of the crude oil export ban, last year there were 78% that exploded from overseas van actually produced in the u.s. and three times as much natural gas van produced offshore. so the depletion of the reserves left the legacy of the infrastructure still producing the declining resources. i'm so sorry. can you hear me?
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you have four minutes and 40 seconds. >> it's left this legacy and declining the sources into the infrastructure requires decommissioning and removal but smaller companies with operational capacities. this has substantial challenges going forward for the safe operations and reliably decommissioning on the platforms. there are 23 platforms and about
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a thousand of them will probably be decommissioned within this decade. such structures can enhance the productivity and it takes into account the scale of the challenge and comprehensively considers the consequences for ecosystems and the sources and of the effects of material left offshore. 59% of them have been permanently or temporarily abandoned and the rest will be at some point. it is equal to the average rate for the entire lifecycle of natural gas supply chain. according to the gao as you pointed out, there are 8600 miles of active pipelines in federal waters in the gulf.
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it lacks a process for addressing the environmental safety risk and ensuring the standards and also monitoring the long-term pipelines and limiting the restoration of the islands and number of pipelines underlining the island. the u.s. is not only facing this predicament of the corporations rather than taxpayers but this august the australian parliament passed legislation on imposing the oil and gas producers.
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recent rates of production, oil and gas and oil reserves would be exhausted in six to seven years. even with the undiscovered and estimated we could run out about mid century. at the greenhouse gases that would be released we really can't do that with a zero emissions the pathway that we followed and how we deal with the legacy and infrastructure over the next decade or two. the nation needs a smart strategy for this endgame that limits climate change and
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deleterious impact on the risk and residual infrastructure and the strategy must be environmentally sustainably effective for the people of the region and protect taxpayers from bearing the cost, so thank you. the chair recognizes -- i hope i'm pronouncing that right -- for five minutes. certainly a major concern to discuss the positive impact as it relates to scientific discoveries in the gulf of mexico and more importantly how they can facilitate in a safe
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manner. i'm the professor of marine biology and endowed chair for fisheries at the institute of texas a and m university in corpus christi. i direct the center for conservation where a large component of the program involves investigations into which represent a dominant structure habitat in the gulf of mexico with hotspots especially in enhancing the marine fisheries with many other species. however validating what we know for generations that is structured habitat to enhance the resources.
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they recognize the vessels in a variety of material quickly colonized thus we are not talking about a new concept but how we can use these practices to safely maximize and enhance the marine habitat. for example, operators in the gulf of mexico estimate there is approximately $18 billion worth of infrastructure that is available. they are routinely material and that represents the serious bottleneck to the process but not in this case the infrastructure here offers especially in a safe and wise manner. until recently, the information regarding this has been relatively sparse, however, in the last few years congress has appropriated over $20 million in research for three separate studies to better understand the
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use of important fisheries in the gulf of mexico and south atlantic, particularly as they relate to fisheries with this extraordinary level of funding today scientists are equipped in the technologies to further the science. the reason they show these structures provide important habitat and other environment infected the decades old structure in the biomass and economic drivers. the question is how do they perform with relation to mother nature or habitat and i'm pleased to report it's often better than the natural habitat with similar output.
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without addressing while the scientific community is well beyond the debate and that is to attract what is already there versus producing and it clearly shows the structures produce. they are not mutually exclusive. interestingly they have fast range boats to locate fish even the small features. it can be an alternative tool by pushing that effort away from the sensitive areas affording
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these from fishing pressure and perhaps it could be seen in person and i recommend anyone -- the crown jewel of the platforms with marine life and other fish have become convinced of their value so they don't condone the removal of the ecosystem over 30 years. so in conclusion they are an excellent example where the economy and public can benefit.
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to access this they take an active interest to safely ensure that much as possible stays in the water. thank you for the opportunity to address the committee today, and i would be happy to answer any questions. the chair now recognizes you for five minutes. thank you to the committee. thank you for holding this hearing and inviting me to testify today. today i will speak to the research on the oil and gas infrastructure as a retirement
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obligation. an obligation to the infrastructure this costs money but companies are required with a full estimated cost today. from the oil and gas production what happens when they stop is as early as 2025 and makes it harder for the cash flows. the bureau of safety indicates it could range from 35 to over $50 billion while the requirements are about $3.47 billion with less.
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they underestimate the cost of retiring deepwater infrastructure with the wells and platforms. by having the others because the uncertainty. infrastructure should be decommissioned but the difficulty making that determination explains why after it becomes enacted it's no longer useful or operational. we've seen this already.
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there's also a problem as well as the process companies have no incentives and they are like an unsecured loan to the government with no charity or incentive because operators bear no costs in the case of default. if the interest payments risks producers would be incentivized with non-economic assets. this is simple the assurance with all obligations with some other form. if it is to operate with the financial assurance the operator could do production.
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full cost is not only reasonable, operators often do benefit in the title that exist today for offshore infrastructure. the keyword is the liabilities to be passed on to others and we can see this in the field of bankruptcy. in 2012 and 2013 and required the properties from the corporation and then undo toward. with the company's most significant liabilities. to receive and decommission certain assets if they failed
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they would have to pay. several companies rejected to this proposal. a few key dynamics. second, the details in my written testimony understand them better than the government does and when they transfer the protections that are greater van with the government requires today. in summary there are tens of billions of liabilities covered by financial assurance into two todecommission in a timely way.
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finally, far more security than the government does for the same risks proving what the government can and should do more. thank you. the chair now recognizes -- >> my name is jackie and i'm a at the largest international advocacy organization that is dedicated to ocean conservation. the reason to move away and to clean and renewable energy in
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the areas this is the latest with the oil and gas industry. it's not a matter of if, but when. the procedures and taxpayers and inadequacies in the provisions this has bipartisan support it is taking important steps.
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necessary to protect taxpayers and allow these for supplemental bombs [inaudible] general bonds require to cover the cost of decommissioning and haven't been updated since 1993. since that year the cost of decommissioning in part only about 10% of the production in the gulf in 1993. regulations need to be updated.
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according to gao, they were covered by bonds but other financial assurance mechanisms but the other 92% simply were not accounted for. gao found. further, financial assurance can't be achieved because of the sufficient data which makes processing this inaccurate. the data for the pipeline [inaudible] financial assurance and understanding the risk requires data. to provide oversight and relying on decommissioning. 97% of requests from 2015 to
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2020 which is nearly 18,000 miles of decommissioned pipelines with other uses of the outer continental shelf. to make matters worse [inaudible] the technology the oil and gas technology haven't [inaudible] all pipelines in the region have advanced detection that two weeks ago we saw that happen with the so-called technology. with limited oversight capacity and substantial economic incentives for production over safety it is no surprise that human error could be an issue. hr 2643 which could direct that
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since 2007 with oversight on active pipeline. the build back better act requires stronger restrictions and abandoned pipelines with strong oversight and prior agencies to take the management approach to abandon infrastructure. thank you. >> thank you, ms. savitz. and i want to thank all the panel further testimony and remind the members that the committee rule poses a five-minute limit on questions into the chair will recognize the members for any questions
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they may wish to ask the witnesses. first the chair for five minutes of questions. >> thank you very much, chair man, for this timely and very important hearing. as the industry has the opportunity to with different rationale prevent any action to transition fossil fuels or deal with climate change -- it's
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about taking more time and i think what just happened in california is a wake-up call, and i appreciate the timeliness and your leadership on this issue very much. all of us to do. a couple of questions. it's easy for people to understand how it can lead to spills and devastate environments and communities. it's tangible. but the threats posed by the pipelines don't have that kind of attention. those that are not currently transported much less understood, known about or depreciated by the public. can we talk a little bit about the hazards and dangers in the
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gulf of mexico? >> since you mentioned me first i will start and then jackie can follow. i will .2 recent examples in the gulf of mexico where the older abandoned pipelines have caused problems. one is as was mentioned in hurricane ida, all of a sudden appeared in the oil slick that lasted for several days and it was traced to an abandoned pipeline that hadn't been fully cleared so all that oil leaked down during that incident. another is an ongoing issue i think you all know the states in the gulf are trying to restore their environments using funds from the bp oil spill including restoring the barrier islands just off the coast of where this developments takes place and one island is with a myriad of
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pipelines coming in. most of them we don't even know where they are, who built them and when that it interferes with the ability to restore that barrier island and similarly, the resources for offshore the pipelines underlay those resources so they have to be careful about where they dredge them because they don't know where the pipelines are. those are recent examples. >> thank you. >> those are good examples and i would just say abandoned infrastructure can cause to pollution and lead to hazards or damage archaeological sites if it is moved by a storm and the oil and gas pipelines can leak oil and gas, and we've seen that happen in the past as well. so i think we need to consider that when we make decisions.
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>> another point that was made, you reference that program that they provide an asset, they provide a bio diverse environment in which fish and wildlife can grow and they become the alternative and so how does that relate to the discussion that this legislation seeks to address and that is to deal with abandoned pipelines and infrastructure and to make the oil companies responsible for that? how does that relate, if at all?
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>> there may be instances in which it makes sense to leave some infrastructure in place, but those who should be exceptions rather than the rule and based on the data that's been unearthed by the government accountability office it's become very clear that our government essentially has made it the rule that the commissioning and places the way to go, not technically a rule but with 97% approval, that is essentially what's happened and i think there's enough infrastructure out there and money behind the infrastructure we don't just assume that it stays in the water. >> i have no further questions, mr. chair man. thank you for the hearing, and i look forward to your field hearings that you're going to have in california, and thank you for that as well and i look forward to the outcome of that.
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thank you very much and appreciate the time. >> thank you, chairman. i now recognize the ranking member for five minutes of questions. >> thank you, mr. chair and thanks to all the witnesses for bringing your expert testimony. we all do appreciate it. a couple of quick questions. how would removing all decommissioned pipelines impact the local species? >> thank you, congressman. we certainly would support property commissioning in the terms of the proper flooding of the well and flushing of the pipes and that sort of thing, but the structure scientifically is what we are concerned with because over decades of time, those have developed with flourishing ecosystems and sometimes it's very rare corals into those sort of things so we
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have issues now we didn't anticipate that level of production or the ecosystems thriving like that when the structures went in and now we have the sort of scientific issue of what do we do because as they occur they are the only structure available so essentially you've just removed that habitat so somehow offsetting that were doing the proper studies to ensure this material won't last forever in the marine life builds up on it and so the science has shown leaving that in the water you can even enhance and maintain the fisheries productivity that you have and there's a lot of concerns that if you remove that habitat, you will begin to deplete the sustainability of the current fishery situation. >> thank you very much for that answer. you are very well versed, 30 years. in your time evaluating industry, has the technology become better and safer as we
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drove for oil? >> yeah, surely it tends to respond to disasters. when i was on the commission, we emphasized the need to improve the safety technologies inspection, and that certainly has been done. one of the challenges is the older infrastructure is not operating in the same standards and with the same capacity of the major oil companies that do that, so for example, when i noted that they detected this methane being leaked they didn't detected from the deepwater platforms that have all the right technology. it's in the older infrastructure that they are seeing this. >> i think that parallels my line of thinking with the mining industry where there have been in the past and we readily admit that but we are getting better and better at it and safer and safer with the technology.
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i appreciate that. i think i pronounced that correct. thank you for your testimony. can you tell us where the nonprofit is headquartered? >> our nonprofit is a 5o1c3 headquartered in new york city. >> where? >> new york city. >> okay. when you track carbon, do you look at donors such as billionaire michael bloomberg? he is a funder of the nonprofit is that correct? >> we are funded by a number of philanthropies including -- >> i asked you a question is billionaire michael bloomberg a founder of your nonprofit? >> bloomberg philanthropies is. >> so the answer is yes. thank you. and do you monitor his private
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jet? >> in terms of carbon tracking, what we look at our the financial implications of the transition -- >> does your nonprofit intend to hold your funders accountable as well as the oil and gas industry? >> what we do is produce research that's focused on the financial implications of the transition rather than holding different individuals or funders or anyone for that matter accountable. >> so i would ask this as we go forward, i would like you to understand in the north part of the country i would say like this when it is 30 or 40 below for weeks at a time, you can
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turn water in the air and it will become ice before it hits the ground. i need to turn on my heater and get instant heat for families. my family and others. do you support that? >> yes. in fact i didn't come to testify on this but many of my colleagues look into issues about intermittency and how renewable energy would be able to address those. >> i'm glad you support the warmth of the northern climate folks. thank you very much for your testimony. back to you, mr. chair. >> thank you, ranking member. i now call upon the representative for five minutes of questions. >> thank you so much mr. chair man and thank you for your commenting and allowing me to question. i have another event i have to go to. i was actually listening to the ranking members questioning, and
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i had to look up the title of the hearing again because i got confused. the title of the hearing is abandoned oil and gas infrastructure but yet the testimony that i've heard and the questioning i've heard it's about how oil and gas development can increase fish and it can be good and about how technology has improved and so on. that's not really what this hearing is about and one thing that i think would be useful in a bipartisan way is to not try to divert the issue because in fact we have -- one reason i'm interested in this because i'm from colorado, we don't have a lot of offshore drilling here, but we have a lot of old mines that need to be decommissioned
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both onshore and offshore and if we do that, we prevent methane leakage, it would prevent oil and gas leakage. it's a good thing and something all of us collectively in a bipartisan way should be looking at. the ranking member talked about the sense of the past and we have better technology now. yes, we do i'm glad we have better technology now, but we still need to think about what we are going to do about all of these old abandoned structures that are leaking so that's what i want to ask you about. you talk about oil and gas companies offshore have no financial incentive to defray the cost of safely decommissioning their infrastructure, and i think you talk about the incentives as a, quote, interest-free balloon loan and if they respond as one would expect, to find themselves unable to pay and decommissioned
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the infrastructure then all of us are left holding the bag. we've been hearing that time and time again about the offshore wells and mines, so my question for you is it the same dynamic for on and offshore oil and gas wells and is there a difference in the policy we should be taking with on and offshore wells? >> that's a great question. fundamentally, many of the issue is that we see offshore also are present onshore. there's one thing that exists joining several liabilities that only exist in certain jurisdictions onshore so in some ways the situation is worse because you know, in some states like california you can go after prior operators of the current operator cannot pay but in many jurisdictions you cannot. our research has found there was about 280 billion in liabilities into somewhere around 1% have ot
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is covered by financial instruments, so there is definitely an issue. what can we do both on and off shore to get the companies -- what kind of policy changes what we need to make to change it so that they would actually properly decommission these? ..
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also there is any leakage under the water it has to come up through the ocean and doesn't reach the atmosphere. the primary concern is the shallow water wells if you have weeks they could reach the atmosphere and we have that technological constraint. we used to do a lot of flaring at the sites. >> thank you mr. chairman. >> thank you for your questions. i now call upon the representative for five minutes of questions if he is
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not here at this moment then we will come back. >> mr. chairman can you hear me? >> i can see you and hear you. >> thank you for the opportunity. thank you for being here today. how big of a role does the nation's offshore energy infrastructure for artificial reefs? >> that in that sense that the largest my man-made artificial reef in the world.
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if we had to generate that material to take it back offshore that would be in the realm of $18 billion it is a valuable resource if we use those practices to reach that. science clearly shows that we create structures out of concrete and other things and then to enhance that so with that scientific solution for the material that is already there and we have shown in many cases over decades the fisheries rely upon these habitats to support the economic drivers. >> and then to salvage the steel that's out there because in many cases it is difficult to get them to put it with the
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value back on land because over the decades it's become so important to marine life we're looking to ensure that habitat remains in the water. >> is this accounted for in the environmental impact statement? does the company get credit for this? >> i don't know about on the environmental impact statement that something we have to ask industry but i do know when they donate. >> so the money they are saving goes back into the program and to reap one of the structures of its in place where the approval may not be as high because they are
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already preapproved and with that reading site that's all they can afford and then to be on the backend of that the commissioning process. >> . >> but it would do some harm for those critters that live around there? that's a major concern but the habitat value is a big concern. and that congress appropriated showed literally millions of fish that are utilizing the
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structures in fast that's where most of the fishery takes place. and then preserving the natural habitat and on the golf that is primarily mad and sand bottom without the structures and that's related how much habitat you have available. >> we need to make sure were not hire on —- harming the environment as we go forward and that committee as a whole all those things that are discouraging energy production in america on harming the environment while doing it because if we are harming the environment and you take the pipelines from being
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constructed and you see the governor of michigan trying to shut down the pipeline that affects all of the upper great lakes as well as canada and then violating treaty so now that portable go on trains which has far more emissions than the pipeline. so choose one of the favorite terms of hell-bent and that has great harm to the economy great harm to job creation did you see the august report over 400,000 people have left the workforce the highest number in keeping numbers and with regards to national security we did not have to be dependent on the middle east in countries now they are bagging them on —- begging them to pump oil.
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and harming national security now will be harm the environment with things like this that are going on including the whole emotion we simply cannot have any fossil fuel infrastructure here in america it all has to go away and everything will be just fine. the people in this country are waking up it does not work and it will continue to cause problems we can have prosperity and a clean environment they are not mutually exclusive in fact they work together and until this committee and this congress and the president figures that out, and how more on —- far more in energy to
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equate our standard of living. i yield back thank you for the time. i really appreciate it. >> i'm sure were also very appreciative of your strong support is mr. graves here yet? representative? i will continue with the democratic members as soon as the next republican shows up. >> i haven't had a response go ahead. >> . >> welcome. >> thank you mr. chairman thank you for the witnesses for their insight i will bring
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my time back to specific questions that do relate to the subject of the subcommittee hearing. before i do that i just have to observe for the past two days yesterday national resource committee markup we have have a whole arsenal of oil and gas industry talking points and we heard that in the context of discussing some baby steps toward holding this behemoth industry a little more accountable and transparent. and those were not massively transformative bills in the oil and gas industry. they were baby steps but it sounded like the sky was falling. every little thing we do to ask were the oil and gas
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industry to make them clean up their mess means we will be supporting putin and foreign competitors and ending the world order as we know it. so we're always told we have no choice it is just fossil fuel now. fossil fuel for whatever the ranking member has an endorsement of the republican energy view which is drill everywhere for export to put her own beaches and ecosystems at risk so oil companies can make even more money on the global market and there is no alternative and we hear all of the happy talk of the sins of the pet past and how happy does been sins are of the infrastructure and for my entire life i have seen nothing but disasters and
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calamities devastated by these entire as we talk about what's going on in orange county because it's visible in the news right now. but it's happening every single day in lots of places the deadliness is inherent in the fossil fuel paradigm. we can do we don't just celebrate the prettiest course at the glue factory there is a better way forward to power this economy and painfully as we start the conversation here today when it needs to be decommissioned so i want to keep an open mind to be pragmatic and so we tend to
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talk an absolute category or do we leave it all in place because someone thinks the fish are happy around the infrastructure? i want to start that you described infrastructure that seems to have ecological services and i appreciate the fact that you clarified even though you think a lot of it should be left in place, you have to make sure that the pipelines are flash. thank you for that. but you are not saying categorically every piece of fossil fuel infrastructure should be left in place everywhere instead of being removed. are you? >> no. that is correct. certain structures are more relevant. but that is not one size fits
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all situation however science clearly shows that i understand your point about the structures but i want to keep an open mind for certain cases where it might make sense to me structure in place but i would like to come back to you because i'm trying to imagine as we transition away from fossil fuels. talk about the fossil fuels. could some of this be the purpose with those that service the structure be a conduit for electricity transmission? >> and in the gulf of mexico or including discussions of the existing infrastructure also industry the proposals
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and that capability for carbon capture and storage. and then to pass judgment if it's a good thing or not but you have to think about the uses of this for the future. i thank you make some good points my concern is the long term and that scale. we imagine these we have to think of what will happen over 100 years what is the long-term consequence. >> that's very troubling picture of companies that are ready to push their cost on to the taxpayer. so stop thinking about that deep-sea salad nation that it can power reverse osmosis membranes so that is
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40 percent of the energy cost can you imagine possibly using this infrastructure to read purpose the pipelines for freshwater? >> that is the possibility for the deepwater platforms. >> i yield back. >> representative and i think he's joined us yet if you have let me know. now i will call upon the representative for five minutes. >> thank you chairman. as i discussed during yesterday's markup the oil
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spill off of orange county has highlighted the need to change the status quo when it comes to offshore drilling policy. the first step we need to take as common sense. that is to and offshore gas leaks and off the pacific coast. the build back better act would invest in long-term coastal communities by doing just that. but addressing new leasing is not enough we need to be examined the existing leases off the california coast as long as the infrastructure is there we will continue to pose a significant threat not only through our environment but to the economy left coastal tourism coastal recreation worth billions of dollars in california. i recognize dealing with this problem will not be easy. decommissioning is expensive and will face opposition from the fossil fuel companies that profit and those that benefit
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from continued extraction will take great pains to distort the facts and mislead the public about the risks and benefits and sadly we have seen this deception before. make no mistake this is apsley necessary for the well-being of the local economy and environment hearing coastal california. it is probably supported by the coastal constituents republicans and democrats and independents. it is not partisan in the coastal communities so i appreciate i am here to share my desire i look forward to working with you closely and with that i will turn to some questions. the pipeline oil spill off the coast of orange county had severe consequences on local businesses and communities as a result of federally sold by the interior department decades ago. clearly demonstrating how they can have long-lasting impacts years or decades after they are sold. do you think we should sell
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more of our public oceans to oil and gas industry? >> thank you for the question congressman. as you know in on those to protect the atlantic in the eastern gulf you know that oil will still if we drill and event micro fishing. every time that happens in that oil and gas are driving climate change. remember me offshore oil and gas industry on eight.5 million acres
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75 percent they are sitting on it so efa and the leasing is not for offshore production. >> both your written statements expressed concern that they are a fraction of decommissioning costs. do you suggest as well as 10 percent? are either of you concerned of the interior department is more upfront collateral it drives more oil and gas companies leading to more orphaned wells? that is an argument that some make when it comes to decommissioning platforms in california. >> if you have a company that already has an existing financial obligation to decommission the infrastructure and i cannot afford to do that and then if
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we can do that in the future if you have a company that cannot handle that obligation already it's already a problem. that's the first one but second it will not get better with time that with worse the time whatever facilities we have decline it will get worse from the taxpayer standpoint because the predecessors that we could possibly fill in and do it simply because it is a disruption so on and so forth.
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but that with those assets that they require far more insurance from this institute that went bankrupt and it required a trust and had to be filled with $80 million from the equivalent of being decommissioned every year it had to be replenished up to 125 percent of that expected decommissioning cost. >> and this is one of those real-life entities and the lesson here is you really don't know where the people will go bankrupt were not in these situations mr. and mom —- protect the interest of the taxpayer. >> if i can briefly here on this topic. >> my colleague has answered in more detail in more
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expertise than i could. >> i will remain committed to ending more offshore in southern california and i will do all i can to look at the decommissioning as well. it will not be easy. we have powerful interest against us who like to distort the facts to create a false narrative to line their own pockets but i will not stop until it's done because that is what our constituents demand. i yield back. >> thank you representative. >> i was told mr. graves will be on shortly if not already representative? if not i will wait. >> i am here but you can go first. >> no. i will wait.
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>> thank you. i have questions what portion of oil and gas on the outer continental shelf are not producing? >> so what is really related to basically two thirds of them. >> so two thirds of the wells are not producing oil they are not contributing to energy availability they are just sitting there so when an oil company stops drilling offshore today immediately take away the platforms and the artificial islands so that nobody can tell that the oil company was ever there? >> now they cannot.
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>> so this is our public land. do the leases require offshore oil and gas companies to remove all of the equipment? >> when the c's production they typically have one year to do that. >> bases production we call that decommission a remove the equipment and they said there were 38.2 billion of estimated on the growth of mexico alone is there enough bonds of these instruments set aside regardless of the up-and-down to be sure they can pay the
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decommission cost and taxpayers are not on the hot? >> and that could be less of the total amount expected. >> i like numbers. two.9billion luscious give the benefit of the doubt and say 3 billion on there are 30 billion potential so these oil and gas companies for them to have the profits to make the investment to clean up when they are done. have they been doing that? >> typically what we will see his well-to-do companies to transfer these assets into other entities that have less financial means. >> and then to transfer the
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unprofitable expensive part of this of the decommission portion with a big healthy company? >> but those are the ones that did not exist even prior to the transfer. >> you mean cell that was created just for the purpose of pushing off the cost of doing business see don't have to pay it even that you have all the upside? using this is what oil and gas companies do? >> we have seen this. yes. >> how did the law facilitate this? >> i suppose on the one hand there is very little oversight of the transfer so there's very little restriction so offshore and onshore to see this behavior. and then secondary to that and
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then to pass the liabilities on to taxpayers and then the new company goes bankrupt. >> before i came to congress i taught business law and a lot of these laws about allowing companies to create entities to sell assets and file bankruptcy they exist for good reasons. that they can also be abused and the result of that and our nature and our planet and if we take advantage of the legal scheme and they put us on the hook for that. why shouldn't we make sure no
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taxpayer is on the hook that another company profited from making quick. >> certainly no private actor. >> so there has to take on risk? we are giving them a bargain deal in terms of offshore liability we are not asking them to indemnify. where saying take her public land and drill if you want to hand that off then that is okay that's of the government is doing. >> technically. >> what is not acceptable to me it should be acceptable anyone on this committee if it will be offshore drilling and it currently is you buy the
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ticket you take on the oil and gas company lease and that includes for the full price and that's exactly what i think that get federal government ought to do to protect taxpayers and then benefit from the taxpayer property thank you mr. chair. i yield back. >> thank you representative. >> i don't believe anyone else is here at this moment someone i have not called on yet. asked them questions myself. doctor come as a former member of the deepwater horizon commission as an unbelievable of the offshore drilling regulation so what has come up
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with that odd spilling california that the federal government already requires pipeline leak detection technology and regular inspections of pipelines in the pacific theater we still experienced a disaster leading to thousands of gallons of oil and i'm trying to understand from your point of view potentially what went wrong. bit more concerning to me is there were only 200 miles of pipeline. we require the oil companies to their own internal expansion on —- expansion.
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whether it is internal external. and every two years of the internal and then the thousands. that there is no monitoring or oversight? >> yes. there is a requirement for pressure sensors to see if there is a leak as well as and california but there is no requirement for routine inspection. >> why? >> because in 2007 the management service there were
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draft rules to promulgate that would require more advanced technology for detection and but they were never executed because of industry concern of cost of feasibility and with the deepwater horizon commission regarding drilling safety in the same thing happened with those it was pushback but they were never executed. so after the deepwater horizon and blue out then that is when those proposals were implemented. >> it took a deepwater horizon
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to implement some of those rules but there were others that were regulations for public safety, pipeline safety, that were just overlooked. >> was there any support from the communities around their that were the most impacted? it's a second port and part of the economy. >> i agree.
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and that's in the importance of the economy. i am just wondering in your experience but i understand the last point that you make. >> passing hr 2643 so do you think the enactment of this will help future offshore pipeline disasters for removal costs? >> thank you so much for that it's important as part of the interior as part of the pipeline operation since 2007 and then that would be finalized and then ongoing
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monitoring which we talk a lot about today. >> thank you very much and i will yield back. representative graves it is good to see you and you are now recognized for five minutes for questions. >> thank you. >> . >> please speak up. >> it is great to see you to have the opportunity to join and the conversations on the gulf coast that's where we represent. i appreciate everyone's interest so to get distorted and translation a little bit
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but then it's really important to keep in mind that the judge found the responsible parties were grossly negligent so what that shows this is an operator that was way out of bounds. they did everything right if it was just an accident there wouldn't be $40 billion out-of-pocket that was quadrupled those penalties that they were forced to pay. so i think it's really important we keep that in mind so as we saw from the obama administration there were
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efforts to produce the amount of domestic energy production i'm sorry that's backwards there was a demand it did not get changed and then to it did not change the demand for conventional fuels are just changed where it came from so the offshore actually has the lowest emissions from any production in the united states it's with the lowest emissions so if they produce anywhere in the globe it may make more sense to do it in areas. and then to do it within the rules and if they don't to where they are held accountable to the tune of tens of billions of dollars with the largest settlement from a single company in us
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history. >> how much of that liability? >> . >> the results of that. >> because you have other responsible parties that are contractually obligated in fact they are really test off. but it is true. have other companies that are contractually obligated and they are just off. >> so the center is funded so these are dollars coming from the industry so it is
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important so the role of the offshore energy can you just talk about that a little bit or if we should just remove it all. >> thank you congressman graves. with millions of pounds of fish using the artificial structures especially in your region are in the gulf of mexico where we don't have structured habitat is now showing the population is not as robust as they are now or to have the same sustainable capacity if they do have these if they do have an infrastructure out there we need to have these in the water to support the fishery as a primary conclusion of the study of where these fish
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occurred. >> doctor you and i have known each other for a long time we've had a lot of discussion about the offshore coastal louisiana recognizing global energy demand over the next 29 years recognizing the lowest emissions per unit of energy looking at what happens around the world of energy production do you believe we should just shut it all down there is a better way to move toward a clean energy transition. >> we depend on fossil fuels for the time being but we have to get off of it with less reliance. and then also with greenhouse gas emissions and using that
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energy is the path going forward with the international agency energy analysis because it does talk about the future of fossil fuels and does recommend fossil fuel development but it also recognizes we will continue to use the resources we already have. it will go down and it will be reduced with a new international energy agency reported just yesterday this is an agency which is not an environmental agency that peaked fossil fuel production we need a good environment and to ramp down in a way that doesn't hurt people are communities and then 20 or 30
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years to have a healthy golf as well as greenhouse gases with the greenhouse gas emissions and missing the target of getting to net zero. >> thank you at the same entity that says what the largest decrease of greenhouse gas and energy history we need to build on our successes thank you and i yield back. >> thank you representative graves that's a very engaging discussion and a very important discussion and i think the witnesses for their valuable testimony and all the members for their questions the members of the committee may have additional questions for the witnesses and we will
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ask you to respond to them in writing members of the committee must submit witness questions within three business days following the hearing the record will be kept open for ten business days if there is no further business. >> mr. chair i just want to commend you for holding this hearing we did go over a little bit but those were important questions and i just want to say we appreciate your flexibility and colleagues on both sides did a very nice job. >> it is really important we hear each other and use this as a mechanism obviously there may be some but i thought all the questions are relevant and needed to be asked. so with that with no further
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business, this subcommittee stands adjourned. thank you


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