inc and mr hmichael bromwich ish and is very welcomeh director of the bureau of ocean energy management regulation and enforcement previously referred to as mms but now reformed with that the testimony you are about to give will be the truth the whole truth and nothing but the truth let the record reflect that all witnesses answered in the affirmative gentlemen the first panel was one you are five i will ask you to please summarize your opening statements and stay within the hminutes for each others and our side  and the intermediate and longterm obstacles and effects are just coming into focus the experiences and lessons learned through the first  remaining years of the oil spill recovery experiences of those directly and indirectly impacted by this spill are offered as just that insights my hope is that the message delivered is not lost in the corporate world of spin marketing or in the spinoff media exposes designed to sensationalize the event and leave the victims and the coast without the attention it is warranted insight one hold the responsible party accountable there are few axioms of our society more basic than the one we learned in some of our earliest social development if you make a mess clean it up as simple as this axiom sounds there has been an everpresent allowance in this disaster that has allowed bp to make it right on their own terms and not based on the terms of the impacted states communities businesses and individuals unlike the natural disasters that we continue to respond to as a nation this disaster has an identified responsible party there is no value in talking about the disaster in terms of responsibility if there are loopholes and justifications that allow the agent that created the mess to define the terms of the response added to this axiom referenced here is the understood message about the mess versus the mess maker somehow we seem to be routed into an ongoing focus of is bp good or bad or is deepwater drilling good or bad instead of a consistent focus of who is responsible for the mess and has it been cleaned up cleanly comprehensively and in a way that does not create another mess the reality is that the value in cleaning up a mess that was created offers as much immunity and positive spin to the mess maker as any spin marketing campaign could accomplish the second insight i offer is to remove the response and restoration authority from the responsible party this insight must not confuse the terms authority and responsibility the responsible party being responsible should translate into doing what is deemed to be required to complete the actions involved in addressing the environmental coastal social economic medical and emotional impacts of the given disaster removing the authority to decide what those interventions that shall be required from the responsible party protects the impacted states communities businesses and individuals from further victimization in an oversimplification illustration when we are involved in a car accident the person who caused the accident doesn't get to dictate how and what treatment or repair is dictated insight number three legislate for the disaster that will happen versus one that has already happened a critical lesson that continues to face us is the need to address current legislation in a way that transcends the most recent disaster while the need to know causal information in any disaster is important the framework of legislation that allows flexibility in accomplishing the overarching mission of effective and expedient response and the ability to require action by a responsible party must be examined while new legislation will not correct any of the ills of the bp deepwater horizon spill we can implement language that authorizes broader oversight and intervention authority stiffer penalties for a lack of cooperation including language that revokes a company's ability to operate under other permits if it has not been compliant while in all terms making sure that production is not mutually exclusive with safety unfortunately we as a collective unit of citizens government officials and industry leaders cannot predict the next disaster but we can predict the next response we can predict the next worstcase scenario and ensure that legislation with the appropriate flexibility and force is enacted to protect the interests of all citizens and finally the last insight is to localize the response process to better serve the impacted victims the shortest distance between two lines is a straight lineh or the shortest distance between two points is a straight line no one argues that but we continue to set aside this scientific law while i have no problem with an honest day's pay for an honest day's work i do question an assignment of claims processing and the payment thereof without a performance clause in favor of the victims we were told that claims processed through the feinberg plan was independent it's not true we were told that the claims would be easier to process at the local level in the feinberg plan it's not true we were told that the feinberg plan had greater flexibility and was implemented to address the victims regardless of the impact to bp we have found that this is also not true i have met mr hfeinberg and have no personal problem with him as an individual i do not claim to know his business  but i do know that because of the lack of ability to resolve claims at the local level his program and process has been ineffective saint bernard has offered at no cost to the feinberg plan to assist him in identifying claimants that are likely to be questionable versus those whose local work history supports their need for assistance a common tenet in the disaster response industry is that disasters are local this is supported because the impact of disaster is most real for individuals living or mourning through it we would ask that the local government and local involvement continue to be involved not only in the compensation process but equally in the response and restoration phase of all disasters thank you hchairman on behalf of florida's sixty seven counties and more specifically our coastal communities and counties of northwest florida i would like to thank chairman issa and the committee members for the opportunity to address the house oversight and government reform committee this morning their presence provided a special opportunity for our entire community to share their experiences and tell their stories firsthand to members of this committee i am here today to speak to you about the struggle that the florida counties and our constituents faced in the days and months following the deepwater horizon it is clear in hindsight that even in the face of these struggles we cannot ignore the good intentions and herculean efforts by the federal and state response teams even though the responseh and even the responsible party tried to do their best while facing this unique and global tragedy however as a lifelong florida resident and survivor of more than twenty hurricanes best efforts and good intentions are not enough we must learn from our mistakes so that the disaster response is not just swift but clear organized and collaborative for the communities impacted there is no question that florida has the foremost disaster response team in our country and arguably the world with a hurricane season that lasts hmonths and can boast up to twenty named storms florida can illafford anything but to be the best yet in the immediate aftermath of the deepwater horizon oil spill our expert response teams were forced under oil pollution act of one thousand nine hundred and ninety rather than the tried and true federal stafford act our traditional emergency management system was turned upside down and who had never stepped foot in gulf county or other panhandle counties of florida that were using year old acp or area contingency plan maps were making final decisions regarding how gulf beaches and all of florida's beaches would be protected local expertise and resources were ignored as strangers decided whether to place oil protection booms near county beaches inland water bodies and sensitive environmental resources to compound matters communications from unified command was limited and rarely consistent from daytoday leaving my county and all of florida counties in the dark and concerned that any preparation and response effort would be too little too late with little information coming from unified command local communities were forced to expend significant financial resources gearing up and preparing for potential events that couldn't be quantified or predicted these financial commitments came as you well know at a time when florida counties and most governments were laying off employees and facing extreme budget shortfalls due to the economy yet it took more than hmonths to begin seeing reimbursement for the emergency expenditures faced with these challenges our coastal counties organized themselves under the umbrella of the florida association of counties to address a range of concern as we evolved  response to recovery and while counties consistently met with state and federal officials in most instances the role of the local community was minimized more importantly in spite of our efforts recommendations regarding what type of recovery structure would  needs and the communities directly impacted were never specifically sought this story and these experiences have produced a short list of priorities that i would like to call lessons learned i share this with you in hopes that congress will take these concepts review them and develop proposals so that any future disasters are operated with clear organization collaboration strong communication focused on the local community individuals and the businesses directly impacted we strongly encourage congress to review and evaluate opa florida's emergency  response system which operates under the stafford act doesn't just work it is an example to be followed why not take the best response plans and teams in the world and use them as the foundation for other disasters the stafford act works because local communities are the first responders the state government responding to our local needs and the federal government responding to the state needs opa failed because it was a topdown approach that looked to the responsible party rather than to utilize local expertise and resources this lack of collaboration created duplication and triplication of all efforts in regards to the claims in general it would be our recommendation that congress provide greater clarity and direction to the process probably the greatest frustration for everyone involved both private and public were constant changes in the claims process there were eight different policies procedures processes and applications within the first two months the summer was almost over before our businesses and individuals finally had a solid process as for our public or government claims it would be our recommendation that costs associated with first responder expenses such as protection prevention strategies mitigation strategies and cleanup should be clearly laid out similarly to the stafford act and not held hostage by the responsible party in preparation for the next potential event a separate funding process should be established so state emergency operations and local first responder plans are not abrogated or delayed because of questions of financial capacity or whether the responsible party will approve the specific cost in addition loss of revenue claims by public entities should be included in a process that incorporates an independent thirdparty review the parties should not have leverage over the states and local communities concerning economic issues determining methodologies for measurement hpercent going directly to the environmental restoration and economic recovery of the gulf coast region i personally support and ask congress to support the recommendations of the secretary of the navy's report published in september of last year m chairman like you we are committed to working with our federal and state partners and we appreciate the opportunity to be before you today chairman issa thank you mr hkief mister kief good morning and thank you for the opportunity to testify on behalf of offshore towing and how we have been impacted in the gulf of mexico as a result of the bp disaster the moratorium and related issues offshore towing is a partnership with three smaller marine towing companies who collectively operate a fleet of seagoing tugboats in the gulf of mexico providing services in the oil and gas sector primarily towing drilling rigs to and from various locations in shallow water we are located along the gulf coast in larose louisiana and collectively employ approximately one hundred and ten people although the moratorium has been lifted and the shallow water sector was not to be impacted as the deepwater sector substantially negative economic impacts have been felt and economic recovery is more distant now than ever before this company used to move twenty five to thirty rigs a month and now we move ten or less due to the lack of drilling permits being issued on top of that  rigs are leaving the gulf as well due to the challenges with issuance of drilling permits we do not have term contracts and work on the job to job on the spot market bp will not compensate companies testified that he felt as though the government was responsible as well for the blowout but this administration continues to reflect as much light as they can on bp or anyone else that they can blame hbillion sounds good but grants us no relief and unforgiving governmental agencies such as the boemre do not provide much hope for us when it comes to addressing our economic issues we have had few layoffs because of this crisis because we maintained an optimistic view relative to the industry rebounding in a timely fashion we have used capital blended with lines of credit to offset the shortcomings that normal earnings would support but even that exercise has its thresholds the beginning of the tolerance levels that have been established have been met now expectations for a timely recovery are lower than ever our confidence in this administration government and its agencies are not what they used to be and we do not believe  any reasonable solutions are in our near future we have recently reduced wages on employees and have started a plan to begin reducing employees we can no longer afford to subsidize unemployment and must enforce these unpopular but necessary exercises our maintenance schedules have also been modified and changed to later dates because the necessity to replace andor overhaul machinery will no longer be necessary due to the lack of use factories such as caterpillar general motors and john deere who produce our engines and replacement parts will begin to be impacted as well therefore states such as michigan and illinois will be feeling this slowdown along with the rest of us of different items that could be identified but this is the biggest example that i could describe we understand that precious lives were lost and that an environmental disaster that was some years in the making should not be ignored the louisiana coast marshes and wetlands are disappearing at astonishing rates so our government has ignored more environmental issues including macondo than anyone else mr hbromwich claims to be offended by the term but he doesn't understand that millions of people are offended by the actions or lack of actions of this administration the government and its agencies the administration the government the agencies the media and the press have done a good job of separating the american people by creating political boundaries to satisfy political agendas when the truth of the matter is that america is more interwoven than what it is being given credit for we need our brothers and sisters in michigan and illinois and they need us americans all over this country depend on one another for a variety of different resources our leaders should focus on that this government is so broken and is beginning to virally infect american people who deserve better it is your duty as stewards of the public to fix this please do your best for the american people put this nation back to work thank you again for the opportunity to be h thank you chairman issa ranking member cummings and members of the committee i'm pleased to speak with you today about the department of the interior's challenges associated with managing federal oil and gas in the aftermath of the macondo oil spill interior leases federal lands and waters for oil and gas exploration development and production these activities provide a domestic source of energy create jobs and raise revenues that are shared between federal state and tribal government revenue generated from oil and gas on federal lands and waters is one of the largest nontaxed sources of federal government funds totaling billions of dollars annually the deadly explosion onboard the deepwater horizon and resulting oil spill emphasize the importance of interior's permitting and inspection processes to ensure operational and environmental safety as found by the national commission on the bp deepwater horizon oil spill and offshore drilling this disaster was  product of several individual missteps and oversights by bp halliburton and transocean which government regulators lacked the authority the necessary resources and the technical expertise to prevent in recent gao has evaluated many aspects of interior's management of federal oil and gas resources we have found material weaknesses in three broad areas and as a result in two thousand and eleven gao placed interior's management of federal oil and gas on the highrisk list first interior has been unable to complete production inspections maintain reliable royalty and production data and provide reasonable assurance that the public is receiving its fair share of oil and gas revenues in recent years interior has not consistently met its statutory or agency goals for verifying that companies accurately report volumes of oil and gas produced on federal leases interior has also lacked consistent and reliable data on the production and sale of oil and gas from federal lands and has been unable to provide reasonable assurance that it was appropriately assessing and collecting royalties secondly interior faces longstanding challenges in hiring training and retaining staff in key oil and gas inspection and engineering positions in addition to hampering production verification efforts these human capital challenges have resulted in delays in issuing leases and caused interior to be unable to meet its statutory and agency goals for performing safety and environmental inspections of oil and gas facilities finally in may two thousand and ten secretary salazar announced plans to reorganize the minerals management service into three bureaus under this reorganization offshore leasing planning and permitting will be done in the bureau of ocean energy management offshore inspections and enforcement by the bureau of safety and environmental enforcement and revenue collection by the newly created office of natural resources revenue organizational transformations are complex endeavors requiring concerted and sustained efforts of management and staff interior's reorganization will be challenging because it is happening at a time when the agency is working to implement dozens of recommendations made by gao interior's inspector general and other entities and because interior is still responding to the aftereffects of the macondo oil spill these efforts include implementing new practices and procedures for planning permitting inspections and enforcement in addition interior has stated that its reorganization will require increased levels of funding and this will be very difficult to achieve in this time of tight budgets i essential that interior get this reorganization right the agency must provide congress and the public with reasonable assurance that billions of dollars of revenues owed the public are properly assessed and collected and that oversight of oil and gas activities on federal lands and waters maintains an appropriate balance between efficiency and timeliness on one hand and protection of the environment and operational safety on the other while interior has already come a long way toward implementing organizational change and has responded to many recommendations it may require congressional attention to fully accomplish its goal of restructuring and improving the management of public oil and gas resources this ends my oral statement thank you i will be happy to respond to any questions you il spill in the gulf of mexico these activities include putting in place strengthened safety measures and regulatory reforms relating to reviewing and approving exploration and development plans and applications for permits to drill those measures and the many other steps we have taken over the past year have been part of our response to deepwater horizon and its aftermath but as you know aside from one grant program my agency is not directly involved in gulf coast recovery efforts nor do we work with bp on its recovery efforts to the extent that the issues the committee is today extend beyond my agency's jurisdiction i will take those questions back to the department of the interior to other agencies at boemre we have devoted enormous efforts over the past year to put in place a new and necessary set of rigorous standards for safety and responsibility in our offshore development program our aggressive reforms to offshore oil and gas regulation and oversight are the most extensive in united states history these reforms strengthen requirements for everything from well design and workplace safety to corporate accountability and are helping to ensure that the u s can safely and responsibly expand development of our energy resources over the past year multiple reviews and investigations have produced reports advocating the need for change in our agency the president's commission on deepwater horizon the department of the interior's inspector general the department's own safety oversight board and multiple committees of the house and senate including this one all have highlighted the need for reform in the way the department does business and in the w gas operations are carried out offshore many of the recommendations presented in these reports have validated the administrative actions and reforms we have been undertaking at the department to promote safety and science in offshore oil and gas operations these changes were necessary to ensure that industry and government worked to help prevent an accident like deepwater horizon from happening again we have issued new regulations to bolster safety and to enhance the evaluation and mitigation of environmental risks our new drilling safety rule put in place tough new standards for well design casing cementing and blowout preventers including the requirement that the drilling process be certified by a professional engineer our performancebased sems rule requires operators to develop a comprehensive safety and environmental management program that identifies the potential hazards and risk reduction strategies for all places of activity boemre has also issued notices to lessees that provide additional guidance to clarify how operators must comply with existing regulations we have clarified that operators must have a wellspecific blowout and worstcase discharge scenario that provides the assumptions and calculations behind those scenarios we have clarified that operators must certify that they will conduct their drilling operations in compliance with all applicable agency regulations including the new drilling safety rule and we have clarified that we will assess whether each operator has submitted adequate information to demonstrate that it has access to and can deploy subsea containment resources sufficient to respond to a deepwater blowout in addition to our enhancing drilling and workplace safety we have focused much of our attention on the reorganization of the former mms into independent en with distinct missions these missions are leasing and energy development the regulation of offshore drilling and the collection of revenues from federal energy development having these three conflicting functions reside within the same bureau enhanced the potential for internal conflicts of interest among the objectives of the agency instead of one agency with multiple and conflicting missions we will have three new entities as mister rusco has just described they are boem bsee and onr we are on track to complete the reorganization by octoberh of this year boemre continues to facilitate domestic exploration by issuing permits we have continued to issue shallow water permits in every case where the application complies with the heightened standards that apply to shallow water operations to date fifty five new shallow water well permits have been issued since last june when new safety and environmental standards went into effect just seven of these permits are currently pending with seven having been returned to the operator for more information deep that it had developed subsea containment capability twentyfive permits are pending and twenty permits have been returned to the operator second there is a category that is frequently ignored in discussions deepwater activity not barred under the moratorium including water injunction wells and workovers since the implementation of these safety and environmental standards forty of these permits have been approved only one is currently pending although our permitting of drilling activity has been moving ahead steadily over the past three months there are good reasons why the pace is somewhat slower than in the past our new regulations have required operators to make sure their applications fully comply with the new requirements in addition our drilling engineers have had to work to ensure compliance with the expanded set of requirements this process may have proved frustrating to some in the industry but the additional rules and heightened scrutiny are completely appropriate and in the best interests of this nation in closing mr hchairman we have made significant strides in reforming the way offshore oil and gas programs are carried out at the department of the interior and  outer continental shelf we have raised standards and promoted safety and science in offshore oil and gas operations and because of the hard work of industry and people in boemre we have been approving and issuing plans and permits and getting people back to work that concludes my i'd like to thank you guys for coming up and sharing your thoughts and concerns i hope you will excuse me if i ignore you and talk to the government regulator that i think may be giving you some of the problems so if i could ask a coupleh mr  yesterday now there are multiple permits frequently for individual unique wells which leads to the larger number mister farenthold and of that fifteen how many of them were in the process before the moratorium went into effect mister bromwich it depends what you mean by in the process can you clarify what you mean filed the application that y'all have been working on and just you know stuck on the shelf mister bromwich well we haven't stuck any on the shelf a number of the projects were ongoing they were stopped by the moratorium and then applications had to be resubmitted to make sure that they complied with new enhanced safety regulations mister farenthold right so the number i haveh and you can correct me if i am wrong ishthere have been about four or five that are actually new ones that weren't resubmitted or however you want toh they weren't already in the works prior to the moratorium mister bromwich that's about right i think the number actually may be slower but those are still projects that are ongoing to put people back to work so the distinction between projects that had been previously submitted and new projects is really quite irrelevant mister farenthold so how long are we looking at h if i had gotten a lease and wanted to drill a well how long under the current process would it typically take assuming i'm reasonable about my paperwork mister bromwich well that's a big assumption one of the challenges that we have seen that industry has facedh and they fully acknowledge thish is that they have frequently submitted both plans that are incomplete and noncomplianth and let me finishh and permit applications that are incomplete and noncompliant we are working with industry every day to try to eliminate the number of times that we have to return either plans or permits so that we can process them straight on through and approve them mister farenthold but is this a result of the fact many new regulations that y'all aren't even completely sure what needs to be done the complaint i'm hearing from my friends in the industryh i'm from corpus christi texas it's pretty big in gulf drillingh is that they don't even know what they need to do to satisfy your criteria i mean i understand there's some growing pains but these things were getting out in hweeks prior to the deepwater horizon mister bromwich before the new enhanced safety environmental regulations that's right they looking at much longer mister bromwich well i can tell you congressman farenthold that if a fully compliant exploration plan was submitted and then a fully compliant atd application to drill was submitted we're talking about a few weeks not a large number of months that has not so far been our experience so far but i take issue with your suggestion that industry doesn't understand what the requirements are because i think they do i think they didn't fully understand them at the beginning i think they do now and if you talk to them hdays after the moratorium was lifted and that's what began the adjustment time and cost both for industry and to some extent for us so i just wanted to clarify the timeline mister farenthold what's happening with the thirty three previously permitted bromwich well we don't track them that way congressman a number of them have not resubmitted their applications we obviously can't do anything about that we can only act on the applications that we have mister farenthold so they were permitted the rules changed you moved the goalpost and they have to start over again mister bromwich no that's not the way i'd put it at all one of the main obstacles to companies getting their permits approved is the fact that they now have to demonstrate access to and ability to deploy containment i don't think you or i want anybody drilling in deepwater that can't show that mister farenthold i am out of time so if we get to another round of questions i do have a couple more so thank you very much chairman issa i thank the gentleman is that this is our watch we are on the earth now and we have a duty to pass on a better environment than the one we found when we came upon this earth and i truly believe that and it kind of surprised me when governor barbour said that he felt that the riskh the risk of what happened with deepwater horizon was worth it when he considered the cost and i understandh believe me i sympathize with people being out of work as a matter of fact i have done everything i know how to try to make sure they get compensated but tell me do you have an opinion on that based upon what you have been doing in the administration mister bromwich yes i do i actually would like to take issue with something else governor barbour said which was that the deepwater horizon blowout was the first event of its kind or anything close to it in the history of deepwater drilling the president's commission says that that's not so they cite seventy nine incidents of loss of well control which is what macondo was loss of well control between and ninety six and two thousand and nine so another way to describe that is seventy nine near misses seventy nine almost deepwater horizons so without going into the details of each one that's what the president's commission found so to say that the risk is one in a million or one in x thousand of deepwater wells drilled is not accurate now we will never be able to reduce the risk to zero we know that and you know that but we have to work constructively to try to diminish those risks in a balanced way so that we don't impose  inappropriately high costs on industry and yet we do raise the bar on safety we have done that so i think we have lowered the risk and my risk threshold may be different from governor barbour's because i would not have been comfortable going forward without the strengthening of the safety rules that we put into place mister cummings let me ask you has the administration also put in place a requirement that all companies have a formal contract to call on that service if service is needed let me quote the new requirement it says boemre will evaluate whether each operator has submitted adequate information demonstrating that it has access to and can deploy surface and subsea containment resources that will be adequate  promptly deal with the blowout let me ask you this can you explain in laymen's terms why you now require oil companies to demonstrate that they can respond to deepwater blowouts before new permits are issued mister bromwich for the very reason that i think you and other members s don't want that to ever happen again we want industry to be prepared and in a way talking about the period of the moratorium is a false issue because the fact is the containment requirement is critically important and industry admits it until february why is that mister bromwich because there were not the containment systems and resources that were ready until the middle of february in the first panel we talked about the marine well containment company there's another group the helix well containment group but neither of hchairman mr hbromwich i just have one question for you then i want to get to some of the other panelists in considering the plans or permits how much do you look at the economic impact and the loss of economic activity in considering the process by which your agency goes through mister bromwich well the individual plans and permits are reviewed by our field personnel in the gulf of mexico i have absolutely no role in that and i don't think it would be appropriate for them to scrutinize the plan applications or permit applications for any other reason other than to determine whether they are complying with all applicable regulations so they do not and they should not three companies one of them was actually founded by my grandfather and my aunt actually owns it now and her daughters and i run that company as well mister guinta i assume it's safe to say you'd like to see faro thank you for being here i also wanted to ask you a little bit about economic impact it seems to me here in washington we are so focused on the regulatory side of this and there's  reason to be concerned about the regulatory environment i don't think anybody disagrees that we want to have safety we want to make sure that this never happens again i don't think that's a partisan issue i think that sense good public policy my concern is with the thousands of people who are negatively impacted for the long term in the decisions that have been made by this administration  my heart goes out to each and every individual who no longer has a job who is waiting desperately to have the possibility of getting back to work and i believe that we ought to consider that as we move forward in just about every public policy decision that we do now it doesn't mean that you provide a permit if it's not appropriate it doesn't mean that you provide a permit to someone who's not capable of handling it but i do think that we have a responsibility to consider the negative impacts that have occurred to regular everyday people who are desperately looking for employment can you just talk a little bit about  how that's impacting the people that you're representing mister taffaro well the main issue i think is that we have to keep in mind that part of what happens is there's a trickledown effect a rig not being permitted  or a drill operation not being permitted doesn't just affect those men and women who work the rig it affects every other spinoff company and agency that provides support for those businesses or for that operation that's where we really feel the effects in saint bernard parish and along the entire coastal louisiana and beyond as you heard the main issue that we want to make sure is that the comprehensive impact is reviewed while we want safety and certainly we don't want to have another impact or another disaster such as the one that we experienced just over a year ago we definitely don't want to exacerbate that call to safety people who have long been concerned about the public welfare have raised some important questions about the aftermath of the bp oil spill disaster some disturbing information has come to light regarding money spent during efforts to recover from the spill for example from my hometown mr hdick gregory who is here today he and others have brought to my attention some investigative articles written by propublica and the washington post these articles are worrying they allege that there are some who profited from the spill disaster these people apparently gamed the system to take so much money inappropriately that they earned the nickname spillionaires two of those  i am involved i have had the experience of reading articles where i cannot recognize the events as they have been described by the reporters so i know how it can be sometimes for others in similar circumstances and we don't always have an opportunity to respond to those articles and perhaps set the record straight therefore i feel duty and mr hwilliams to give you the opportunity here today to respond to those articles and to what they have alleged about your conduct in the wake of the bp oil spill disaster mr htaffar you're required to speak truthfully you are not required to answer questions outside the scope of this hearing you may choose to answer but that would be true of any of our witnesses is that if something is outside the scope and the meaning of  substantiate your comments the idea is we were under a state of emergency i did declare a disaster i think everyone who had any involvement in the process would certainly see that as justifiable as far as handing out contracts saint bernard parish government me as the elected chief elected official signed one contract regarding the operations of the bp oil spill disaster mister clay and that was the  problem with the way the operations were run bp executives authorized representatives on the ground with bp to initiate and negotiate land deals vendor agreements  use of resources and then changed those personnel out and then didn't pay them what they were owed that is a true economic impact of what we have going on to employ the exact individuals who were impacted by the spill whose livelihoods overnight were ripped from them whose generational cultural identity overnight was ripped from them every selection process that was implemented was done in a public forum and was continuously reviewed and modified to make sure that those individuals who were most impacted were those people who were being put and i think it is very critical as mr htaffaro indicated i come from a county in northwest florida that has less than twenty thousand people we're a very small county we have an operating budget on a millage based on hmillion you're going to run into family folks i felt like and certainly i'm glad that we're here in an office of oversight and reform because personally not that i take offense i appreciate the question but i feel like it is a red hearing for the issues that we are here to address today we were under a tremendous amount of pressure i have two people in my emergency management department two we had no resources from the state we had no guidance from the federal government we were put under tremendous strain and the article that you're referring  to the author of that never came to my county never stepped foot in our county what you're indicating there is that a girlfriend worked as a public information officer and she had volunteered through that period of time tremendously through that process so i think with all due respect sir my scenario would be you have to understand that i'm proud of what we did trying to put people to work together amassing what we had basically a militia of people who were trying to fight what was coming on our shores and so i appreciate the question but i think it is very misleading to the ultimate goal that i would like to do and present from the federal government what you can do to help me at the local level mister clay and i'm glad that you both have responded  you for the record did your ethics board clear that action mister williams yes mister chairman i appreciate you giving me the opportunity actually before that was done the board of county commissioners did not approve any of the contracts as my colleague indicated this was done primarily through our county administrator however we went through our legal counsel we went to the state of florida's ethics commission we also went to the governor's task force that was guiding that and asked for permission ahead of time to make sure it was there so i feel like the media certainly exploited this scenario to make it look bad for a lot of folks that were doing the best they could and being proud to work for their communities but yes sir mister chairman i appreciate you giving me the opportunity because i was ahead of timeh we did it right we stopped profiteering i served on the governor's task force we went through and we saw companies coming in and asking for several hundred thousands of dollars to man some of these small counties we refused to do that we turned and asked the governor for assistance and through the department of emergency management we work i guess the s in some cases but mark mccormack who was a prolific writer wrote among other things the terrible truth about lawyers and what they don't teach you at the harvard business school and i don't take away every quote from all of those books but i take away one which is that a problem is something money can't solve mr hbromwich if money was not the problemh and i presume money was available whether it is the twenty dollars billion from bp the billion dollars from the industry to form a quick response for future potentials bills et ceterah why did it take you not just the hmonths of the moratorium but essentially another many many months of permitorium before you had guidance so that we could begin having oil wellsh new oil wells drilled again and permitted perspective your agency's inspectors went on a rig that had not one but two battery packs not active an oil well that you mentioned the h this thing had had repeated miss preventers but did nothing but say pick one all of these things had occurred prior to that date so was it an earthquake in your organization or was it an earthquake to the oil industry the oil industry has made it pretty clear that bp was a bad actor on this well and a bad actor in the gulf but that in fact there was a reason that their actions were not consistent with other drillers in the gulf so which earthquake was it was an earthquake within the oil drilling industry or an earthquake within your agency mister bromwich both and as the president's commission notes it is inappropriate to single out bp as the only bad actor here that report which is based on a thorough investigation pointed out that halliburton was hrusco isn't it true that the reorganization is as much at fault for the delay in the ability to get america working again in the gulf isn't that what the gao study finds is that this is a distracted over basically then you say you have to do that isn't this a secondh isn't this taking six hmonths to decide that you're going to add one more way to stop the oil industry from starting again wasn't that reckless to go hmonths and discover  formed the marine well containment company in july so they knew at that point that that was going to be an obstacle to getting deepwater permits until they could put together the resources so it took them and then it took later heli number of months close to hmonths from the time they recognized that it needed to be done and they announced it until they were ready to go the mere fact that we clarified what was required in november didn't start any clock and hpercent of the operators now the other hpercent come forward and ask questions of us we'll clarify it for them we meet all the time mister chairman with operators we met this week with a group of gulf area operators  delegation headed by director of natural resources for louisiana scott angelle they have been a forum for asking questions asking for clarification and getting them chairman issa mr hkief i'm sorry that we really can't do more for you today but we are not going to give up on this on any of your testimony here today mr hbromwich you said you would take something back if it was outside of the mainstream i want to make sure you take this back today there's pending litigation or current litigation in the eastern district of louisiana challenging seismic surveys in the gulf of mexico by the infamous nrdc vs salazar our information is that the secretary has in fact worked out to stay that case and is discussing settlements the question for department of interior is if you settle one more time with a radical environmental group that sues and then gets settlements leading to regulatory changes or areas off limits don't you have a conflict of interest in fact shouldn't this case be a case in which those with a vested interest the states and the oil companies should have a seat at the table rather than having a settlement issued around what they would call their interest along with the gentlemen here today mister bromwich i don't need to take that one back because i'm involved in that matter first of all i think the characterization of  without going into the details of settlement discussions there are settlement discussions ongoing and i will tell you that one of the goals of such settlement discussions is to prevent more radical injunctions or actions being taken by  with respect to the involvement of the oil companies they are interveners in that case so they have a seat at the table chairman issa but they are locked out if you settle in fact the nrdc has on their web site their litigation motive and method as part of their fundamental way of doing business so you may not consider them radical but an organization that basically litigates in order to legislate and an agency that settles in order to effectively create legislation is exactly what this committee is concerned about so you may not consider them radical you may not consider your settlement around the intervenors as in fact somehow unamerican or that you have a conflict but this organization here is finding that of the new archeological assessment report is it true that operators will have to employ a marine archeologist to comply with this rule mister bromwich they will have to have a survey conducted whether it by hiring somebody contracting with someone or whatever we don't mandate that but they will have to do an archeological survey yes mister mchenry and why is that necessary mister bromwich why is that necessary it's because a number of discoveries have been made in recent years of and other structures that are protected by various federal laws including the national environmental policy act and as we've eliminated the categorical exclusions with which we used to do exploration plans and now are doing environmental assessment sitespecific environmental assessments the way the process works is we have different subject matter experts who have to look at the issues and our archeologists subject matter experts will simply not sign off on an exploration plan without that kind of a survey so that's the reason mister mchenry okay well so in terms of what your organization does does that have anything to do with safety mister bromwich it has to do with protecting the your experience there's a difference between the opa and the stafford act in terms of responsibilities and everything else do you think that operating under opa was reasonable proper basically supplant opa with the stafford act but we are trained particularly in the state of florida we have test modeled we have put everything through over and over case studies and because we're so impacted by our storms we were unable at the local level to make decisions firsthand it has always been at the local level and work that up under the unified command the responsible party highjacked the entire process we were basically at their mercy their decision making we were disconnected from our state partners and i believe from our federal partners in the process we actually called it unidentified command we would wait for weeks and weeks trying to get things done we wasted incredible amounts of time looking at bo strategies and national contingency plans and area contingency plans that were extremely dysfunctional they were antiquated there was no span of control there was no unified command the state of florida in my area in the panhandle was being controlled f  mobile it was a breakdown as the governor indicated earlier from communications and processes the methodologies it was completely broken so to answer your question emphatically no opa did not work on the ground level it did not guess when i was four in camille mississippi but with florida i've been elected since two thousand and four two thousand and five you know the history where we crisscrossed our state with four hurricanes in hyear heavy heavy damage and as an elected official i have watched a masterful process and obviously florida has masteredh mr hfugate now being head of fema coming from florida we know how to do it at the ground level we make good decisions we work with our emergency management partners we work with our state partners to make those critical online decisions this process was dysfunctional and broken mister mchenry and stafford was clearly better mister williams yes sir it gives the local government the ability to pull on the resources as necessary but to make ontheground field decisions that we can implement immediately we had to go through an approval process to give you a very poor analogy it is like go ask your mom go ask your dad and i could never get a straight answer it is a system that i think this group particularly in congress has to look at there are lessons in homeland security there are lessonsh as the governor indicated earlier if we drill off of cuba china et cetera as bad as the responsible party scenario was without a responsible party where would we be multijurisdictional lines and central has to be charged one point i would like to make i came a few months ago during the national association of counties and met with intergovernmental affairs and requested the ability for intergovernmental affairs from the administration to work with the directors of emergency management within the five affected states so that we could go back and look at case examples and studies and what could we do better that i think is very critical and i would ask that the chairman and this commission review that so we can get down to our emergency management helicopters guy but if you look at what's going on if i were a speculator i would be buying oil futures we've got the slowdown in the gulf we've got a slowdown of land leases we've got the epa talking about fracking regulations we've got the sage lizard which is another quarter of the mms finding up on the board which we cited earlier that might clarify it since mms found that there was a correlation between a reduction in the gulf and increase in price that's your own study mister bromwich chairman i'd never seen that before i don't like to comment on things that i've just been introduced to i have read in recent weeks a lot of very knowledgeable commentators including economists who say it is a world market and a relatively minor slowdown in permitting here has virtually no you actually see a spike in the price of oil whether it is driven by speculators or the market even when there's a hurricane that's delaying production in the gulf just over a couple of days how can you rationally say that a longterm slowdown in the permitting process isn't going to affect the price of oil mister bromwich because i don'th well you asked me whether it was causing a rise in the price of oil now my understanding of world market conditions is that production has continued at pace that the projections for declining production are not for the present they are for the future and therefore i thought the question was about the present and i don't think it is having an effect at present mister farenthold just real quickly there have been the most reliable sources of energy production does predict a decline in two thousand and eleven and in two thousand and twelve i don't have a crystal ball but i'm not in a position to dispute that mister farenthold so a decrease in production typical under supply and demand would probably result in an increase in price of occurred or is occurring that was delivered under our discovery request from your organization you gave it to us so hopefully you'll take it back look at the information that we received pursuant to our request series of contributing causes to the oil spill a variety of primarily human errors committed by personnel from bp transocean halliburton and so forth and it specifically said yes and we have already taken many of those steps our drilling safety rule which is addressed to well design well casing cementing and blowup preventers we think substantially reduces the risks of another spill like deepwater horizon as i said beforeh i'm not sure you were hereh we will never be able to reduce it to zero we won't but we have reduced it already substantially and i think over time as industry wants to go into deeper and deeper water and the regulatory process needs to keep up i hope that we can further reduce that risk but it will never be reduced to zero mister connolly one of the arguments made by governor barbour and others is that you have thirty one thousand oil rigs the safety record is fine you know once in a while one bad apple shouldn't cause us to turn everything on its head my point to governor barbour was well but one blowout of this magnitude is pretty significant and shouldn't we be doing everything in our power to try to minimize that ever happening and the fact that this happens once is once too many given the severity and magnitude of the disaster what is the view of the administration with respect to sort of rolling the dice and taking our chances on a blowout mister bromwich well we don't want to roll the dice and take a chance on a major bl again the risk will never be reduced to zero but we think we can do and have already done many commonsense things to reduce that risk and furtherh i'm not sure whether you were here at the timeh but this is not unprecedented in the sense of losses of well control that nearly led to blowouts this was the only actual blowout but the president's commission found that there were seventy nine instances of loss of well control between  six and two thousand and nine so another way to put it is seventy nine almost deepwater horizons mister connolly so the idea that this is a unique event and really apparently an act of god or something like that is misleading well thankfully it was unique in terms of the fact that the well totally blew and you had hmillion barrels of oil spill into the gulf but in terms of the problems that arise particularly in deepwater with high pressures and so on  accident was a temporary moratorium on additional permitting until we had our arms around the causes and the prevention and so forth in listening to some of the rhetoric and even reading some issa i thank the gentleman we have had a vote called on the floor and so with that i want to thank all of our witnesses for your generosity of your time the record will remain open for an additional week to allow you to add add itional information plus opening statements of members on the dais who were not able to be here with that we stand adjourn