the oversight hearing on the subcommittee of energy and mineral resources on the deepwater horizon incident now come to order the subject of this morning's hearing is  witnesses and we look forward to instructive hearing this morning obviously there is a lot of questions and concerns that have been raised as a result of this horrific accident before we begin i would like to ask unanimous consent to allow members to participate who are not a member of the subcommittee but a member of the full committee  o be allowed to sit in and to participate in this subcommittee hearing without objection so ordered so i suspect there are several different hearings going on concurrently but we welcome those members from full committee who are not part of the subcommittee from participating and will look forward to your contribution to the slammer unrecognised thank you mr chairman i would also ask unanimous consent that as they are able to get three other members who are we'll refer to a ranking member here and and then the ranking member of the full committee would like to make a brief statement and we'll get to the heart of the hearing here with the three panels that organizational structure that is now being changed as a result of the terrific accident that has took place on the deepwater horizon on april twentieth of this year  before we began i think it's important that we take a moment to acknowledge the brave men who lost their lives aboard the horizon that night although the focus of the nation right now is on the environmental and economic catastrophe occurring in the gulf i think it's fitting and appropriate that we not lose sight of the fact that there was also a tremendous human tragedy as a result of the loss of those lives so our thoughts and prayers are with those families and the workers just as those thoughts and prayers are with everyone along the gulf coast who are suffering today as a result of this spill subcommittee today will do the work that i think the american public expects members of congress to do as a part of our oversight and in response to  situations that clearly indicate that this tragedy he could have been prevented while it's expected that many may engage as a result of this her ific accident and the blame game and pointing fingers it is also expected that congress do its appropriate work in the aftermath of this explosion obviously a number of questions have been raised as to who was responsible how the spill could be stopped and what we can do to ensure that something like this hopefully never ever happens again three weeks ago in the full committee hearing we posed some of these questions to the hads british petroleum and trans ocean that was the contractor that was drilling the exploratory well today it's the chore of the subcommittee to turn the spotlight on minerals and management services because in the category of lessons to be learned it is here that it seems to me that the appropriate work of the subcommittee and the full committee as well as other policy committees that have overlapping responsibility that we do our due diligence in a way that will allow us to clearly understand what are the lessons to be learned all the term minerals and management services as we discuss this in the context of this subcommittee and full committee is always proceeded with the adjective little known agency of minerals management services by the press clearly it is a lot better known today this  agency has had its troubles for years it's well known and to members of this subcommittee and i believe to the chairman ray hall and myself because we have held in recent years a number of hearings trying to correct the problems that have existed in recent years with enron minerals management services oversight hearings that go back to two thousand and seven recently the administration announced plans to split up the mineral management services into three agencies and issued new rules regarding the offshore drilling and safety some of which already have been published it's also pushed the pause button on deepwater drilling until the presidential commission can report back with recommendations on what happened how it happened why it happened and how most importantly to keep it from happening again when it comes to regulations we must i think ask the hard questions on how we strike a proper balance between the role of government and the role of the private sector clearly too little regulation can result in an unsafe conditions that can ultimately result in the tragedy that we are facing today but also too much regulation can be a problem as operators begin to expect the government to do everything and absolve themselves of their own safety responsibilities there clearly is a responsibility on the part of all those who are participating and it is the job of this subcommittee in the full committee to really make those determinations as we look at legislation to correct these insufficien s i really comprise this and it is really examining the role of risk assessment on one hand and risk management on the other it's something that is always difficult but it's something that must be done if we are going to take the necessary corrective action assessed what are the risks that are out there prioritizing those risks and determining what is an appropriate role to establish a management priority list to adequately ensure that we are managing those risks based upon those that create the most potential  catastrophe such as the one that we are experiencing happening when it comes to an organization therefore we are trying to strike the proper balance between making sure an agency doesn't have too many conflicting purposes and ensuring that excessive fragmentation doesn't keep those agencies from in effect working effectively as we hope they will in the future it would be particularly unfortunate up we went into a full circle and were treated  with the same problems of coordination that the lentils commission found back in one thousand nine hundred two for the audience in those listing here and i know most subcommittees are aware the minerals and management services was created in the early one nine hundred eighty s by secretary watt as a result of his secretarial authority it is a organic organization  therefore this secretary or any secretary could reorganize minerals and management services just as secretary watt created back in the early eighty's for the purposes it was intended to but secretary his testimony to oz several weeks ago indicate said that he didn't want to go in that direction that in fact he wanted us to enact in statue a reorganization of the minerals and management services that would have the full force of the law in terms of its responsibility and its jurisdiction as we move forward and be a part of course of the the appropriation an authorization under full oversight of the congress as i told the secretary when he testified before as at that time i hope this reorganizational structure is not is not simply reorganizing the boxes because i think the public expects us to do better and certainly if we are going to ensure that future accidents is don't happen we're going to have to create a reorganization of minerals management services that simply is not rearranging the boxes i think it's no surprise to those of you who are here and who i've worked with over the years that you know that i am one of those who is a strong supporter of offshore drilling i believe it's one of the tools in the energy to box that we will continue to depend upon for decades as we look at all the energy tools in our energy toolbox but we should not lose sight of the fact that under normal conditions offshore exploration and utilization of oil and gas can be done extremely safe and safely with little impact on the environment but as we look today tragic and horrific results can take place if we are not following all of the safety requirements that are necessary therefore we have to under the category again of lessons to be learned ensure that if we go forward that we create the confidence in the american public that in fact we can do this safely and therefore again one of the purposes of today's hearing so as i close let me give you some final thoughts it might cost a little more to do business during the safe periods as we look at what went wrong and how to fix it but that cost is nothing compared to the tremendous expense and the tragedy that has resulted because of this accident my assessment fifty nine days into this this explosion that took place is that clearly as we look back on other incidences that are comparable complacency and overconfidence as we look and examine all of the facts that took place were a direct result of this accident complacency and overconfidence complacency and so many wells that had been drilled offshore both in the gulf and around the world that this was a routine way of doing business and over confidence in systems redundant systems that were intended to apply in the event of an accident that did not work over confidence and redundancy of systems that clearly failed we saw that occur sadly and nasa with the tragic loss of the challenger and the columbia again complacency and overconfidence both by the public sector and the private sector we must remind ourselves at the end of the day that we're all human and therefore complacency and overconfidence is something that can and does happen but we have to ensure as we look at the reexamination of how we prevent this from happening in the future is that complacency and overconfidence doesn't in the future so with that i look forward to the witness's testimony all now recognize the distinguished ranking member mr doug lambert from colorado thank you mr chairman today is day fifty nine of the deepwater horizon incident we are here to examine possible shortcomings with regard to him in messes oversight of oil and gas development on the outer continental shelf as we conduct this hearing we still do not know what actually caused the disaster on the deepwater horizon we don't know how to stop the oil leaking from the sea floor and we still don't know what happened to cause the explosion and what caused the failure of the blowout preventer yet the administration has already made the decision to eliminate him m s as an agency has imposed a six month moratorium on deepwater drilling and as stopped all future outer continental shelf leasing it's important to keep in mind what we do know though we know that this incident has had devastating impacts on the gulf region that the federal government and b p have still been unable to stop the leaking well and that b p is liable for all the cost incurred by government agencies responding to the spill restoration of the environment resulting from the spill and billions an equal mic damages to the people of the gulf and the affected states we know that stopping the leak and cleaning up the oil must be b p and the government's first priority we know that according to caen arnold an engineering expert used by the department to recommend safety improvements in his opinion this disaster was i quote a groupthink kind of thing and there were a bunch of things that were on the borderline when you keep adding up the mistakes you end up in a situation where a big problems thinks up on you unquote i wonder how our witnesses here today will explain how in a mess is supposed to overcome rationalizing groupthink that results in a disaster well in a mess has tremendous responsibility i wonder about their ability to overcome human error we know that the administration inspected all the offshore rigs with no significant safety violations and yet has instituted a six month moratorium as part of a peer reviewed report that moratorium was subsequently refuted by seven of the engineering experts they asked to peer review the report they said that in their professional opinion i quote changes made in the wording are counterproductive to long term safety unquote this is because in acting a six month moratori possibly for political reasons creates new and unintended safety problems when ongoing drilling is interrupted we know that this moratorium is estimated to result in nearly forty six thousand lost jobs almost overnight and as many as three hundred thousand jobs if it continues for a long period of time furthermore e i a estimates that more to moratorium will result in a reduction of domestic crude oil production we know that the secretary has decided to break up in a mess first it was two departments now it appears the plan is to make it three separate entities on tuesday the president announced a new director from him in as who will be responsible for breaking up and rebuilding the pieces of him a mess as much as the administration wants to place the blame on their predecessors the fact remains that while the comprehensive environmental analysis required for the o c s five year leasing program and the lease sale was conducted under the bush administration the exploration plan the application for a permit to drill amended a p d s and inspections of the deepwater horizon rig were done by the obama administration we will hear from one of our witnesses today that safety reportable and last time incidents for offshore operations and blowout incident rates steadily improved throughout the bush administration that is hardly the record of a group of people that regularly cut the regulated community slack i hope that we can see the newly appointed director of him a mess here in committee at some point unfortunately the do ministration did not send him here today to testify before this committee mr chairman i look forward to hearing from all of the witnesses and i yield back thank you i appreciate that ranking member but with all due respect i think since the gentleman was just appointed yesterday big brother and vicious to think that he'd be prepared to testify today but i will at the chairs discretion as a courtesy allow the ranking member of the full committee to make a brief statement and then it's the chairs intention to begin with the first panel on the witnesses first panel will come forward and get seated and i will recognize the gentleman from washington the case teams for a brief statement will begin with the first panel thank you very much mr chairman and thank you very much for the courtesy of allowing me to to make a statement as has been stated we are nearly two months n c start of this crisis but our priorities today remain the same as they were on day one and that is to stop the leak to clean up the spill and to address the needs of the communities and the businesses in the gulf of mexico but our next job and the reason for this hearing is to get answers and fix the failures in order to prevent it is a disaster like this from happening again what's needed are educated reforms not a rush to judgment to ensure that all the necessary changes and reforms are made we need to know what all of the facts are and what went wrong out on the gulf both what wrong what went wrong at the rig and as well as a federal bureaucracy charged with overseeing the drilling and today we are specifically looking at s and its regulations as i've previously stated and with the chairman observed in his opening remarks the failures at m m s have been known for years and there is bipartisan consensus that fundamental changes need to be made at the with the existing m m s structure this must be done to ensure that american made energy production is the safest in the world on tuesday yesterday president obama pointed pointed a new head of m m s and it is unfortunate he can't be here today but i can certainly understand that and hopefully this committee subcommittee will be able to hear from him in the very near future so if any changes that are being made whether it's to m m s or any other you back my time thank you very much will now begin with our panel as i said on the outset we have three panels this morning and will give the appropriate time for all members of the subcommittee and those who have joined us from the full committee an opportunity to to ask questions as we go through our process so i want to thank the witnesses for a period i think all of you have testified before you know the rules we have the five minute rule in which you will make your presentation the lights there are in front of you the green light remains on for four minutes and the fifth man at the  goes on and when the red light goes on we would ask it kind of close on your comments if that's possible so our witnesses this morning on the first panel are the honorable bob abbey the  current and soon to be former director of minerals and management services we appreciate your service mr abney ms mary kendall the acting inspector general for the united states department of interior mr frank  and the director of natural resources and environment at the u s government accountability office g a o so let's begin first with mr bob abbey who is the director of the minerals management services responsibilities for the minerals management service and it's a pleasure for me to be here today to represent the employees of the minerals management service to discuss our ongoing safety and management reform efforts related to offshore energy activities  and his address to the nation this past tuesday president obama described three key areas that the administration is committed to working on first the stopping of the leak from b p s well and tackling the related cleanup second the recovery  of the gulf coast via long term gulf coast restoration plan and finally the prevention of future disasters in the outer continental shelf the department and the employees of the minerals management service share those commitments since january two thousand and nine secretary salazar has taken the department of interior in a bold new direction we have worked to really to reform not only the minerals management services culture of doing business but the entire department  by issuing new ethics standards for all employees for other reforms that they were implementing have resulted in a better balance between our energy needs in our stewardship of the environment for example secretary sala renewable energy office located in virginia which will coordinate and expedite as appropriate the development of when solar and other renewable energy resources on the atlantic outer continental shelf the tragedy and the massive spill in the g d has made the importance in urgency of this reform very clear the secretary has announced the reorganization of the minerals management service and the establishment of the bureau of ocean energy mountain management the bureau of safety and environmental inforce mit and the office of natural resources revenue this effort will ensure the independence of the add on continental shelf inspections and enforcement missions on may twenty seventh the secretary delivered to the president the results of a thirty day safety review that he ordered the department to undertake the report recommends a number of specific measures that can be taken on both short and longer term basis to improve the safety of offshore oil and activities including aggressive new operating standards in requirements for offshore energy companies all may thirtieth two thousand to and in response to the safety report the department issued a directive to all and us last season operators imposing a six month moratorium on deepwater drilling the moratorium will provide time to implement new safety requirements and allow the presidential commission to conduct its investigation this directive applies to drilling activities in water depths greater than five hundred feet deep water production will continue and be subject to closer oversight and safety requirements shallow water development and production activities including exploration and development drilling may proceed with adequate oversight and it here and to safety requirements it should be noted that the department is aware of insensitive to the economical and social impacts of the moratorium and the other notices that we've been issuing that may have on the communities and businesses involved we're working closely with members of the public and with local elected officials to hear their concerns and consider changes where appropriate significant attention is also give being given to the inspection program it has long been recognized that inspection personnel faced numerous challenges such as the length of time to travel to deepwater facilities and increasingly complicated drilling technology additional inspection program funding has been requested in fiscal year two thousand and eleven the number of inspectors needed and the qualifications required to be an inspector are being assessed and no doubt there will be changes more recent actions include the president's selection of former assistant u s attorney and justice department inspector general michael bromwich to lead reforms at the minerals management service at the as the department accelerates reforms in the regulation and oversight of offshore oil development run which will oversee reforms of the minerals management service helping to restore the integrity and rigor to the relationships with between the red the photo regulatory of officials in oil concludes my remarks and i'll be happy to respond to questions from you our members of the subcommittee testimony thank you mr chairman the members of the committee thank you for the opportunity to testify today about the proposed reorganization of the minerals management service and the regulatory structure that m m s has promulgated governing not only its own operations but those of the offshore energy industry that m m s regulates while the office of inspector general has not in the recent past conducted any rigorous review of m m s is governing regulations during the course of other works that the all i g has done we have gained an understanding of some of the regulatory challenges that face m m s we are also presently in the process of identifying gaps weaknesses and opportunities for improvement in m m s operations and regulations with a focus on the permitting process inspections and forstmann programs environmental and safety requirements and the regulations governing post incident review or investigation let me begin with the la s has five brief paragraphs of regulation to cover post incident investigation as a result in conducting the investigation in to the deepwater horizon disaster m m s is bound by the coastguard regulations which are comprehensive but in my view completely backwards gathering evidence via a public hearing rather than developing evidence to culminate in a public forum generally m m s regulations are heavily reliant on industry to document and accurately report on operations and production i'm not prepared today to comment civically on m m s is permitting environmental or safety regulations although given the april twentieth disaster on the deepwater horizon and the present circumstances in the gulf of mexico i certainly believe that our review will find opportunities to strengthen the regulations in these areas we learned recently that m m s has a dearth of regulations governing their inspection program anecdotally we have also learned that m m s inspectors at least in the gulf of mexico region operate relatively independently with little direction as to what must be inspected or how this is not the least of the inspectors challenges however we have been told that m m s has approximately sixty inspectors for the gulf of mexico region to cover nearly four thousand facilities this is juxtaposed with the pacific coast which has ten inspectors for twenty three facilities m m s also has difficulty recruiting inspectors due to its great and pay structure industry tends to offer considerably higher wages and bonuses when they can be recruited inspectors for m m s receive primarily on the job training in any reorganization effort m m s should consider formalizing and updating its inspector training program and conduct periodic reviews of the program to ensure inspectors receive the proper and current training to keep pace with technological advances and procedural changes we also have questions about m m s is in force programs in the operations and safety arena we question whether the civil penalty regulations are tied appropriately to the seriousness of the violation and the threat to human safety property and the environment again the regulations are sparse we have also had questions about the influence of industry on m m s and developing regulations well industry clearly has influence m m s appears to have followed the proper legal processes in finalizing its regulations because m m s really eyes heavily on the industry that it regulates however the possibility for and the perception of to influence will likely remain well there is ample opportunity to improve and strengthen the regulations that government govern m m s and industry the greatest challenge in reorganizing and reforming m m s lies with the culture both within m m s and within industry as you know the office of inspector general has issued a plethora of reports critical of various practices and misconduct while each report included troubling accounts of inappropriate behavior on the part of certain m m s employees that conduct was for the most part enabled by industry how do we address the conduct of industry representatives perhaps it is time to impose some ethics requirements on companies doing business with the government mr chairman and members of the committee this concludes my prepared testimony today and i would be happy to answer any questions thank you very much our final witness for this panel and then we'll begin the question period as mr frank rusco the director of natural resources and environment with the u s government accountability office mr a school thank you mr chairman and members of the subcommittee thank you for the chance to speak here today on the department of the interior's management of oil and gas on federal lands and offshore and on plans to reorganize interiors oil and gas program this hearing takes place against the sobering backdrop of the ongoing oil spill in the gulf of mexico that began april twentieth with an explosion and tragic loss of life it now appears at the spill is or will be the largest in history in the effects on sea life gulf coast west let wetlands local economies and the livelihoods of many are large and growing for the past five years g a o interiors inspector general and others have reported on interiors management of federal and gas resources both onshore and offshore these reports have made over one hundred twenty recommendations many of which interior has been working hard to implement to be fair it must be said that in the course of our work we found the vast majority of interior employees and management to be talented hardworking and scrupulous however we also found pervasive system wide problems in key areas that we believe must be addressed by interiors top management as part of any successful reorganization interior has not kept pace pace with changes in the oil and gas industry or changing the lease management practices employed by other resource owners for example in two thousand and eight we found that interior had not comprehensively studied how much or how to charge for federal and gas for over twenty five years despite significant changes in the industry over that time frame similarly we found in two thousand and eight that interior had not kept abreast of lease terms used by some states and other resource owners to encourage faster development of promising leases while providing more time to develop more speculative leases to its credit interior is currently engaged in reviewing these two areas in two thousand and ten we reported that interior had not kept pace with the oil industry in terms of production verification technologies including the types of meters used to measure oil and gas and how data from meters are collected and stored these findings raise questions about whether or not the federal government is collecting the proper amount of oil and gas revenue second interior lacks agency wide guidance or regulations that define how it will manage the federal and gas program evaluates offshore leases using available seismic and other information to estimate a fair market value for their rights to develop any oil and gas on a lease than a mass one sell lease unless it receives at least this amount in contrast b l m does not estimate the value of the oil and gas on lancet leases further in our recent work looking at production verification we found that interiors m m s for offshore and b l m for onshore had differing capabilities to evaluate changing production metering  verification technologies and that they did not coordinate adequately to share information and avoid duplication of effort third interior lacks adequate management information systems to provide sufficient oversi the program for example we have identified instances in which one databases used to collect and store royalty payment information were not fully compatible to data were not collected consistently three agency databases lacked key functionality resulting in staff using offline workarounds for inaccurate data were recorded in agency databases and five some data that would be useful for evaluating management decisions were being collected in an ad hoc fashion the oil and gas industry has changed dramatically over the past three decades and will continue to change as technology improves allowing oil and gas resources to be be developed that not long ago were out of reach this is true onshore with the expanding development of unconventional oil and gas and offshore in deepwater the ongoing oil spill in the gulf illustrates starkly the need to be able to assess the risks associated with new technologies and to atten risk where possible and mitigate the damages associated with even rare catastrophic failures as a secretary consults with congress on plans to reorganize interiors oil and gas program there are opportunities to address this need both onshore offshore changes in technology and the oil gas industry and gas industry will require evolving guidance and regulations the change will provide opportunities for interior to take the best from it onshore and offshore programs and apply these best practices more consistently within and in and across m m s and b l m lastly any reorganization of interiors oil and gas program will be most successful if interior develops management information systems that are robust compatible across the entire program and up to date this concludes my my oral remarks i will be happy to answer any questions you may have thank you thank you very  much for the entire panel's testimony and i will begin the opportunity to give members of the subcommittee a chance to ask questions let me begin mr abbey you're kind of wearing two hats these days both with minerals management services and both with  bureau of land management the proposed changes that we're talking about minerals management services it appears doesn't apply as it relates to the leasing and permitting if we went forward with this implementation for onshore leasing permitting as well as offshore why should they be separate well i think that there's a couple reasons mr chairman and and one is the urgency of moving forward as quickly as possible and reviewing the lessons learned from the terrible deepwater horizon accident and and apply those lessons as quickly as we can into the regulatory reforms that are underway as well as other rules that will be implementing but one of the primary purposes for the reorganization is to provide greater clarity of the mission for both leasing and and and permitting as well as safety and enforcement and to try to separate those two functions  so that each new bureau that is proposed for creation will have a clear distinct function and that both missions will be equally executed but then what you're eventually saying is that ultimately down the road it could apply to onshore as well well let me address that right now we have already created a special office under the assistant secretary for land and minerals that specialises is made up of employees from both the minerals management service as well as a  management and the office of surface mining and reclamation the primary purpose of that special office under the auspices of the assistant secretary of lands of minerals is to provide greater efficiencies and consistency in how we are managing all owing gas as well as all the president is stablished this commission that has a six month timeframe clearly they will come with recommendations that may compliment but may differ from the recommendations that are currently being made with minerals and management services and through the hearing process as we do our due diligence how are we going to incorporate this commission's recommendations well any any recommendation that will be forthcoming from that commission was certainly considered and how we're going to conduct business in the future now purpose of that presidential commission is to look back to determine what lessons have been learned and how we can best apply them so that we can have a safer  program where managing there are some that say that our in the shallow wells the five hundred feet of ocean depth unless that the new regulations for offshore are vague and confusing is it is mess working on any new guidance for the operators on those shallow wells mr chairman we issued a notice to lassie's last week regarding the need for the end to for operators operating in in shallow waters to adhere to news safety requirements that was part of that notice to lassie's due to the confusion among the operators as well as our own employees we held a meeting with the shallow water coalition members as well as members of congress to go through that notice to lessees detail provision by provision to provide greater clarity at the conclusion of that meeting that we had last week people now have a greater understanding of what the intent of the note is to lessees are and how we intend implemented what would it take for the companies to be able to demonstrate in the light of this disaster that they really have the responsibility or the capability i should say capability  to clean up a disaster of this magnitude clearly all the reports that we've seen the reports that were filed that were basically kind of cookie cutter copies of one another  in light of what we have experienced inadequate to do the job have you had a chance to begin to reassess what a comprehensive containment and cleanup plan would require  worst case scenario as such as we're experiencing well the what we're experiencing today certainly is way beyond anyone's imagination what could have happened with offshore drilling started now we can imagine  america you're absolutely right there's no doubt that this the spill response plans that have been previously submitted by the operators in the outer continental shelf will need to be reviewed and amended based upon the lessons that we now  learn so these the last season the operators will be required to go back and revisit their spill response plans and to come in with something that will give not only those of us who are now working in the minerals management service but the american public a little more confidence about their ability to control or contain any future spills well obviously today the the confidence of the american public on that point if not at zero is near zero so we've got to do better  kendall because my time as expired but in terms of the reorganization proposal that's before is and that will hopefully address chairman ray hall's clear act later this month in july do you see any potential problems in the reorganization plan we do have some concerns about just the ability of interior staff to stop simultaneously respond to the catastrophic oil spill in the gulf undergo a major structural reorganization and also work to implement the over one hundred twenty recommendations made by g a o the dia why inspector general and interiors royalty policy committee we do feel that any reorganization should be done only after thoughtful analysis was sufficient time to consider a variety of organizational structures and in consultation with congress on that point i mean i think members of the subcommittee on a note i think we need to spend time in looking at the current staffing to do the inspection i mean the numbers i have is basically five for the west coast one for alaska and fifty six members for the gulf coast but that's not going to get the job done if we're going to bring in the regulatory requirements that i think many of us believe is going to be necessary to begin to  reinstill confidence and so we're going to have to do a cost analysis of how many inspectors you really need based upon the rigs that are out there ms campbell you have any concerns about this reorganization plan that you'd like to point out as well i  certainly share your concerns about the inspectors and the staffing the staffing definitely and agree with mr rusco that it needs to be well thought out and considered before hasty action is taken u nexpected an unintended consequences attached to most actions and i think proceeding thoughtfully and carefully is definitely the way we need to proceed to depart needs to proceed in the reorganization all right my time expired clearly mr landlord thank you mr chairman ms kendall the department takes very seriously the importance and integrity of scientific and peer reviewed documents in fact your office has conducted in the past a number of thorough investigations into the accusations that political appointees changed or modified scientific documents after they were peer reviewed now according to recent press reports and release is from the department the recent offshore safety report after being peer reviewed was edited by political operatives at either the did the department or at the white house to assert against the recommendation of the report signers that a six month o c s off outer continental shelf moratorium was appropriate this was then falsely presented to the public as the sole work of the engineers and experts who names were signed onto the report these experts have since objected to this misrepresentation they have also suggested that this political decision to impose a moratorium will not only cost jobs in or g security and huge amounts of needed revenue but may actually threaten the safety of workers and increase environmental threats to the gulf region already so hard hit by the spill i want to know if your office is planning or has even already opened an investigation into who made these changes congressman lamborn we have not i understand right now that the sixty  a lawsuit brought against the department by industry and as has been the office of inspector general's practice for as long as i've been with the office when matter is in another forum such as a federal district court unless there is a compelling need for us to get involved in this case we have not heard from either the parties either the department or the industry we would not investigate that and i think it would be inappropriate i may have heard all the things that that you've itemized here i was not involved in the process of developing that report and i think it would be inappropriate for me to comment on it in by the way i  had didn't make any suggestion that you were involved fact it's good that you're not so that you can be and a disinterested objective observer because there needs to be an investigation let me point out that the lawsuit you're referring to is about the enactment of the more the six month moratorium and has nothing to do with the report that some said should result in a moratorium these are two entirely different matters so why can't you do an investigation of who made the changes in a peer reviewed document to say that there should be a moratorium when that was not in the document originally perhaps we can revisit that at that issue i think the distinction is a fine one but i'd like to be able to think about it a little further well i know that some members of congress both in the senate in the house have called for you to make this yield back all right and i'd like to introduce for the record without objection a letter on this issue from senator vitter and represented schoolies all right without objection so ordered appreciate your service for taking over what is clearly even in the interim an organization that has been highly challenged and has a lot of issues that we need to get to the bottom of and work through over the next months to make sure that this kind of thing never happens again i have a we've all seen a copy of the the oil response plan from b p it was approved by m m s back in i think november of two thousand and eight it determined that the worst case in scenario for an uncontrolled blowout in the gulf was three hundred thousand barrels of oil per day it says quote unquote i hereby certify that b p exploration and production incorporated has the capability to respond to the maximum extent practicable practicable to a worst case discharge or a substantial threat of such a discharge resulting from the activities proposed in our exploration plan now i know the estimates of changed and and we're now looking at something between thirty five thousand and sixty thousand barrels per day from this event that's nowhere near the worst case scenario that they said that they were planning for and i think we can all agree that at least within the first couple of months their response to to that thirty five to sixty thousand barrels was completely anemic i can only imagine what a three hundred thousand barrel per day event would look like do you think m m s fundamentally made a mistake in him in approving some of these plans for these  events that on paper said everything's fine without digging into the background and making sure that they actually had the physical capability to manage a catastrophe like this congressman i think that's an excellent question and there are a number of investigations in reviews underway right now to determine just what minerals management service employees did as part of their review process i will say this and i'll use the chairman's own words i think over time all of us whether society employees in the minerals management service or the industry became complacent and over confident that such a spill like the one that we're seeing today could never occur we now know differently as we look forward to apply the lessons that we're learning each day you're going to see a more diligent effort on the part of any regulatory agency who has any jurisdiction at all relative offshore drilling and production will would do a better job as far as addressing your specific question i will say this that during my period of time for weeks now with the minerals management service i have seen nothing but professionalism on the part of his employees i do think reorganization is is needed so that we can separate the various functions distinct functions of that organization so that we can have some checks and balances so i'm certainly all for the reorganization proposals as we presented i do think also that a better job needs to be done in the future what what can we do right now what is m m s or the administration doing to make sure that all of our other offshore producers whether we're talking about the the old rigs in california whether we're talking about alaska the gulf that that they that we deal with this gap between what's on paper and what is physically capable  response what are they capable of providing in terms of personnel in terms of skimmers in terms of containment devices to deal with the blowout what is m m s doing to make sure that god forbid this thing should happen on another well someplace else offshore that the producer has the capability and it's their responsibility and the the opi a the act that was passed back and nine hundred ninety that they have the physical capability to respond to that well i certainly think that that's one of the purposes for this paul's this six months moratorium to allow all of us to go back and to determine the plans that are in place today whether or not they're adequate to address what could potentially occur out there the first and foremost effort that we're applying right now is to prevent future spills anything like this from ever happening again the secretary ordered and we have implemented inspections on all deep shook deepwater rigs to make sure that the equipment that they have on those rigs are what they say they have on those rigs that they are appropriate that they qualified people on those rigs to to manage the equipment we are increasing the number of inspections on not only deepwater rigs but also all the shallow water rigs and at the same time we're  doing the plans that have been previously submitted to to determine if they're still adequate that brings me to another thought and we've heard some some stories both within this disaster and on also allegations of on other rigs of a mismatch between for example the engineering drawings for equipment and what's actually there or you know we heard all about the batteries in the miswiring and all those things associated with the blowout preventer is part of that process also doing some sort of a review to make sure that that when the when the drawings or the documentation says x that we don't two weeks ago that after requesting the g e to come in and do a review of mismanagement excuse me misbehavior within the m m s that it took three years to get a night she's report that happened twice can you explain to me why it should take three years when a director of an agency asks for an inspector general's report and then is told you know stand at ease while we do our report so they can even solve the problems that they themselves have identified and requested the i g to evaluate how that that it's vance's good government congresswoman i'm not aware of any incident where that occurred where m m s has requested an investigation of and then something has taken that long  the other thing that puzzles me is that our policy is one where as we find things during the course of an investigation if there's something that the department can do management wise to solve some underlying sort of organic problem we will communicate with the department at the time we find this information we don't hold it till the end you know in some cases they may not have everything they need to take administrative actions say against an individual until they have a final report but they can take corrective management action if there is an organic problem that led to some misconduct well mr chairman that the testimony that we heard from a former m m s director in this committee was that an m m s director had requested and i g s hearing in two thousand and four and got the final report in two thousand and seven and then subsequently a follow up report requested in two thousand and seven was not issued until two thousand and ten that seems to me to be inadequate in terms of a timeframe for responding to a request by an administrator to solve the problems within their own do you believe that the only ams leasing program should be removed from b l m oversight and given to a separate agency be a lamp's leasing program i do not thank  you i also have a question about the unionized employees that are inspectors in the gulf couple weeks ago again in testimony before this committee we learned that that father and son inspection team that last inspected the deepwater horizon well came to their subsequent questioning session with a union lawyer and that they were unionized employees it seems to me that in an inspector situation the union representation and unionization of these types of employees may not be the best an appropriate place for unionization do you agree or disagree you know congresswoman i really do not agree with that i don't think that this event had anything to do with  union or whether or not the inspectors were unionized there's a lot that we are going to learn about you know our inspection program there's a lot that we already had underway prior to the deepwater horizon and secretary salazar had asked the national marine board to conduct an independent review of the minerals management service inspection program and to come in with their own recommendations so that we could improve the were it was currently being performed by inspections it's a very complicated work but going back to your question it has nothing to do whether or not the inspectors are unionized or not and mr rusco you mentioned that with regard to lease terms that have come a long  way that we may be at the department of the interior have not kept up to date with with the lease terms that would give the people of the united states more return for their  minerals in the gulf and i would just command to your attention changes that were made in the least terms for the state of wyoming so own oil and gas and surface agreements which were updated during the last four years under its director lynne bloomgarden who has since returned to the private practice of law but she did a really good job updating the terms of the state of wyoming oil and gas leases and surface use agreements to provide for more safety for environmental protection and for stronger lease terms and return to the people of the state of wyoming in the instance of wyoming's terms and they might service a good example for onshore department of the interior lease terms that on the offshore we don't have that much invested in wyoming thanks m over to the oil industry the keys to the kingdom and they've taken full advantage of that and what we're about is we've got to get the keys to the kingdom back because the industry really doesn't seem to be able to act responsibly on its own now when you look at  resources available to m m s the lack of resources you look at the lack of vigilance i think that will also be part of the story you know if i'm the industry m m s is like  buzzing around my head it's a joke and we've got to figure out how to make the agency more relevant so the industry actually cares when they show up for an inspection i mean people who are and you made the point people who don't get paid enough so that you can recruit good people and they're standing next to an industry person on on on the rig who's talent on this that and the out there and you know we've been in baghban and so forth it's it's not a fair fight and we've got to get back to where the industry actually cares when m m s inspectors coming because maybe they have to like get with the program so what i what i'm curious about is just the permit process because i'm very interested in going forward how we make sure that certain parts of that process  elevated into statute particularly the ability to demonstrate as a company that if you're going to go drill on the moon or you know five thousand feet under the surface of the ocean and the techniques you have for stopping spill actually will work there and you have to certify to that it has to be some independent verification of it and so forth and so on so what happens the application comes in all the boxes are checked and then  go to work so can you just take me through the the process that happens when that permit comes in in terms of getting to the approval stage the application for a permit to drill as summited it would be based upon the exploration plan that had already been submitted and previously approved by the minerals management service there would have been a and analysis of the exploration plan to determine what the likely consequences of future drilling would be based upon the terms and conditions of the exploration plan the minerals management service employees would then look at the application for a permit to drill they would assess the the adequacy of the information that was contained in that permit application they would move forward and either reject the application for a permit to drill are to accept it at that point in time once a permit is issued to the industry member they couldn't go forward and it's reviewed that determine whether it's incomplete or whether it's insufficient asked for more information more information comes in an intelligent person can figure out you know how many extra pages to add to add to their application to get that box checked or their points along the way in that in that initial process you just described where somebody actually going out and kicking the tires on the operation i mean really sort of pulling the layers back  and trying to corroborate whether what's presented on paper is actually matched by the reality does that happen or would you say the resources aren't there for that to happen well up until the time that you've approved an application for a permit to drill there is really no tires to kick there's no operations to go out and in and review or inspect it's only after they have the authorization to move forward to begin drilling our two laid their platform and then to commence with drilling is there any action that inspector can go out and monitor and to determine whether or not they're conducting but you could go if somebody saying that the deepwater horizon rig if there's a problem that happens the way we're going to  is with x y and z technique where equipment we're relying on the blowout preventer or something you could say to them well can you demonstrate other places where this isn't this is this is in place and we can go check it out we can we can do an independent review of whether a blowout preventer actually can never fail like the sun coming up every day or whether it's just another piece of equipment that can fail and presumably there are places you can go look to verify what's being submitted even though it's not for that particular location or rig right that is true and that is i mean the experience that the people have that are doing the reviews certainly have been involved in a number of inspections and in a number of plan reviews in approvals you know it is in the conduct of doing business there's an awful lot of similarities in the operations that are occurring in the gulf of mexico so you're absolutely right relative to do we have the knowledge of what is being proposed and has it worked elsewhere and the answer that question is what is usually proposed by an operator as part of their exploration plan or as part of their application for a permit to drill is state of the art best management practices it has been tried and proven to work in other parts of the gulf of mexico and therefore there are some similarities there are some familiarity with what is being proposed by the by the operator and the minerals management service would make their determination based upon the papers that have been submitted the plan the applications and also their own experience with similar operations operating in that in that same area the gentleman's time is expired alright  clearly brought out that the failure of oversight and perhaps even corruption in m m s which has been prior administrations and extends to date in this administration has been a serious problem and one difficult to overcome but a statement that you made this candle really made the silly in my ear stand up that is perhaps it is time to impose some ethics requirements on companies doing business with the groups help me if you would congressman with what you're what you're suggesting well perhaps what about what an environmental group providing office space and meals to in l c s employees be a violation of ethics rules  i can't really speculate on that if it may it may not i'd certainly need more information and that the end of the n l c s is a net in a landscape conservation service part of b l m yes sir so  i realize that you may not be familiar with specific situations but just in agreement just in general can we agree that an environmental group providing free office space and meals to governmental employees who have some responsibility of oversight that would be a violation of ethics rules in general would it not it would depend quite frankly if the ethics regs are are very specific if this environment metal group were a prohibited source then yes but without more i couldn't opine on whether it would or would not be you know of itself ok so this is a very targeted ethics issues and it would apply to some but not others in terms of those who may influence government is what you say in the gift acceptance rule which would be meals and the space is  little i'm not as familiar with what that might imply but gifts are covered under the ethics regs and government officials are prohibited from receiving gifts from p sources with some some exceptions in terms of dollars and i hear what you're saying those are kind of the rules but the question more is in line with what your personal belief or perhaps the beliefs of your of the  but i'll i'll follow up with another question in your testimony today that you say that we need to consider penalties against the companies which provide gifts to him in the ass employees should we in consideration of those rules expand that consideration to gifts of all interior employees oh yes so i guess kind of to follow up and maybe a last question you know this before we move on so if i understand s and to control the cozy relationships with companies that we now have to go to the companies themselves to impose ethics rules we can't really accomplish that by writing in our own departments no that wasn't what i was implying congressman my my testimony was suggesting that essentially it takes two and the m m s employees that we're talking about i would abby's statement that we're talking about a very limited number of people the oh i g reports that have come out that have been well scathing if you will about the conduct of some m employees it's very very limited in terms of numbers but that having been said the conduct always related to something viz a viz industry and my suggestion is that perhaps like we do with government contractors now have affirmative responsibility for industry to disclose maybe something that would be useful in this arena as well but to have industry understand what the rules are that applied to the people that they deal with on the government side seems to me to be a very simple thing that we could do and require of companies who want to do business with the government i in no way would would defend any ethics lapses by companies and certainly environmental groups and i certainly agree with you on the transparency but i am a bit concerned at that does suggest that either we're i unable to control ethics problems in our own governmental departments in the administration or perhaps that we give up or maybe we give them a pass and now we put the responsibility on outside groups and companies no i'm not suggesting that at all i think it's a two part solution the gentleman's time has expired and the chairwoman recognized the gentleman from massachusetts  ongoing extraordinary spill they were all we all have witness to on a daily ongoing basis but mr abbey you happen to mention that the spill of this magnitude was beyond anyone's imagination and mr cassidy my colleague from louisiana who is not here today in an earlier hearing said that this was an absolute failure of imagination that and i my view it's an abject failure because if nothing else the sheer depth at which this well was placed tells us that if an event occurred in which technology did not immediately solve the problem and we had a continuous event that we had the potential for an environmental disaster and we've seen that in spite of b p s best efforts they did not have in place a plan to respond to a continuous event they were never asked to have a plan in place to respond to a continuous event of this magnitude in the event that technology did not help them so my question is mr sarbanes has asked about the permitting process and you said there are instances in which applicants are rejected do you in the course of that have a presumption that there are instances in which a no is an appropriate basis for an answer for the application and that that know is based on a common sense understanding that if an event occurs at a depth of depth that we douse the end technology does not keep it from being abruptly shut off that the challenges are so extraordinary that the environmental impacts and economic impacts can only we're seeing today and therefore the risk does not warrant whatever we might gain from such a well well i think that's an excellent question i will say this  regulatory agency should always be ready to say no if they do not have sufficient information or adequate information to do an analysis of what's being proposed and understand what are the likely consequences of the proposed action the question i think that you raised congresswoman is best addressed maybe by the presidential commission it is really a very complex issue that we're dealing with all and yes is going to continue to be for years to come a major component around nation's energy portfolio a large percentage of our domestic oil and gas in this country to produce from offshore we have to take that into account as we move forward but we have to be smarter about it we have to make sure that any future drilling is done right is done safely and is done in compliance with the law as to the broad spectrum of the question that you raise i really believe is best addressed by the presidential commission with the others address this as well and i'm just curious as we go forward not only should the commission address it but in the reorganization of m m s there should be an appropriate place for this kind of risk assessment and understanding whether or not it is possible civil to put in place a quick quick response to an event such as occurring down in the gulf and given that that there is that is not possible you know all the modeling out there all all the appropriate response plan for it if it is not possible then then when is no warranted but i'd like the others to respond to how they see the capacity of the m m s to deal with this and whether reorganization has the potential to address it as well what we have found system wide and pervasive problems at interior in terms of attracting and retaining enough of the kind of expertise to do the jobs that we looked at in terms of safety in production inspections production verification inspections meter calibration inspections i think that the knowledge required to understand the technology in the deep gulf has to evolve  as as the as that as the technology evolves and what we have seen is that interior has been challenged in keeping abreast of technology and having enough of the right kinds of action experts staff on hand to to address these issues that is something they must address in any reorganization or even if they don't reorganize they must address that in order to be effective do you think it's possible to put in place a response plan to an event like this that could have quickly dealt with this issue or do you think there's a level of human in possibility here that it just would require too much just too much more than anybody could have in place to immediately deal with an event of this nature i'm sorry i'm certainly not qualified to answer that question and we have not evaluated that specific question mr abney do you have any feel sense of  that i think the first the oil spill response plans not only do responsibility the minerals management service but also the united states coast guard there are some joint jurisdictions there and responsibilities as well as far as trying to contain any spill that might that might occur in the outer continental shelf congresswoman i'm not i'm not a technical expert either relative to the engineering capabilities of trying to contain a spill of this magnitude i do believe that there are you know there is equipment there is sufficient equipment in certain sufficient technology that would allow us to get trained such a spill but we've got to be prepared to react to well first and foremost to try to prevent future  this magnitude and then secondly if there is such a spill in the future that we have to do a better job of reacting gentlewoman's time has expired we think or thank the witness will now recognize the last member of  the gentleman i've just noticed that we have votes and following the gentleman's questions the committee will recess for the purposes of going to vote for this series of votes and then want to thank the members of the panel for their most eloquent statements to this very issue that we're now discussing before the subcommittee i find it somewhat ironic why why are we seemingly surprised that something like this has happened in terms of the oversight responsibilities that the federal agencies have towards this matter for example and the oil spill it's my point is that  we can't even account for the billions of dollars that american indian tribes supposedly had given responsibility to the department of interior to account for and why are we surprised that with a department that has a thirteen billion dollar budget to oversee hundreds of billions of dollars of our nation's resources and when i hear that if i hear heard it correctly from our inspector general that sixteen x inspectors  review four thousand facilities i mean i'm somewhat a little puzzled mr chairman and i wanted to ask our panel it's quite obvious that the interior department doesn't have r that's that's that's quite a number to be responsible for what i'm curious about mr abbey is that the president made an announcement ministration is seriously looking at worse is just something that the white house just dreamed up to say that we should do it because we needed energy of course we need energy and i want to ask mr abbey was there any given serious accounting before the president made the decision that we should go to off should really before this disaster occurred the track record in the as far as operations in the outer continental shelf it's been a fairly good one again it goes back to maybe a little over confidence relative to the abilities of not only a regulatory agency like the minerals management service to respond to any kind of spill but but also the fact that the industry knew what they were doing as they went forward and developed these resources there are seventeen hundred employees working for the minerals management service there are sixty two are there about inspectors those sixty two inspectors perform on average twenty four thousand inspections per year now these inspections can be anywhere from two hours to up to a three member team conducting at spector's over a three day period depending upon the job so i just want to do so within the twenty two thousand the structure somehow or some of these major corporations happen to have gotten the record of not complying with a lot of these standards and they get away with that margaret that b p was one of the one of the corporations that really was given a lot minor and they can be corrected and within a matter of days if they're serious then the minerals management service will actually shut in a production facility our drilling facility until the deficiency is taken care of now according to the media reports there warnings given to b p or this rig that was being questioned and yet nothing was done is that correct i don't know you know i would rely upon the investigations in the reviews that are underway right now because we're going to learn a lot about exactly what took place rather than reacting to allegations one one other question i have that mr abbey and i'm glad we've got the g a o we've got the inspector general we've got to get this thing worked out pretty well it's my understanding that the offshore rig deepwater horizon is registered under the under the flag of the republic of the marshall islands and of all places and this whole registration process i think there were only paid twenty thousand dollars and this practice has been going on for how many years where you go and register in the foreign funding which certifies that it's ok but pay twenty thousand dollars it's supposedly the republic of the martian armies now are supposed to be responsible for safety standards in the equipment in the operations of this rig is that correct well i've heard that i think that's a question better asked of the united states well let me ask you this should we continue this practice of registration the way we're doing it now so that companies could escape paying taxes and hiring cheap labor no i want to ask your honest opinion on this should we change the whole process of registration well as a as a citizen of the united states and not as a representative of the minerals management service or this administration i would say that's a good question for this congress to look into that commission chairman i think that's a  provide iraq us and the other members have an opportunity to ask her questions as a couple questions i'd like to get another second chance of of these witnesses and then we'll begin to the second panel so i suspect we're going to be here depending upon the in about another twenty minutes or half an hour chair will try to get as many members an opportunity to be recognized between now and the next time that we are asked to return to vote and then of course i also am informed maybe that those could be our last votes of the day and hopefully that will be the case and if it is we will come back and by that time hopefully get to our second panel on our third chairs a subcommittee with then that's all resources a gentleman from arizona my friend to provide thank you very much chairman and thank you for your courtesy and inviting resource committee members to be part of this hearing i appreciate  with a couple of issues i understand that m m s is doing an investigation of b p atlanta something that we wrote in the letter twice requesting that there be some follow we've been told that b p keeps as bill documents which is the crux of the issue in electronic form and uses the databases to record their status i'm assuming m m s is the agency has obtained copies of all these from in the course in the course of this post post incident investigations that are going on we if you could please provide immediately or not sooner to the to the committee chair for dissemination to the rest of us  electronic copy of of that information a copy of the as built along with the drawing log which i think is important and the database that is used to record the status of the  documents i think that would help this committee and in terms of its due diligence to look at the post incident record that's been going on about these investigations and that's in the form of a request and transmit that as well to the happen the next panel mr abbott will testify that the about the b p atlantis that's relative to the request we sent a letter to than another i had the opportunity to meet with mr abbott yesterday he told me that he has still not been interviewed or contacted by m a m m s regarding the investigation do you agree do you feel that that is part of the post incident process that's going on and the issue that congressman darrell hava in preparation for this hearing i did look into the information that we have compiled regarding the allegations that have been made by mr abbott i don't have any specific knowledge relative to  what all those facts are but in preparation for this testimony i did read documents that mr abbott was interviewed by minerals management service employees as well as a member of our office of the solicitor i have also looked into exactly what our investigation has found i will say this at the investigations of the allegations are taken serious and that that investigation continues but to date the minerals management service has confirmed that b p submitted a complete hazard analysis as required by regulations and that it was approved by the minerals management service before production and at last at the atlantis facility the minerals management service conducted for inspections of the process safety system and then these inspections included a review of the surface safety system function logic and we found no violations since b p began producing at the atlantis platform the minerals management service has inspected the atlantis three day appreciate the information and i'm assuming that that will be forthcoming and some written documentation that the committee and my office who has been requesting this can review mr abbott will be a panelist later on and i'm sure you'll have a point of view on the information and also in the comments that he has been interviewed my recollection that he has not but be that as it made let me let me quote one thing if i may mr chairman and it is it proof of strength of the blind sheers rams on blowout preventers which is the subject and it quotes the the regulation and the regulation and this is b p saying we are not aware that we have to provide information stack both surface and subsidies stacks are capable of sharing the drill pipe in the hole under maximum and to them to support its surface pressures how concerned would would would we should we be that if b p has not been verifying the to be the gentleman's last august very much i'm not aware again of what was required in the past so i will say this that under the safety report that was issued by the secretary of interior to the president that there were some recommendations regarding  what we anticipate to be required of operators in the future we followed up and when i say wait a minute it's management service followed up with that safety report with our own notice to lessees identifying the new requirements that we are going to be enforcing  as a result not only just the incident but also the fact that we do want to improve safety within the industry we are looking at blowout preventers and we are requesting independent third party verification that the equipment on these platforms are sufficient to do the jobs of their intended to perform not only are we asking that third party verifications but we're also asking and directing that the c e o s of each of these operators  verify that they are in full compliance with our new requirements and then we are conducting our own independent inspections as a follow up to the independent verification that we're receiving very good  if you could capsule eight the answer that you've just given is in the form of a formal response is a letter to the chair of the subcommittee ranking member and i'll be happy to share it with the full committee members member for the day have bay area of course i'm especially interested in the oil spill taking place actually on folding throughout the gulf i think what we've learned the most the most complex and dangerous part of  deepwater drilling is what takes place subsurface as we get into deeper and deeper water five thousand feet six thousand feet and even seven thousand feet below the surface operations get more and more complex thank you would agree with that what is surprising to me is that while there are a whole slew of resin regulations for rigs at the surface level rules and regulations for subsurface operations are sparse why is that the case and the question is for the i i'll take my first shot at that i wish i could answer more specifically and directly to your question i really don't know i do know that the technologies are very similar in shallow water in deep water even though the the drilling is more complex and deep water i do know that both required due diligence both require that there are quit capable of performing the jobs in task of their intended to perform and that there is adequate safeguards including redundant safeguards to prevent what we're experiencing today from ever occurring again the investigations in the reviews that are underway today will certainly help us have a better understanding of exactly what took place and what needs to be done please i'm afraid i'm with mister abbie on this i'm not familiar personally familiar with the the regulations in any level of detail i've come to learn basically everything i know about from basically priests crypt of requirements to performance based requirements and so that's something that my office is looking at as well in terms of what where there are gaps if indeed there are gaps in terms of safety measures not only deepwater but shallow water as well so would you like to respond jail's not studied to specific issue and i can't respond directly to your question but we do have concerns about a system wide and and pervasive problem in keeping up with with technologies in other areas that we have looked at to the extent that that's occurring in this case then then it's something that needs to be addressed and we do expect to be looking and your positions shouldn't you be familiar with these regulations and i'd like to get a response  writing as soon as possible thank you during the course of the six month moratorium at the administration has imposed on deepwater drilling there have been suggestions that m m s reviews spill response plans for existing deepwater rigs  m i'm wondering if spill response plans were ever reviewed or approved in the first place is there a database that exists that shows that m m s reviews and these in approved these plans spill response plans are reviewed and approved prior to permits being issued as you know based upon those reviews that would be determine whether or not this bill plan is adequate to cover what is likely or what might occur based upon the analysis and a determination at the time of what might be a worst case scenario as we mentioned before in earlier comments to members of this committee what we are experiencing today is beyond what we imagine could occur in such a spill scenario so those are response plans will be re evaluated based upon the lessons that we're learning to determine whether or not they need to be improved is there a database database that currently exists i would imagine congressman that there is an approval mechanism that that we can share with you relative to the to the documentation or the review that took place i don't know whether or not it's electronic database but we'll can certainly look into your question and respond accordingly please do anyone else like the responses i'm wondering if you my briefly explain the clump laxity obama ration to take place subsurface can you paint a picture of how flow lines well well hads pipelines and safety shutdown systems work and what type of engineering required to not only build those systems but also operate them do you believe m m s employees have a full understanding as to these nuances and also do you believe them amass or any other government agencies better equipped to review and approve plans than industry experts the witnesses might answer the latter part of that question in the first part of that question but it has to be your last question because we will let our other colleagues yes or w well i think you're absolutely right mr chairman i'm better prepared to answer the last part of your question than the first the bureau the minerals management service do have capable engineers employed to have to conduct the necessary views and analysis to make appropriate determinations relative to the adequacy of the plans that are being submitted we are very fortunate to have good engineers working within this organization as has been brought out technology continues to change we're continuing to do our best to stay abreast of what that technology is and how best to to make sure that our own employees are well aware of what is being proposed today and what might be proposed in the future there are still work that we can do that would improve that overall performance but i do believe we have the capable expertise now do we have enough of that expertise is a whole different issue and i would i would say that we could certainly help the organization by bringing in some additional people thank you very much thank you it's going to have to be thank you for the rockets we've just called roll again mr gohmert we will recognize you for five minutes and i'll take a quick look at it i'll try to see if i get mr cassidy and before we recess again before we go to the second panel ok thank you mr chairman and if you use all your time you can defer to mr cassatt or you know we've been told that  is being divided into three new entities do you have a job already designated in those three new into these i have a job already that i'm going back to soon is the new director of the minerals management service arrives on monday i'm the land management that's the job i'll take upon our return to on monday so you won't be part of those three i will not well i know you regret that  well let me ask you the staff had done some work for prior hearing and we found out that the one unionized entity within m m s was the offshore inspectors and director byron mom didn't know a whole lot about the unionized aspect she didn't know about unionized contracts and so i'm curious and want to ask you since these offshore inspectors were unionized in their union contract where they are where there are limits on their travel or amount of time they could work in a day anything like that they could affect how much inspection they could do so i'm not i'm not aware of this bus specifics of their individual contracts i do know that unions do negotiate the work environment terms and conditions of the work environment i would be surprised if that might not be part of the contract but i do not know doing his job was actually to have them sent out in pairs so that one could report the other there was some problem they weren't doing their jobs and so i was asking her if it was a good idea to have the last inspection team that went out to the deepwater horizon before the blow be a father and son team and she said that was under investigation so my question to you is different has there been any limitations so we won't have any more father and son or related teams that are supposed to be double check in each other as offshore inspectors there are changes in the works congressman and i don't know whether or not the father son team had had anything and to do  well i know i mean i'm not sure it's an issue but oh you don't think you know your problem to have the only check and balance be a father and son team they're going to watch each other carefully and report the other when they're not doing their job just right you don't see a problem with that congressman i do not because i believe that if we asked someone to do the job we're going to do the job that's not to say that we could and should not have checks and balances to ensure that people are actually doing the job whereas we were told that was the check and balance to make sure they were doing their job well i would suggest to you it's not a good idea and that something should be done about that well now we've heard the president say he wanted to find out six month moratorium and that there are other companies who are not nearly as irresponsible as b p was and that it is costing them a fortune to shut down their rigs and some of them are probably move off if this is really going to be a six month moratorium so i'm curious is it deigned to be by m e m s measure of kind of kick in some rears of some oil companies to force them into costing millions and millions of dollars just to sit idle because b p screwed up is that the purpose of the moratorium no it's not at all the purpose the purpose of the moratorium is to well then had there been inspectors that are being sent out to those thirty three so you could get back to the president say these guys are innocent they're doing everything right they did not have a problem with blowout preventers like maybe they weren't cutting corners or doing everything right so don't penalize the is there ben inspectors go out so you could let the president know he doesn't have to keep kicking their errors they're doing their jobs correctly secretary salazar immediately asked and directed the minerals management service to conduct  an inspection of all deepwater rigs shortly after this incident those evaluations have taken place well my time's running out so quick question from a scandal we had heard from the inspector general previously on investigating the nine hundred ninety eight hundred ninety nine leases in which the process of judgment language was pulled out for those two years and that according to him there were two people with the interior department that knew why that language was pulled out it obviously cost our country i thought hundreds of millions now i'm told it's biggins of dollars that went to the big oil it's better grow more you know i always give a little leeway but you're going to your colleagues time and i weigh well if i could just finish the question because it is critical to this country ok well you're repeating upon your colleague stryker so my question is now that we've found out that one of the two people that pulled the language out has returned to interior because  went to b p we can't question her now that she's back in government service with the interior have you question as to why she cost the country billions of dollars by pulling the process just language out no we haven't congressman my recollection was not that ms was one of the two people that was involved is just not my recollection i'd have to go back and look at that i'll have to check that out mr cassidy from louisiana you've got five minutes we've got three hundred seventy eight people who have not voted and seven minutes and seventeen seconds before the vote is called it's the chairs intention when we wind up with this question will recess once again and i will adjourn this panel we will not be back for an hour probably two o'clock go have some lunch because we'll do panel number two a number three ok i'm told by some they feel there's a defacto more torrential water operations that the two permits that were done were recent to the next day and that yes there's conversations but never is there clarity it's always it's just move just out of reach there is no moratorium on shallow water drilling in operations we have submitted are actually approved in and shared with the lassies that they are going to be adhered to new safety requirements before any new drilling occurs and i was told that they heard those they accepted and they thought they were reasonable actually they say so they're already interested standard and yet they're still not getting permitted well i'm not sure about that congressman cassidy i will say this once we receive that third party verification that their equipment is as functional as it is it's doing the job that it's intended to do there should be no problem moving so ordered by already already engaged or they are already doing the inspection that would be up to the operator or the lassie to engage that third party and so just to be clear you're saying that if you contract with a third party is going to come in and inspect and then boom we're ready to go on previously approved applications for permits to drill that's great thank you  the also in the testimony i'm sorry came in late and this is addressed i apologize somebody is testimony spoke on the pacific coast there was ten inspectors for like twenty eight rigs and the louisiana gulf coast there is like i don't know thirty inspectors for inspectors in the pacific and something in the neighborhood of fifty six or so right five hundred one got up and so i do not have an answer to why there is such a discrepancy in the numbers based upon the regs and where those rigs are are located i will say this though that the minerals management service needs more inspectors in the gulf of mexico ok that leads me to my next question i was struck that this kind of automatic system where you keep your inspectors can type in data and isn't really uploaded which i just thought was yesterday's news is not going to be done for six years through through this system now why has it taken so long to put something would seem so basic in place which is direct uploading the data i don't know but i can start things that i think you may be referring to is the production verification technology that industry uses which is second by second data collection and storage on on production and so why don't we i mean  interrupt only a minute fifty left as i was reading that i'm struck i know the contractors working for the army corps have got to have a data set that the corps can kind of plug into like spot used to do in somebody's brain and immediately understand what's going on inside their brain now doesn't mean they have to expose their whole company they just have to expose a data set that interfaces with the c d c with the army corps database why can't we just make perfect sense to me require that the leas let us know what they're our data is as regards flow rates it could be down and there is a pilot program to do that but it is not moving very quickly and why in the h would just about these about the gavel me so i'm trying to get it in before the light turns red there really seems to be a conflict of values here on the one in your testimony most kendall is that these people go out barbecues together on the other hand we know they all go to college together so  going to have somebody that knows anything there's not that many petroleum engineering schools also here that industry is way ahead of government in terms of their knowledge base of what cutting edge technology is and then i read in testimony to by golly we're not doing continuing education for inspectors and so it almost seems like the guys that are actually doing the work on the rigs are about a mile ahead of the inspectors in terms of knowledge the only way we're going to give the inspectors that knowledge is to allow them to have a barbecue over a continuing education conference on the other hand that's held up as a perception of impropriety so it's almost like we've got a like from birth make people petroleum engineers like we do the dalai lama and say listen you cannot go into industry you must stay is wavy advanced in tech and the technological x expertise versus the government first and foremost we're asking our inspectors in many cases to do an almost impossible task on one hand we're asking them to go out and inspect  production verification and production plant production platforms and same time turn around and inspect drilling operations i think in the industry they say they specialize and so they may have some skills and abilities to do certain things on the platform and yet we're asking our inspectors to do much more than just specialize we're asking them to look at production as well as drilling operations and they get paid more for it and believe me clearly when i'm reading that we're losing we have turnover because industry pays so much more i'm frankly kind of nihilistic that we're never going to be able to compete so whenever we get somebody who is such a brilliant someone area why would an industry hire him away  i'd like to answer that i i think that that our our studies have repeatedly found that there are problems with coordination across the interiors of oil and gas programs it goes across field offices it goes across m m s offices and it goes between emma mass and and b l m for offshore and onshore there there is a lack of of a coordinating mechanism and there's a lack of sharing of information and there's a patient and you've been very good in answering our questions those of you in the audience and those and paddle two and three and ask you to continue to be patient we are going to recess the subcommittee once again we will come back at two o'clock to he panel to panel three i'm sorry but we have six votes and i got to try to get there to cast this first vote the subcommittee on energy and minerals will now reconvene we took a break during those last series of votes there were six of them i thought we would be finished before two o'clock i to apologize to the witnesses of the second witness the second panel and the witnesses of the third panel because obviously i was off by about twenty minutes but and the audience it's the intention of the chair now to go through the second panel and the third panel and conclude the hearing when that takes place members that are here will be recognized under the same terms as we hold with the previous witnesses previous panel excuse me and so now with the pedal to the chair will recognize the gentleman mr ken abbott who is a former contractor for the british petroleum platform abbott you've been very patient today i appreciate that you've waited all morning and heard the testimony and there were some references in that this morning it's just money as it was towards some of the  comments that you've made and so i suspect after your five minutes there will be questions as it relates to those and everything else that's been discussed here this morning so please begin you have five minutes my background and training is in the field of engineering project management for over three thirty years i have worked in the management of a wide variety of large own sure and offshore engineering projects my employees my employers have been among the largest engineering construction managers in the world including m w cal browning root stone and webster shell oil and jacobs engineering and others engineering project management is a field dedicated to management of large engineering projects i am not an engineer and i do not do engineering i provide management support for engineers by establishing projects schedules and budgets and by audit performance of the project against him in addition i manage the engineering document control systems and database records necessary for the engineers to do their work b p atlanta  is the world's deepest mord all and gas platform production facility is located in over seven thousand feet of water in the gulf of mexico deeper than the deepwater horizon well now falle in the gulf it is rated to produce two hundred thousand barrels of oil per day and large quantities of natural gas for more than the horizon well and august two thousand and eight i started work under contract for the b p project management office for the b atlantis project on the subsidy team i was hired as a project controls lead and had responsibility which included management of the engineering documents almost immediately upon reporting to our i was confronted with the problem that b p atlantis operations that apartment that actually operates the rig was demanding as built p n id's which are very important engineering documents that operations must have to operate safely the end we  problem there and government we get involved in acronyms as well and we've got tons i'm in the industry anyway we and we did not have these p and i d s to provide operations these are documents that should have been supplied before the rig started production but at that time and lana's had already been in operation for about a year another b p manager had written in an email that the piano i d s for sub sea are not complete and have not been approved for handed over to operations this could lead to catastrophic operator errors currently there are hundreds if not thousands of subsidy documents that have never been finalized yet the facilities have been turned over and by the way this is included in the distribution we made the committee as one of the attachments from this time until i was fired on february fifth two thousand and nine i worked to obtain b p engineers approval as built drawings needed to safely operate the rig we made little if any progress technique the vendor company which was the lead engineering contractor did not have and could not provide up to date p and i d s the v p lead engineers responsible for various sectors within the project did not have and could not provide up to date p n i d s at one point b p management vetoed a plan to solve the problem because of its estimated cost of two million the insisted that we had to develop our obtain these documents the more unpopular i became industry practice and m m s regulations require engineering to prove design and construction b p is the owner operator that overall had responsibility for overall integration of various corresponded designs component designs and that is not been done properly the integration engineering is a critical part of engineering the system before i was terminated from b would have elop the database of all the complete and incomplete documents to analyze the overall completion status the results were astounding yes out of the total of over seven thousand joins documents almost ninety percent had never received any engineering approval of any kind not even for design and you can see the last column of this attached chart and this shows the b p itself did not fulfill its role of integration engineering this lack of critical engineering documentation is being seen on the deepwater horizon rig was involved in the texas city disaster in two thousand and five and the alaska pipeline spills in two thousand and six it's a common thread for those disasters in b p atlantis and the days after the after i was terminated i tried to follow complaints with the b p ombudsman the department of interior inspector general and the department of justice and m m s i did receive a written response from the b p ombudsman over a year later judge stanley spark and the ombudsman found that my complaints about the lack of proper engineering documents was valid and conclusion from my experience in working in the industry for over thirty years i have never seen these kinds of problems with other companies i have never seen another company with this kind of widespread disregard for proper engineering and safety procedures i saw  p and that we hear from the news reports about horizon texas city and the b p alaska pipeline spills b p s own investigation of itself the former secretary of state mr baker reported that b p has a culture would simply does not follow safety regulations from what i saw that culture is not change is very saddening to me that department of the interior and m m s so unwilling to enforce the law against a culture of repeat violations thank you of these documents that you've referenced were either substandard or damaged are anyway constituted an imminent hazard within the platform atlantis yes sir i do as part of my responsibility of managing the project documents we kept electronic database with all the drawings in it and drawing a lot that showed the status of the joins you know if it had been reviewed and approved ninety percent were  if we wanted to gain those documents who has them today british petroleum yes m m s ours or an independent third party b p british petroleum has those documents and the drawing logs and they're not required to be filed with mineral management services as i understand regulations they're required to be available and kept in some location for review by minerals management  d i don't believe i know that they're ninety percent on have not been approved by engineers that have not been as built and that's the last i saw on the document you make a result of that that the safety factor is such that this this non production platform should be at this point shut down or closed what you mean the production platform right right yes i do think it should be i do believe it should be shut down based on the fact of the really poor engineering design and non adherence to normal engineering practice they do not have final as built drawings and because of that the operators out there do not have a good road map are good drivers manual if you will of how that rig should work and it's a tremendously complex rig and they run big risks that they don't have those plans i saw similarities between in lantus and deepwater based own you know information from articles i've read for example when b p tried to shut down  the b o p blowout preventer on the deepwater they spent they wasted a day because they had the wrong drawings in trans ocean didn't have the current drawings either the drawings hadn't been  changed the design of the b o p had been changed after it was installed nobody bothered even though b p approved that nobody bothered to produce new engineering drawings for those operators so even the owner operator b p was sitting there trying to figure out how to shut that thing off pushing the wrong buttons and you know there was wiring changes that's a perfect example of the same kind of problem that b p planners have let me ask a couple questions was it relates that point one were you ever on the deepwater horizon no sir i will never reveal it was you ever review that the drawings or the plans for the deepwater right now sir your comparative analysis is based upon what you've read over the last month that's correct  you say it's unreasonable for the mineral management services to take months to investigate the atlantis since you provided copies of the british petroleum database to mineral and management services result of the recorder by the president doing that due diligence with the secretary of interior as they are reviewing all of these deep water platforms but isn't that bad a year and a half old dad i had at the time it was back in february of two thousand electronically available that should be a pretty simple matter to check in a few days by the m m s personnel i have that's my point though i mean and obviously if they they have this new updated information they'll be able to do analysis to see whether or not it's changed from the information that you had which was over a year ago exactly whether or not they've corrected any of those drawings are plans or whether they're the exactly and so i don't know why they just don't do that you know they they told congress this committee i believe in february they would do it by may they had three months to do it they could have just pulled that log and a few drawings to spot check and that would have taken maybe a few days that was never done and now they're now they won't three more months by my time's expired so i want to allow my colleagues an opportunity but let me ask just one quick question as it relates to that point you made do you believe the expertise is there with that resides within mineral management services to do that spot check to do the efforts that are necessary to to either hold british petroleum violation are to either clear them i can't answer that congressman i don't have would assume from all the work that you've done you've had experience in your previous work with minerals management services i mean don't you have any interaction or relation in your past no not really i produce the drawings and you know we proper documentation following on the chairman's questions i mean this is not a this is a production facility rather than an exploratory or drilling facility  i think the i'm not an expert in this area but i think that this safety record is better once these things are in production so what is what it what do you see is the risk here well i would agree  a multiple well psi there are many production wells i think probably four to six in production now that are hooked up directly to the piping and all but there are also two drilling rigs they're drilling new rigs right nearby the atlant is so rivalry so it's a combination drilling and production rig and yes production rigs are theoretically more safe because you know you're not going to the whole drilling process and here's the thing you know all of this equipment be at production our drilling rigs is under is subsurface with tremendous pressures and tremendous heat they say that the pressure down the bottom of that ocean can take a fifty five gallon fifty five gallon jug and reduce it to the size of a fan bowl now this means that the man that the manifolds and all the piping underneath has to be extreme new cutting edge metallurgy welding procedures except for a if those welding procedures and those that metallurgy was not reviewed by b p engineers who know the overall design then there's a tremendous danger that there could be errors there is also a tremendous  possibility that the operators if they don't have the latest drawings in front of them could make mistakes in an emergency situation when they're shutting this rig down and you know that could be deadly  why help me understand why would be not provide this or not want to provide this documentation is it did they save time or did they save money or is it just sloppy procedure and it would have been in their financial interest to provide these but they just didn't get around to i mean what what do you think is behind this ok from what i saw there you know working the budgets working document control and scheduling  what i believe what i saw was that b p management set the tone and they were more more concerned with production and cost making the money safety was a last issue that i found to be take engineering normally goes through several processes you have a preliminary design it's approved by the you know by the owner company and they go back and forth with the vendors and get it right to fit their design and finally they produce as bill drawings that takes many thousands of man hours to do if you just shortcut and say we're going to take deployment area drawings and build it based on that it cost you a lot less money and that at the atlanta this in all parts of the operation there this documentation might want to reiterate excuse me for the record that that distinction because i think it's important for folks to know the percentage of a platform that's above the water that's below and the potential hazard risks that you're concerned of  well below the surface it's pretty much all high pressure and high temperature so it's special metals and in my opinion the most dangerous of all the pipe being in equipment that that is built for that platform lies had a meeting with the justice department and m m s was on the phone asked me one or two questions they said they would follow up with an interview with me never happened they said in february of this year when your committee sent your letter to investigate it in may when you send it you specifically mentioned they should talk with made a never talk with me in any sense at all done any kind of interview and just a very quick question since my time is up employee got promoted when i came in and he wrote a very direct letter saying that there are hundreds if not thousands of joins that are not complete and could cause catastrophic operator errors and you know and i pursued that i ask for a list of problems when i went in and i pursued that problem and all i got me was a very unpopular you know reputation and right and pretty much ran off thank you mr holt  at what point in the process and then masses interaction with b p should they have should and this have become aware of a problem with the absence of drawings that's a very good question congressman there is an immense regulation that says the owner operator will have as will drawings and he will keep them in a place where we can review them but you know what the real problem is from what i can see what i have seen in the last year and a half they don't review him at all and so it scares the heck out of me i do not believe that im in mass my opinion looks in any way at drawings to see if they've been completed and reviewed by engineers and if there  built and that's the real danger and if this committee could change anything it would be to get them to do their job to inspect the drawings and not just to go out there and check pressure readings and look and see if they did a safety desk that's not enough based systems work fineries if you ever thought of sinden something as a final product from an engineering company to a refinery that wasn't as built and approved by your engineers you fired it's simple as that so is or is there a point at which a permit is issued to the company for production let's say where you would say without and then having seen the drawings that that permit should not be issued absolutely  you know they have to sort of occasions one or two plans one an expiration plan and one a production plan for every will they design and build and what happens is that the production side when they get ready to start a production and they they b p had to certify to him in mass that they had complete as built drawings and they were engineering proof and i haven't yet seen that certification we've asked for it  and i understand they're going to try to get it for the committee but if that sort of the case sense yes it was done then it was followed falsified and i guess you would say that as a threshold matter the certification should have been received by m m s before a permit was issued but beyond that even with the certification and then should probably have done enough independent review to be able to assure itself that that certification is well founded absolutely congressman you know when they started production in november of zero seven on atlantis merritt member i came to work there in sept august of zero nine zero zero eight almost a year later when i came in there they had the problem of ninety percent of the drawings not being approved and not being issued to the operation or the operations manager ron berger met with me in january of two thousand and nine and said can i don't have any any drawings for my operators on the rig built drawings i said i'll try to get them and i kept trying until i was right as we as we have this hearing today and in atlanta says in production what percentage of those drawings do you  think are available in the way that they should be well anyone know that when i left ninety percent of the drawings were not as built and not reviewed by a b p engineers and i know that judge  reviewed my complaint about that said in an a p article three weeks ago that the best of his knowledge they weren't complete in september of two thousand and nine b p is telling him now recently that they've been done but he has no documented proof of that so it's possible that at that production facility people are still flying blind absolute civil now you know the president put this mor m in place for offshore drilling beyond five hundred feet so that's not with respect to facilities that are already at the production stage correct operation could have reached a stage that if you don't have in place the right kind of oversight that even though you you go into a moratorium that there's still some risk there do you believe that when you impose a moratorium on a drilling operation from that point forward you have eliminated the potential risks that exist well as long as you shut the well and properly you know which is what they would be doing with as a result of this moratorium it should be safe until you resume the drilling you know but that once again i is the more dangerous side and if you don't have a good engineer approved designs you know if the owner operator b p is getting lazy and want to save money and just take in those preliminary drawings from their vendors and use them and you have tremendous risk there and then the minute they start up there in the same risks pool they were before  completed engineering documents on board the b p atlantis rig when it began operating in two thousand and seven however b p s managing attorney stated to the associated press on may fifteenth that quote p has reviewed the allegations and found them to be unsubstantiated why would be p not have these critical documents before starting operations of the b atlantis rig congressman the only reason i can and this is my opinion is because they felt it would be a lot cheaper just to build it cutting corners and not getting the drawings approved from their vendors by their own people and you know that's exactly what they did they cut short cut those man hours and did poor engineering practice mr abbott what was the response of your superiors at b p when you alerted them that the b atlantis was missing crucial final engineering documents that could lead as one b p official stated to catastrophic operator error well congressman first i talked to the lead engineers to find you know when i discovered the problem and not got big kickback from them because they weren't used to doing that they asked me why should we have to approve these drawings and i said because every other engineering company i've ever seen and owner company does ok it's standard engineering practice and when i went to my supervisors  and his boss and talked about it they told me don't put pressure on the engineers you know you're causing problems and they really discouraged me trying to pursue that which was part of my job and you know i just don't want to see people die because i know what can happen if the operators at any kind of plant don't have good as built finally issue drawings mr abbott do you have any reason to believe that there are other b p rigs currently operating in the gulf of mexico that have similar safety deficiencies as the b p atlantis well as congressman costa remarked and i and i had told him this and he remarked on it basically i see similarities similarities between atlantis and the deepwater facility from what i see in the press and there's at least three different incidences that described the same situation one was the problem with the blowout preventer neither b p nor trans ocean had the most current draw and that is inexcusable for an owner operator b p to not have those drawings on that site and you know an interview with one of the mechanics another incident on deep water and the man said you know i smelled the gas coming up from the well the engine started surging the automatic set off didn't work and if i had just had a procedure for manually shutting down that engine i'm out of saved esol he did not have a procedure a simple one page procedure for shutting down an engine that's what i call a big lack of engineering documentation mr abbott right now b p s chief executive officer tony hayward is testifying before the energy and commerce committee right across the street we all know that b p cut corners and ignored warning signs with the deepwater horizon but you have raised questions about the safety of other b p rigs that are currently operating in the gulf of mexico just to add that what you on message to mr hayward as he testifies before congress today well for one thing i would say mr hayward please get get a complete honest answer for these congressman you know three weeks ago he said that there was nothing wrong with the b p drawing atlantis drawings when the unit started up and there's nothing wrong today so that in a letter to his people and at the same time judge spark and his chief investigator employee complaints about safety and said yeah there is something wrong mr abbott was right these drawings are not complete and so i would say to tony tony please get this right and  would say in general you know these rigs all of the b p rigs need to be checked out for for do they have complete design drawings for those operate years and i have real doubts about that so you believe that there could be other rigs out in the gulf of mexico without complete design without completed procedures to take in the event that something goes wrong i know for it's for sure the atlantis did i know from what i've read that deep water had similar problems that could have helped cause a disaster and i can and i can only assume that at the very least we ought to be checking out all the b p rigs checking the drawings not going out there and check and pressures and safety checks that m m s is currently doing and that's what they're doing do you believe mr abbott that there could be another b p ticking time bomb out in the gulf of mexico as we sit here today and mr hayward sits testifying across the street i absolutely do congressman i think that i know when the for a fact that it lantus has four to five times the flow capacity with about eight wells that this one well deepwater horizon had and it's got just as much risk in just as much high technology engineering that could be wrong should any of the b p rigs be shut down right now in order to ensure that a complete safety inspection is completed well since after a year and a half of trying to get both b p and him asked to inspect this thing and check the drawings i would say that the best solution at this point would be to shut that rig down and then to get to put down his own b p to prove that it's safe to fix anything can be fixed if you spend enough time but it's dangerous as it is and it needs to be shut down the gentleman's time has expired i think i think that the only i don't but i have some questions i'd like controls manager project controls manager and how often how long have you been doing this it's pretty much been my whole career for thirty to thirty three years and has most of it been  offshore platforms probably about seven years that has been offshore and the rest has been i'm sure everything from seventy million dollar projects to two three billion dollar projects on shore  so you have as a project manager i think with the seven years in the additional years on shore experience you have what is considered good experience on offshore  platforms and you indicated that you've worked for shell and what other companies some of the major owner companies are shell in general ledger and b p of course engineer and chemical instruction companies that do the work in the field or those include stony webster let's stipulate for the record this isn't your first rodeo ok i'm trying to the reason i'm asking that is because i'm trying to get some comparative analysis based upon the testimony given as this afternoon with regards to your experience with british petroleum on the on the platform atlantis and other platforms that you may have worked on i suspect you're a pretty thorough guy a sound like you are this kind of documentation for plans and drawings that you describe in your testimony is the same kind of information you would request for shell or any of the other but as you work with absolutely it's standard engineering practice and it was forthcoming on those instances in every case and you better not have not have he better not do it improperly or you wouldn't be there so are you saying based upon your experience seven years on offshore platform and the time that you've spent on shore that there seems to be a culture of carelessness at least as i said this morning in the testimony a  a sphere of overconfidence and complacency that came together that created this her horrific disaster congressman i do agree that there is a culture of complacency and  non concern for safety issues at b p the like of which i haven't seen anywhere i've worked you know nobody's perfect no company's perfect but it is thoroughly embedded and management sets the tone there and you know people do  months ok so it was six months compared to twenty plus years of working with other companies correct probably twenty nine so project managers is generally hired on by a company to take on a certain project you work at through to the end and then the company like sure work you get hired for another project or you move on to another company what are you doing now i'm a contractor and i finished it now at this time to see what we think is good and what needs to be changed but and clearly it's for me the staffing racialist got to be looked at i mean you can you can break it down  different organizational structures but clearly the staffing ratios are inadequate to do the job with the amount of platforms whether they be production platforms or drilling to ensure that the regulations safeties are being done but i cannot understand for the life of me why after seven years of doing that you would have had no interaction with mineral management services inspection personnel it's really a quite easy explanation man most of my assignments i worked in the home office and sometimes in the field on the engineering projects like you said with a design in by and you know have built all the components for the offshore and onshore units but in that role we just don't really have any contact with the m m s people the m m s people primarily deal with the operations people on the rig and the operations managers and i guess they probably deal a lot with the regulatory people within the all companies you know as far as leasing range you indicated do you believe it it's in terms of the risk analysis versus the risk management say for us can for us to continue to utilize the oil and gas finds that are available to our country to be used as a part of an overall energy portfolio and that we gas fields should be at some point i mean you know a fair bit about the energy needs of this country in the world i mean by basic question to you is is can this be done safely and if it can what should we be doing to ensure that it is safe as we do our due diligence i mean i as i made the statement i think you heard me this morning unfortunately the confidence factor by the american public if not zero is near zero as to our ability to do this and to utilize this important source of energy for our country so could you give me  your your thoughts on this because certainly congress it goes to the heart of ultimately how we move forward in a comprehensive energy package that is absolutely critical to our country in the twenty first century absolutely you're asked for my opinion and i'll be glad to give it to you from what i've observed i am a realist as well as somebody that wants to protect our gulf i live there and the lives of the people that are working on it but at the same time i know that gas that very scarce all and gas resources are being depleted on shore and in shallow depths that's a fact and we are left with the deep sea and we have to find out how to use it and we have to be able to control it and make it safe for our environment i believe that a very basic type of regulation is being overlooked by the m m s and that is they need to be checking to see they asked for the drawings they say you have to have as bill drawings they should be doing some kind of cursory check looking at the document log to see if the drawings have been issued as built check a spot check and some of the drawings to make sure there's no fooling around and that should take a few days on each rig  congressman and that if we accomplished nothing else but got that regulation in force i think the job would have done a tremendous benefit value for this country i think there's things that could be made better  regulations but i'm not an expert in that i'm not going to go into it i just think the regulators need to regulate and the oil companies need to know that in the end there are regulators that are serious about it so you do you believe it can be done safe think absolutely it can be done safely i don't think it's beyond our technology a country that's built some of the biggest dams in the world and the space shuttles certainly think we could figure out how to drill a hole in the ocean and not have it blow out how long does it take to take either of those measures to sort of shut down a drilling operation would you say and honestly i just can't comment on that i'm just i'm not close enough to  that to give you a reliable time ok well as i listen to testimony i guess what i'm worried about is we now have in everyone's mind the notion that the mor is in place but curious as to how long it actually takes before you can say that that's that's true i mean you say that more  that mean by monday night all of these drilling operations have been put into into a pause mode probably not so if it's friday or two weeks or three weeks out  re going to discover later if something goes wrong that well while they were in the process again this thing shut down but then in the meantime something happened and if that's the case then i think b p s drilling operations in particular somebody ought to be going in looking at those looking right over their shoulder as they are implementing the moratorium because they've already demonstrated a culture that doesn't seem to put a high priority on this and if they are if those rigs are at higher risk which i i gotta believe they are given that culture then somebody needs to be paying a lot of attention to how the moratorium is out actually being implemented could because i could see as waking up and reading a newspaper headline about how some other drilling operation that was supposed to be getting close down has blown up congress and i would agree with you completely that you know to say we have a six month moratorium by itself does nothing for us because you know six months from now we if everything goes the way it is m m s will still be doing the same kind of inspections and not checking the draw upon my recommendation would be to see you know that these right that these inspections are done properly that they include reviews of the design basis drawings to see if they're up to snuff and to see if they're complete and then all the other things that they should do as well the safety checks the pressure tactics and you know there should be a plan they could stagger these inspections and in six and i could see it would take six months to get these things in place but if nothing changes in six months they're right where they were and you're right it is just as dangerous as ever when they started mr thank the gentleman finished ok you may be right mister  but in six months we're supposed to have the new improved minerals and management services so if in fact that's the case hopefully the sort of oversight and review that you are suggesting here today the elements are of the moratorium that the president has implemented with regards to both deep water and water of under five hundred feet or less because i know we talk a lot about it today and we talk about it all the other hearings but the moratorium for six months is any wells that were that were being drilled for production purposes but have not yet reached production stage are any anticipated new efforts that we're going to take advantage of their a p i and had moved far along enough the process to begin actually drilling the exploratory well understand there was two new wells being drilled when all this happened how many wells were in production when you were out there when i was there there was four four did you get a chance to review the drawings on the on the blowout valves and some of the side we had trees and yeah we had tree drawings that show you know that tree replaces right preventer when it goes right and that's on the ocean floor actually and so were you confident that those safety aspects on the atlantis were in place  i know that the they had preliminary well drawings that none of them had been approved by b p engineers you know not very safe if you haven't even reviewed the design of them and and issued him as bill to the operators wyoming i believe has a question thank you mr chairman now i'm in the flow of the conversation so of appreciate your letting me follow up on your line of questioning mr costa where mr cost to seem to be going and i think he was really getting to the heart of the matter finally which is it seems that and tell me if you agree with this statement safety and the priority that safety is from company the company varies depending on the culture of the company and the size of the company small medium or large is not an indicator of who may be the safest or the most reliable or the most responsible but in fact you really have to look at each company individually to understand whether their corporate culture is one that values safety of people and the environment and so you shouldn't just judge big as being more safe and capable than little companies or vice versa based on their size so you really have to zero in on the company itself and look at their track record that's the other giveaway exactly all right our third panel is now here you get the prize for who waits the longest but there are lots of us here to ask questions so maybe that is a benefit of sorts  we would like to recognize this group that involves a combination of various perspectives mr christopher mann senior officer of the pew environmental group mr allan spectrum and vice president of the office of shore technical and mr eric i'm a little a little group director of the upstream industry operations for the american petroleum institute ms daniel bryan the executive director of the project on government oversight i like this pogo mr steve maly the operations manager for the badger or oil corporation is that correct right and i understand you are more representative of the small i don't know if that's the appropriate term since we have to be careful some of the adjectives we use here but does it well the last the larger energy companies ok good you can tell us all about badger when you get to testify so let's begin with mr christopher a man the senior officer at the pew environmental group i think you folks have sat around here long enough today to get the rules you got to activate your mike you've got that  clock in front of you and it is green for four minutes yellow for a minute and then it turns red as you can see the chair tries to give a little bit of discretion and as long as you don't get i'm upset so everybody's been on good behavior here today so what it should be good mr man that's my first rule mr chairman not to upset you so i'll at this point the program i'll try to be brief and get right to it i very much appreciate the opportunity to share the views of the pew environment group on the minerals management services regulation of offshore energy development i want to note that the recommendations in my written statement were developed in coordination with the ocean conservancy the deepwater horizon oil spill has become the worst environmental disaster in u s history it brings into sharp relief the costs both human environmental of our society's dependence on fossil fuels totally something went disastrously wrong with that drilling operation the revelation since a spill about environmental shortcuts and lax oversight by the minerals management service so this disaster is as much a failure of governance as it is a failure of technology my written statement provides detailed recommendations for reform of both the oil pollution act and the outer continental shelf lands act although oil spill response or recovery are vital we are now sadly reminded that once the o l is in the water much of the damage is inevitable prevention is the name of the game and my remarks today will focus on reforming the development process in the hope of preventing a repeat of the deepwater horizon our government system to decide where when and how period that most of us would probably prefer to forget during the interview meaning thirty two years the technology to extract oil and gas has advanced dramatically but technologies always fail eventually and the technology to prevent and respond to all spills has not kept pace we believe the management of offshore oil and gas development is deeply flawed the five year planning process through production needs to be brought into the modern era structural reforms proposed by the administration are an important first step but congress should amend the outer continental shelf lands act to ensure that the risks of offshore energy development are fully and accurately assessed and managed what are the ke commission and the u s commission on ocean policy cited single sector management of marine resources as a factor that contributes significantly to the degradation of our marine ecosystems the o c s lands act focuses on expeditious development which pressures and processes i'm sorry which pressures the process and create strong forward momentum for production especially after the period when leases are sold the o lands act does not include standards for environmental protection to which decision makers can be held accountable and it places decision making squarely in the hands of the minerals management service which lacks expertise or institutional interest in ocean issues and has clearly failed to assess objectively and accurately the potential risks of o c s trailing lasley current law allows inadequate environmental analysis and it is inadequate preparation for and capacity to respond to all spills what do we recommend congress do about this congress should amend the policy statement in the o c s lands act and create substantive standards to prioritize protection of coastal and marine ecosystem health standards should include the identification and protection of important ecological areas collection and an analysis of baseline scientific information and a requirement for demonstrated capacity for oil spill response by potential lessees congress should ensure that federal agencies beyond the minerals management service have a much greater role in o c s energy development decisions congress should amend the lands ac to require joint preparation of or at a minimum concurrence by the secretary of commerce in five year old gas leasing programs and the need for documents that in company that of that planning congress should ensure environmental review is thorough at each step of the leasing process the ocean agencies should be required to examine worst case scenarios and cumulative impact categorical exclusions are not intended to cover actions with potentially serious environmental consequences and should therefore not be applied at any stage of the o c s development process and finally we recognize that moving toward more comprehensive ocean management comes with additional costs to address these needs congress should set aside a portion of osha o c s revenues in a permanently appropriated dedicated fund for ocean coast and great lakes conservation management there are clearly profound environmental consequences from development of oil and gas resources offshore but there is a compelling logic in taking a small portion of the revenue we derive from developing those resources and reinvesting it in conservation and management of renewable ocean coastal resources with clear act introduced by chairman ray hall last year provides a good model for the structure of such a fund mr chairman we look forward to working with both congress and administration to protect the health of our oceans as we meet our nation energy needs that should not be an either or proposition thank you mr mann pre shared your testimony and our next witnesses mr allen spectrum and by president of the offshore technical and regulatory affairs for the international association of drilling contractors it was just back when thank you chairman cost to members of the committee i want to thank you for the opportunity to speak to you here today on the restructuring of the m m s and how the implementation of a health safety and environment safety case or safety case might affect the restructuring efforts while i d c opposes the moratoria imposed on offshore drilling i d c does support many of the recommendations made by secretary sala in his twenty seven may report to the president one such recommendation is the adoption of a safety case requirement based on the two thousand and nine i d c h s c case guidelines to be imposed on  a risk based approach to the analysis of hazards as safety case provides a tool for the assessment of the new new technology and the development of controls to manage the associated risks without the protracted delays inherent in the development of prescriptive regulations i will address why many have chosen to implement a safety case what are the proof requisites to successfully implementing a safety case how key parts of the safety case are developed and the challenges to implementing a safety case in the united states historically the safety case has served three principal functions its primary use allows companies to identify hazards in the workplace and establish the risk management controls needed to meet their internal health safety and environmental objectives as the capability of the safety case to assist in meeting internal objectives was recognised its use was broadened and companies began to ask their contractors to implement a safety case regulatory bodies were not far behind establishing their own sometimes differing objectives what are their practices a company implementing a safe case must have a robust and effective management system to assure the output of a safety case is reflected in the workplace the commitment to implementing a safety case must be ongoing there must be a constant learning in the workplace and feedback into the risk management process if a safety case is to be effectively used to address extra no goals there must be a dialogue leading to clear understanding and incorporation eve of either the clients or the regulators expectations into the safety case the three main elements in the development of a safety case are the identification of naser hazards and events and the assessment of risk control measures to prevent and mitigate the hazards and integration of these into measures into operations while each safety case will be unique for offshore drilling there are a number of commonly recognized hazards fourteen such hazards are shown on this slide regulatory jurisdiction over each of these hazards its spread across multiple agencies jurisdictional issues between agencies can adversely influence effective development and implementation of a safety case a team identifies the risk control measures necessary to prevent the on wanted to vent from occurring as well as measures to mitigate the effect should the event occur despite the precautions a team then refers reviews equipment design operating structure and training plans emergency response plans except for a in order to provide a means to implement the control measures what are media challenges the secretary's report says the safety case will impose will be imposed by emergency rule making id i d c is concerned that this process will not allow for the dialogue necessary for industry n d o i to reach a neutral understanding of deal i specific goals for the safety case the report recommends that a well construction interface document accompany the safety case there are generally there are presently no government or industry guidelines that describe the content of such a document a dialogue is urgently needed so as to understand deal i's expectations regarding the content of this document the coast guard shares jurisdiction over offshore drilling operations with the department m m s had to clearly identify boundaries on areas of individual and mutual regulatory concern we are concerned that with the safety case these boundaries may shift review of the safety case for require a a personnel with the knowledge and experience to address the full scope of the identified hazards and risk control measures addressed in the document their experience must match that of the team that develops there will also be a need for auditor is to assess the implementation of the safety case both onshore and offshore for its part i d c is committed to assisting drawing contractors to implement the safety case sustaining a dialogue with the oil companies to facilitate question and answer period i want to get back to you on some of those slides so whoever's doing those will we may want to come back to them and explore a little more about what you consider best management practices  for the opportunity to address the regulation of the offshore oil natural gas industry my name is eric maleo and i'm the upstream director for the american petroleum institute a p i has about four hundred member companies which represent all sectors of america's oil natural gas industry our industry supports  point two and a million american jobs including over one hundred seventy thousand jobs in the gulf of mexico blades the offshore development business and our industry provides most of the energy we need to power our economy and our way of life first thing i like to say is our thoughts go out  thoughts and prayers go out to those families who have lost their loved ones and to the workers who've been injured in this and to our neighbors along the gulf coast who've been affected by this tragic one precedented accident the people of the oil natural gas industry understand our responsibility to find out what happened and why and we understand that we need to cooperate and work with the government and move forward so we can improve the equipment in a procedures and the offshore operations so we can prevent accidents like this happening again our industries top priority has always been to provide energy in a safe technologically sound and environmentally responsible manner this incident is a sobering reminder to remain focused on efforts to continuously improve operations so we can safely and reliably provide americans with the energy they need we support the government's review of the systems that we have in place and we will take the necessary steps to prevent accidents like this from occurring again we believe a constructive cooperative relationship between government and industry is critical to promoting safe offshore operations while maintaining a strong offshore oil and gas program both are vitally important to producing the oil natural gas american consumers need and providing the energy and jobs crucial to the economy and the gulf region and the nation our goal is to understand the causes of this incident and to correct them we are standard concerns many people have about offshore drilling in the wake of this incident that is why we are committed to meeting the public's expectations for safe and reliable production or nation's critical energy needs access to affordable energy impacts  sector of our economy every state in our nation and every american family we appreciate the opportunity to address the existing regulatory process affecting oil and natural gas development to be clear oil natural gas operators on subject to significant federal regulatory requirements a secretary salazar testified last month the offshore oil natural gas industry is a very highly regulated industry there are twenty seven statutory authorities that apply eighty eight code of federal regulation sections and twenty four significant approvals and permits furthermore a p i in the industry through the standards setting process develop the technologies best practices and programs needed to help ensure that workplace safety and environmental stewar forefront of the offshore oil and gas development process since one thousand nine hundred four a p i has developed industry standards and practices that promote reliability and safety through the use of proven engineering practices a p i standards are developed through a collaborative effort among industry experts technical experts from the government and other interested stakeholders the industry has helped create more than five hundred standards including some two hundred forty exploration and production standards that address offshore operations seventy eight of these standards have been adopted by the minerals management service and their regulations as a result of the regulatory framework industry standards and individual company safety programs offshore oil natural gas development has been safely conducted for nearly sixty years in the gulf of mexico within that time more than forty two thousand wells have been drilled including more than two thousand deepwater wells but despite those safe operations we know we must now focus on making sure this kind of accident will never happen again the industry's committed to a goal of zero fatalities zero injuries and zero incidents and industry has already taken steps to improve safety and environmental performance in the aftermath of the gulf incident we've already assembled the world's leading experts to conduct a top to bottom review of the offshore drilling procedures from operations to emergency response to industry task forces that are addressing issues related to equipment and operating practices delivered recommendations to the interior department last month a commitment to learn from this experience and to make offshore oil natural gas exploration and production safer will not stop intend to use any findings from the incident that's investigations to continue to improve technologies and practices to achieve safe and environmentally sound operations as part of this process we will continue to develop new a p i standards and revise and adapt existing standards to raise the bar of performance to a higher level as congress considers these important issues thoughtful consideration must be given to harmonize the need to protect the environment and attack taxpayers while allowing us to safely and reliably provide the energy our nation relies on for economic and energy security the part of energy projects that we will need much oil natural gas to fuel our economy for decades to come we have the opportunity to help those resources here at home with the ability to do it in a safe and responsible manner responsible path forward is to recognize the important role energy plays in fostering job growth and energy security those goals job growth and energy security can and should be met through responsible domestic oil and gas development we look forward to providing constructive input as this committee the congress and the administration move forward with policy proposals this concludes my statement mr chairman i welcome questions from your colleagues thank you thank you mr leader and will move on to our next witness ms daniel bryan the executive director of the project on government oversight thank you thank you very much chairman thank you very much for inviting me to testify today and i want to compliment the committee for having structured the hearing with a panel for whistleblower i think it's a really important element of oversight and something that other committees should be following in your example since one thousand nine hundred five pogo has issued five reports about m m s is failure to do its job and the deepwater horizon disaster is a direct result of that failure splitting up mess is an important step but reducing these structural conflicts will not fix two primary dysfunctions the revolving door between industry and m s and over dependence on industry for expertise the revolving door between industry and m m s has been swinging wildly and agree just example of this problem is the last director of m m s on the previous administration randall lucy who recently came before your subcommittee as the president of an offshore drillers trade association the national oceans industry association as a disturbing side note his predecessor at that association tom fry was also a former m m s director these two cases are emblematic of what is wrong with m m s when the director of m m s joins a trade association whose explicit mission is to secure a favorable regulatory environment for offshore driller taxpayers have to question whose interests were actually being served when he was at m m s in the case of mr lucy who joined the trade association only fourteen months after leaving m m s in other words just after his cooling off period it's unclear whether he was always ideologically opposed to m m s his mission as we've been discussing all day m m s so has suffered from a conflict in its mission oversight and promotion of production should never be combined and one agency the clear act tackles this conflict by separating out the auditing and regulatory functions and giving it to the i g secretary salazar as proposed reorganization of m m s would also help to improve the agency by separating into three three separate organizations but this plan success would depend on adequate funding staffing and expertise and we are concerned that there is a problem perhaps in letting the regulatory functions sink deeper into the bureaucracy poker really believe that particularly the auditing function that is responsible for collection of royalties should be moved out of interior entirely and made part of an independent federal contract auditee agency we also believe it's essential to rebuild the government's technical capacity to challenge industry within the department of interior we heard members of congress i believe it with ranking member lambourn who was talking about the groupthink and also congressman sarbanes who is talking about the keys to the kingdom being turned over to industry and those are both going to be resolved we believe we can rebuild technical capacity within the department of interior so they can challenge industry and have the intellectual security to to fight back when there are questions the way to do this also is to be ensuring that there are enough inspectors in auditors considering increasing the pay and g s scale for inspectors who are critical to rig safety and also determining whether some of the functions of b l m should be incorporated into this reorganization as the clear act also prescribes by bringing all the inspectors of both  offshore into the same division might help to focus that inspection mission poses also very pleased that president obama's recently announced nomination of michael bromwich to be the new head of m m s because of his reputation as a tough investigator is a former inspector general and the fact that he's not from the insular culture of the department of interior and also his lack of ties that oil and gas industry could be a tremendous asset in changing the culture of coziness with industry and other factory things important in terms of changing the culture is that m m s should be making better use of partners like state and tribe auditors there's a an incident that happened before the committee a couple of years ago that i think is worth noting when a north dakota state auditor told subcommittee that a high ranking m m s official had advised him and other members of the state and tribal royalty committee not to testify before congress because it was best to keep any problems with m m m s in house and those are exactly the kinds of people that  s should be seeing as partners rather than a silenced outsiders additionally there must be a rigorous and forstmann of existing rules and regulations and when it comes to ethics and forstmann there is one piece of good news that came from the most recent  investigation into the culture of accepting gifts from the oil and gas industry appears to be on a decline after one m m s regional supervisor was investigated and terminated after accepting gifts from an offshore drilling contractor this example shows that a culture can change when people are held accountable for misconduct the clear act language to increase fines and penalties could provide effective tools for improving realty management it's also important to note that as this has been going on for years with people from within s particularly on the royalty side and auditors coming forward as whistleblowers they have all suffered retaliation of reassignment and job loss the current whistleblower protection laws do not provide adequate protections for these people and the bipartisan whistleblower protection act would remedy this gaping hole in government accountability tools lastly no matter what reforms are put in place they must be accompanied by increased transparency about m m s as operations interior should be providing to the public and congress easy access to information regarding leases volumes of production production costs audits environment environmental impact statements and safety assessments it's notable that after the president's open government directive required all agencies to put three high value data sets online that interior gave no information about oil and gas leasing but instead put up a database of national treasures which had already been on line anyway thank you again to the committee for your oversight of s which has been going on for many years and for asking me to testify i look forward to answering any questions you may have and to continuing to work with the committee thank you we'll get to that a moment or last witness for this panel or the last panel but certainly not the least production office in houma louisiana as well i come here today representing not just badger but also the citizens of my adopted home state how many people do you employ about twenty four badgers an independent meaning we don't own pipelines refineries or gas stations rather badger operates a handful of shallow water gas platforms in the gulf of mexico shelf like this one hundred miles off shore and one of the points i've noticed  sitting here today is the confusion between rigs and platforms platforms that i think a structure especially on the shelf it's in place with a production facility and our plan is to i'm glad you pointed that out and it's why the confusion about four thousand rigs and platforms some of those structures you're talking about are single well structures in very shallow water so the number is high  s the ratio makes it not comparable with california this particular platform is one we installed in two thousand and seven and we had applied for and been granted permits to work over three of the four wells with the drilling rig which will come up next to the platform jack up and and and service service the wells we have no interest in playing the deep water our operation bears little resemblance to b p s but the deepwater moratorium and shut us down as documented in last sunday's washington post the deepwater moratorium has now spilled over causing regulatory confusion and slowed activity in the shallow waters of the shelf i mentioned the permits we had in hand to work on three wells that have been verbally rescinded that's probably three hundred jobs between the direct people that would work on the rig for the contractor and suppliers plus the support jobs that that would entail in the case of our platform the well heads and hands the b o p s will be high and dry you can't really see them in the picture but  they're right above that first deck the water depth is two hundred feet so divers could access anything that went wrong in the water the wells are shallow in low pressure the well  the wells are gas condensate wells not all wells so the environmental threat is much less we're not in the same league as deepwater high pressure or oil but the shallow shallow water shelf has a forty year history still still intact of increasingly safe and clean operations comparable to or better than other industries that don't operate in the marine environment because i'm lazy i used m m s his own slides this is from a p d f that they have on line that shows drilling recordable incident rate osha record of holes and last time accidents for a thirteen year period ending in two thousand eight that's a pretty impressive trend same thing for combined operations drilling production construction and excellent blowout incident rate and i think everyone can see in two thousand and six and two thousand and seven for the entire gulf of mexico zero blowouts with hundreds of platforms down in the storm since two thousand and five subsurface safety valves prevented production well blowouts and any substantial environmental impact from spills those came about after production platforms spill in one nine hundred seventy way before the m was instituted industry learn from that experience and m m s is enforced evidence that together we can can and do learn from our mistakes in answering the question what went wrong it's important to recognize that someone is doing something right as i stated my testimony the cozy relationship as described is not consistent with my experience with m m s in fact if you'd asked me a year ago would i be here today defending m m s i'd say you've got to be kidding to answer what went wrong i've suggested in my testimony that the regulatory structure for drilling rigs and production platforms be distinct because the separate processes are so different between them i've also suggested that the focus needs to be redirected the agency needs to be redirected back that oil and gas not wind energy all industrial processes involve risk mine safety folks can't guarantee safe coal mines the f a a can't put me on a perfectly safe point to go home osha can't guarantee perfectly safe factories offshore oil has its risks but the alternatives have grave risks as well if we don't produce oil and gas here we've got to bring it in and boats it's a terrible way to move boiling oil around  if look at the list of the worst oil spills in history it's dominated by large tanker spills those tend to happens happen in our rivers and bays not fifty miles off shore natural gas would be a good bridge the future but we're planning to shoot it in the head along with the oil industry because both things tend to run together ethanol creates a dead zone in the gulf of mexico every summer from the fertilizer runoff from the midwest i'm waiting to see which northeastern state they'll compare the size of it to delaware new jersey connecticut it's usually one of those wind energy doesn't replace petroleum as a transportation fuel and if you look at it closely it has its safety environmental risk to last i'd like to say that louisiana is the birthplace of offshore technology louisiana did not share in a big way in the royalties we never got much out of the deal except jobs louisianians develop much of the technology and provided the people who made the global offshore industry possible reagan north sea angola the middle east you might be served as good a gun bow as you could find in downtown mahmoud louisiana is family as much as were affected by the oil in the marsh everyone in the state is only one or two degrees of separation removed from someone whose job depends on oil and gas and everyone knows that when not if the deepwater rigs leave they've left for good in that context one hundred million dollar fund for laid off workers is nothing i've seen estimates as high as three hundred thirty million dollars a month we're talking permanent crippling structural damage to the economy especially of louisiana but to the rest of the gulf states as well these men and women that work on the deepwater rigs and support that activity live in louisiana but also in mississippi this regulatory impasse must be solved louisiana doesn't want to be on the government dole or b p s deal we don't need another panel or commission the regs currently on the books vigorously enforce to reflect the relative risk of deepwater oil can do the job but we must in the mor thank you thank you for your able to get your five minute testimony in seven minutes and forty seconds so the chair obviously isn't a good mood this afternoon  and you mentioned the ability to demonstrate our mountain effective response to accidents clearly we've learned if nothing else the responsibility in this disaster was totally and completely inadequate and we've also learned that when we compare the response to other plans that have been submitted that they tend to be severe i would suggest deficient as well if they were ever tested and we pray to god they're not they will not be tested  can we should we well i think we should but is it possible in terms of the technology of the science of the ability to produce this oil and gas it's been  many times over the last two months that our ability to respond to such catastrophe has not kept up with the technology to do the production can we develop but isn't there you know it's a it's an excellent question response removal and recovery technology is is just of course a fraction of what's been invested in the technology to get the oil out of the ground so certainly some additional resources there through the oil spill liability trust fund or another mechanism would be appropriate at the same time i think we have to be honest that i'm not sure that any amount of preparation would have prepared us to contain a spill like this which is why i say prevention is really the name of the game so i would include in that not just response technology but but safety and and blowout prevention so on the risk management and the risk assessment do you think that the focus on the assessment of the risk cast to be on to prevent the blowout from from ever taking place because once that happens a spill of this proportion could is very very difficult to handle yes i mean i think there are two components the risk assessment one is what is the risk of the blowout occurring and the second is once the blowout occurs what is the what is the likely damage from that spill and to make sure that we have based on not just a process based we've all heard reports of statements put into assessments of proven technology that would view that as extreme what if an exploration band gets a full house environmental impact statement immediately after their approval to plant a company applies for a permit to drill an a p i do you suggest that yes i mean we feel that what's not been lacking is the quantity of environmental review it's the quality and that the problem is that when when the environmental review is industry underestimated or even downplayed the risk of an offshore blowout given the response we've seen you know there's been a preponderance of testimony to indicate that possibly although as i you could document with with the challenger accident or with a plane crash but clearly the finger seems to be pointing in that one company in particular has had a history more than other companies  contractor lives with every day and certainly trying his best to control it's his asset and it's his people that are the first ones to feel the brunt of the unintended event what's your that's that's considered best decision and that happens you know i mean clearly when you look at the testimony that's been given in the twenty four hours prior to the blowout of  of the horizon that there were certainly indicators that something wasn't right could you please tell me what you think best management practices are certainly most of our members a least those that are participating in our h s c conferences in the conferences that s p c conduct indicate that in their behavior based safety programs they are getting stop work  ocean i do not know the specifics of the trans ocean rig or the management level stop work authority on that system relate to you want to comment on those two questions i think it's important that we kind of hold off position and perspective on whether or not safety is being taken for granted i don't believe that is the case and what i would you don't think there's been a i mean certainly sixty days later that's not the case but but just two to be failsafe if you look at the record in the gulf over sixteen billion barrels been produced and you have less than one one thousandth of a percent of the oil spilled from that you have also over forty two thousand wells drilled to over two thousand and people order this is an unprecedented tragic accident that we would hope to have never occurred at all but there are regulations in place and there are redundancies in place and it starts with a company in our own safety m r environmental management program the government currently does not have industry put out in one thousand nine hundred three its own safety environmental management guidance documents so for the past twenty years the a p i and the industry has been following a document on how to put together a safety environmental management program in addition to that  you have to go through the risk management up front all the way through to the drilling of the well when you have the well design the well construction the well operations the blog provider if you look at each phase of the operations are go seas built in we don't even want to get a lot provider we want to have the design in place we want to have that construction in place when we don't have the operations in place so that you don't even get to the b o p and all if you look at the rags and if you look at where industry has gone they've created the procedures and the design and the practices to make sure we don't get to that point but i guess miles from a point is we have to go back to really see what happened here the industry put together task forces that have already put together recommendations to improve performance we're continuously looking for ways to improve performance and that's partly a tear actually except that a lot of recommendations and include them in our latest notice to lessees so we're already seeing measures taken to raise the bar performance but a lot of that stuff has already been done and is being done by the industry the american petroleum association subscribe to a stop work concept that should be the order of the day on any platform i don't believe that's something within our recommended practices at this point something that we can look go back and look at but i do understand a lot of our members a lot of the operators have that as part of their internal programs create recommend a practice is we bring the experts together and and coach bob drive your part of your association is to establish best management practices right that's correct and that's something we can look at and go back and take a review of of our safety and environmental performance documents to see if that's any doing i've got more questions but i  yes could you tell me your general reaction to their qualifications their training their professionalism in your experience most of my dealing as been with engineers at the district and regional level i haven't dealt much with the inspectors i'd say in general they're qualified dedicated public servants there's a tier there of middle managers i'm very impressed with have you ever been concerned about the culture at the k thank you question for ms brian are you equally concerned about where people come from when they enter an administrative capacity is where they go to after they leave absolutely we call that the reverse revolving door and we think that's a very important part of any reforms would be to ensure that that we're looking at at making sure that people coming into the government aren't regulating their former employer for example ok so does it disturb you that mr lucy before he was in my master director was the deputy director of the u s fish and wildlife service do you think that somehow that created a bias going into the m m s that should be somehow regulated or curtailed not at all because that would have been a public service that is working for the government so our concern is what is a financial interest and i don't see that he would have had one in the fish and w the industry they're regulating and how long after they leave should they be unable to go back to work that depends in part on the particular position of the person this is  a subject of a lot of conversation and i do think that in general most people think two years really is helping to at least ensure that you there is some distance from relationships and sort of a two coziness with the people that they actually were just coming from is in terms of their colleagues but it depends on how high up in the structure of the bureaucracy and their relationship with particular contractor leases so for example if someone is an inspector there would be a different standard i think for a revolving door than someone who's the head of m m s i would argue that there should be a permanent ban from some of the director of m m s from going to turn in work for industry have you written a proposal that looks at all these different levels and how you recommend that they be they be regulated and does it concern you that you could end up with someone who's the director of the m m s who's not terribly qualified because they don't have previous knowledge they come in as say you know a blank slate in terms of having a bias but that blank slate also may mean they don't have any knowledge of an industry they're trying to regulate we've spent a lot of time looking at revolving door primarily with the department of defense in our history and in that work and so we certainly have written a lot on the subject of the revolving door of work mostly in the senate but it's not a lot of work in that arena in terms of management of agencies we found is that the head of an agency is not the person who needs to have the technical expertise they need to have that expertise from within their departments and have advisors who can give them the advice but we are not as concerned that the head of an agency have that technical background one of the things that i've i thought it was one of my best examples of how you don't have to be going through the revolving doors actually the deputy secretary of energy in the bush administration comics lerato secretary of deputy secretary of energy one would have thought there are many industries he could have gone to the revolving door from industries that they are regulating but instead he went to the broadcasters association which had nothing to do substantively with the work you've done because his work with the manager and running an organization and that was his strength and i think that's an example of someone who can go on to the private sector and do very well for himself but not trade into those relationships but he's been overseeing the government ok what about an environmental organization let's say someone goes from the u s fish and wildlife service had this same gentleman mr lucy gone instead from the u s fish and wildlife service into an environmental organization as for example secretary babbitt is is that problematic i really don't see it as comparable because for us the concern is the financial interests of the entities that are being regulated and what if they have a financial interest been to set change what i mean if there is a financial edges i'm not sure  the engineers that the secretary from national academy of engineering asked to review his plan eight of them i think made a statement and they said that the more after the secretary of course made imply that they endorsed the moratorium the eight of them were from akademi a sent out a rather scathing rebuttal of that and among the quotes are a blanket moratorium is not the answer it will not measurably reduce risk further and it will have a lasting impact on the nation's economy which may be greater than that of the oil spill which it will not measurably reduce risk further and have a lasting impact upon the nation's economy what the not being i don't mean to be cheeky but i'm just asking what would you know that they don't know that would imply that they're wrong that the blanket moratorium is not going to be helpful well i i have to review their comments and i have not done that i what i would say is that they may have more standing to comment on the engineering aspects than the economic aspects and i mean we are certainly sensitive to the economic hard intel you're from the way the and you don't need a study to know that this is going to be a stake in the heart of louisiana's coastal account as is the oil spill sir the actually the turns out again in louisiana we know all my heart bleeds i think mr mayor he was getting emotional as he was so was i that for the fisherman for the tourist industry it is awful but size but it's interesting we have the director of the oyster association who likewise got emotional because he said that he was adamantly opposed to the moratorium because he said in times past when fishing was bad people worked on the rigs and when rigs were down they worked in fishing and this takes care of both so again what do you know th it is it is it is me just that teachers when i speak to my medical students i say is that a belief system argue have a fact upon which you base this the fact that we're basing this on is that this is the worst environmental catastrophe think we can ever guarantee that when somebody cuts corners and makes and makes decisions which everyone else would condemn that we can avoid an accident as a physician i can tell you have somebody practices unsafe medicine we end up with a bad outcome that's not an indictment of safe practices as an indictment of that person's particular practice so so that said we do have an oil spill but we also have clearly identified already factors which which if any one of which have been done correctly or probably would have happened so we're going to indict all those folks who are doing it safely according to protocols best practices because of the actions of someone who are an entity which did not do so  this is not an action that the pew environment group is taking this is an action taken by the administration but i do think it's appropriate after such a calamity to take a guess and i'm out and jam and cause us if i'm not getting the answer to my question why wouldn't  between transient impact and permanent impact from day one of this bill i've seen journalists trying to compare it trying to force it into exxon this is not a valdez spill is a much lighter grade crude was fifty miles offshore it took out a month to make it to shore and once it's in the marsh  it's it's a terrible thing and i'm not trying to minimize it but mother nature has ways to take care of it and my expectation would be that in a few months you'd be able to find some impact in a year possibly after a few years i'm not an environmental specialist but my thinking would be that it's going to mother nature is going to take care of it when these rigs move those jobs will go with them people will go off to other things we industry barely survived what we went through in one thousand nine hundred six just because a low oil prices but when these rigs go overseas to other markets it costs so on wells five hundred feet or alas he had knowledge that there had been some confusion as it related to the moratorium and he indicated that there was immediate last week and he thought that they had created a better understanding of what was intended with regards to the kind of well activity that you're engaged in do you concur with this statement this morning i was a little confused about what he's talking about i may be speaking out of school i think there was a meeting up here with a group of the rig contractors the shallow water rig contractors and they have they may have achieved some clarity  logistics of picking up a rig to go work on our wells and at one point we had a problem and it was virtually rescinded and work on in limbo right now we think we've satisfied what mr abbey said the requirements betting that we'll make our own changes and you more or less kind of indicated some additional thoughts but do you think that he's gone far enough are is is this first good clear bill because much of what was recommended is incorporated into that bill i would say if there's one thing that's really still out there and not dealt with it is a revolving door question while president obama has issued an executive order at the beginning of his  administration that at the moment is addressing the concerns we have that is only an executive order it's not a law and when president clinton came into power he also issued a similar revolving door restriction which at the end of his administration he lifted and so our concern is that this is an executive order is only good as long as the president likes it and we really would encourage the committee to consider incorporating on that revolving door thing clearly one of the outcome of that if you want to stop that is to pay people an appropriate sum of money so that they can do that i mean obviously a person that worked on a rig would have a lot of experience in terms of what stand there now if there rick and specter if they were  mean you've got to obviously have the restrictions in the fire wall and all that stuff you can't be going to sporting events together and that kind of stuff but but what should be an appropriate salary i don't know that i could give you a specific amount but i in other countries versus the united states what are the skills needed for inspections in countries with h s c cases and how does that differ from skills necessary to be an inspector in our country and is there anything we of comparative analysis that you could speak to i would begin by saying that the underlying cultures in these countries are different than they are in the united states for a large part in norway for example there is a much different view of the role of government industry and the worker there's a more shared view of responsibility and this leads to a more cooperative effort to address concerns when they arise i would i know from experience in norway that there is a fairly consistent movement of people between mid management levels within the industry to mid management levels and government to instil expertise in both directions but it comes to the issue of prescriptive regulation versus performance based regulations where other countries are relative to the united states again there's cultural differences and there's a difference in how good they are not for the record as a term that regulation is used but there has to be a balance between prescription and performance things like coupling some fire hoses have to be standardized but the approach to risk management  in the countries that have an effective safety case seems to be working the north sea countries are seeing a reduction in their major incidents and safety profile incidents  levels certainly the north sea is a very difficult place places throughout the world to do this kind of activity they have a long track record me ask you know i mentioned in my opening statement that it's understandable given our culture that we're kind of in a mode as we try to address this horrific accident but it is human nature to point fingers and gauges the blame  game the press certainly is involved in that sense of since it has taken place sometimes i think creates the perception that the government's allow the industry to take the reins and effectively regulate itself based on the questions i've asked you how would you compare the u s the united states regulatory scheme is one of the more prescriptive regulatory schemes in the developed world another words are we as tough or are we tougher are we more relaxed then areas of the developed world where this has been done for a long time i'm not talking about nigeria  are some of these other places in the third world where i understand the standards are much weaker again it depends upon how you're going to define what you're regulating  the prescriptive m m s is regulations are volume unus if you look at them in comparison to the regulations in either the u k or norway they're probably fifteen to twenty times thicker and that's all due to prescription does the prescription actually lead to an improved safety result i'm not convinced that it does given the experience in those expertise level within the minerals management service take a see that has no experience in either maritime issues or in boiling gas production offshore and ask it to itself into the offshore workplace i just don't think it would be effective in my sense is it wouldn't work either they don't even have any helicopters i guess they could turn to one but the so you question i was trying to ask compared to other developed nations when it care compares to coming comparing safety performance is i know there are cultural differences but i mean at the end of the day you compare safety performances based upon whether or not accidents is like this happen and on that basis how would you rate the the u s safety record well you've just said accidents like  this this is a unique incident that happened only in the united states so well but there's been other major spills or is one in off the coast of mexico a number of years ago that up until recently indicated it was larger than this one i don't but there's no comparison between the current safety culture in mexico and their culture that existed then there's no comparison between the safety culture in mexico and the united provide a tool to the regulator that allows him to assess from the get go the risk associated with a particular activity and that starts with the the geologist who interprets the data to design the well but you concur with that mr miller i would i think that this industry is dedicated to continually improving operations we understand based upon the sense of dent that we have a long way to go oh and we're doing that right now we've already taken steps made that comment to your testimony about zero risk i don't know that that's ever possible i have just great difficulty with will do everything we do in life as a risk the goal is zero it up in the morning and we get in our car and we back out the driveway i mean there's no zero risk that you're going to get to work safely we don't want to back off the goal of zero injuries your own vironment no i understand i mean that ought to be the standard but will be a question that i'll come back to you with the months ahead what are the lessons to be learned here there's a lot of lessons that are being learned and it's already started with discussions among the industry experts on what is being done across the board all internally what's the a p i doing to sit down and developing your own in house operation to say look at this is a big big problem for years and the american public has little confidence in our ability to deal with this today and how are we going to capabilities and are already recommendations to incorporate into our a p i specifications for i think everybody gets american petroleum industry institute yes you're going to little fast there already is a standard developing organization and we have specifications which deal with how to manufacture a piece of equipment and they quit task force has already come out and said we need to go take a look  conditions there's also a task force on operating procedures and they decided that and recommended to the interior that you need to barriers below the the wellhead in place so that you have the obstacles that will  prevent the barriers that will prevent hydrocarbons from reaching the well and getting into the surface and they've made a number of other recommendations they've already been hard at work there's already been a task force put together on how to deal with stopping and containing  ed well essentially what you have here a blowout at the wellhead which is a area that we really need to see improvement we need to see and processes in place as to what measures should be should be used what order when you do them is it a top kill is it is it a coffer dam so you can look at all those and have the process he's in place and have the resources in the gulf so that you can stage those and have them in place another area where we put a task force together on surface and shoreline response there's been a lot of talk about this spill not having the reaction to the spill not being adequately going to look at plans we're going to look at the resources and the research that's necessary to improve that and another area there's been a lot of discussion as with the oil spill liability trust fund we support the oil spill a lot of the o t trust fund we think it's an important component to make sure the taxpayer does not put any of the bill for this and we're looking to figure out a way to make sure the trust fund is in  place as an insurance element to the taxpayer so the taxpayer does not foot the bill to improve upon the current system so all these task forces are moving forward they're working their short term and their long term and we've recently come out with a recommended practice sixty on isolating flow zones during well construction and so this is avoiding getting to the point where you have pressure building up what practices you have in place with  you don't have the pressure building up so you don't get to a point where you have a blowout and we're pushing to have this adopted by the government well let me make a recommendation to you and then ask one final question will close the meeting my recommendation is that as you deal with this internal reassessment of what should be the best management practices realizing that the old days are gone and if we want to for one of the members of congress that does support using all the energy tools in the energy toolbox that includes offshore utilization of oil and gas that we're going to have to do a heck of a lot better than we're doing today and so i think these recommendations need to be put forth in all of your testimony and with milestones that are probably sooner than you would like because i suspect the clear act  chairman rainfalls is going to be marked up probably in july and obviously this will effort will continue through the august break and i suspect in september are october w be looking at some sort of a comprehensive bill to change the way we deal with this issue so that hopefully it will never ever happen again i mean i think that's what we owe the american public if we're going to ever restore faith and confidence in your industry's ability to do this which i think most people agree is necessary for our economy and for a long term comprehensive energy package but you better be moving and getting this information to members of congress yes or realizing that it's going to cost more and realizing that we're not going to all agree at the end of the day so my final question is this i would just think about i haven't talked to any of the various other energy companies since this horrific accident has taken place but i would think that and i would like to know if you can answer the question that the major energy companies that are engaged  in deep water as a result of this in the last month or so have taken upon themselves to do their own internal safety audit they can you know well we think we're pretty good but you know who knows  and so is that taking place too you know i can assure you that's happening and part of the part of that process is you know if i was a executive in one of these companies that's what i'd be doing now the companies are doing that not only are they doing that but they're coming together to talk together as an industry not just a p r members and not just operators its equipment manufacturers it's it's to the drillers it's the service and supply companies so that the lessons can be shared across the board as to what individual companies are doing so that everybody can share and improve across and have consistent improvement across the board for the industry that is happening and and we are moving quickly and we can provide to use the recommendations that have been provided to interior and we get that information to you appreciate that appreciate all the witnesses of this pat on the previous other two panels want to thank you all for your patience and your time obviously this is a work in progress but we must work together on behalf of all of those in the gulf  have suffered this tragedy the families who have lost their loved ones the communities that have been devastated economically and in a way of life that mr lay you conveyed i think quite well to all of us in terms of the importance that we all view that part of america so clearly we have our work cut out for us and i hope that we can continue to work together in a bipartisan fashion so that  we can cap this well clean up the mess and learn the lessons that are critical to ensure that in the future this never happens again the hearing is now adjourn