committee will come to order the oversight committee exists to secure two fundamental principles first americans have a right to know that the money washington takes from them is well spent and second americans deserve an efficient effective government that works for them our duty on the oversight and government reform committee is to protect these rights our solemn responsibility is to hold government accountable to taxpayers because tax payers have a right to know what they get from their government we work tirelessly in partnership with citizen watchdogs to deliver facts to the american people and bring genuine reform to the federal bureaucracy this is this morning we will review the enormous task confronted in the gulf as a result of the bp oil spill and the obama administration's choices made then and to this is clear that this was a manmade disaster that eleven people died in what should not have happened but it is the choices after an initial event that we will focus on today that is not to take away bp's ultimate responsibility but this committee reviews government actions both prospectively and retrospectively we cannot expect to do a better job next time if we do not focus on what was done right and what was done wrong in this disaster the government made several decisions under its  authority one of them was not to use the stafford act and in fact to leave the very entity that created this pollution in a position of authority and lead there are many reasons this may have happened but we have to ask should it happen again congress has the clear power and authority to change the rules of the road we should not have to choose between holding a pollute r responsible and empowering leaders at the federal state and local level to do what they are responsible to do on behalf of their citizens the reimbursement for actions directly and indirectly belongs to british petroleum they have said they will meet that challenge and we will hold them to it but as the days and weeks went on after an initial spill  some miles out at sea it became obvious that we lacked the resources in place to do the job that was coming the response was slow and chaotic additionally we will hear from testimony today that the secondary damage turned out to be in many cases far worse than the little or no oil that came to the shores of communities that is part of what we have to do deal with here today oil spills and other events are inevitable in my hometown of cleveland more than hyears ago a liquefied natural gas container went bad and many died it has not stopped us from resourcing and using natural gas in america three mile island is still in the memory of people my age it has not stopped us from using nuclear fuel as a primary source for base load coal miners to our dismay continue to die trying to harvest that fuel around the world that a necessary part of our society that dangerous jobs are done by people who choose to do them and have a right to be protected in that process but this hearing is not about the riskiness of any of these fuel sources it is in fact about whether the federal government knows better this time than they did before this event additionally it is important for us to understand that just as  hurricane katrina told us that fema had problems working with states fema was not necessarily ready for a loss of vast areas of response we now know that even when  the response capabilities were in place even when it was a single event of a company that did not do their job and did not play properly by the rule we find secondary events throughout the area we find oil coming ashore and not being responded to for a number of reasons we additionally find a loss of revenue in unrelated areas we will hear from our second panel and from our first that the loss of tourism was needless and extreme in areas in which the water was clean the shore was pristine and in fact people were scared away we need to make sure that does not happen again we need to make sure that governors and local officials are empowered to do what is in the best interests of their people and that the american people get a fair understanding of the scope of any problem or spill lastly we will hear today that as a result of one reckless action we find countless billions of dollars of revenue lost good hardworking americans out of work resources necessary to make us less oilreliant on countries that often are not friendly to us leaving for the very countries that in fact will now produce the oil that we are forced to buy in america today both sides of the aisle talk about jobs i for one am not an economist but i can understand that if hbillion worth of purchased oil were produced here in america there would be countless millions of direct and indirect jobs available to americans there are many things that we are not competitive on here in america certainly one of them we are competitive on is natural resource extraction from our coastal waters and onshore locations i look forward to hearing from my old friend and a considerably wellknown figure to all of us and a great governor governor barbour and with that i recognize the gentleman from maryland for his opening statement mister cummings thank you very much mister chairman and good morning let me first welcome governor barbour and i thank you very much for being with us today i also want to take a moment to recognize dick gregory who is a person who has fought hard for so many people for so long in our audience and thank you mr hgregory for being part of this hearing today governor barbour your state has been through a tremendous amount of difficulty and i sincerely look forward to your testimony let me also welcome michael bromwich from the department of interior mr hbromwich you agreed to be here with incredibly short notice so we thank you very much for your testimony and for your expertise finally let me welcome the residents of the gulf who have traveled here today to share their avoidable and that it resulted from clear mistakes made in the first instance by bp halliburton and transocean and by government officials these were extremely difficult lessons learn i am encouraged that now more than a year later officials in both the oil industry and our government appear to be heeding these lessons and retooling the way they do business first we must never ever forget that eleven individuals lost their lives in an explosion on aprilh to address deficiencies that contributed to these deaths the interior department issued an improved workplace safety rule that many including industry believe will significantly enhance worker safety the department also completely reorganized the minerals management service mms had been criticized because it oversaw the safety of dr the environmental impacts caused by drilling and the revenue generated from drilling according to the national commission mms had a builtin incentive to promote offshore drilling in sharp tension with its mandate to ensure safe drilling and environmental protection the department also implemented a number of critical safety measures to ensure that a blowout like this would never happen again for example a new drilling safety rule strengthened standards for well control procedure drilling equipment and well design and it required independent and thirdparty inspections finally the department issued a notice to lessees to require all companies to demonstrate that they can actually a well that they can actually cap a well and handle a deepwater blowout before any new drilling permits were issued these were responsible steps taken after it became clear to the nation after  disappointed by your actions today you stated that the committee investigations have interviewed investigators have interviewed more than fifty government officials scores of residents business owners and whistleblowers as part of this administration that is news to everyone on this side of the aisle because you completely excluded us from that effort and you have not explained why unfortunately this is the definition of partisanship and it undermines the integrity of this committee and by the way this report that is being submitted this morning was submitted to the press before we even saw it nevertheless moving forward it is our obligation as members of the united states congress to develop constructive ways to help people in the gulf rebuild their lives and their livelihoods in my former capacity as chairman of the subcommittee on coast guard and maritime transportation i visited the gulf twice while oil was flowing from the macondo well i saw firsthand how this spill affected small business and other industries that were decimated by the spill i have offered several measures to provide real solutions to gulf residents last congress i offered a provision in the legislation that cut in half from hdays to hdays the amount of time responsible parties had to settle claims arising from the spill i also worked on provisions with chairman oberstar to strengthen the coast guard's oversight of an oil spill response plans this year just recently i offered an amendment to h h to require all oil and gas exploration development and production activities in the gulf to be conducted by u s flagged vessels talking about jobs that is jobs this which would have immediately stimulated the gulf economy unfortunately the rules committee did not allow a vote on my amendment my basic point is this we have a tremendous opportunity in this committee to really help people people who have undergone extreme hardship as the goal respond without objection to my ranking member just for your edification this investigation began under your predecessor chairman towns we went down jointly and separately he authorized minority trips when i was in the minority in addition to the joint trips we did including members of both parties when i took the chair we continued that investigation we have had joint trips in addition to we have authorized minority trips down there as a matter of fact we have never turned down a request by the minority to go on staff factfinding every request has that has been asked for has been granted it is true that both your side and my side under both the majority and minority have gone both together and independently but i certainly think that i don't i will not belittle any effort that your side made to get at individual and independent facts i hope you were not intending to do so by saying that you were american people and it is about the integrity of this committee i do not belittle for one second the findings and the things that the majority has done what i am saying is that we want to be a true partner in all of that i have said to you privately and openly that we too care about government operating properly we too care about making sure that every agency of government does what make it clear we too are partners we too were elected by seven hundred thousand people per district and so we want to make sure our voices are heard too and i appreciate your comments chairman issa i thank the gentleman with that we are prepared to introduce our first panel i am going to deny myself the honor of introducing governor barbour and instead go to the newest member of the mississippi delegation congressman steven palazzo for his introduction of his governor and i understand you were governor when you were in the state house leadership firsthand after the devastation of hurricane katrina and more recently the deepwater horizon oil spill indeed no other governor has been as frequently challenged to rise to the occasion of leading a state during a time of crisis whether manmade or natural and each time governor barbour shouldered the burden of leadership in a manner that calmed tempers mended broken hearts and resulted in incredible efficient outcomes to accomplish this he met each event with a balanced regimen of compassion and order allaying fears and the sense of loss with hope in the prospect of swift recovery i vividly remember the many times the governor and his beautiful wife marsha walked hand in hand with the victims and in the aftermath  of it all assured them that everything was going to be all right more recently he continues to guide our state through historical floods and a severe tornado season he has not only led mississippi through the country's worst natural and manmade disaster but he challenged us to build back bigger and better he is a great leader in every sense of the word and of course i am talking about mississippi's rd governor haley barbour mister chairman as someone who represents a district devastated by the  appreciate you directing the committee to assess the recovery efforts of bp and the obama administration i would like to briefly mention that as someone who has worked offshore on drilling platforms i have a particular concern on how the administration came to the decision to institute a mor magnitude will continue to have a negative impact on the gulf coast economy for years to come studies conducted by louisiana state university put potential estimated job loss by the moratorium and subsequent permatorium on the gulf coast  region at around twenty four thousand the ripple effect of these lost jobs and high energy prices hurts our national economy the majority of the jobs lost in mississippi are from the fourth congressional district of mississippi the district i represent i worked offshore i know the value of the jobs that the offshore drilling industry provides i look forward to further investigation into the economic impact of the administration's decisions and their motivations i applaud the committee for the extensive work on this critical the affirmative governor you know this routine you have seen it for years your entire statement will be placed in the record we will not hold you to an exact hminutes but come as close as you can  different from other disasters when representative palazzo talks about katrina we had utter obliteration on the coast we had places where it looked like the hand of god had just wiped away the gulf coast for blocks and some places for miles we had hurricane force winds hmiles inland and to get people where they got confident that the coast was going to come back where they had hope for their families and their communities where they were willing to return home was an enormous part of the job in this case keeping people calm you know you had an oil well to blow out a hundredplus miles away from our coast and i should say at this point this experience for us was a little different than for louisiana louisiana was closer to the well they  time since the well blew out b what got to us you would not recognize as oil there was this orange mixture of water and the remnant of oil that th oil people call mousse and then there were what we call tar balls and tar patties when i was a kid we used to go to the beach we used to throw them at each other tar balls because the gulf of mexico seeps out but when this happened people were obviously very very concerned and one of the big jobs was to keep people calm to keep people understanding we are going to prepare we are going to have a good plan we are going to have the resources to execute the plan we are going to protect the coast particularly the habitat particularly the coastal marshlands where the shrimp and other important wildlife actually born and start to grow and we had to do that with a different set of rules and the first point i want to make is the stafford act the decision was made that this disaster would be managed under the oil pollution act not the stafford act as has been said to the committee by others a disadvantage of that for us is we are used to the stafford act florida alabama mississippi louisiana texas we have managed disasters under the stafford act because that's what hurricanes are managed under that's what tornados are managed under that's what floods like we have in mississippi today so a it was  something we knew but very important from a governor's point of view the stafford act expressly says that the federal government will supplement the work of the state not supplant it one of the problems we had under the oil pollution act early on and lasted for several weeks the coast guard who headed the unified command and we are accustomed to unified command we have unified command under stafford act disasters they took the position that the national guard worked for them and this became a real issue which i'll talk about in a minute but under the  national guard works for the governor unless the president federalizes the national guard we are not mad at anybody about it but it didn't work well when they tried to assume command over the national guard and i should say president bush after katrina talked about federalizing the response and i very loudly and publicly said no that we don't want the army coming pollution act ought to be changed to say flatly like the stafford act it's supplemental to the states and it doesn't usurp the states authority where this came into play was in our plan to defend the state shoreline against oil we developed a layered defense plan beginning outside the barrier islands using the barrier islands to protect us protecting the gaps between the barrier islands that oil had got through to the sound that would be our principal place to try to pick it up to keep it from getting to shore steering it towards beaches keep it out of marshlands as it turned out the coast guard approved that plan never understood how to execute it and after the second time that oil got to our barrier islands completely undetected much less contested undetected we demanded that we be put in charge of this and the coast guard agreed and we worked out a system that worked i will just tell you before that there was no command and control in fact unified command could not even speak to the hundreds of vessels of opportunity up to get command and control as it should be two other points i want to make and i'll be glad to i am trying not to get into too much detail for us this turned out to be primarily an economic disaster now it may be that there is something slushing beneath the sea or that is going to develop that becomes ecologically dangerous and we are all over that and not just mississippi all the states the federal government all kind of scientists but thus far environmental damage for us again we are different from louisiana has been very manageable we have on the coastline of mississippi we have hmiles of coastline we never closed hmile of beach except for one time in the whole experience we had one mile section of beach that we closed overnight because we had a high tide after a hurricane where some oil got across the highway and we couldn't clean it all up otherwise we cleaned up the oil that got to the beaches every day the day it got there so our environmental damage unless there is something to come is not our issue our issue is a gigantic economic loss talked about tourism our tourism industry was clobbered our season starts when our schools get out which are earlier than in the north our schools get out the middle of may so that is when the tourist season starts of course this happened april so people saw on tv the same brown pelican coated with what looked like hinches of oil i mean looked like a chocolate pelican and they showed it every hour every day hhours a day hdays a week for weeks and weeks and weeks and weeks and the news media particularly hour cable tv gave citizens the impression the whole gulf coast was coated in oil people deduced from that that it was unsafe unpleasant don't want to go there they canceled their reservations they canceled their contracts to buy condominia and not just in mississippi but all across the gulf coast the president to his credit actually it got so bad that the president came to mississippi alabama and florida and held news conferences on the beach to say look the beaches are clean the water is clear it's beautiful down here come on down here but that one news day can't compete with what was being s every day every hour for weeks huge economic problem and loss there and of course in the fishing side on seafood huge losses because they closed our waters and i should say to you right now we have not since this oil spill had one sample of seafood in mississippi waters that was tested that did not pass the test to meet every standard the same is true for the federal government we haven't had one one sample of seafood that failed yet we have people that won't buy seafood from the gulf coast in new york and san francisco and chicago because of what they saw on television so the fishermen have some mitigation of their losses because they got hired to be vessels of opportunity the processors were slammed so seafood a huge problem the oil and gas industry the moratorium for which there was no reason in fact the government appointed a panel to look at this and the panel disagreed with the announcement that was made that you got the impression it was the panel's recommendation to have a moratorium and the panel after said whoa that wasn't in our recommendation we are against that that was added after the panel was through we drilled more than thirty one thousand mexico in the last hyears and this is the first time anything vaguely like this had happened the moratorium hurt us financially more important hurt the country thirtyhpercent of all the oil economic problem for us and again louisiana's a little different from the rest of us this was an economic problem remember the natural resources damage assessments and the payments that can be made under that are largely limited to environmental and while there is some loss of use room there largely these states cannot be compensated for their economic loss except by getting part of the civil fines that are going to be assessed against bp and the responsible parties and i would ask you to consider as members of congress looking at this and understanding that this is this is the best way to help these states recover because it is economic recovery that they have to get unless something really changes on the environment i apologize i went over mi would also note for the minority that after the break it's my intention to have a committee vote to make this a committee report so during this intervening period if the  to enter this in the record it's a staff report i am going to elevate it to a committee report after the minority has entered their comments and any adjustments are made right now it's the basis for a committee report the intention is to make sure that your staff that has been working on the same set of facts edit make changesh suggest changes make any other comments so that it becomes a joint report and i wanted it to reflect both majority and minority opinion  come and i walked on the beaches down there and also on beaches i believe on the east coast of florida and i saw these tar balls this was when there was no oil well problem and so when you just said that hmillion barrel of oils leak out naturally each year i hope everybody in the country knows that because that amount loss in drilling permits that is tragic especially in view of the fact that we just sent hbillion down to brazil so that they can drill in deepwater and we can't and it really surprised me i think you said there w thirty one thousand wells in the last hyears down there and it's been done drilled without any real big problems and yet right now this administration is stopping us from drilling here and we are sending billions and billions and billions of dollars over to the middle east to countries that don't like us very much and that really really bothers me and i hope that you are able to in effect go on a crusade to tell the story that you told us today because i think the american people need to know that we have the ability to move rapidly toward energy independence over the next decade if we use natural gas and oil shale coal that can be converted into oil and we are not doing any of that and as a result this country is really suffering and i really sympathize with you on the impact the fiscal impact that was going on that took place down there in the gulf during the terrible crisis and i want to say one more thing about the media i really sympathize with you in this drum beat that went on and on and on over a month or hmonths showing the problems that were created down there which obviously had a devastating impact on you and your economy and i hope that in the future when these kinds of tragedies occur the media will not sensationalize it to the degree that it hurts economies like that in the gulf states i just have a couple of questions you said that the stafford act could have been handled or it could have been handled much better stafford act can you elaborateh you may have mentioned this in your opening remarks but what could have been done that would have been better in helping to manage the problem in the gulf if you as governor and the governor of louisiana did have the control that you want barbour the two big reasons of the stafford act being preferable to state and local governments we're used to it we deal with it all the time i think when you have some of the local officials later today we have all had to work under the stafford act because pollution act there was an impression that the federal government was in charge under the unified command and they told everybody what to do and that not only is contrary to the u s constitution and bad law but it also didn't work your jurisdiction under the stafford act tell me how that would have been more of a positive situation or solution for you governor barbour where it really became very apparent we had a defense plan to defend our shores from oil the coast guard had no way of managing that they had approved the plan they had no way of managing that we literally sent people to walmart to buy radios we had a situation where our air national guard opportunity where to go we had to set up a whole communications system and a commandandcontrol system which we did not do for weeks because we thought the coast guard knew more about this than we did but it turned out that we had to set up the communications system we had to set up the commandandcontrolhsystem and frankly they were cooperative when it got to it but it should have never come to that we were lucky that this disaster was manageable enough that you could make those kinds of mistakes and still clean them up mister burton thank you mr hchairman thank you go issued and i believe they are going to be testifying later on today on a panel they issued several reports warning that taxpayers are not receiving a just or fair return for when gas and oil companies were not doing as well as they are today but they encouraged additional exploration at the time when oil and gas were lower and under some of these leases oil companies pay absolutely no royalties at all to the american people when they drill on federal lands and this is oil that is owned by the american people it is on federal lands u sually there is a royalty paid back to the government to the taxpayers but here they are paid absolutely nothing back and i would like to quote from their report special lower royalty rates referred to as royalty relief granted on leases issued in the deepwater areas of the gulf of mexico from one thousand nine hundred and ninety six to two thousand a period in which oil and gas prices and industry profits were much lower than they are today could result in between hbillion and hbillion in lost revenues to the american people to the federal government compared with what it would have received without these provisions end quote our chairman in a rare expression of bipartisan support i want to compliment you mr hissa for the significant work that you have done in this area and on this issue and you had called for an end to these leases on octoberhth two thousand and nine chairman issa issued a staff report warning that actual shortfalls to u s taxpayers could be much much larger and this is what his report said and i quote depending upon the market price of oil and natural gas the total cost of foregone royalties could total nearly  hbillion oil and gas royalty payments represent one of the country's largest nontax sources of revenue taxpayers must get every cent that is owed to them end quote and i hyears the rest of the country has been sucking the gulf dry and we get nothing at the period of time you are talking about in the late nineties all this production out of the gulf of mexico and the states were paid nothing zero nothing when you drill on government land in wyoming wyoming gets some of the money but fortunately in the last administration this was changed and we are going to start on a little stairstep basis getting a little bit of the royalty and ultimately maybe about two thousand and seventeen or something the states will get a legitimate fair share of the royalties so i am very sympathetic to the royalty owner because we feel like we are we should be considered royalty owners too and that the federal taxpayer and the taxpayer in mississippi both ought to be getting a fair royalty for the production of oil and gas or if it's coal on land or whatever i think that is absolutely the case but i hope y'all will please understand when there are only five states in the country that allow offshore drilling the other forty five ought to let us five who allow it they ought to let us participate as royalty owners too misess maloney the real royalty owner is the american taxpayer so do you believe that the taxpayer has a right to every cent that is owed to them under these leases and that they should be completely corrected as the chairman said governor barbour and that i believe the mississippi taxpayer should share in that when we dealing in the waters that are mississippi waters and are part of the outer continental shelf that's recognized as mississippi so ma'am i am not arguing with your point about the federal taxpayers i just want to make sure the state taxpayers get treated as royalty owners in the five states that allow this it's not fair for the other forty five states to burn the oil that we have taken out of the outer continental shelf and they get treated the as an amendment and several other amendments regretfully chairman issa you voted against it and i feel the same as governor barbour that this should be directed that the american taxpayer is entitled to  royalties for oil extracted from taxpayerowned federal and stateowned property and i hope that you will join with us in a bipartisan way to correct this going forward so that there take it i thank the gentleman congressman you don't have to remain since we didn't swear you in but you are welcome to stay you look good with the governor you always look good next to the governor that will  as it currently stands chairman issa and so for the foreseeable future if there were to be another one you would potentially have another oil loss in which the federal government was able to get fines the federal government would i don't think we actually collect royalties on what's spilled into the gulf but short of that we would continue from that particular rig that's not a relief one it's not covered by the clintonera contract failures the fact is you stand at believe that from this side of the dais that we should look at legislation that provides sooner and more specific revenuesharing based on the potential risk in other words effectively insurance policy where you would have revenue not for current expenditure but for contingent expenditure if you have another economic event like this governor barbour well two things there is legislation that was passed i think in two thousand  compensation for the risk we take right now the only way that i see that we can reasonably be compensated for the damage done to us is if you take the clean water act fines and they are going to be clean  potentially in the billions and that the states that were affected be given a share of that with enough flexibility that they can spend it to help their economy were from mississippi now this well wasn't in mississippi waters but that gives you an idea sort of reference that we have a lot of people that work in this industry and right now you know where they are i went and visited leviathan oil rigs hmiles west of haifa israel i met two guys from mississippi who were working that oil well in israel who had been working in the gulf of mexico the year before and they had to leave because of the go we certainly have seen a lot of those rigs sail off let me ask you a followup question you mentioned the immediate following the too much control by the federal government and bp but governor doesn't that continue till today isn't bp still in the driver's seat on a lot of things including compensation aren't you sort of in a backend ability to help your people governor barbour regardless you know i am not i am a recovering lawyer so i know that a judge has ruled that the gulf coast compensation facility whatever it's called that that is not truly independent of bp and that may legally technically be right i think they are trying to do a good job we don't get many complaints in mississippi they are doing something that's complicated and i will say this about it it is sure better than having to litigate all this where people wouldn't get their money for years and years and years and the trial lawyers would get half the money so it is a long way from perfect just like what i do is a long way from perfect but i think it is better than the alternative of litigation and as i say we have cases that are difficult cases where people are not satisfied but we really don't get many complaints and we have been paid mississippi to adjust for those flawed contracts that were signed this committee held hearings much earlier on it found that the oil companies thought they were going to be paying royalties and were actually surprised when they found out that the defect in the disney world there's a saying over at animal kingdom that says this it says we do not inherit our environment from our ancestors we borrow it from our children and in that light you know i was read measures to prevent this kind of massive oil spill from ever happening again everyone remembers bp's repeated failures to cap the well it became clear immediately that bp had no idea how to end this disaster every week they would try a new strategy but it was a complete trialanderror fiasco they tried the top hat by the way i was down there when they were trying to build  this was a massive steel containment dome lowered into the well of course that failed they also tried the junk shot they injected golf balls and shredded tires and drilled floor into the blowout preventer but that to failed they tried several more times until finally they tried the static kill they basically injected mud into the blowout preventer to start regulating the flow of oil but that hdays and it was crystal clear to everyone watching that bp simply did not have the technology to handle a deepwater blowout which i think is atrocious governor i want to ask you about a specific requirement issued by the department of the interior to require all companies to prove that they can cap a well before receiving a drilling permit it was called  that it has access to and can deploy surface and subsea containment resources that would be adequate to promptly respond to a blowout end of quote is something of which i am ignorant but what i do know is we have had more than thirty one thousand wells drilled in the gulf of mexico in my life this is the only time anything like this anything vaguely like this has ever happened and when you consider the amount of our domestic oil production that comes out of the gulf and comes from offshore drilling elsewhere when you consider the fact that we have a n energy security a military security and a national security issue in this country because we import way too much foreign oil including a lot from people who are not our friends th words if this were to happen again if we had hdays of oil spewing out into our waters you're saying that the risk of that f talked to the tourism people i even talked to the industry people a lot of them and you know what they said they said you know whath this is before we knew the full impact of it they said you know what we agree we ought to have some kindh we should have the ability and it should be proven ability to cap something like this before we even continue governor barbour i think beyond that congressman it is very clear that this well blew out because normal standard procedures and protocols weren't followed i don't think there's any question that corners were cut i don't know whose fault it was i don't know who the specific responsible party is but i don't think there's any question that that was the cause of all this and this is why i say the risk one out of thirty one zero is worth taking when you're talking about something that is so important to the economy and the united states of america that's why i have that view mister cummings i understand thank  industry why don't we take a minute and have you expound on the effects that the bureau of ocean energy management revenue and enforcement has  issuing let me back up the bureau of ocean energy management revenue and enforcement has been issuing a great deal of new regulations affecting offshore drilling have your constituents been in touch with you about these new rules  are shutting down the gulf have shutdown the gulf i mentioned earlier i was in israel this winter like in february went on an offshore drilling rig and two of the guys working on the rig were from mississippi almost every that it was going to be a long time before there was going to be drilling again in the gulf of mexico that's what we get people who've lost their jobs whose kids have lost their jobs who are worried abouth who are worried about this the serviceh we have people who work off shore but we also have significant service industries in our state that repair rigs that build service boats that work on boats and that so it's a big industry in the gulf south  how about let's talk a little bit about bp's actions during the spill and recovery there were many officials and citizens that felt bp played too large a role in the spill response and the federal government should not have let them play this large of a role and that was a common criticism we heard in the media at the time of the spill as well at any point either during the disaster or during the recovery phase did bp have too much of a say in the response governor barbour no question bp had a big say in the response and they were paying for it but i have to tell you congressman sometimes bp was easier to deal with than the government that's just a fact of life that we learn that sometimes the federal government is not the easiest group to do business with in fairness to b for us everything that we asked them to do and of course everything we were asking for they had to pay for everything that we asked them to do they considered and almost every time they did it where many times some shipyards in mississippi to build the skimmers so we'd have enough skimmers so i'm not going berate that part of the oil pollution act what we didn't like was the usurpation of state worst natural disaster in american history as governor of mississippi its you learn not to criticize people too harshly for unprecedented unforeseen disasters natural  otherwise they had a hard time they seemed slow to try to get in charge we had the problems i'm talking about with command and control but i don't want to be overly critical because when stuff like this happens you make mistakes and so that's why i try not to assess blame let's just figure out how to do it better mister desjarlais i think that's very diplomatic and reasonable  can fully prepare for this we always learn and we try to make improvements and i think that i agree with your statement one last thing on the seafood you said in your opening statement the seafood is safe to eat what about the reproduction and are the seafood stocks where they should be or is it too early to tell governor barbour well we have had no evidence whatsoever or finding of anything from the oil spill that got into the reproductive  some losses in dolphins sea turtles that are more than normal the peculiar thing about it is we started seeing it before the oil spill just a little bit before the oil spill this started happening so nobody has been able to tie it but that is something we got an antenna up about is that we have seen mortality rates among sea mammals and sea turtles for happening again but it has been severely criticized for regulations that would apparently accomplish that it's been criticized for these regulations it's too burdensome has been criticized because these regulations would cost jobs therefore i was intrigued by what some of theh from the very top of the oil industry is saying and i'd like your view on he says and i'm quoting now far from resisting those rulesh he means the regulations that are coming outh our industry is helping to strengthen them the proactive uncompromising approach to safety is the test we should all apply to any company starting with our own in an industry that is always edging up against the frontiers of geology and engineeringh here goes your risk pointh the best practices barbour as i understand the statement i would because i think what he's saying is as the chairman of a big oil company his incentive among others is he doesn't w administration's new safety measures but they are working with the administration to make them stronger he does not appear to be fighting the regulations for which the administration has been criticized i want to give you another  example from the top of the industry the president of shell marvin odum again shouldering his own responsibility but he says additional safeguards beyond what he himself would do must be strengthened across the industry to develop the capacity to quickly respond and resolve a deepwater well blowout in the gulf of mexico regardless of how  unlikely it is that this situation will occur that doesn't come from members of congress or from environmentalists that comes from the top of the oil industry i just want to know if you would agree with mr  litigating as you said the only way to do that is to hold the industry accountable here you have another oil executive arguing for more robust requirements to demonstrate  the capacity to cap a well if there's a blowout i just think it's important to bring out how the industry instead of fighting regulations now is working with the administration for tougher regulations i think their concern governor is that these regulations be across the board so some of them are not engaged in spending more money to be more safe than others so if there are regulations saying all of you are well it is a form of regulation we're going to shut you down while we write new regulations so while everything that you said i am very comfortable with there are connotations there that i don't think we should take too far  were recovered that leaves us about hmillion barrels that got into the gulf in this disaster i'm not reducing this for a minute but let's just do the numbers so of that approximately another hpercent was burned  off and another hpercent was estimated to be dispersed using dispersement and we all understand there is some controversy about whether to use dispersement so if you take the amount that was evaporated and burned off you're now down to about half you're down into the two some million nearly three million barrels no matter how you look at it whether you take the whole amount or the reduced amounts you've got less than hyears of oil in one short quarter of period you have got about hyears if you would give credit for these efforts to mitigate is it any surprise to you that the gulf fish shellfish and so on are doing just fine when in fact this is essentially including the natural amount that's still coming into the gulf this about three year's worth maybe total that went into the gulf in hyear that this is not such a big thing even though it is a big thing to us individually and a big thing when it gets to congressman right after the oil spill happened when i say right after the first month or so we had professors and experts who told us that the gulf would over a period of time for lack of a better term digest this that there are microorganisms in the gulf of mexico and i think in other places where you have oil seeps that eat the oilh chairman issa including santa barbara never assumed it was true but it looks like to the laymen from afar that that is in fact what happened that the microorganisms were able to manage this and maybe that wasn't totally unforeseeable because they do eat up so much oil every year two or things i would mention unlike exxon valdez this was light oil and secondly the water was warm exxon val obvious which is that the offshore oil and gas industry is inherently dangerous but the commission also reported that accidents are surprisingly common that involve l well control here is what the report said drilling rigs are themselves dangerous places to work dense with heavy equipment hazardous chemicals and flammable oil and gas all surrounded by the open sea environment far from shore where weather and water conditions can change rapidly and dramatically the seriousness of these risks to worker safety and the environment are underscored by the sheer number of control accidents and many of these accidents occur very close to your sate were you aware of these figures seventy six accidents governor barbour of course my state is an oil and gas state not just offshore and a drill rig is dangerous i mean you see a lot of people who worked in the oil fields that have lost fingers got hurt got hurt one way or another got burned it'sh it's a dangerous thing the accidents you're talking about though all turned out to beh were managed they were manageable and managed this the bp macon well spill is unique but yes sir it's a tries very hard to protect their people because it is very expensive when they don't so rational regulation is something we ought to all be for we need to be careful of the excessive unnecessary okay fair enough governor some have suggested that new safety measures should apply only to deepwater wells because that's where bp's rig was when it exploded do you believe that shallow water exempt from new safety measures the administration is implementing governor barbour well again if you're talking about safety measures to try to prevent injuries i don't think that's what you're talking governor doctor harriet perry of the university of southern mississippi gulf coast research lab identified oil droplets in blue crab larvae last summer this was the first time finding was never replicated or we didn't have anyhsimilar findings in any samples that came out of the catch and that's why it hasn't that hasn't bothered  are a number of reports of red snapper showing up with lesions in the gulf a louisiana state university professor is fairly confident that these lesions are consistent with the toxic congressman if this were showing up in any samples of seafood taken by the government federal government or state government i would be more concerned about it than when a college professor  government and state government then that would give me real pause but we're not the fact that we're not finding it means that i'm really noth i don't know what the professors are finding or purporting to the absolutely not texas and mississippi share a common bond both border the gulf of mexico and are both deeply affected by what happens in the gulf of mexico both environmentally and economically i think leases just immediately nearby to florida mexico for a long time has been exploring the gulf of mexico i realize you're only a recovering attorney i'm a recovering attorney too your recollection of lawsuit u s doesn't have any jurisdiction over any of use of our resources rather than crippling our domestic companies and our domestic exploration and hpercent of our domestic oil supply that we might be focusing on how to respond in the event one of these accidents or any sort of energy that we need to get ourselves off of foreign energy and the best way to do that is it to increase supply and production of american energy this has hurt that because this is a big source of domestic oil you can't work but after the maintenance was done they left and you know the way the industry works those big rigs they work on big jobs they are very expensive to move not only in cost of moving but opportunity costs they get paid huge amounts of money a day to operate them whether they will come back how soon they will come back is a very serious issues so we saw not only the jobs move but we saw the drilling rigs that produce the jobs go to australia go to angola brazil so that's a big damage to us not just in jobs on the platforms but jobs in the service industry thousand barrels a day less are going to be taken out of the gulf if more than a quarter of that is mississippi related economic related what does that do to your economy relative to oil in the foreseeable don't mean this as precision but four of the eleven people killed on the rig were from mississippi which gives you a sense of the number of people that we have working in the industry on rigs in the service industries a question of do we get it in america or do we get it somewhere else isn't that really the gulf question today governor barbour well if you look at when has the united states had reduced use of oil it is every time there's been a recession and so i don't want a recession if we're going to keep a strong economy we've got to produce more energy in the united states including oil and to go shoot the best goose we've got laying golden eggs the gulf of mexico where we're getting hpercent of our oil or we were and that production is going down now and it's going to keep going down remember oil production today is based on decisions that were made in the past normally several years in the past a moratorium is one of the few things that has an immediate impact when we see what we're seeing right now with high energy prices the speculators are speculating the u s is going to be producing less and less oil because they think the administration's policies will result in that so they are betting the price of oil is going to go up and then you take that with the value of a dollar which oil prices are denominated in dollars since the value of a dollar goes down then that's a doublewhammy for the people who are paying four dollars for gasoline and for the people who think you're going to deal with that by davis i've listened intently to your testimony of course i grew up in the mississippi delta on the other side of the river near greenville mississippi just a few miles and as dick gregory kno tremendous relationship with the state itself and we watch very closely what takes place and what goes on i know we're talking about the worst environmental disaster in the history of our country but as you indicated in your testimony it also had a massive economic impact particularly the fishing and tourism industries and i want to focus a little bit there according to the noaa the total amount of shrimp caught commercially in the gulf decreased hpercent from two thousand and two thousand and ten the amount of shrimp caught commercially in mississippi was down hpercent last year from the year before could you share and you've done it eloquently closed federal waters were closed first mississippi waters were closed once we had encroachment louisiana because they were closer to the well their waters were closed very early as well and this  is fisheries for us for shrimp we have big shrimp boats that will go all the way down to texas coast and come all the way back around the florida coast but there are not that many of them that are that big that go that far so have a lot of fishermen in the shrimp industry whose waters were closed to them their losses were mitigated by the fact bp was willing to hire their boats to be part of this vessels of opportunity program one hundred boats participated and most days we would have five six seven hundred boats out there and they would be getting paid some of them more than they made fishing but the processors got clobbered and so the fishermen are nowhere if they don't have processors and so while they were getting a chance to be helped there was nobody who was helping the processors and without the processors there's no fishermen and so fishing was hurt that way recreational fishing which is a real industry in my state there are people from chicago who come down there and pay boat captains to take them out fishing shut out shut down again they got other than perhaps the listing of any moratorium what else can the federal government do that might assist with the economy we know that the economy obviously was hurt badly use it to reduce the debt it might cover a day or two worth of deficit but we think the best thing the federal government can do is let some of the fine money and there's legislation in the senate i believe to most of the fine money go to the states let the states use the money with flexibility for economic growth there maybe it has to be related to the them on the coast maybe at the port maybe in alabama they've got something totally different or maybe in florida there is a whole different concept but we would like to see a significant part of the fine money gentleman from idaho mr hlabrador for hminutes mister labrador hello governor in idaho obviously we don't have an oil industry so i don't spend a lot of time thinking about this but i think about common sense it seems like there is a lot of common sense just lacking here and i'm going to just give you an example you've had a colloquy with several people here on the panel i mean on this side and sometimes common sense just seems to lack in washington d plane and the regulations said that all planes should be within hmiles of each other and apparently the first lady was within hmiles i'll get to my point and i think you'll get it in just a second so the response in washington d c was not hey geez somebody screwed up and they failed to comply with the regulation it should have been hmiles instead of hmiles the response in washington was we need new regulations  it seems like that's all i ever hear about in washington d c when somebody screws up when somebody makes a mistake we don't say hey that idiot didn't follow the regulations what we say is we need new regulations and it's just to me incomprehensible that all we can ever think about is adding regulation upon regulation when the regulators are not doing their job they already have regulations that should actually be enforced and instead all we ever talk about is making it more difficult for industries for private enterprise and for individuals to live to survive so can you explain to me and i think you mentioned this earlier i think you mentioned that the macondo incident occurred because regulations were not followed in fact i think your word was that some corners were cut can you explain that a little more to me what you meant by that governor barbour i can't slight the regulatory regime but in the normal standards and protocols of shutting in a well it was clear from the reports at the time and nobody has denied it that they didn't follow the standards and protocols that the industry had been using settled on and had worked with great results for a long long long long time this was widely reported and so it always seemed to me pretty clear why the well blew out and this was reportedly again with nobody arguing this was a pretty tough well they had trouble with this on this was a big elephant well but they did cut corners and you're right when you say the issue is following the regulations we got now i can't improve on your statement  why is it that here in washington we don't seem to understand this why is it that we can't understand that we have regulations i think you used the number we've done this in the gulf over thirty thousand times and this is the first time something like this happen will actually be able to have a good environment we will be able to have good water and we will be able to have jobs and the economy will improve thank you very much governor barbour thank you chairman issa i'm going to follow up on the gentleman's line of questioning because i think it was excellent governor on the day that the oil well blew hmiles off your shore there were two mms officials a father and son team they came on reviewed passed and left isn't that so as far as you know before won't fail again and that's going to be a line of questioning is not just other new regulations but an agency that failed to ensure safety what has changed there so hopefully they will be as candid as you've been governor barbour well i have to say common word i want to welcome governor haley barbour to this committee and i was just thinking to myself i regret very much you're not running for president i think you would have added some good common political sense and a lot of congressman burton and complaining about the negative media attention as somebody who ran a very large county with hmillion people i can sympathize but on the other hand was it the bad media that caused a hit to the mississippi either right before or right after a hurricane missed us and it pushed some water over the highway and through a culvert and it pushed some oil patties up there and we closed that beach for more thanh we actually closed that beach overnight that is the only time but if you watched tv in virginia you saw louisiana and you thought mississippi and florida and alabama for that matter and texas you look back now and if someone gave you a truth serum do you think in retrospect that the process for permitting and improving to your question i think that what we have done for hyears with more than thirty one thousand oil wells with very positive results in fact nothing like this ever having happened i would not take issue with that i mean regardless of what we do occasionally you're going to have the bad outcome but we're not going to make people quit taking lefthand turns we're not going outlaw lefthand turns because they are a little bit more dangerous than regular driving and i really see this that rational regulation of this had resulted in thirty one thousand times nothing like this now this has happened one time does that mean we have to turn the world upside down and i think the answer is no mister connolly governor i would agree with you  i don't think we have to turn the world upside down but really my question isn't that that's not our only choice the question is could we in retrospect have tightened up regulation and been more rigorous in the review process such that and the enforcement for example get the blowout protection equipment that might have stemmed the spill or contained it i mean i take your point that the devastation wasn't what was  presented visually on television i fully respect and understand that but on the other hand at one point the extent of the spill on the surface of the water would have gone from my district in northern virginia dale city all the way to new york city if it were superimposed on the map here that's eyepopping and that's of deep concern to all of us all i'm asking don't turn the world upside down but could we not on a bipartisan basis agree that in light of that experience it only requires one to create such environmental havoc this isn't the category it seems to me of a nuclear disaster it only requires one turning left hand and having an accident god forbid is a terrible thing been written over and over and over without contradiction they did not follow the normal protocols and they did not follow the standards and these two regulators were on the well that day i think the congressman from idaho's point is the right point it's not that we need more regulation it's that we need to actually enforce the regulations in real life if  have the full regulatory process that's on the books right now no more exclusion secretary salazar for your comment i'll read it there is no question that the suspension of deepwater drilling will have a significant negative economic impact on direct and indirect employment in the hurt economically and by the way he follows that up which isn't on this quote he follows this up by noting that there's an extremely good history of safety in the oil and gas industry mister chairman my own view is that the policy of the administration is to increase the cost of energy so that people will use less of it and therefore there will be less pollution and alternative forms of energy will become more economically competitive i have said that publicly a thousand times  i might as well say it here when they did the moratorium that was my assumption that this was consistent with that policy and look it's one policy that works i mean we have got four dollars gasoline and gasoline in january ofh was a dollar eighty something but that's what i took to be the rationale for that is to make these other alternatives economically competitive you had to increase the price of oil and other traditional chairman issa well it's certainly done that by the way the quote that wasn't on the screen is i am also aware that as a general matter the safety record for deepwater drilling has been good i am going to go to one prices and domestic production meaning he was quite sure that if we drilled more here it wouldn't change the global price i'm going to take you to page twenty three of an mms report titled mms economic impact assessment at the time they were assessingh and i will just read it because it's a little hard to read that oneh they were assessing that at seventy five dollars a barrelh which is where we were not where we are unfortunatelyh that if production went down by am i but it would not surprise you that if you got a half dollar increase for such a minor one and if you decrease by three times that amount wouldn't you guess it would go up a whole lot more than that ten fifteen dollars a barrel could certainly said you can't affect the price of oil overnight well of course that is absolutely true but if there is a belief that the u s is going to produce less and less oil going forward particularly because of government policy issa does it surprise you that the policies of this administration seem to be targeting the economic wellbeing of your areah and i'm not trying to say it's a big plot or anything elseh but it does seem if aircraft fly into the pentagon fly into the twin towers the next day we are figuring out how to get airplanes back in the air and yet the economy the seafood economy the tourism economy and the oil economy of your state when you're suffering it seems like there's no limit to how long this administration will take to have a moratorium to think about whether or not they can let you do something that's hearts or what's inside their heads but i have notedh and i hadn't said it here but i think it is appropriate to say there has been an effort to raise taxes on the oil industry because it's a very is equal to onehalf of hday's deficit i mention that because it says to me that can't be the real reason i mean the real reason can't be to touch the deficit because it doesn't even touch the deficit and of course as we know the guy who's going to pay it is the one who pumps gas in his truck so do i think there are some people who don't like the oil industry or think it's a good whipping boy politically i suspect that but i can't say what's inside people's hearts or minds and don't pretend to but i do know it wouldn't do anything about the deficit chairman issa well governor i couldn't agree with you more that we can't be sure of somebody's motives although i can be sure that if wall street were to cause an economic meltdown that this administration would allow it to be up and running the next day because they did the last administration did this administration did we have had great disasters and great impacts in other areas of the economy but amazingly the reforms came after everyone was back up and running not before they were allowed to go back up and run governor you have been very kind with your time we appreciate your being here you're  probably the most welcome relief to us in congress to see somebody who's doing the right things who's making the right decisions who's steering a course for your state and we appreciate you taking your valuable time to be up here today