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S. HRG. 111–1239 

ECONOMIC AND ENVIRONMENTAL IMPACTS OF 

THE RECENT OIL SPILL IN THE GULF OF MEXICO 

HEARING 

BEFORE THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

MAY 11, 2010 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys 
(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

THOMAS R. CARPER, Delaware 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

AMY KLOBUCHAR, Minnesota 

SHELDON WHITEHOUSE, Rhode Island 

TOM UDALL, New Mexico 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

ARLEN SPECTER, Pennsylvania 

JAMES M. INHOFE, Oklahoma 

GEORGE V. VOINOVICH, Ohio 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

MIKE CRAPO, Idaho 

CHRISTOPHER S. BOND, Missouri 

LAMAR ALEXANDER, Tennessee 

BETTINA POIRIER, Staff Director 

RUTH VAN MARK, Minority Staff Director 
(III) 

C O N T E N T S 

Page 

MAY 11, 2010 

OPENING STATEMENTS 

Boxer, Hon. Barbara, U.S. Senator from the State of California ........................ 1 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 3 

Lautenberg, Hon. Frank R., U.S. Senator from the State of New Jersey ........... 5 

Vitter, Hon. David, U.S. Senator from the State of Louisiana ............................ 6 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland ................ 9 

Alexander, Hon. Lamar, U.S. Senator from the State of Tennessee ................... 10 

Klobuchar, Hon. Amy, U.S. Senator from the State of Minnesota ...................... 11 

Specter, Hon. Arlen, U.S. Senator from the State of Pennsylvania .................... 12 

Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode Island ......... 13 

Udall, Hon. Tom, U.S. Senator from the State of New Mexico ............................ 13 

Merkley, Hon. Jeff, U.S. Senator from the State of Oregon ................................ 14 

Shelby, Hon. Richard C., U.S. Senator from the State of Alabama .................... 15 

Landrieu, Hon. Mary L., U.S. Senator from the State of Louisiana ................... 18 

Baucus, Hon. Max, U.S. Senator from the State of Montana .............................. 21 

Nelson, Hon. Bill, U.S. Senator from the State of Florida ................................... 22 

Menendez, Hon. Robert, U.S. Senator from the State of New Jersey ................. 23 

LeMieux, Hon. George S., U.S. Senator from the State of Florida ...................... 24 

Carper, Hon. Thomas R.., U.S. Senator from the State of Delaware, prepared 

statement .............................................................................................................. 132 

WITNESSES 

McKay, Lamar, Chairman and President, BP America ....................................... 26 

Prepared statement .......................................................................................... 29 

Responses to additional questions from: 

Senator Boxer ...................................................................................... 41, 48, 50 

Senator Whitehouse .................................................................................. 43 

Newman, Steven, President and Chief Executive Officer, Transocean, Ltd ....... 52 

Prepared statement .......................................................................................... 54 

Responses to additional questions from: 

Senator Boxer............................................................................................. 67, 92 

Senator Baucus .......................................................................................... 79 

Response to an additional question from Senator Carper ............................ 80 

Responses to additional questions from: 

Senator Cardin .......................................................................................... 81 

Senator Merkley ........................................................................................ 84 

Probert, Tim, President, Global Business Lines, Chief Health, Safety and 

Environmental Officer, Halliburton ................................................................... 94 

Prepared statement .......................................................................................... 96 

Responses to additional questions from Senator Boxer ................................ 100 

Response to an additional question from Senator Carper ............................ 105 

Responses to additional questions from: 

Senator Cardin .......................................................................................... 105 

Senator Merkley ........................................................................................ 108 

Bortone, Stephen A., Ph.D., Executive Director, Gulf of Mexico Fishery Management Council ................................................................................................... 152 

Prepared statement .......................................................................................... 155 

Responses to additional questions from Senator Boxer ................................ 158 
Page

IV 

Overton, Keith, Chairman of the Board, Florida Restaurant and Lodging 

Association; Senior Vice President and Chief Operating Officer, TradeWinds 

Island Resorts ....................................................................................................... 160 

Prepared statement .......................................................................................... 163 

Responses to additional questions from Senator Boxer ................................ 168 

May, Eric B., Distinguished Research Scientist, Living Marine Resources 

Cooperative Science Center, Department of Natural Sciences, University 

of Maryland Eastern Shore ................................................................................. 174 

Prepared statement .......................................................................................... 176 

Responses to additional questions from Senator Boxer ................................ 183 

Response to an additional question from Senator Carper ............................ 186 

Caldwell, Margaret R., Director, Environmental and Natural Resources Law 

and Policy Program, Senior Lecturer in Law, Stanford Law School; Executive Director, Center for Ocean Solutions, Stanford University ...................... 187 

Prepared statement .......................................................................................... 189 

McInerney, Thomas G., Lieutenant General, U.S. Air Force (retired) ................ 199 

Prepared statement .......................................................................................... 201 
(1) 

ECONOMIC AND ENVIRONMENTAL IMPACTS 

OF THE RECENT OIL SPILL IN THE GULF 

OF MEXICO 

TUESDAY, MAY 11, 2010 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

Washington, DC. 

The full Committee met, pursuant to notice, at 2:30 p.m. in room 

406, Dirksen Senate Office Building, Hon. Barbara Boxer (Chairman of the full Committee) presiding. 

Present: Senators Boxer, Inhofe, Baucus, Carper, Lautenberg, 

Cardin, Klobuchar, Whitehouse, Udall, Merkley, Specter, Vitter, 

Barrasso, and Alexander. 

OPENING STATEMENT OF HON. BARBARA BOXER, 

U.S. SENATOR FROM THE STATE OF CALIFORNIA 

Senator BOXER. We are going to get started. Senator Inhofe has 

informed me we have five votes that may start at 3:30, so we are 

going to get through as much as we can. 

What we are going to do is try to keep our opening remarks to 

3 minutes if we can. And if you give up your opening statement, 

you will get that extra 3 minutes added onto your question time. 

So, that is how we will go. We will start off by hearing from colleagues on the Committee, and then we will turn to our distinguished panel of Senators. 

Today we will hear about an oil spill that could be one of the 

greatest environmental disasters our Nation has ever seen. My 

heart goes out to the families of those who lost their lives. 

Our ocean environment is not only a God given treasure and our 

legacy; it is also a great economic asset. In California, for example, 

ocean-related tourism, recreation and fishing generate $23 billion 

in economic activity each year and support 390,000 jobs. California’s 19 coastal counties account for 86 percent of the State’s annual economic activity, or more than $1 trillion. Nationwide, we are 

talking about $130 billion of economic activity on our beautiful 

coasts and 2.4 million jobs annually. 

Louisiana is the largest seafood producer in the Lower 48 with a total economic impact of $2.4 billion. Recreational fishing in Louisiana generates an additional $1 billion in retail sales a year. The 

Gulf Coast is also home to remarkable wildlife refuges. One of the 

first refuges, Breton National Wildlife Refuge, was established by 

Teddy Roosevelt to protect the numerous species of birds that use 

the islands for nesting and wintering. 
2 

We are all united in our top priority, stopping the spill, cleaning 

up the oil, and protecting the threatened and natural resources of 

the region. 

As I analyze what happened here and the policies and practices 

surrounding offshore oil drilling, a number of issues come to the 

forefront. 

First, it is imperative that the impacts to businesses, jobs and 

environment are taken care of quickly. Those responsible must provide the resources, and that means we need to change the law regarding limits on liability. This idea has strong support, and I will 

work with my colleagues to move forward with legislation as soon 

as possible. 

Second, I am pleased that Interior Secretary Salazar is already 

discussing separating mineral extractions responsibility from safety 

and environmental oversight. I have already discussed this idea 

with Energy Committee Chairman Bingaman, and I believe we will 

work together on legislation. And there is a strong argument for 

supporting this separation. The MMS found that any type of spill 

was remote, the impacts limited, and therefore MMS supported categorical exclusions on a site by site basis. Categorical exclusions. 

BP said, in its oil expiration plan, there would be no significant impact on any natural resources, and MMS went along. 

In addition, I am concerned that reports of corruption in MMS, 

including illicit activities which were brought out by a press investigation, could have played a role in these decisions in this approach, and I will introduce, without objection, the IG report into 

the record. 

Clearly, stronger, more independent oversight of oil company activities is needed. With so much of the region’s economy at risk, 

why were exploration plans and environmental documents prepared with little to no analysis of the threat of a serious spill? 

Third, has the push to drill in ultra-deep water and expand exploration outpaced the oil companies’ ability to respond to oil spill 

disasters in waters so deep they have been described as inner 

space? 

A fourth area of great concern to me is the lack of sufficient 

back-up safety systems. How do you go ahead and hold a party on 

a rig to celebrate safety when you do not even have an effective 

plan in case the blowout preventer fails? 

Sixth, I am concerned about the cement application since I have 

learned that it could have been a cause of a serious blowout on 

Australia last year. I want to find out more about the condition of 

the cement, the companies’ experience and practice in carrying out 

this sensitive part of the operation. 

This Committee has an important role to play. It is responsible 

for a number of areas directly related to the oil spill, including the 

Oil Pollution Act, environmental aspects of Outer Continental Shelf 

lands, air and water pollution, fisheries and wildlife, and regional 

economic development through the EDA. 

So, today’s hearing is just the first step in this Committee’s oversight of the oil spill in the Gulf. Next week we will have a hearing 

with Administration officials to get even more answers. 
3 

Moving forward, we all must work together to stop the spill, repair the damage and find out why it happened so that nothing like 

this ever occurs again. 

I look forward to the testimony from all our witnesses. 

Senator Inhofe. 

[The referenced report was not received at time of print.] 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Thank you, Madam Chairman. 

I agree with you that our prayers are with the families and loved 

ones that were lost. And I want to recognize all the men and 

women of the oil and gas industries who work every day to provide 

the energy to fuel America. And another thanks to all of the volunteers from the conservation groups to fisherman to Gulf Coast residents who are helping with the response effort. 

The fact that we are holding all of these hearings this week is 

a little disturbing to me. My feelings are that the people testifying 

today in all of these hearings should be spending their valuable 

time assisting with the response effort. This incident was, indeed, 

tragic and we will feel the consequences for some time, even as we 

try to understand what happened. I hope today’s hearing will enlighten us as to the possible causes of the spill. 

There will be a number of hearings this week on the subject, and 

I hope they remain focused on the facts and what we need to do 

to solve the problem. With this in mind, I think Congress should 

focus on three priorities, which I think the Chairman agrees, we 

need to mitigate and contain environmental impacts, provide assistance to the Gulf’s commercial and recreational fishing industries, and investigate the causes so we can prevent a disaster of 

this kind from happening again. If we stay focused on those priorities, then we can make prudent short- and long-term policy decisions as we address this spill. 

One of our witnesses today is Lieutenant General Tom 

McInerney. He will help us put this in a proper perspective. I remember Tom so well. I was there 20 years ago, the Exxon Valdez, 

and I remember what happened. 

And I can also remember that people at that time were saying, 

some of the extremists environmentalists, we are going to parlay 

this Exxon Valdez into a retardation of the effort to explore and develop our own resources in the North Slope, which was exactly the 

wrong thing at that time because that was a transportation accident, and if we do not produce our domestic resources then we are 

going to be bringing in from other areas, and the likelihood of a 

transportation accident would be that much greater. 

There was point made recently by the New York Times columnist 

Tom Friedman. He noted that some may attempt to overreach for 

an end to offshore production. But he wrote, now I’m quoting now, 

and you would not have expected this from him, ‘‘We need to remember that even if we halted all offshore drilling, all we would 

be doing is moving the production to other areas outside the United 

States with even weaker environmental law.’’ And that is exactly 

the point. I agree with him. 
4 

As investigations of this tragic event continue, I want to make 

a few things clear. If we find gross negligence or other violations 

of Federal law on the part of oil companies and their subcontractors, then we will hold them accountable. But by the same token, 

if the Federal officials failed to exercise proper oversight or implement specific requirements, then we will hold them accountable, 

too. 

Madam Chair, let us work together to find out what happened 

and take the responsible path forward. 

[The prepared statement of Senator Inhofe follows:] 

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE OF OKLAHOMA

Thank you, Madam Chairman. I first want to say that our prayers are with the 

families who lost loved ones in the tragic explosion in the Gulf. I also want to recognize all the men and women in the oil and gas industry who work every day to provide the energy we need to fuel America. And a note of thanks to all of the volunteers—from conservation groups to fishermen to Gulf Coast residents—who are 

helping with the response effort. 

Before I begin, let me say that the fact that we are holding this hearing today 

troubles me a great deal. It’s too early to begin assessing what caused this terrible 

tragedy. And the people testifying today should be spending their valuable time assisting with the response effort. 

This incident was indeed tragic. We will feel its consequences for some time, even 

as we try to understand what happened. We also continue to assess the extent of 

the environmental and economic impacts. I hope today’s hearing will enlighten us 

as to the possible causes of the spill. There will be a number of hearings this week 

on this subject—I hope they remain focused on the facts and what we need to do 

to solve this problem. 

With that in mind, I think Congress should focus on three priorities as we move 

forward. We need to: • Mitigate and contain the environmental impacts, • Provide assistance to the Gulf’s commercial and recreational fishing industries, 

and • Investigate the causes so we can prevent a disaster of this kind from happening 

again. 

If we stay focused on those priorities, then we can make prudent short- and longterm policy decisions as we address this spill and its causes. 

One of our witnesses today, Lt. Gen. Thomas McInerney (Ret.), will help move us 

in that direction. He will provide some valuable historical perspective: Lt. Gen. 

McInerney led the military’s response to the Exxon Valdez oil spill, which occurred 

over 20 years ago. 

At the time, I was serving on two House committees investigating the causes of 

Exxon Valdez. In 1990 Congress unanimously passed the Oil Pollution Act, OPA, a 

sensible bill that serves as the controlling statute covering offshore accidents such 

as the one we are dealing with now. In fact, this Committee has jurisdiction over 

OPA. 

Though Congress stepped up to the task, we can’t forget that Exxon Valdez was politicized—and continues to be politicized—by certain activist groups bent on blocking access to America’s domestic resources. I believe their actions made America 

more dependent on foreign oil, from countries that have few environmental restrictions. It’s also important to note that Exxon Valdez was a transportation-related incident. The fact that we have grown more dependent on foreign oil means we have 

more tanker traffic, and thus we have created greater risk of an accident occurring 

than what would normally be the case if we had produced the oil right here at 

home. 

This was a point made recently by New York Times columnist Tom Friedman. He 

noted that some may attempt to ‘‘overreach’’ for an end to offshore production. But, 

he wrote, ‘‘we need to remember that even if we halted all off-shore drilling, all we 

would be doing is moving the production to other areas outside the U.S., probably 

with even weaker environmental laws.’’ Exactly. 

Yet some activist groups refuse to acknowledge this reality—and just as they did 

in 1990 they are exploiting the Gulf tragedy for political gain. Again, I urge my colleagues to remain focused on mitigating the damage, getting all the facts, and investigating the causes. If we need to pass legislation, let’s be sure it solves the problem. 
5 

Let’s protect the marine environment, but remember we can do that—and indeed 

the industry has done that in the vast majority of cases—in tandem with oil and 

gas production. In other words, the two are not mutually exclusive. 

In the meantime, there is an aggressive, ongoing response effort. I spoke with 

EPA Administrator Jackson, and she assured me that the agency is doing all it can 

to respond. I appreciate her leadership efforts thus far. I’ve also contacted the Coast 

Guard to get its perspective on the response effort. My staff is communicating with 

the Pentagon. I also launched a Web page that serves as a clearinghouse for information on the spill. 

If we find gross negligence or other violations of Federal law on the part of oil 

companies or their subcontractors, then we will hold them accountable. By the same 

token, if Federal officials failed to exercise proper oversight or implement specific 

requirements, then we will hold them accountable, too. 

Madam Chair, let’s work together to find out what happened and take the responsible path toward a legislative solution, if needed. That’s what the American people 

want and what the residents of the Gulf Coast deserve. 

Senator BOXER. Thank you. 

Senator Lautenberg. 

OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, 

U.S. SENATOR FROM THE STATE OF NEW JERSEY 

Senator LAUTENBERG. Thanks, Madam Chairman. 

Testifying before us today are the worldwide leaders in offshore 

oil drilling, BP, Halliburton, Transocean. These are the companies 

involved in the spill. It is devastating to the Gulf Coast of the 

United States. And ultimately what this spill shows is that offshore 

drilling cannot reliably be conducted safely. And if these three 

giant profitable companies cannot get it right, nobody can. 

The bottom line is that if you drill in the ocean, oil spills cannot 

be a surprise. And all it takes is one major spill to destroy a coastline. And since the year 2002, we have had six major spills in USA 

waters. And that is in addition to what might be addressed at 

times as minor spills. And they are not minor if it is on your seashore. 

The Deepwater Horizon case shows us that no rig is too big to 

spill. In fact, there was a similar major spill off the coast of Australia just last year. Halliburton did the cementing on that rig and 

has been blamed for the 10,000-square-mile oil spill that ensued. 

Halliburton cemented its first offshore oil rig off the coast of Louisiana in 1938. And now, even after 72 years, they still have not 

got it right. They cannot guarantee that we are going to be protected against severe damage to our precious resources. 

Oil drilling is a 19th century answer to a 21st century problem. 

It is inherently dangerous, inherently dirty, and inherently destructive to our environment. 

The lesson of this oil spill disaster is that we need to move away 

from oil, find better ways, cleaner energy, renewable, to power our 

country. And that is why I am introducing a bill that is beyond the 

Petroleum Act which would impose a fee on each acre of offshore 

oil leases. The money generated by that fee is estimated to be nearly $2 billion a year, problems that have not then appeared with the 

incredible growth in profits that these companies have seen. 

And I look at this, and I remember a time when America was 

in uniform. I was one of those people. Now, what did we do when 

we sat up, when our country and our people were under assault? 

We said that maybe we ought to attach some of the excess profits 
6 

that are being made when our country is under the kind of assault 

that it is. 

And Madam Chairman, we are going to look at all options that 

come before us in order to adjust the situation as we see it. 

Thank you. 

Senator BOXER. Thank you. 

Senator Vitter. 

OPENING STATEMENT OF HON. DAVID VITTER, 

U.S. SENATOR FROM THE STATE OF LOUISIANA 

Senator VITTER. Thank you, Madam Chair. 

This incident is clearly a major human disaster, and again, I repeat, my heart and prayers go out with all of ours to the families 

directly involved starting with the 11 deceased or missing, all their 

families. And it is a major environmental disaster. 

Clearly, we need to learn an enormous amount from these 

events, and significant changes will have to be made to Federal law 

and policy and procedure in light of that. 

Having said that, and acknowledging that this sort of hearing is 

absolutely necessary, I want to repeat a concern that I made in a 

letter last week to the Chair that having this and many other hearings on Capitol Hill while there is still an ongoing disaster in the 

Gulf, while the flow is unabated, 5,000 barrels a day continuing to 

come up, I think is a mistake, and I think by definition is pulling 

some amount of focus and resources away from that ongoing disaster. 

And I make that plea again as a resident of the Gulf Coast, and 

I ask that my letter be made part of the record for this hearing. 

Second, Madam Chair, you mentioned a number of responses 

that have to happen. First, stopping the flow. Absolutely. Second, 

you said cleaning up the oil. I want to suggest inserting a step between one and two, and you may well consider this as part of 

cleaning up the oil. But two, I think we need to separate it out and 

define it differently. 

Before we clean up the oil, we need to protect the coast and the 

marsh before the oil gets there and stop as much of that oil getting 

there as possible. In particular, in the Louisiana ecosystem, which 

for the most part is not a traditional beach. If the oil comes in past 

the barrier islands, past the beaches we have and infiltrates the 

marshland, it is 100 times more ecologically devastating, particularly for the long-term. 

And so I think there needs to be a very specific focus on protecting the beach and barrier islands and marsh and preventing as 

much of that exposure as possible. 

I look forward to this hearing, and I will be particularly focused 

on about five topics. 

No. 1, I would like an update on all efforts to stop the flow, including the relatively new idea of a junk shop approach to putting 

material in the BOP or the piping. 

No. 2, and related to my last point, we have a real problem getting boom and related assets to the Gulf region, and I would like 

some thoughts about the supply chain ramping up on that and the 

inequity which exists now, disadvantaging Louisiana in terms of 

how much boom is getting there versus other places. 
7 

No. 3, there is a very innovative proposal put out by the State 

of Emergency Dredging to build up the barrier islands and to extend some of our barrier islands to protect the coastline. 

No. 4, I am very concerned that all sorts of labor and assets are 

being brought into the Gulf Coast, and existing labor and assets 

right there are not first being utilized. 

And No. 5, the first industry, and part of our society that will 

be devastated by this, is seafood, and certainly I want to talk about 

that with our witnesses. 

Thank you, Madam Chair. 

[The referenced letter follows:] 
8 
9 

Senator BOXER. Thank you, Senator. 

Senator Cardin. 

OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND 

Senator CARDIN. Well, Madam Chair, first, thanks for holding 

this hearing. 

Clearly, our first priority right now is to clean up and mitigate 

the damage that has already been caused and to find out what 

happened in the Gulf of Mexico and to learn from this. That is our 

first priority. 

I have the honor of chairing the Subcommittee of Water and 

Wildlife of the Environment and Public Works Committee. And we 

have a responsibility to understand what this is going to cause to 

our environment. It is a reminder to me that we need an energy 

policy in this country that makes us secure, deals with economic 

job growth and deals with our environment. And this oil spill, to 

me, is just another reminder that we need to get on with that 

work. We also need an alternative to oil. That is clear to me. And 

this bill only underscores that. 

This spill is going to have a devastating impact on wildlife and 

water quality. There are 280 species of migratory and resident 

birds that go through the Gulf, coming from Canada to South 

America. Five species of sea turtles, 20 species of whales and dolphins, several species of tuna, swordfish, grouper, snapper and 

other fish, shrimp, oysters and blue crab. So, this is going to have 

a major impact on the environment, not only of the Gulf of Mexico 

and the surrounding States, but for the entire region around there. 

And I have not even addressed the consequences if the BP spill 

gets into what is known as the Loop Current that Senator Nelson 

continues to remind us about. That literally could bring the oil up 

the Atlantic Coast and could affect the Chesapeake Bay, 

Assateague, and Ocean City in my home State of Maryland. 

That is why I was relieved when the President said that Site 

220—it is a lease-sale 220, offshore from the Maryland coast about 

50 miles—that he is going to put a hold on that effort. This is real, 

that we could have additional drilling in the mid-Atlantic. The 

President said he will put a hold on it. I think we need to have 

a permanent ban. 

And quite frankly, I think we have a responsibility to stop further explorations in new areas. I am particularly concerned along 

the Atlantic. If we had a similar episode along the mid-Atlantic, it 

would have generational impact on the Chesapeake Bay, on our 

beaches and our economy. It is just not worth the risk. 

And yes, our first priority will be to clean up and mitigate. But 

I hope we will learn from what happened in the Gulf and not put 

other communities at such risk. 

There is a better way for energy for America. We know that. Let 

us get on with an energy policy that makes sense for our economy, 

makes sense for our environment, and makes sense for our security. 

Senator BOXER. Thank you, Senator Cardin. 

Senator Alexander. 
10 

OPENING STATEMENT OF HON. LAMAR ALEXANDER, 

U.S. SENATOR FROM THE STATE OF TENNESSEE 

Senator ALEXANDER. Madam Chair, thank you for holding the 

hearing. 

This is an environmental catastrophe. We need to stop the spill, 

repair the damage, and find out what happened. But I would like 

to make three points. 

First, that, unfortunately, all forms of energy have its risk. Connecticut knows about gas plants blowing up. West Virginia knows 

about coal mine tragedies. Tennessee knows about coal ash spills. 

And even in some of the cleaner forms of energy, as unfortunate 

as the oily waterfowl images that we see are, the American Bird 

Conservancy might want us to remember that the current 225,000 

wind turbines that we have in America kill 275,000 birds a year, 

and one wind farm in California killed 90 golden eagles in 1 year. 

So, there are risks in every form we have. 

Second, this should spur us more rapidly toward clean energy. 

There is bipartisan support for that on this Committee and in the 

Congress. First, electric cars. If we electrified half of our cars and 

trucks in 20 years, which we could do without building a new 

power plant by plugging them in at night—it is a very ambitious 

goal—that would be the best way to reduce our use of oil. 

Yet we would still need, by most estimates, about 12 million bar- rels a day, and if we did not, we would have $14 and $16 gasoline. 

We would still use a lot of oil. And in the Gulf right now, thousands of wells produce about one-third of all the oil that is produced in our United States. 

Third, we need to focus on energy research and development. We 

have strong bipartisan support for that, for finding the 500-mile 

battery, the solar panel that is one-fourth as cheap as it is today, 

the way to recapture carbon from coal plants. 

Finally, I would suggest something that might not seem so obvious which is that oil regulators might learn from nuclear regulators. The number of persons who have died from a nuclear accident at a commercial plant in the United States is zero. The number of sailors who have died in a nuclear navy, based upon a nuclear reactor, is zero. 

Is the regulatory responsibility for oil spread too thin? There are 

14 agencies or so who look after oil. One, the Nuclear Regulatory 

Commission, looks after nuclear power. 

Second is accountability. The Navy has a remarkable safety 

record operating reactors. This is because of accountability. A 

former sub captain, Bill Ostendorff, now a Commissioner of the Nuclear Regulatory Commission, testified last week before this Committee that every officer, every captain, knows his mistakes will be 

carried with him through his career, and a fourth of his commanding officer classmates were disciplined at some point in their 

careers. Maybe we need some of that kind of accountability in oil. 

And finally, the nuclear industry has shown that safety can be 

efficient as well as cheap. We now run our reactors faster than 

anybody in the world 90 percent of the time, and that is efficient, 

and that is cheap. 

So, I think there are lessons that can be learned from the nuclear industry, and there are clear, clean energy options, nuclear, 
11 

electric cars and energy research and development that we can 

pursue in a bipartisan way. 

Thank you, Madam Chair. 

Senator BOXER. Senator, thank you. And as you know, we all 

want to work with you in terms of your recent catastrophe from the 

flooding. We are working together to try to help you on that. 

Senator ALEXANDER. I know that you are, and I thank you, and 

I thank Senator Inhofe both, for your—— 

Senator BOXER. I know how hard you have been pushing on that, 

and we are ready to help. 

Senator ALEXANDER. Thank you so much. 

Senator BOXER. Senator Klobuchar. 

OPENING STATEMENT OF HON. AMY KLOBUCHAR, 

U.S. SENATOR FROM THE STATE OF MINNESOTA 

Senator KLOBUCHAR. Thank you very much, Madam Chair. 

On Friday I saw firsthand the miles and miles of orange in the 

sea, the oil slick. The scope of this disaster is staggering. But for 

11 families, the lost cannot be quantified. Eleven families lost a 

loved one in this tragedy, and I can only imagine what their families are going through. 

I could not help but think of our bridge collapse on August 1, 

2007. I said that day a bridge in the middle of America just should 

not fall down. Well, an oil rig off the pristine shores should not just 

explode in a massive fireball and threaten our Nation’s coastline. 

Madam Chairman, we all know that accidents happen. But some 

accidents are not acceptable. It is not acceptable for a floating oil 

rig the size of a football field to burst into flame. It is not acceptable that 11 people died, that thousands of our Nation’s rarest and 

most precious wildlife are threatened, and that the livelihood of 

millions of people on the Gulf Coast has been turned upside down. 

As a former prosecutor, I know that when tragedies strike, people want answers. The American people want to know when this 

disaster will end. First and foremost, they want to know how it will 

end. They want to know who is responsible. They want to ensure 

that the victim’s families and the American taxpayers are adequately compensated and that measures are taken so that an incident like this never happens again. 

I saw when I was there how hard Federal officials, countless volunteers, industry employees are working to clean up the oil and 

prevent further leakage. But there are still many questions that 

need answers. 

BP was responsible for a similar explosion in March 2005 that 

killed 15 employees, left 170 injured and prompted the U.S. Chemical Safety and Hazard Investigation Board to conclude that—and 

this is a quote—the Texas City disaster was caused by organizational safety and safety deficiencies at all levels of the BP Corporation, warning signs of a possible disaster were present for several 

years, but company officials did not intervene effectively to prevent 

it. 

The American people want to know what changed between the 

2005 disaster and the disaster last month. Mr. Probert, the American people also would like to know if Halliburton cement work 

somehow contributed to this disaster. And the people in our coun-
12 

try are not dumb. They know that in instances like this there is 

going to be a lot of finger pointing, like when a group of kids knock 

a baseball through the neighbor’s window and none of the kids 

want to own up to the mistake. 

But in this case the consequences are not simply the cost of repairing a broken window. For 11 families, the consequences are too 

difficult to contemplate. For the American people, the consequences? Well, it could be one of the most costly environmental 

disasters in our history. 

Madam Chairman, the role of this Committee is to examine the 

costs and associated responsibilities to look at the environmental 

damage. I hope the testimony at today’s hearing will provide the 

answers that the America people are waiting for. 

My major focus after seeing this disaster is to make sure that it 

never happens again and to end it as soon as possible. 

I thank you for convening this hearing. 

Senator BOXER. Thank you very much, Senator. 

Senator Whitehouse. 

Senator WHITEHOUSE. I would be delighted to yield to Senator 

Specter. I understand that he—— 

Senator BOXER. Senator Whitehouse yields to Senator Specter. 

Senator Specter. 

OPENING STATEMENT OF HON. ARLEN SPECTER, 

U.S. SENATOR FROM THE STATE OF PENNSYLVANIA 

Senator SPECTER. Thank you, Madam Chair, for convening these 

hearings. 

I think that rather than viewing this catastrophic spill as an impediment to establishing a national energy policy we should use it 

to spur us on. Because we know that we cannot rely on oil drilling 

offshore. 

I believe that these hearings really need to explore a number of 

questions that have been raised as to the cause of the incident. 

First, the allegation has been made that the technology has not 

changed much in 20 years. Booms, skimmers, chemical dispersants. 

They have played down the possibility—the oil companies have— 

of uncontrolled blowouts. They said that blowout preventers were 

practically foolproof. But Government regulators, back in 2003, had 

disputed that. 

The underground blowout in East Timor last year was a warning. It leaked for some 10 weeks, causing enormous damage. There 

is evidence that the industry was not willing to pay for enough 

boats and booms to enclose such a fast growing spill. The oil companies could have had some version of the containment dome ready 

before the spill rather than building one after it happened. 

These are issues these hearings need to explore, and we need to 

take whatever steps are necessary through regulation to prevent a 

recurrence. 

This Committee reported out a bill some months ago, and a number of our colleagues, Senator Kerry and Senator Lieberman, are 

working on legislation. And I think this incident underscores the 

need to move ahead. 

But we now know that, on the current state of the record, that 

we cannot rely on offshore drilling, that the environmental risks 
13 

are much too serious. We have quite an array of Senators from 

States impacted by this array, more Senators on the witness table 

than usually appear on the Senate floor, almost a quorum at the 

witness table. And the stream may carry it up throughout the entire East Coast, so there is more concern to be had. 

I look forward to the cooperation of the Republicans with the 

Democrats to move ahead to find answers to these questions. 

Thank you, Madam Chair. 

Senator BOXER. Thank you very much, Senator Specter. 

Senator Whitehouse. 

OPENING STATEMENT OF HON. SHELDON WHITEHOUSE, 

U.S. SENATOR FROM THE STATE OF RHODE ISLAND 

Senator WHITEHOUSE. Thank you, Madam Chair. 

First, let me join my colleagues who have expressed their condolences to the families of the 11 workers who lost their lives, and 

I join in wishing a speedy recovery to all of those who are injured. 

This incident clearly requires us to reset a lot of assumptions. 

We were told something like this cannot happen. It did. We were 

told that the industry was prepared for it. In fact, it looks as if the 

contingency planning was far from adequate. We are told we have 

adequate environmental laws. It is not clear that our environmental laws are strong enough and adaptive enough for a continuing spill of this variety that at present has absolutely no end 

in sight. 

There are questions of accountability and cost, and who should 

answer for this, and how much it will cost, and why taxpayers 

should end up paying anything for this when all is said and done, 

and why companies should have limits on their economic damages, 

and what are the—in the context of the sort of dollars at stake 

here—microscopically small levels of liability. 

Finally, we were told that drill, baby, drill was the solution to 

our energy problems. I think that anybody who really believes that 

should go tell that to the tourist economy of Florida. I see Senator 

LeMieux here. Go tell that to the fishing community of Louisiana. 

Senator Landrieu is here. 

Clearly we need, as Senator Cardin said, a review of our energy 

strategy. And as Senator Specter said, let us use this as a time to 

move forward and protect ourselves against this kind of disaster, 

enhance our national security, and improve our economy, our jobs 

and our environment. 

Senator BOXER. Senator Udall followed by Senator Merkley, and 

Senator Baucus should be back. 

We are going to start with Senator Shelby because we got a note 

that he is needed on the floor at 10 after, and he is the most senior 

here. But we have to go through quickly, and Senator, we have 

three more, and then you will be on. 

Senator Udall. 

OPENING STATEMENT OF HON. TOM UDALL, 

U.S. SENATOR FROM THE STATE OF NEW MEXICO 

Senator UDALL. Thank you, Madam Chair. 

I also join in the condolences to the families. 
14 

Following this disaster, many industry observers have expressed 

shock and surprise that such a catastrophic failure could occur. 

Just last year, however, a major blowout and serious oil spill occurred off the coast of Australia. That blowout and explosion occurred just after the well was capped, eerily similar to what happened in the Gulf. In that case, the blowout preventer did not 

work. 

I also understand that there is a 1999 report by the MMS that 

shows that blowout preventers failed over 100 times in the late 

1990s in more minor accidents. 

Information is also coming forward that unusual procedures were 

used in cementing this well, and I think the regulators need to 

focus on that aspect, and we should be able to hear from them. 

But the big question it seems to me for the industry is, in the 

future, will the industry support strong, mandatory regulatory 

standards for cementing and capping wells rather than relying on 

the blowout preventers which clearly are not a reliable failsafe solution? 

Secretary Salazar has come forward with suggestions for reform 

within the Department of Interior. One of his ideas is to try to 

build a firewall between leasing and safety, and I welcome that 

suggestion. Most of the countries in the world that have this kind 

of activity going on within their government rely on a separation 

between leasing and safety. And so, I think it is very important 

that this Administration move forward with that. 

I am pleased that the Administration is moving forward with 

this reform. But industry must also change its deregulatory and 

self-regulatory attitude. Regulations impose modest costs, but these 

highly profitable companies can easily afford them. 

Compared to an oil spill, regulation is a bargain. 

Thank you, Madam Chair. 

Senator BOXER. Thank you, Senator. 

Senator Merkley. 

OPENING STATEMENT OF HON. JEFF MERKLEY, 

U.S. SENATOR FROM THE STATE OF OREGON 

Senator MERKLEY. Thank you, Madam Chair. 

I, too, like my colleagues, express my thoughts for the families 

who have lost loved ones in this tragedy and the thousands of families who have had their livelihood affected by this tragedy. 

I will be brief so we can get to our panel. And just note that I 

will be very interested in understanding the types of rigorous examination and testing of blowout preventers that occurred or did 

not occur preceding this particular accident, and all that we can 

learn to avoid a disaster like this in the future, and whether there 

is, in fact, any real set of technology that can make deep water 

drilling safe. 

I know the citizens of Oregon have their doubts because of the 

fact that, even in an unlikely event, an event could have such an 

impact upon our salmon, upon our shellfish industry, upon our 

coasts, upon the entire ecosystem off the coast of Oregon. I have 

had those reservations for a long time, and I will be looking to 

learn a great deal through this afternoon’s hearing. 

Thank you. 
15 

Senator BOXER. Thank you so much. 

Since Senator Baucus is not back yet, when he comes, we will 

hear from him. This is the order of seniority: Shelby, Landrieu, 

Nelson, Menendez and LeMieux. 

Senator Shelby. 

OPENING STATEMENT OF HON. RICHARD C. SHELBY, 

U.S. SENATOR FROM THE STATE OF ALABAMA 

Senator SHELBY. Madam Chairman, Ranking Member Inhofe, 

thank you for allowing me to testify before the Committee today. 

I traveled to Alabama last week and witnessed firsthand the destruction caused by the oil rig explosion. What I saw was disturbing. Even today the oil continues to flow at a rate of 5,000 barrels, as a lot of you have pointed out. Tar balls have washed up 

on the shores of Dolphin Island, Alabama. As long as this oil continues to pour into the Gulf, we have a real—and an unprecedented—disaster. 

As we continue to respond to this disaster, our main objective 

must be to stop the flow of oil. Until this leak is stopped, we cannot 

adequately protect our Gulf. Second, clean up should be rapid and 

with as little environmental impact as possible once that happens. 

As the responsible party, BP must be held accountable, and the 

Federal Government should ensure that BP upholds its financial 

obligations. I do not believe that BP—or any company for that matter—should solicit hazard mitigation solutions after an accident. 

Third, this oil spill could become our Nation’s worst environmental disaster in decades. It already threatens hundreds of species of fish, marine life, birds and other wildlife along the Gulf 

Coast. We need to ensure that techniques utilized in recovery efforts are safe and that we protect our environmentally sensitive 

areas. 

Finally, we should make every effort to help our coastal communities get back on their feet with minimal disruption and financial 

harm. 

How will the fishing industry weather the potential economic disaster? Good question. What will happen if Gulf seafood is contaminated and unable to be sold? We need to plan for the long-term impact that this accident will have on the Gulf Coast. 

In the wake of this accident, many are understandably concerned 

about the safety and environmental risk associated with offshore 

drilling, and with good reason. Simply halting all offshore development, I believe, will not address our energy needs and would immediately increase our dependence on foreign oil. This accident should 

not be used, in my judgment, as an excuse to halt the gains the 

U.S. has made in developing domestic energy resources. 

Instead, Madam Chairman, we should proceed in a measured 

manner to fully understand the true cause of this accident and review procedures and protocols currently in place that oversee this 

industry. We need to ask several questions, in my judgment. 

First, why did this happen? We need to examine the role the 

Minerals Management Service, the agency responsible for both environmental enforcement and financial administration of offshore 

drilling leases, played in this accident. In 2008 the Minerals Management Service was exposed, and I quote, as ‘‘a cesspool of corrup-
16 

tion and conflicts of interest’’ with regulators routinely accepting 

gifts from oil and gas companies. Is this why regulators did not 

mandate the use of a remote control device to shut down the well? 

I do not know. But it is a good question. 

Second, what role did BP play in this explosion? Were cost cutting measures implemented at the detriment of safety? 

Finally, is the Oil Spill Liability Trust adequate to deal with 

such disasters? Since the Fund’s inception in 1986, the cost of clean 

up for such severe environmental disasters has kept pace with inflation while the cap on individual claims has not. 

This accident, I believe, Madam Chairman, serves as a reminder 

that there are risks involved in meeting our energy needs as a 

country. 

Madam Chairman, I speak today to remind the Committee of the 

importance of proactive rather than reactionary measures, foresight rather than hindsight. I ask you to continue to consider the 

needs of our Gulf Coast as we move forward with our cleanup and 

restoration efforts. 

And Madam Chairman, thank you for your courtesy here today. 

[The prepared statement of Senator Shelby follows:] 

STATEMENT OF HON. RICHARD C. SHELBY, 

U.S. SENATOR FROM THE STATE OF ALABAMA

Madam Chairman and Ranking Member Inhofe, thank you for allowing me testify 

before the Committee today. 

On April 20, 2010, the Transocean-owned Deepwater Horizon drilling rig exploded, sending hundreds of thousands of gallons of oil toward our coastal shores, 

estuaries, and beaches. Alabama is bracing for the environmental and economic impact to our coastline. At this point we do not know how severe the impact will be, 

nor can we estimate the long-term effects. However, we have already seen evidence 

that this spill may devastate our Gulf Coast region—an area that has continually 

suffered one disaster after another. 

Madam Chairman, I traveled to Alabama and witnessed firsthand the destruction 

caused by this catastrophe. What I saw was disturbing. Even today, the oil continues to flow at a rate of 5,000 barrels a day. Tar balls have washed up on the 

shores of Dauphin Island, Alabama. As long as this oil continues to pour into the 

Gulf we have a real and unprecedented disaster. 

As we continue to respond to this disaster, our main objective must be to stop the 

flow of oil. I am concerned that initial reports of the complexity and volume of the 

spill were underestimated. It seems as if the amount of oil leaking from the wells 

more than tripled overnight. At this rate, the spill could easily eclipse the 1989 

Exxon Valdez accident—the worst oil spill in U.S. history. 

Second, clean up should be rapid and with as little environmental impact as possible. As the responsible party, BP must be held accountable, and the Federal Government should ensure that BP upholds its financial obligations. I do not believe 

that BP, or any company for that matter, should solicit hazard mitigation solutions 

after an incident. Just as we would never send our warfighters into combat without 

a contingency plan, we should consider strengthening regulations on industries that 

engage in high risk operations that affect our citizens and our environment. 

BP’s most promising solution for stopping the oil flow involved a 100-ton concrete 

and metal box designed to cover and capture the oil that’s now flowing into the Gulf. 

It failed over the weekend. Other suggestions as to how to clean up this mess have 

ranged from the entrepreneurial to the MacGyver-esque. Portions of the Florida 

coast will use bales of hay, while human hair clippings are being stuffed into casings to augment boom reserves, and pounds of peat moss are being considered to 

help soak up surface oil. This is not what we should expect from the world’s fourth 

most profitable company. 

Third, this oil spill could become our Nation’s worst environmental disaster in 

decades. It already threatens hundreds of species of fish, marine life, birds, and 

other wildlife along the Gulf Coast. We need to ensure that techniques utilized in 

recovery efforts are safe and that we continue to do everything possible to protect 

our environmentally sensitive areas. 
17 

We should address the recovery techniques used to clean up the oil slick. While 

dispersants may be the best action to mitigate the oil spill, we must understand 

what the long-term effects will be on the ecosystem. It is my understanding that 

dispersants have never been used at this concentration, and thus far it is publicly 

unknown what chemicals even make up the dispersants being used in the Gulf. All 

the facts must be provided to the public so we can have a full and complete picture 

about the environmental impacts dispersants may cause. 

Finally, we should make every effort to help our coastal communities get back on 

their feet with minimal disruption and financial harm. Fishermen are now placing 

booms in the Gulf instead of hooks. But Madam Chairwoman, these jobs are only 

temporary. How will the fishing industry weather the potential economic disaster? 

And what will happen if Gulf seafood is contaminated and unable to be sold? During 

the beginning of the tourist season, the Alabama coast has already begun to deal 

with smaller beach crowds and rental cancellations. We need to plan for the longterm impacts this accident will have on the Gulf Coast. 

In the wake of this accident, many are understandably concerned about the safety 

and environmental risks associated with offshore drilling. We are often quick to 

turn to reactionary and overly stringent public policy as a stopgap measure. Although my home State is affected, I caution against hasty reform. Simply halting 

all offshore development will not address our energy needs and would immediately 

increase our dependence on foreign oil. We cannot forget that our Nation is still dependent on millions of barrels of oil every day from overseas. This accident should 

not be used as an excuse to halt the gains the United States has made in developing 

domestic energy sources. We must let the investigation into this accident move forward and be careful to avoid rash or precipitous actions. 

Instead, we should proceed in a measured manner to fully understand the true 

cause of this accident and review procedures and protocols currently in place that 

oversee this industry. We need to ask several questions. 

First, why did this happen? 

We need to examine the role the Minerals Management Service, the agency responsible for both environmental enforcement and financial administration of offshore drilling leases, played in this accident. In 2008 the Minerals Management 

Service was exposed as ‘‘a cesspool of corruption and conflicts of interest,’’ with regulators routinely accepting gifts from oil and gas companies. 

U.S. regulators did not mandate the use of a remote controlled device to shut 

down the well should the oil rig become damaged or require evacuation. Yet these 

devices are required by Norway and Brazil. While the efficacy of the device is unclear, the Minerals Management Service did consider requiring its use only to decide 

‘‘acoustic systems are not recommended because they tend to be very costly.’’ No one 

can state, unequivocally, that a remote control device would have prevented this disaster. But it is also unknown whether it would have provided a last resort protection against underwater spills. Madam Chairman, it does not appear that the Minerals Management Service’s oversight is sufficiently protecting our Nation from environmental disasters. 

Second, what role did BP play in this explosion? 

In 2007 Congress investigated one of the worst workplace accidents in the U.S., 

a massive explosion at BP’s Texas City Refinery in March 2005 that killed 15 people 

and injured 180. The U.S. Chemical Safety Board, an independent Federal agency, 

investigated the accident and stated, ‘‘The Texas City disaster was caused by organizational and safety deficiencies at all levels of the BP corporation. The combination of cost cutting, production pressures and failure to invest caused a progressive 

deterioration of safety at the refinery.’’ Was this lack of concern for safety part of 

BP’s corporate culture that translated to potential questionable standards on the 

rig? The Justice Department must continue their investigation to determine whether malfeasance occurred. 

Finally, is the Oil Spill Liability Trust fund adequate to deal with such disasters? 

Since the fund’s inception in 1986, the cost of clean up for such severe environmental disasters has kept pace with inflation, while the cap on individual claims 

has not. While we should not be reactionary in our energy policy, our job as lawmakers is to examine where there are breaks in the chain and to make sensible repairs. 

This accident serves as a reminder that there are risks involved in meeting our 

energy needs as a country. But even with this tragedy, the United States still has 

the most rigorous and robust environmental standards of any oil producing country 

in the world. 

Madam Chairman, I speak today to remind the Committee of the importance of 

proactive rather than reactionary measures; foresight rather than hindsight. I ask 
18 

you to continue to consider the needs of our coast as we move forward with our 

cleanup and restoration efforts. 

Senator BOXER. Senator Shelby, thank you so much, and we really appreciate your being here. 

Senator Landrieu. 

OPENING STATEMENT OF HON. MARY L. LANDRIEU, 

U.S. SENATOR FROM THE STATE OF LOUISIANA 

Senator LANDRIEU. Thank you. Madam Chair, thank you for taking the initiative to hold this hearing today. And I thank all the 

members of this Committee for your very thoughtful remarks, particularly in regards to the men that were lost in the incident and 

their families. Many of them came from the Gulf Coast. 

Madam Chair, you are aware of the ongoing and urgent needs of 

Louisiana’s coast. I have brought this to your attention, as well as 

other members of our delegation, for some time now. But as we 

begin to understand this tragedy and to put it in perspective, I 

think a few facts are important. And I gave the same testimony to 

the Energy Committee this morning as I am giving to the Environmental Committee because I think it is important to be consistent 

and balanced in our message. 

There are over 300,000 men and women that work in the oil industry in Louisiana. There are 1.8 million that work nationally. 

And many people that work in this industry are proud of the contributions that this industry makes to our country every day. We 

owe the workers of this industry a debt of gratitude for what they 

do. It is dangerous, hard work, sometimes separated from their 

families. And the members of the Gulf Coast delegation have a resolution before the Senate that I hope we will pass today. 

There is some other perspective that is important. From 1947 

until today there have been 42,645 wells drilled in State and Federal waters in the Gulf of Mexico alone. The first deep well was not 

drilled yesterday. It was drilled 31 years ago in 1979. That well 

was drilled in 1,000 feet of water. 

We have 2,250 deep water wells drilled since then. In fact, as I 

questioned the executives this morning from BP and Transocean, 

Madam Chair, there are 120 deep water wells operating worldwide 

today. The record will show that from 1947 until 2009, 175,813 barrels have been spilled out of 16 billion produced. That is 1,000th 

of 1 percent of total production. 

Madam Chair, I know that this Committee has its eyes on the 

environment. We in Louisiana live in that environment. We do not 

only have our eyes in it, we have our hearts invested in it. And we 

are making a living on that delta. But we need the oil that comes 

from offshore to keep this economy moving. We must examine what 

went wrong, weigh the risk and rewards, and fix what is broken 

and move on to get this country more independent of foreign oil. 

If we could do without this oil, we would. But we simply cannot. 

Not today, not in the near future, maybe some time in the distant 

future. But we use 20 million barrels of oil a day. We are only producing 9 here at home. If we just transport this off of our shore, 

we transport the environmental risk and we transport jobs. 
19 

We must find out what went wrong, hold BP accountable, and on 

the record they said they will be accountable, under oath, for all 

economic damage. 

And finally, and thank you for your patience; our delegation has 

repeatedly come to this Congress for the last 25 years saying yes, 

these resources belong to the Federal Government. But the Gulf 

Coast States, including Florida, that do not drill, and I will say this 

on their behalf, are absorbing 100 percent of this risk. And so revenue sharing is very important from the billions of dollars generated from this industry to make sure it is safe, that we have the 

appropriate response, and this country gets the energy it needs. 

I agree with Senator Alexander about nuclear power and its 

promise. But for right now let us focus on holding those responsible 

for the damage, let us focus on moving this industry forward in a 

more safe way, and hold people responsible so all economic damages to anyone affected are met. 

Thank you again for your initiative. 

[The prepared statement of Senator Landrieu follows:] 

STATEMENT OF HON. MARY L. LANDRIEU, U.S. SENATOR FROM THE STATE OF LOUISIANA

Thank you, Chairman Boxer, for holding this important hearing today. And thank 

you for your determined commitment to the Gulf Coast recovery efforts and for your 

understanding of the urgent needs of Louisiana’s coastline and wetlands. 

Our Nation lost 11 men in this unprecedented accident. Our thoughts and prayers 

are with their families as well with those injured. 

As my colleagues and I outline our differing views on energy policy today, I believe it is important that we do not lose sight of this key point: the men and women 

that were on board the Deepwater Horizon on that fateful day were and are hardworking Americans. 

WHAT LESSONS SHOULD WE LEARN?

Some suggest that we put a halt to all new offshore drilling. I don’t believe that 

we can retreat from domestic energy production. Banning offshore drilling will not 

keep our workers safe, and it won’t prevent our shores from getting stained with 

oil. 

If we stop drilling here, then we will simply import more than we already do from 

Saudi Arabia, Nigeria, Venezuela and elsewhere. 

Even if we simply import our oil, our beaches are very much at risk. That’s because we need to get it from overseas and into our gas tanks in massive oil tankers. 

And periodically those tankers spill. In fact, according to the National Academy of 

Sciences, oil tankers spill about 4 times as much oil as offshore drilling does, on 

average. 

It is simply not right to export our energy production overseas to countries who 

care nothing for the environment and who have few resources to mitigate the impacts. 

America must reduce its oil consumption for national security and for the environment. But we need to be realistic. Today America consumes about 20 million barrels 

of oil each day. We produce about 5 million barrels of oil here. We produce another 

3 million barrels worth of biofuels. That means we would need to reduce our consumption by 60 percent just to become energy secure. Message: Oil is here for the 

foreseeable future. Drilling for it here is the environmental choice. 

WE NEED TO MAKE OUR COASTS MORE RESILIENT

Louisiana is just beginning to see the damage wreaked by this oil spill. Unfortunately, this oil is spilling on a coast that is already in a desperately fragile condition. 

When the oil reaches the wetlands, it can coat, suffocate and kill the grasses 

whose web of roots holds the marshes in place. Then all that will be left is mud, 

which will simply sink into the seawater. 

Those wetlands buffer the region from storm surges—unless the marsh grasses 

are so depleted that they wash away. Normally, the wetlands would naturally re-
20 

plenish themselves with sediment that washes down the Mississippi River—except 

that sediment has been channeled away by levees, pipeline cuts, and other energyrelated development done decades before we understood its impacts. 

Louisiana’s wetlands are sinking and disappearing into the Mississippi River 

Delta at a terrifying rate: nearly a football field every 30 minutes. An area half the 

size of Washington, DC, disappears every year. 

Louisiana’s wetlands are nature’s levee system—they diminish the destructive 

force of hurricanes destructive power by reducing storm surge and absorbing wave 

energy. 

Scientists estimate that for every 2.4 square miles of wetlands, deadly storm 

surges are lowered by about 1 foot. A recent study indicates that if some of Louisiana’s barrier islands are washed away, wave height could increase by 700 percent. 

Those same barrier islands—the Chandeleur Islands—have oil washing ashore 

today. That oil threatens their vegetation, and if the vegetation dies, the island will 

soon wash away. 

If those islands wash away, one LSU researcher estimates that the barrier coast 

can expect increases in storm surge and wave height of greater than 6 feet. 

America needs oil from the Gulf of Mexico. Revenue sharing helps us do it 

sustainably. 

The Gulf of Mexico accounts for one out of every four barrels of oil produced in 

the United States. 

The Gulf Coast is home to 40 percent of America’s refining capacity, where crude 

oil is converted into gasoline for our cars, heating oil for our homes, jet fuel, diesel 

and other oil products. 

Those are critical assets, and we can’t simply wish away the fact that we need 

them. 

That is why this incident only bolsters the case for revenue sharing as an appropriate policy to compensate the States that accept oil and gas production off their 

coasts. 

In the Domenici-Landrieu Gulf of Mexico Energy Security Act, the linkage between production and impact was strongly reflected in the provisions that dedicate 

OCS royalties to the coastal protection and restoration fund. 

Revenue sharing won’t prevent these accidents, nor will it erase their environmental impact, but it is equally unrealistic to expect oil and gas production to come 

to a halt in the United States. 

The compromise is this: revenue sharing serves as compensation for the risk associated with energy production. 

That money should be invested in coastal sustainability and resiliency. That way, 

our coast is at least in a better position to respond to/recover from these incidents 

as opposed to the current scenario where we see the potential for a significant impact on an already deteriorated coast with no ongoing compensation to mitigate both 

direct and indirect impacts of energy production. 

Healthy wetlands help mitigate the impacts to further inland estuaries, and 

healthy barrier islands can serve as a blockade, stopping the oil from passing inward. 

That is why it is so important that States with oil and gas production off their 

shores get a portion of those revenues to ensure their coastal areas are healthy and 

thriving, providing the best protection against any disaster. 

CONCLUSION

Today I hope that we can begin to understand what went wrong on April 20th 

when 11 men lost their lives. And I hope that we can take steps to reduce the 

chances that it will ever happen again. 

But I also hope that we learn the right lessons. 

Senator BOXER. Senator, thank you so much. And we know that 

you are deeply involved in this recovery effort and recovering these 

industries that potentially could be very badly damaged. 

Senator Baucus, I promised you when you came back, so please 

proceed. 

Senator BAUCUS. OK. 

Senator BOXER. And then we will go to, just to make it clear, 

Senators Nelson, Menendez and LeMieux. 
21 

OPENING STATEMENT OF HON. MAX BAUCUS, 

U.S. SENATOR FROM THE STATE OF MONTANA 

Senator BAUCUS. Thank you, Madam Chairman. I will be very 

brief. And I thank the indulgence of my colleagues both on the 

Committee and the panel for letting me proceed here. I am not 

going to be long. We all have the same views. 

For me, it is important that we protect all our natural resources, 

wherever they may be. The Gulf is clearly one. We have heard from 

the Senator from Maryland about the Chesapeake Bay. In my 

State of Montana, it is Glacier Park, it is Yellowstone Park, the 

natural resources there. And by the way, today is the 100th anniversary of Glacier Park. 

BP has owned gas leases up on the North Fork of the Flathead 

which adjoins Glacier Park. I spent some time talking to British 

Petroleum, and just recently—I take my hat off to them—they have 

withdrawn those leases, about 168,000 acres worth. Excuse me. 

[Remarks off microphone.] 

Senator BAUCUS. Excuse me, the wrong company. ConocoPhillips 

has run those leases. But I have talked to BP many times about 

whether they should proceed or not. BP has coal bed methane interests in that very same area, and they, too, have announced that 

they are not going to proceed with their coal bed methane. 

My main point here is that the Gulf is an extremely environmentally sensitive area. I am not convinced, based upon the press 

reports I have read, that sufficient precautions were taken either 

by the relevant agency or by the company. 

I read—I do not know if this is true or not—that of the 15 or 16 

preventers that are used in situations like this, the vast majority 

of them have failed in the past. And I think those were at depths 

not nearly as deep as 1 mile. 

The whole thing is life is, if you can do it right, do it right the 

first time. And it just seems that BP and the agency, Deepwater 

Horizon, all the relevant parties here, did not do it right the first 

time. And by the first time I mean make sure that all the protections are first in place, make sure there is sufficient redundancy, 

and make sure there is an adequate response plan if something 

does go awry. 

It just seems like a lot of mistakes were made. I do not know to 

what degree it is human error or technical error or what combination, but we are going to find out more in the next several weeks 

and months as this unfolds, and that will enable us to more appropriately take the proper action. 

I just say at this time that I am quite distressed. I support oil 

and gas, offshore oil and gas development. But not like this. I saw 

a map, it was in the New York Times about 4 or 5 days ago, and 

it showed hypoxia is growing in the Gulf, near Louisiana especially. 

But a lot of that is runoff. It is not just oil and gas. It is agriculture 

runoff. But we are going in the wrong direction here, folks. We 

need oil and gas, but we are going in the wrong direction and not 

taking sufficient protection. 

I believe, frankly, that all of us have a moral obligation when we 

leave this place to leave it in as good a shape, or better shape, than 

we found it. We are not here forever. That pertains to economic opportunities for our people. It also pertains to the environment. I 
22 

just feel here that we have kind of dropped the ball here. The large 

‘‘we.’’ And I hope we do not let that happen again. 

Thank you, Madam Chairman. 

Senator BOXER. Thank you very much, Senator. 

Senator Nelson. 

OPENING STATEMENT OF HON. BILL NELSON, 

U.S. SENATOR FROM THE STATE OF FLORIDA 

Senator NELSON. Madam Chairman, one of my worst nightmares 

might be coming true. Because if this thing is not stopped, and it 

does not get stopped until the relief well is done in 3 months, then 

it is going to cover up the Gulf Coast. 

The wind is eventually going to keep it going south, and it is 

going to get into the Loop Current. And the Loop Current comes 

south and comes right around the Florida Keys where 85 percent 

of all the live coral reefs are in the entire country. 

And it becomes the Gulf Stream, and it hugs the east coast of 

Florida, and I mean literally hugs the coast. It is less than a mile 

off of the beach, the Gulf Stream, and it continues on up halfway 

up the peninsula of Florida before going a little bit out into the 

ocean. 

Then it continues right up, paralleling the coast all the way to 

Cape Hatteras, North Carolina, before it goes across the ocean past 

Bermuda and on to Scotland. 

So, if this thing is not stopped, we are looking at a major economic and environmental disaster affecting our State and the rest 

of the Gulf and the Eastern Seaboard of the United States. 

Now, first of all, I think it is clear that there sure should not be 

any more exploratory drilling until the investigation is completed 

between the Department of the Interior and the Department of 

Homeland Security. And I would argue that there clearly should 

not be any new drilling in new areas that have not been approved 

for lease, especially since almost 38 million acres are under lease 

in the Gulf of Mexico alone that have not been drilled. 

Since there has been such a push to put this off of Florida, I 

want to point out, remember the old saying, when Willie Sutton 

was asked why does he rob banks he said because that is where 

the money is. The oil is not off of Florida. 

[Chart shown.] 

Senator NELSON. This is, you cannot see it, but this is a fancy 

chart that tells you, from the Department of the Interior, that 90 

percent of the oil, the undiscovered oil in the Gulf of Mexico, is in 

the central Gulf and the western Gulf and only 10 percent of the 

undiscovered oil is in the eastern Gulf. 

And my question is, and I have raised this for years, is it worth 

the tradeoff to our economy in Florida, not only beaches, and we 

have more beaches, obviously, than any other State, but the economy to our fisheries, our fisherman, our oysters. Is it worth it, that 

tradeoff? Is it worth the tradeoff to national security in the largest 

testing and training area for the United States military in the 

world, which is basically the Gulf of Mexico off of Florida, for 10 

percent of the undiscovered oil in the Gulf of Mexico? And I think 

the answer is clearly no. 
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But what have we heard the last several years? We want to drill 

in the eastern Gulf. Well, in front of this Committee, you are going 

to have to face two things. You are going to have to face Minerals 

Management Service reform, and there is a sorry record, a record 

of incestuous relationships. You have seen the news stories of the 

sex parties and the pot parties. MMS needs to clearly be cleaned 

up. 

Second, you have jurisdiction in this Committee on the question 

of the liability. And there was an artificially low liability limit of 

$75 million. BP says it is going to exceed that, and the question 

is, how much? I think it is very reasonable to expect that you ought 

to consider raising that liability for economic damage to at least 

$10 billion. 

So, Madam Chairman, those are my heartfelt remarks. 

Senator BOXER. Thank you, Senator. They certainly were. 

Senator Menendez. 

OPENING STATEMENT OF HON. ROBERT MENENDEZ, 

U.S. SENATOR FROM THE STATE OF NEW JERSEY 

Senator MENENDEZ. Thank you, Madam Chairman and Ranking 

Member Inhofe, for the opportunity and the invitation to testify 

about my bill, joined by many of my colleagues here and on this 

Committee, the Big Oil Bailout Prevention Act. 

The bill would increase the cap on economic damages resulting 

from an oil spill from the current $75 million to $10 billion. Companion legislation would eliminate the $1 billion per incident cap 

on the Oil Spill Liability Trust Fund, and together they accomplish 

three things. 

First and foremost, the bill will make sure that people in communities injured by an oil spill would get compensated for their loss. 

Right now, fisherman, hotel owners and other people dependent on 

clean water and clean shorelines for their livelihood are collectively 

holding their breath, hoping this spill does not destroy fisheries or 

make landfall again, destroy beaches or estuaries. At the very 

least, they should feel confident that if economic damages do hurt 

them, they will be made whole. 

The second thing this bill does is to ensure that claimants will 

be made whole quickly. It is possible that other Federal laws or 

even State law will allow some claimants to be compensated for 

their losses even if a $75 million cap is hit. But we do not want 

another situation like that after the Exxon Valdez where it literally 

took two decades for some to get paid and some were never compensated because they gave up. 

Under the subsequent Oil Pollution Act, claimants can now 

quickly and efficiently have their claims processed up to $75 million. By raising the cap, we can ensure all victims can be compensated on time. 

Finally, the legislation will ensure that polluters are the ones 

compensating spill victims, not Federal taxpayers. We all know 

that when a crisis unfolds and the responsible parties cannot be 

made to pay for their damages, people will look to the Federal Government for help. Taxpayers should not have to pay for the misdeeds of oil companies or those who drill, period. 
24 

Madam Chairman, as the investigation into this matter goes forward, we will see blame cast far and wide for the accident. There 

is no doubt that mistakes will be found, that industry and regulators alike will be criticized for their arrogance in thinking a spill 

simply could not happen. 

But viewed from an economic perspective, the cause of the accident is quite clear. When you have an industry that does not have 

to pay the full costs of the damages they cause, they will automatically not invest enough in safety. If they know that they are on the 

hook for the first $75 million in economic damages, perhaps they 

will not invest millions in a new valve or even a few hundred thousand for an acoustic switch. 

For a business, decisions are simple. How will each decision 

maximize their profits? It is time for us to pass the Big Oil Bailout 

Prevention Act to force companies to bear the full costs of their 

damages and therefore give them the economic incentive to be as 

safe as possible. 

Now, some have suggested that despite the potentially astronomical damages in the Gulf the bill sets the cap too high. Well, given 

the fact that BP has earned $5.6 billion in profits—not proceeds, 

profits—in the first 3 months of the year, I think somehow they 

and others in that category will be OK. 

Our legislation has received wide support from both the House 

and Senate leadership, the White House, and many members of 

this Committee. 

Let me close and make one final point. Just because the crisis 

will undoubtedly result in new legislation, more safety regulations 

and new safety technologies does not mean that oil drilling will become completely safe. There is no such thing as too safe not to 

spill. We were told that. We have learned a different lesson. 

It is a lesson that certainly, for my home State of New Jersey, a $50 billion tourism industry that Senator Lautenberg and I represent, a major coastal fishing, fourth largest in the Nation, we 

cannot afford that type of drilling, that type of spill, on the beaches 

of New Jersey and the consequences that it will produce for a generation. 

That is what is at stake in the long run. But in the short run, 

Madam Chair, we should make sure that people, ultimately, will be 

compensated and not just simply rely on a company saying we will 

pay all legitimate claims, whatever that means. 

Senator BOXER. Senator, thank you. 

And finally, Senator LeMieux. 

OPENING STATEMENT OF HON. GEORGE S. LEMIEUX, 

U.S. SENATOR FROM THE STATE OF FLORIDA 

Senator LEMIEUX. Thank you, Madam Chair, and thank you, 

Ranking Member Inhofe, for allowing us to testify at this hearing 

today. 

I want to echo upon the comments of my senior Senator from 

Florida about the potential environmental and economic damage 

that this oil spill could cause to our home State. 

Florida is a State with 1,800 miles of coastline, 1,200 miles of 

sandy beaches. We have a $65 billion tourist industry. Last year, 

we welcomed 80 million visitors. Our salt water fishing industry 
25 

has a $5 billion impact on our economy, and there are 50,000 Floridians who are employed by that industry. Recreational boating 

has an $8 billion impact to our economy. It provides 222,000 jobs. 

I, like other folks who have testified here today, had the opportunity to fly out over the spill last week, last Monday. And you see 

the devastation that this oil spill is going to cause. And while we 

have all been hopeful that British Petroleum was going to be able 

to stop this spill, we are now 3 weeks after the spill started. The 

attempts to stop it have not worked. 

And I think if I could leave this Committee with a thought and 

one point to remember, it would be this. Everything must continue 

to be done to stop the oil spill, but right now the States in the Gulf 

need money to be able to put together mitigation teams, teams to 

prevent the oil from washing ashore. And they need substantial 

dollars to do so. 

We can have hearings, and you will have hearings, I am sure, 

to find out what went wrong and why it went wrong. You will have 

hearings to talk about what Federal agencies should have done better and should have worked better. 

What we need right now, for Florida, for Mississippi, for Alabama, for Louisiana and for Texas, because, as my colleague said, 

if this spill continues until the relief valves are drilled, we are 

going to have oil in the entire Gulf of Mexico which potentially cannot only get in the Florida Keys and into our reefs, but go all the 

way up the Atlantic side, is we need an evergreen fund of money 

that is put forth by British Petroleum right now, say put $1 billion 

in there. 

Let those dollars go to the States, let the States put emergency 

response teams up, just like we do during hurricanes. And we 

know how to do this. We are going to have local governments, business, volunteers, State government and county government all 

working together to mitigate that oil coming upon shore. We need 

to do this for our fisheries, we need to do this for our tourism, we 

need to do this for our environment, and we need to do it for our 

economy. 

So, there are a lot of good things that have been said here today. 

Madam Chair, that is the point that I really want to leave this 

Committee with is we do not need to just be worrying about all the 

reasons why this happened. We certainly need to continue to work 

to stop the oil from spilling. But we need dollars right now in the 

Gulf States to mitigate and prevent this oil from doing tremendous 

environmental and economic harm. 

Thank you, Madam Chair. 

Senator BOXER. Thank you very much. 

Thank you all, Senators, and I would ask at this time for the 

three panelists for Panel One. Actually, this was a prelude to Panel 

One. Lamar McKay is the Chairman and President of British Petroleum America. BP owns the lease from the Mineral Management 

Service to drill for minerals at the site of the ongoing spill. Steven 

L. Newman is the President and CEO of Transocean, which owns 

the oil drilling rig associated with the oil spill named the Deepwater Horizon. That rig was leased to BP. And Tim Probert, President of Global Business Lines and Chief Health, Safety and Environmental Officer for Halliburton. Halliburton led the cementing 
26 

efforts to temporarily cap the exploratory well involved in the ongoing spill. 

And gentlemen, as you did in the Energy Committee, I am going 

to administer the oath to you. So, if the witnesses would all rise 

and raise your right hand. Do you swear and affirm that the testimony you will give before this Committee will be the truth, the 

whole truth and nothing but the truth? 

[Witnesses reply in the affirmative.] 

Senator BOXER. Let the record show that the witnesses answered 

in the affirmative. 

We welcome you here, and we are going to go into your testimony. So, we are going to start with Mr. McKay of BP America. 

Welcome. 

STATEMENT OF LAMAR MCKAY, CHAIRMAN AND PRESIDENT, 

BP AMERICA 

Mr. MCKAY. Thank you, Chairman. Chairman Boxer, Ranking 

Member Inhofe, members of the Committee, my name is Lamar 

McKay, and I am Chairman and President of BP America. 

It is obvious we have experienced a tragic set of events. Three 

weeks ago tonight, 11 people lost their lives and 17 were seriously 

injured. My deepest sympathies go out to the families. 

They have suffered much along the Gulf Coast. This disaster is 

impacting everyone along the Gulf Coast. It is understandable to 

me. I grew up in Mississippi. I lived in Louisiana most of my working career. And I know what people are going through. 

Over the last few days, I have seen the response firsthand, and 

I have talked with men and women on the front line. There is a 

deep and steadfast resolve to do all we humanly can to stop this 

leak, contain this spill, and to minimize the damage suffered by the 

environment and the people of the Gulf Coast. 

As a responsible party under the Oil Pollution Act, we will carry 

out our responsibilities to mitigate the environment, to mitigate 

the environmental and economic impacts of the incident. Our efforts are part of a Unified Command that has established, that was 

established within hours of the accident and provides a structure 

for our work with the Departments of Homeland Security and Interior, as well as Defense, Energy, OSHA and other Federal agencies, 

as well as affected State and local governments and Transocean. 

We are grateful for the involvement of President Obama and 

members of his Cabinet and for the leadership and direction and 

resources they have provided. We are also grateful to the Governors, congressional Members, State agencies and local communities of Mississippi, Alabama, Louisiana, Texas and Florida. 

I want to underscore that the global resources of BP are committed to this effort and have been from the outset. Nothing is 

being spared. Everyone understands the enormity of what lies 

ahead and is working to deliver an effective response at the wellhead, on the water, and on the shoreline. 

Before I describe our round-the-clock efforts to respond to this series of events, I want to reiterate our commitment to find out what 

happened. Understanding what happened and why it happened is 

a complex process. We are cooperating with the joint investigation 
27 

by the Departments of Homeland Security and Interior and investigations by Congress. 

In addition, BP has commissioned an internal investigation 

whose results we plan to share so that we can all learn from these 

terrible events. 

I want to be clear. It is inappropriate to draw any conclusions 

before all the facts are known. As we speak, our investigation team 

is locating and analyzing data, interviewing available witnesses, 

and reviewing and assessing evidence. And today I think it is important to give you and the American public an idea of the questions we are asking. 

There are really two key sets of questions here, and we are actively exploring both of them. First, what caused the explosion and 

fire on board Transocean’s Deepwater Horizon? Second, why did 

Transocean’s blowout preventer, the key failsafe mechanism, fail to 

shut in the well and release the rig? 

With respect to the first question, the key issue we are examining is how hydrocarbons could have entered the well bore. BP, as 

a leaseholder and the operator of the well, hired Transocean to drill 

the well and fulfill their safety responsibilities. We do not know yet 

precisely what happened on the night of April 20th. But what we 

do know is that there were anomalous pressure test readings prior 

to the explosion. These could have raised concerns about well control prior to the operation to replace mud with seawater in the well 

in preparation for setting of the cement plug. 

Through our investigation we hope to learn more about what 

happened and what was done in the hours before the explosion. 

Apart from looking at the causes of the explosion, we are also examining why the blowout preventer, the BOP as it is called, did not 

work as the ultimate failsafe to seal the well and prevent an oil 

spill. Clearly, the BOP remains a critical piece of equipment 

throughout all operations to ensure well control up until the time 

the well is sealed with a cement plug and is temporarily abandoned. 

We will continue full speed ahead with our investigation, keeping 

all lines of inquiry open until we find out what happened and why. 

At the same time, we are fully engaged in efforts to respond to 

these events. Our subsea efforts to stop the flow of oil and secure 

the well involve four concurrent and parallel strategies. 

Activating the BOP would be the preferred course since it would 

stop or diminish the flow at the source. Unfortunately, this has 

proved unsuccessful so far. We are working on a containment system which will place large enclosures, or containment chambers, on 

top of the leaks and conduct flow to a ship at the surface. There 

have been technical challenges. Engineers are now working to see 

if these challenges can be overcome. 

We have begun to drill the first of two relief wells designed to 

intercept and permanently secure the original well. We began drilling the first relief well on May 2nd and expect to begin the second 

relief well later this week. This operation could take approximately 

3 months. 

A fourth effort, known as a top kill, uses a tube to inject a mixture of multi-sized particles directly into the blowout preventer to 
28 

cap the well. It is a proven industry technique and has been used 

worldwide, but never in 5,000 feet of water. 

Now, on the open water, a fleet of about 300 response vessels has 

been mobilized, and about 1 million feet of boom are now in place 

with more than a million more feet available. We are also attacking 

the spill area with Coast Guard approved biodegradable 

dispersants which are being applied from planes and boats. We 

have also developed and tested a technique to apply dispersant at 

the leak point on the sea bed. The EPA is carefully analyzing options for this technique’s further use. 

To protect the shoreline, we are implementing what the U.S. 

Coast Guard has called the most massive shoreline protection effort 

ever mounted. Thirteen staging areas are in place, and over 4,000 

volunteers have already been trained. 

We recognize that there are both environmental and economic 

impacts. BP will pay all necessary cleanup costs and is committed 

to paying legitimate claims for other loss and damages caused by 

the spill. 

Tragic and unforeseen as this accident was, we must not lose 

sight of why BP and other energy companies are operating in the 

offshore, including the Gulf of Mexico. The Gulf provides 1 in 4 barrels of oil produced in the United States, a resource our economy 

requires. 

Now, BP and the entire energy industry are under no illusions 

about the challenge we face. We know that we will be judged by 

our response to this crisis. We intend to do everything in our power 

to bring this well under control, to mitigate the environmental impact of the spill, and to address economic claims in a responsible 

manner. 

No resource available to this company will be spared. I can assure you that we and the entire industry will learn from this terrible event and emerge from it stronger, smarter and safer. 

Thank you very much for the opportunity to appear before you 

today. I would be happy to answer your questions. 

[The prepared statement of Mr. McKay follows:] 

[Editor’s note: Mr. McKay’s responses to questions for the 

record printed here are incomplete because some of his responses 

contain confidential business information. This material is available in the Committee’s files.] 
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Senator BOXER. Thank you very much, Mr. McKay. 

Mr. Newman, President and CEO of Transocean, who owned the 

drilling rig associated with the spill, the Deepwater Horizon, and 

leased it to BP. 

STATEMENT OF STEVEN NEWMAN, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, TRANSOCEAN, LTD. 

Mr. NEWMAN. Thank you. 

Madam Chairman Boxer, Ranking Member Inhofe and other 

members of the Committee, I want to thank you for the opportunity to speak with you today. 

My name is Steven Newman. I am the President and Chief Executive Officer of Transocean, Ltd. Transocean is a leading offshore 

drilling contractor with more than 18,000 employees worldwide. 

I am a petroleum engineer by training, and I have spent years 

working on and with drilling rigs. I have worked at Transocean for 

more than 15 years, and I am incredibly proud of the contributions 

our company has made to the energy industry during that time. I 

sit before you today, however, with a heavy heart. 

The last few weeks have been a time of great sadness and reflection for our company and for me personally. Nothing is more important to me—and to Transocean—than the safety of our crew 

members. And my heart aches for the widows, parents and children 

of the 11 crew members, including 9 Transocean employees, who 

died in the Deepwater Horizon explosion. These were exceptional 

men, and we are committed to doing everything we can to support 

their families as they struggle to cope with this tragedy. 

Over the last few weeks we have also seen great acts of courage 

and kindness in our colleagues and in our communities. That courage and kindness was embodied by the 115 crew members who 

were evacuated from the Deepwater Horizon and who were as focused on the safety of their colleagues as they were on themselves. 

It was embodied by the brave men and women of the U.S. Coast 

Guard who provided onsite response and search and rescue efforts, 

and the medical professionals and the families and friends of the 

crew members who were waiting for them when they arrived on 

shore. And it is embodied by our friends and colleagues at 

Transocean and across the industry who have rallied to help the 

families of those who were lost in this accident. 

This has been a very emotional period for all of us at 

Transocean. It has also been a period of intense activity and efforts. Immediately after the explosion, Transocean began working 

with BP and the Unified Command in the effort to stop the flow 

of hydrocarbons from the well. Our finest engineers and operational people have been working with BP to identify and pursue 

options for stopping the flow as soon as possible. 

Our drilling rig, the Development Driller III, is involved in drilling the relief well at the site, and our drill ship, the Discoverer Enterprise, is standing by on location to carry out unique oil recovery 

operations in the Gulf. We will continue to support BP and the 

Unified Command in all of these efforts. 

At the same time, we have also been working hard to get to the 

bottom of the question to which this Committee and the American 

public want and deserve an answer. What happened on the night 
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of April 20th? And how do we assure the American public that it 

will not happen again? 

Transocean has assembled an independent investigative team to 

determine the cause of these tragic events, a team that includes 

dedicated Transocean and industry experts. They will be interviewing people who have potentially helpful information and studying the operations and equipment involved. 

Because the drilling process is a collaborative effort among many 

different companies, contractors and subcontractors, the process of 

understanding what led to the April 20th explosion and how to prevent such an accident in the future must also be collaborative. Our 

team is working side by side with others, including BP and governmental agencies, and these investigative efforts will continue until 

we have satisfactory answers. 

While it is still too early to know exactly what happened on April 

20th, we do have some clues as to the cause of the disaster. The 

most significant clue is that the events occurred after the well construction was essentially finished. Drilling had been completed on 

April 17th, and the well had been sealed with casing and cement. 

For that reason, the one thing that we do know is that on the 

evening of April 20th there was a sudden catastrophic failure of the 

cement, the casing, or both. Without a failure of one of those elements, the explosion could not have occurred. 

It is also clear that the drill crew had very little, if any, time to 

react. The initial indications of trouble and the subsequent explosion were almost instantaneous. 

What caused that sudden violent failure? Was the well properly 

designed? Were there problems with the casing or the seal assembly? Was the casing properly cemented and the well effectively 

sealed? Were all appropriate tests run on the cement and the casing? Were the blowout preventers, the BOPs, damaged by the surge 

that emanated from the well beneath? Did the surge blow debris 

into the BOPs, preventing them from squeezing, shearing or closing 

the pipe? These are some of the critical questions that need to be 

answered in the weeks and months ahead. 

Until we know exactly what happened on April 20th, we cannot 

determine how best to prevent such tragedies in the future. But regardless of what the investigations undercover, ours is an industry 

that must put safety first. We must do so for the sake of our employees, for the sake of their families, and for the sake of people 

all over the world who use, enjoy and rely on our oceans and waterways for their sustenance. 

Thank you again for the opportunity to speak here today, and I 

am happy to answer any questions. 

[The prepared statement of Mr. Newman follows:] 
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Senator BOXER. Thank you, Mr. Newman. I thought your questions were very much on point, those that you posed. 

Next, we will hear from Tim Probert, President of Global Business Lines and Chief Health, Safety and Environmental Officer for 

Halliburton. Halliburton led the cementing efforts to temporarily 

cap the exploratory well involved in the ongoing oil spill. 

STATEMENT OF TIM PROBERT, PRESIDENT, GLOBAL BUSINESS LINES, CHIEF HEALTH, SAFETY AND ENVIRONMENTAL 

OFFICER, HALLIBURTON 

Mr. PROBERT. Chairwoman Boxer, Ranking Member Inhofe and 

members of the Committee, thanks for inviting Halliburton to testify. We will continue to work with you and your staff to collect factual data that will enable an understanding of what took place and 

what we collectively can do to ensure that domestic oil and gas production is undertaken in the safest, most environmentally responsible manner possible. 

The catastrophic blowout and the spread of oil in the Gulf of 

Mexico are tragic events to everyone. On behalf of the entire Halliburton family, we extend our heartfelt sympathy to the families, 

the friends, the colleagues of the 11 people who lost their lives and 

those workers who were injured in the tragedy. 

As we hope you can appreciate, neither Halliburton nor any 

other party can make a judgment or offer any credible theories 

about what happened until, at a minimum, the well owner has 

interviewed everyone on the Deepwater Horizon to recreate the 

daily log of activities for April 20th. In the absence of that information, no one should rush to judgment. 

However, two things can be said with some certainty. The casing 

shoe was cemented 20 hours prior to the tragic incident, and had 

the BOP functioned as expected, this catastrophe would not have 

taken place. 

For more than 90 years, Halliburton has provided a variety of 

products and services to well owners throughout the life cycle of 

their reservoirs in the oil and gas industry. With respect to the 

Mississippi Canyon 252 Well, Halliburton was contracted by the 

well owner to perform a variety of services. These included cementing, mud logging, directional drilling, and real time data acquisition and data delivery services for key personnel on board the rig 

and on shore. 

Since the blowout, Halliburton has been working, at the direction 

of the well owner, to assist in the efforts to bring the well under 

control. This includes intervention support to help secure the damaged well and assistance in drilling one or more relief wells. 

At the outset I need to emphasize that Halliburton is a service 

provider to the well owner, is contractually bound to comply with 

the well owner’s instructions on all matters relating to the performance of work-related activities. 

The construction of a deepwater well is a complex operation involving the performance of many tasks by many parties. While the 

well owner’s representative has ultimate authority for planning 

and approving activities on the rig, the drilling contractor performs 

and directs much of the daily activity. 
95 

Cement can be used to isolate formation fluids, to prevent movement of these fluids between formations and to bond and support 

the steel casing. There are many external factors which affect the 

design and execution of a cement job. These include the variability 

of the hole geometry, the relative location of hydrocarbon zones, 

and the hydrocarbon content of associated drilling fluids. 

The centralizer placement on the production casing, the drilling 

fluid conditioning program prior to cementing, and the cement slurry and placement design used for this well were implemented as 

directed by the well owner. By design, there was no continuous cement column installed throughout the entire well bore. 

Approximately 20 hours prior to the catastrophic loss of well control, Halliburton had completed the cementing of the ninth and 

final production casing string in accordance with the well program. 

Following the placement of the cement slurry, the casing seal assembly was set in the casing hanger. In accordance with accepted 

industry practice, as required by MMS and as directed by the well 

owner, a positive pressure test was then conducted to demonstrate 

the integrity of the production casing string. The results of the 

positive test were reviewed by the well owner, and the decision was 

made to proceed with the well program. 

The next step included the performance of a negative pressure 

test which tests the integrity of the casing seal assembly and is 

conducted by the drilling contractor at the direction of the well 

owner and in accordance with MMS requirements. We understand 

that Halliburton was instructed to record drill pipe pressure during 

this test. After being advised by the drilling contractor that the 

negative test had been completed, Halliburton cementing personnel 

were placed on standby. 

We understand that the drilling contractor displaced the dense 

drilling fluid in the riser with lighter seawater prior to the planned 

placement of the final cement plug, the drilling fluid being transferred directly to a work boat alongside the drilling rig. The final 

cement plug would have been installed inside the production string 

and enabled the planned temporary abandonment of the well. But 

prior to the point in the well construction plan that the Halliburton 

personnel would have set the final cement plug, the catastrophic 

incident occurred. As a result, the final cement plug was not set. 

Halliburton is confident that the cementing work on the Mississippi Canyon 252 Well was completed in accordance with the requirements of the well owner’s well construction plan. 

Before closing, though, I would really like to respectfully address 

an issue Senators Lautenberg and Udall raised about the spill in 

Australia. 

A commission of inquiry is still underway. But I can tell you that 

Halliburton performed the cement job according to the well owner’s 

direction. And public testimony tells us that the well control event 

occurred some 5 months after the well completed cementing operations. We understand that neither the drilling contractor nor the 

well owner performed integrity testing on that cement job, and a 

subsequent event caused that incident. 

Thanks for the opportunity to share Halliburton’s views, and I 

look forward to answering your questions. 

[The prepared statement of Mr. Probert follows:] 
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Senator BOXER. Thank you very much. 

Mr. McKay, we have heard from the media that there is a lot of 

BP video of the spill, and there have been requests to see it to look 

at the spill volume because it seems we cannot get a true picture. 

But we have heard 4 million gallons. Is that your estimate of what 

we have spilled so far? 

Mr. MCKAY. I think the estimate is 5,000 barrels a day for the 

last 20 days. So, if that, doing the math, if that is right, 42 gallons 

per barrel, so I would have to do the math. But as far as videos, 

there are some videos and pictures that are on the United, the Unified Area Command site. I believe they are actually trying to add 

to that in terms of a—— 

Senator BOXER. I understand it is far more than has been released. Would you get back to this Committee? We would be interested in viewing those and making those public. Would you get 

back to us on how many of the videos have still not been shown 

to the public? I mean, get back to us on how much footage that has 

not been shown to the public. 

Mr. MCKAY. OK. 

Senator BOXER. And make that available to us. 

Mr. MCKAY. Yes. Everything goes through Unified Area Command. Yes. 

Senator BOXER. All right. 

Mr. Probert, I was taken by your testimony. It seems to me that 

you are blaming the well owner in all the cases here. And in other 

words, you do not do any testing unless they ask you? You do not 

test the cement; you do not, if they do not ask you, you do not do 

it? You take no responsibility? 

Mr. PROBERT. I think that I certainly, I certainly was not intending to suggest that in any way. I was simply trying to clarify the 

roles of the parties. 

There are two tests which are undertaken on the integrity of the 

well itself. One is called a positive pressure test, which tests the 

integrity of the production string of casing itself. The second is 

called a negative pressure test and that tests the integrity of the 

seal assembly, which is the top of the casing string where it sits 

in the wellhead. 

With respect to the cement itself, it is obviously an engineered 

product and that it can, subsequently, be tested when it has been 

pumped into the well bore using a variety of techniques. 

Senator BOXER. And do you recommend that test be done? 

Mr. PROBERT. That testing is done at the discretion of the well 

owner. 

Senator BOXER. That is the point I am getting at. So, let us just 

say the well owner does not do it. Do you feel you have any responsibility to urge them to do it given what did happen in Australia? 

Mr. PROBERT. The MMS is fairly clear on this point. If it is felt, 

for example, that the integrity of the cement is in question, such 

as there is an event called loss returns and that means that during 

the pumping on a cement job no returns are received at the surface, that would mean—— 

Senator BOXER. Sir, I am sorry. I have so little time. So, I guess 

my question is, if you felt that the well owner was not testing the 

cement, would you feel any obligation to request that they do so? 
111 

Mr. PROBERT. We would feel an obligation if we felt that the integrity of the cement was in question, yes. 

Senator BOXER. That was my question. Thank you. 

Mr. McKay, prior to the incident on the Deepwater Horizon rig, 

BP was quite confident in its ability to deal with an oil spill there. 

In February of this year BP submitted to MMS an initial exploration plan for the area where the Deepwater Horizon incident occurred. And in that plan BP said, due to the distance to shore, 48 

miles, and the response capabilities that would be implemented, no 

adverse impacts are expected for beaches, for wetlands, for shore 

birds and coastal nesting birds, for coastal wildlife refuges, and for 

fisheries. Your words then. 

However, BP’s certainty in its ability to deal with a spill is in 

sharp contrast to what is being said now that an actual spill has 

occurred. Yesterday, BP released a statement regarding its effort to 

control the leak that said, ‘‘All of the techniques being attempted 

or evaluated to contain the flow of oil on the seabed involve significant uncertainties,’’ and these are your words again, ‘‘because they 

have not been tested in these conditions before.’’ 

Well, I will tell you that just putting those two statements side 

by side, it is a stark difference in what you said before and what 

you are saying now. How do you reconcile the stark difference in 

what you said in trying to get this project going without a big, long 

environmental impact statement, which you got, and what you are 

saying now, that these conditions have never occurred before? 

Mr. MCKAY. We obviously did not expect a situation like this. 

The conditions that we are working in are very unique. It is in 

5,000 feet of water. It is the first time something like this has happened. This is an unprecedented accident. Obviously, when that 

document you are quoting was turned in, we were not expecting 

this. 

I think the spill response plan has actually been a good foundation to deal with this. It is, if we look at what we are doing, fighting this thing as aggressively as we can offshore with dispersants, 

in-situ burning, skimming resources, those resources have come to 

bear and the booming to protect shoreline have come to bear the 

costs of a spill response plan that was in place, and enacted and 

approved in 2009 of last year. 

The subsea interventions that we are doing are the first of its 

kind—— 

Senator BOXER. Well, I know, I know that you are working very 

hard now. I am not questioning that at all. I am just saying, when 

you look back to the documents that you filled out, when you were 

asking for no long environmental impact statement, you wanted to 

be exempt from it all, and you got all of that, you got all of that, 

you said then, it is unlikely that we are going to have an impact 

because we are using proven equipment and proven technology. 

My time has run out. But I want to say that we cannot have a 

world where people say one thing before they get a permit and 

then just act like they never said it. You said we will not have a 

problem. And then we have a tragedy like this. And I am just saying we need to do better. 

That is why I am supporting separating out the oversight of moving forward with these drilling projects from the safety oversight. 
112 

We need to have it done in two separate places and have an independent agency because this is just unacceptable to say two starkly 

different things about the same project. 

It is just—it does not build our confidence in the future right 

now, and frankly I do not see how we could possibly approve anything like this until we figure this thing out. We cannot have companies saying one thing to just get fast approval and then acting 

like they never said it. 

Senator Inhofe. 

Senator INHOFE. Thank you, Madam Chairman. Let me just refer 

to my opening statement. I implied, and I really believe that you 

guys, your time would be better spent right now down there trying 

to contain this mess than it is up here at hearings. 

However, when I said that, I would compliment our Committee 

and the Chairman because they had already decided to have Committee hearings over in the House Energy, in Congress, Committee 

and then the Senate Energy and Natural Resources Committee. I 

think that kind of forced us to do it, or we would not be doing our 

jobs. 

So, anyway, I still stand by the statement that I would rather 

you go ahead and get that done. Then the blame game can take 

place later. 

The Senator from Pennsylvania implied that a lot of the technologies and the things that were being done have not really 

changed over the years. And it is my understanding, because we 

are trying to really get into this thing and learn what it is all 

about, Mr. McKay, the use of dispersants, I understand that the 

type of dispersants that you are using is this biodegradable, it is 

a technology that is, something that is newer than the dispersants 

that have been used before. 

Would you comment on this technology, and has this improved 

over the past period of time? 

Mr. MCKAY. The dispersants were are using were pre-approved 

by the EPA for over-flight and they are—— 

Senator INHOFE. The dispersants that are used now are not the 

same ones that were used like—— 

Mr. MCKAY. These are the very latest versions of dispersants. 

They are biodegradable. When we talk about technology, it is partly the dispersants, it is partly the method by which you are deploying them and what scale and how they are being deployed. And on 

the surface, as you know, I will not go into detail, we have got an 

air force flying with dispersants. 

The other thing we are doing with subsea dispersant, which is 

a new technology and has not been done before and the EPA is 

monitoring very closely, is to inject dispersants at the source, effectively. We do believe that will allow less dispersant to be used per 

unit of effected oil. So, this is being done in trials now. We hope 

to go to—— 

Senator INHOFE. And with the EPA and the Coast Guard—— 

Mr. MCKAY. And the Coast Guard. 

Senator INHOFE. They are involved in this thing, too. 

Well, the MMS has been beat up pretty bad. I think one of the 

reasons for that is that they have come out and said we have done 
113 

something, you know, right in terms of trying to monitor these 

things. 

I remembered, and I asked the staff to get this for me, it is dated 

January 29, 2009, when we made a big issue of the problems that 

exist with the MMS. And Secretary Salazar, he launched this reform, and he put Tom Strickland in charge of it. Frankly, I thought 

that that pretty much had worked. 

And Mr. Newman, the safety record, I thought it was pretty impressive that the MMS has conducted 26 inspections on Deepwater 

Horizon in the past 5 years. Is that unusual? Is that what has been 

happening in the past? And then also, what is the story on the 

SWAT teams referred to by Salazar? I am not sure if that is an 

inconsistency, if perhaps that is saying we are doing something 

now that we should have done before. Would you try to explain 

that? 

Mr. NEWMAN. I think there are two parts to your question, Senator. One has to do with the relationship, in this case, between 

Transocean, the drilling contractor, and the MMS. And the way I 

would characterize our relationship with the MMS is they show up 

on our drilling rigs regularly, unannounced, they conduct thorough 

inspections of the drilling rigs, they know what to look for, and 

they are thorough and rigorous about looking for that. 

Senator INHOFE. All right. But when you say they come up unannounced and they—what is the kind of frequency we are looking 

at? 

Mr. NEWMAN. I think the frequency you cited was 26 times on 

the Deepwater Horizon in the last 5 years. They are out there once 

a month, every other month. They are out there routinely. 

Senator INHOFE. And they, apparently you were the recipient of 

an award that was for ‘‘Outstanding Drilling Operations and Perfect Performance.’’ Anyway, these efforts were out there, and you 

have been, does that imply, that would imply to me that you have 

been complying with the recommendations that the MMS had? 

Mr. NEWMAN. Yes, Senator. 

Senator INHOFE. OK. 

Mr. McKay, it is confusing to a lot of us. We look at the BOP 

stats here, and I know you cannot see that but you know what it 

is. You live with this on a daily basis. When we are dealing with 

this, they apparently have different rams that were on the BOP 

stacks. Do you want to just briefly, briefly, discuss the different 

purposes of each one. Why do you have more? Is this redundancy? 

How many are on there? And how does it work? 

Mr. MCKAY. Yes, let me walk through that a bit, and then perhaps Mr. Newman can help me since it is their BOP. They have 

different sets of rams, or valves, in a sense valves that can close 

around different sizes of pipe, also different types of rams that can 

sheer pipe and seal, also different types of rams that can actually 

just cut pipe to get it out of the way. So, there are various types 

of rams in BOPs, and this one had each one of those types of rams. 

Senator INHOFE. OK. 

Mr. Newman, do you want to make any comment about that? 

Mr. NEWMAN. I would be happy to tell you about the BOP on the 

Deepwater Horizon, Senator. The BOP on the Deepwater Horizon, 

there are two basic closing mechanisms. One is a mechanism the 
114 

industry refers to as a ram-type preventer. That closes large blocks. 

The other one is an annular-type preventer which squeezes a 

doughnut around any pipe that would be in the well bore. 

The Deepwater Horizon was fitted out with five ram-type preventers, and these ram blocks can have openings in the center. So, 

that would facilitate the rams closing around pipe. Sometimes the 

rams have sharp edges. 

Senator INHOFE. So, it is a redundancy. I appreciate that very 

much. 

My time has expired, but I do want to ask a question for the 

record, and you can respond to it later concerning the cementing, 

for Mr. Probert. 

Thank you, Madam Chair. 

Senator BOXER. Thank you, Senator. 

Senator Lautenberg. 

Senator LAUTENBERG. Thank you, Madam Chairman. And thank 

all of you for your testimony. One thing is certain, that each one 

of you must feel terrible torment about what is going on. And I 

know that you do. 

But the fact of the matter is you had the responsibility to make 

sure that everything was just right in the processing here. You all 

know that you are in an industry that can produce wonderful 

things, but also within the orbit in which you are working you can 

also be witness to terrible, terrible situations, as we have seen 

here, the Deepwater Horizon. 

I would ask each one of you, and I know there are parts to the 

puzzle that each one of you puts together, and I would ask you 

first, Ms. McKay, is BP the party responsible for the leak? 

Mr. MCKAY. We do not know who is responsible for what yet. 

The investigations will look at the processes, the equipment and 

the decisions that were made—— 

Senator LAUTENBERG. OK. I do not want to cut you off, but I 

want to try to move along. 

Mr. Newman, is your company responsible for the eruption that 

occurred from the rig? 

Mr. NEWMAN. Senator, until we understand the root cause of the 

event, I do not think it is appropriate to speculate on who or what 

might be responsible. 

Senator LAUTENBERG. Yes, well, I know that everybody, there is 

a bit of, if you will forgive me, a bit of a handoff that I think is 

taking place. 

Mr. Probert, do you—— 

Mr. PROBERT. I think everyone is working very hard together, 

collectively, to pull the facts together so we can really diagnose exactly what did take place. 

Senator LAUTENBERG. I will tell you what I draw. The conclusion 

that I draw is that nobody assumes the responsibility, whether it 

is yet or because of the time. The fact is that what it says to me 

is that these projects, as valuable as they are, bring with them a 

level of danger that is terrific, a very heavy risk to the nearby seashores, communities, States, et cetera. 

And that is what concerns me about this willingness or intention 

to continue new drilling. We do need to have an oil supply. We do 

need to have it available to the public. But we also need, just as 
115 

intensely as we do investing in these drilling programs, we, just as 

intensely, do we have to find alternative, renewable sources that 

are sustainable. And I do not see it. 

I come out of the business world. I spent 30 years in the corporate world at a company that today has 40,000 employees, and 

I was one of the founders of that company. And I know how to— 

what I recognize on a balance sheet or P&L statement. And I just 

mention for interest here that BP in the quarter just ended at the 

end of March had a 133 percent gain, for a quarter, profits of $3.2 

billion. Is there any challenge to that, Mr. McKay, at all? 

Mr. MCKAY. No. 

Senator LAUTENBERG. And I heard the Secretary of the Interior 

declare publicly that BP was going to be responsible for the clean 

up there and for whatever resources it took. So do it. 

I then heard, and I do not remember whether it was you, sir, or 

someone else in the company who said reasonable claims, that is 

what you are doing. Is that correct? 

Mr. MCKAY. Legitimate claims. 

Senator LAUTENBERG. Legitimate claims. So, that is already an 

area of protection that you are putting around this thing. But we 

will go, we will make the judgment about the claims that are legitimate and those you are willing to pay. But it says also that there 

are a lot of claims that might not be legitimate, and you are going 

to reserve the opportunity to make your decisions when the situation occurs. 

Mr. MCKAY. Can I clarify the intent? 

Senator LAUTENBERG. Please do. 

Mr. MCKAY. The intent is to be fair, responsive and expeditious 

and to address all claims. It is— we are not using legal words. This 

is what we mean. We are a responsible party as a leaseholder, and 

we are going to live up to every single responsibility under that 

and we have publicly said—— 

Senator LAUTENBERG. Well, at some point, one or more, well, all 

of you will be involved in anything that occurs by way of expense. 

Mr. Newman, I think I read correctly when—— 

Senator BOXER. Last question, Senator, please. 

Senator LAUTENBERG. When you said that you had completed 

your task before the explosion occurred. Am I right? 

Mr. NEWMAN. Senator, I indicated that drilling operations, the 

process of actually deepening the well, had completed on April 

17th. 

Senator LAUTENBERG. OK. 

Madam Chairman, I ask unanimous consent that my full statement be inserted in the record, and I ask you whether we are going 

to have a chance to ask further questions. I know that you have 

another panel coming. 

Senator BOXER. Well, here is the situation, colleagues, so we can 

make a decision, all of us together. We have four votes scheduled, 

and pretty soon, too. We expect them to start around 4:30. So, we 

are going to have to recess at that point. My hope was, because we 

have a whole other panel, to try and complete this round and have 

everybody do some written questions. And I am sure, gentlemen, 

you would be very pleased to answer those, correct? And that 
116 

would be very helpful. But we can probably go until about 4:45, so 

why do we not keep moving on. 

Senator Vitter. 

[The prepared statement of Senator Lautenberg was not received 

at time of print.] 

Senator VITTER. Thank you, Madam Chair. Thank you all for testifying. 

As I said in my opening statement, between the task of stopping 

the flow and cleaning up the oil, there is a critical challenge that 

I am very focused on with folks in Louisiana which is blocking the 

oil as much as possible before it hits land, in particular before it 

gets into marshland. A barrier island’s beach is one thing—not that 

I am trivializing that impact, but once it gets behind them into 

Louisiana marshland, it is a very delicate and specific ecosystem. 

It is a lot more complicated. 

In that effort, boom and related supply is critical. That is the 

currency, as you know, of the entire effort. I have two questions, 

Mr. McKay, related to that. First is this. On Friday I sent Admiral 

Allen a letter, I copied Tony Hayward, among others. It pointed out 

that, according to the latest Unified Command statistics, there was 

an enormous inequity in terms of boom going to States. 

Mississippi was getting about 1 mile for every 1.32 miles of vulnerable coastline, just taking a 200-mile radius from the event. 

That covers all of their coastline. Alabama was 1 mile to every 1.76 

miles of coastline. Louisiana was 1 mile of boom for every 13.5 

miles of coastline. And that is counting all of Mississippi and Alabama’s coastline as vulnerable, and just about half or less of Louisiana’s. It is an order of magnitude difference. 

What is being done to correct that? 

Mr. MCKAY. Two pieces to your questions. One is the supply 

chain for boom is being enlarged, effectively, so that we can sustain 

boom. I do not have a foot number, but it is going to be a sustainable amount of boom that we think that we can continue to do this 

for quite a period of time. Second, there is several billion feet of 

boom being flown in. 

Third, I spoke to Unified Area Command yesterday, I think it 

was, about shifting and redeploying as we need to to protect as the 

sheen and things move around. So, I believe Commandant Allen 

and the others in Unified Area Command are looking at this. And 

then we are working, as you may know, with your parish presidents and the area contingency plans to kind of effectively shift 

and get that over there. 

Senator VITTER. OK. If your team could get, I am going to submit 

this letter for the record about the inequity, and if your team could 

get an up-to-the-minute response about what shift is going on, that 

would be great. 

With regard to the overall supply line of boom and related materials, let me just say that the experience on the ground, on the 

front line, if you will, is still very frustrating and very uncertain 

in terms of that actually showing up. So, I just commend that to 

you as well. 

Mr. McKay, a related point. As you know, there has been a major 

proposal to do emergency dredging to build up and extend barrier 

islands off Louisiana, to close smaller gaps between sections of bar-
117 

rier islands, as part of this protection. It is basically a lot more effective than boom, which is in limited supply anyway. Does BP 

have a specific response to that? Because obviously all of these efforts are very time sensitive. 

Mr. MCKAY. Again, I believe that proposal and that plan are 

being reviewed, as we speak, in Unified Area Command. So, that 

is the mechanism, the structure, that we are operating under, and 

I believe, as I understand it, over the last couple of days they have 

been reviewing. So, I do not have the latest up to date information 

today, but they are reviewing it. 

Senator VITTER. Well, that is certainly true. As I understand it, 

the Federal agencies, including the Corps, which has to issue a permit, including EPA, are fine with this and are essentially awaiting 

a decision on movement from BP. So, I think that is a broad but 

accurate statement of where it is. So, when can we expect a clear 

reaction decision from BP? 

Mr. MCKAY. I will take that back for immediate understanding. 

Senator VITTER. OK. And again, if you all can respond directly 

to me and others about that, that would be great. 

Another very important, if I could just wrap up quickly—— 

Senator BOXER. Yes. 

Senator VITTER. Another big concern, Mr. McKay, as you can 

imagine, is using as much local labor and assets in the response 

as possible because these are the people hurting from the spill. And 

BP has made a commitment to that. 

The problem is in practice we are seeing a lot of cases where it 

is not happening. And it is eerily reminiscent for us, quite frankly, 

to a lot of the response after Katrina and Rita where all these enormous mega-companies came in from out of State and did an enormous amount of the work and occasionally hired locals five levels 

down the chain as subcontractors. 

Let me just give you one concrete example. Grand—— 

Senator BOXER. Senator, we have a vote that started and Senator 

Cardin and others are waiting. So, you can come back and talk 

on—— 

Senator VITTER. Well, can I wrap up this question? 

Senator BOXER. Well, I thought you were wrapping up. 

Senator LAUTENBERG. [Off microphone.] You need to get regular 

order, Madam Chairman. 

Senator BOXER. I am trying to get regular order, if I can. 

Senator VITTER. What is BP doing to prevent what has been happening in the last few days of local labor and resources not being 

exhausted before being brought in from elsewhere? 

Mr. MCKAY. We recognize the issue and have been working on 

it and will continue. 

[The referenced letter follows:] 
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Senator BOXER. All right. If Senator could have it in writing, 

then we are all interested in that as well. 

Senator Cardin. 

Senator CARDIN. Well, let me again thank the three of you for 

being here. 

Mr. McKay, I want to talk a little bit about BP’s initial exploration plan. I say that because we understand the risks that are 

involved in any type of operation. But it is important that accurate 

information is made available about the potential risk, about the 

potential environmental damages, and the capacity to respond to 

that. 

The plan that you submitted in part is used by the agency to determine whether the environmental waiver should be granted or 

not. So, Chairman Boxer read part of what was included in BP’s 

initial exploration plan as related to our beaches. But let me just 

say, and we will relate it to water quality, and I am quoting from 

your report, it is unlikely that an accidental oil spill release would 

occur from the proposed activities. In the event of such accidental 

release, water quality would be temporarily affected by dissolved 

components and small droplets. 

You then go on to talk about the fish habitat. In the event of an 

unanticipated blowout resulting in an oil spill, it is unlikely to have 

an impact based on the industry-wide standards for use of proven 

equipment and technology for such responses. 

My question to you is, would you say that the risk assumptions 

regarding the impacts, I am not talking about the likelihood of the 

event but the impacts of such events, were accurate? 

Mr. MCKAY. Obviously, in hindsight, it—we did not expect something of this magnitude and this impact, and the permit is what 

it said. It was unlikely. And I believe it was unlikely. But we have 

an unprecedented—— 

Senator CARDIN. There are two questions here. One is the likelihood of this event occurring, the second is the impact of such an 

event. And what I am trying to focus on, in the event this were to 

occur, do you believe that you accurately portrayed the impact to 

the environment of such an episode? 

Mr. MCKAY. I am saying, based on the available data going into 

that, that was an accurate representation. 

Senator CARDIN. And that is based upon, as I understand it, 

proven equipment and technology to deal with an episode. 

Mr. MCKAY. Yes. That was predicated on spill response technology. 

Senator CARDIN. And the proven equipment and technology, as 

I understand it, includes the blowout preventers. And it is because 

of blowout preventers being repeatedly described, the blowout of 

any oil spill as unlikely. And is it not accurate that industry touted 

these blowout preventers as failsafe? 

Mr. MCKAY. We do consider the blowout preventers to be one of 

the last, you now, there are multiple barriers and the blowout preventer is an important and—— 

Senator CARDIN. Are they failsafe? 

Mr. MCKAY. They are fail-closed is how they are supposed to operate. 
120 

Senator CARDIN. Yet MMS accident reports state that blowout 

preventers have failed or otherwise played a role in at least 14 accidents. Is that not correct? Most of them have occurred since 2005. 

A 2003 report by Transocean noted that poor BOP reliability as a 

common and very costly issue. 

My question to you is, was it accurate to portray that the proven 

equipment would prevent this type of an environmental disaster? 

Was that accurate? 

Mr. MCKAY. I believe given the data at the time it was accurate. 

Obviously, obviously, this is an unprecedented event, accident, and 

it is going to be reviewed in every way it can possibly be reviewed 

to understand what—— 

Senator CARDIN. I am losing your response here. I understand 

the risk issue. I am talking about the environmental damage. You 

rely upon the blowout issue that has been proven in the past not 

to work. I do not know how you could accurately portray to the regulatory agency the minimal risks in the event of a blowout. 

Mr. MCKAY. All I can say is there have been 43,000 wells drilled 

in the Gulf of Mexico in the last 50 years. The data that goes into 

that recognizes some of the history in the Gulf of Mexico. 

Senator CARDIN. One last question in my 42 seconds that remain. 

Was the report Friday accurate that MMS has granted another environmental exception for a Deepwater Horizon that will be 4,000 

feet deep? That you are being given another environmental waiver? 

Mr. MCKAY. You may be referring to the relief well for our crisis 

response here. I do not know. The Horizon is sunk, so I—— 

Senator CARDIN. Are you seeking further environmental waivers 

at this point? 

Mr. MCKAY. The environmental—the way the environmental 

waivers work or the exclusions work, is that when the lease-sell 

was done, there was an EIS done, an environmental impact statement done at the lease-sale—— 

Senator CARDIN. My question was simple. Are you seeking further environmental waivers at this point? 

Mr. MCKAY. We are seeking what would be an industry standard 

exclusion because that work has been done through the lease-sale 

and the grid environmental assessments prior. 

Senator CARDIN. Thank you. 

Senator BOXER. Here is where we are. There is a lot of interest, 

so I am going to have to ask you to stay, gentlemen, until we come 

back. 

But we will have time for Senator Alexander, and then we will 

go vote, and then we will return with Senator Merkley, Senator 

Barrasso and Senator Carper. OK. 

Senator ALEXANDER. Thanks, Madam Chair. 

Mr. McKay, I heard an interview a few days ago by the Chief Executive of BP, and I believe he described the intricacy of this drilling as similar to open heart surgery at 5,000 feet. Is that correct? 

Is that an apt description? 

Mr. MCKAY. The description was about using remote operated 

vehicles at 5,000 feet and doing connections and cutting hydraulic 

lines and rethreading things, yes. 
121 

Senator ALEXANDER. But that is a pretty good way to think about 

it? I mean, it is an intricate operation, and it would be like open 

heart surgery at 5,000 feet? 

Mr. MCKAY. It is not a bad analogy for the work that was—— 

Senator ALEXANDER. If you had open heart surgery, would you 

want your doctor 5,000 feet away? I would not, either. I am wondering, even the most skilled physician, or the most skilled operator, would have to be very skilled to be always successful at 5,000 

feet. Would there not be substantially less risk of an incident like 

this with drilling that was not in such deep water? 

Mr. MCKAY. Let me just mention what we were doing. We were 

working on a piece of equipment that had failed. And we were 

working on a piece of equipment that had hoses that were leaking, 

and we were refurbishing and reworking those hoses. That was in 

response to trying to get that blowout preventer closed. So, that is 

not normal operation. 

Senator ALEXANDER. Well, someone was drilling at 5,000 feet. 

Was that Mr. Newman? 

Mr. MCKAY. We are the lease operator. Transocean drills the 

well, owns the blowout preventers—— 

Senator ALEXANDER. So, you were in—I mean, I think it is an 

apt description, the idea of being a mile away and drilling at 5,000 

feet and being able then to deal with the intricate things that 

would have to be done that deep. It is quite a remarkable achievement. 

But I wonder, as a matter of policy, if we would not be wise to 

consider whether, just as we might in medical policy, that we 

would ask doctors to get a little closer to their patients if they were 

going to perform such an intricate operation, should we not ask explorers for oil to get a little closer to the oil before they try to do 

these intricate operations? Would it not be better—is it a good idea 

to drill at these, 5,000 feet? 

Mr. MCKAY. I think there have been over 3,000 wells drilled in 

deep water, and this is the first accident of this kind. So, we have 

got to—the really important thing here is to understand what happened so that it cannot happen again. I have confidence that we 

will understand that. I really do. 

Senator ALEXANDER. How many wells are there in the Gulf of 

Mexico? 

Mr. MCKAY. There have been over 42,000 wells drilled in the last 

50 years in the Gulf of Mexico. 

Senator ALEXANDER. And what percent of the United States’ production of oil comes from the Gulf of Mexico today? 

Mr. MCKAY. Between 25 and 30 percent. 

Senator ALEXANDER. So, nearly one-third of all the oil that the 

United States produces today comes from the Gulf of Mexico. What 

would happen if we suddenly closed all that down? What would 

happen? What would the price of gasoline be in the United States? 

Mr. MCKAY. I cannot predict what the price would be. It 

would—— 

Senator ALEXANDER. Would it not be much higher? 

Mr. MCKAY. Less supply is not good for price. 

Senator ALEXANDER. Yes. The Oil Pollution Act, I believe you 

said this, BP is the responsible party by legal definition. Correct? 
122 

Mr. MCKAY. We are a responsible party, yes. 

Senator ALEXANDER. And that means that you pay all response 

costs associated with the accident, and that includes costs borne by 

the Federal Government, the State and local governments and 

those of any contractors that are legitimate. Is that correct? 

Mr. MCKAY. That is correct. 

Senator ALEXANDER. And in addition, liabilities, you might have 

another liability of up to $75 million on top of that. 

Mr. MCKAY. We have said, in regards to the $75 million, we expect to exceed that, and that is effectively irrelevant. 

Senator ALEXANDER. Yes. There is something called the Oil Spill 

Liability Trust Fund. What costs would the Oil Spill Liability, what 

is that, and what costs would the Oil Spill Liability Trust Fund pay 

in addition to the ones you just described? 

Mr. MCKAY. That would be—I think that is in place for folks who 

cannot pay. So, we would not be accessing that. 

Senator ALEXANDER. Thank you, Madam Chair. 

Senator BOXER. Thank you, Senator. 

So, we appreciate your patience. We are going to vote and come 

back and do another round of questioning, starting with, let me say 

it again, Senator Merkley, Barrasso and Carper will be the first 

three. 

We stand adjourned until after the votes, and thank you very 

much. 

[Recess.] 

Senator BOXER. We are going to resume. 

And I appreciate the opinions of the people in the audience. We 

have a policy in here of no signs, but I do appreciate your being 

here, and I welcome you to this hearing. 

So, here is where we are. We are going to continue this, and 

start off with Senator Klobuchar. 

Senator KLOBUCHAR. Thank you very much, Chairman Boxer. 

Mr. McKay, after going to the site, and again, I appreciated the 

hard work that all of your employees are doing to try to stop this, 

but I was just struck as to why there was not a back up of any 

kind. And I know that in certain countries, like Norway and Brazil, 

they require precautions to avert a catastrophe. And this rig lacked 

a remote control shut off switch, a back-up system that could close 

the well. 

Why was there not any kind of redundancy or back-up system 

beyond the blowout preventer? 

Mr. MCKAY. There are multiple barriers—safety barriers—in a 

well. There are drilling fluids that will withstand and hold back 

the hydrostatic pressure. There are casing and cement jobs that are 

put in place to secure the well. There are well controlled procedures on a rig to deal with a kick, if it happens. Then there is a 

blowout preventer which is intended to be a fail-close device. 

You mention Norway and Brazil, and I think you are referring 

to acoustic remote control, effectively. On this particular well—and 

perhaps Mr. Newman can help me if I say it wrong—we had the 

shut-down systems on the rig, there were three of them, three buttons to hit, let us say. And then there was something called a dead 

man’s switch, so that, if it loses connectivity of the rig, it should 
123 

shut in and fail-close. And then there is manual intervention with 

the ROVs that were accessed and that did not work. 

So, obviously we will need to look back at all this after we get 

through it. But I do not think the acoustic switch would have 

done—we had three switches on the blowout burner. 

Senator KLOBUCHAR. And how many times have these, whatever, 

supposedly fail-safe blowout preventers proven effective? And what 

confidence do you have that a similar failure will not happen on 

another rig that is currently in operation? 

Mr. MCKAY. They are used around the world, on every well, essentially, and they are very effective, and they are—it is very rare 

that anything goes wrong with them. 

I would say what we are doing is—I really do believe that we are 

going to get to the bottom of what happened here. And the really 

important thing for us is to share with the MMS, any other Government agencies, and the rest of industry to try to understand 

what has happened here as quickly as we can, because what we are 

doing is some incremental testing. 

And I know the—Secretary Salazar will be looking at what type 

of incremental testing or other procedures need to be put in place. 

But the learnings here are going to be really important in terms 

of what to do going forward. 

Senator KLOBUCHAR. Well, that is for certain. And you know, one 

of the issues here is that we now learn from this. But the people 

from that area, and hopefully it will be limited to a certain area, 

are going to learn a lot more, and that is that they are going to 

have huge damage to their economy, huge damage to their livelihoods, to their environment. 

And I know that you indicated that BP will absolutely be paying 

for the cleanup operation. How do you compensate the American 

people for lost tourism, lost tax revenue, lost fishing trips, lost endangered species, wildlife, critical habitat? Are you going to be able 

to compensate them? 

Mr. MCKAY. Our statement and intent have been very clear from 

our CEO. We are going to pay all legitimate claims. I am as frustrated as anybody that we have got this happening. As I said, I am 

from the Gulf Coast. I understand the hardship that people are 

going through. We are going to be fair, responsive, expeditious, and 

do the right thing here. And we have been clear about that from 

the outset. And we can put blame and fault and everything off to 

the side. We are a responsible party, and we are acting that way. 

We intend to continue doing that. 

Senator KLOBUCHAR. Well, we are going to hold you to this, 

clearly. And my concern, Minnesota is a long way away from the 

Gulf, but it is where the Mississippi River starts, and my concern— 

and I hope to God that this gets stemmed and one of these things 

you are trying out works. But we are very concerned about the 

damages. 

Yesterday, USA Today reported that oil executives, including BP, 

argued against having the Mineral Management Agency adopt regulations that would require drillers to perform independent audits 

and hazard assessments designed to reduce accidents caused by 

human errors. One of the reasons for BP’s opposition was that the 

new rules would have been too costly. 
124 

A week after this disaster in the Gulf, you announce record quar- ter profits of more than $6 billion. And I know that Senator 

Menendez mentioned the last year profits of what was $16 billion. 

Do you still think that stronger safety regulations, given the 

amount of damage we are facing, are too costly? 

Mr. MCKAY. I am not familiar with us saying the regulations 

would be too costly. But what I do really believe is that, as we get 

through this incident, there will be a need to look at the regulations and how they work going forward. We have to—we must 

learn from this. This resource is so important to develop safely. We 

will learn from it. And I am confident we will figure out what has 

happened here and be safer for it. 

Senator KLOBUCHAR. OK. 

And again, just so you know, for the record, Chairman Boxer, I 

would like to put this USA Today article in the record because it 

does say they also said the new rules would have been too costly. 

That is from the newspaper article. I am sure there is some back 

up source for it. But if I could put this in the record? 

Senator BOXER. Without objection. So ordered. 

Senator KLOBUCHAR. OK, just to summarize. My time is up here. 

You are committed to paying for this. And again, I know that we 

will have—there will be disputes going forward about what that 

means, but it is a—that is a very important commitment. And second, that we are going to discuss stronger safety regulations obviously going forward and you are supportive of doing that. 

Thank you very much. 

[The referenced article follows:] 
125 
126 
127 

Senator BOXER. Thank you. 

Senator Barrasso. 

Senator BARRASSO. Thank you very much, Madam Chairman. I 

wanted to continue some of the questioning, Madam Chairman. 

Specifically, Mr. McKay, when the explosion occurred, I am just 

trying to get into the response the plans. When the explosion occurred, did you have a plan in place, a specific plan in place to respond to this massive oil spill? And then specifically, was this a 

specific plan for this platform? Because the press seems to indicate 

that there was not such a plan. 

Mr. MCKAY. We had a very specific plan that was authorized in 

terms of the Gulf of Mexico Spill Plan, June of last year, by the 

MMS. That plan was activated immediately. The first spill response portions of that were called in 2 hours after the explosion. 

That has been the foundation for the response plan. And it has 

actually worked. And Admiral Allen would be the person to speak 

about it best, I think. But yes, we had a very detailed plan. And 

that is still continuing. 

Senator BARRASSO. I think what I just heard you say is it has 

actually worked. And I do not—maybe you could be a little more 

explicit in that because I think most people looking at this do not 

think it worked. So, what you think of as a plan for response 

versus what really happened and where we are today. 

Mr. MCKAY. Well, any sort of response plan is a model. You cannot—there is no way to predict the individual incident that may 

occur. The model worked in the sense that resources were known 

where they were, organizations were known how to react, the resources were put together, boom disbursements, skimmers, in-situ 

burning, pre-approved priorities, pre-approved dispersants, area 

contingency plans in the States were activated. 

You know, the plan is about a document this thick, and the plan 

has been exercised. Of course, it is being flexed and moved and 

made more robust in certain areas, but the foundation of this was 

in place. 

Senator BARRASSO. Looking at the Financial Times, it says a 

spreading stain, BP oil spill, the impact of the fatal Gulf of Mexico 

explosion will go beyond the damage to the environment. And I am 

trying to get an assessment of what we knew about the spill and 

at what point. 

It says the first estimate was still deceptively reassuring, suggesting that the leak was just 1,000 barrels a day. And that was 

the date. And then 8 days later, April 28th, more than a week after 

the accident, the U.S. Coast Guard said it believed that the flow 

was five times greater than previously thought, now at 5,000 barrels per day. 

At what point did you realize that a massive spill was occurring, 

at that level? 

Mr. MCKAY. Well, the volume estimates are based on, effectively, 

surface expression because you cannot measure what is coming out 

at the seabed. So, this is based on NOAA models and Coast Guard, 

NOAA and BP estimates, effectively from surface information, 

over-flights and things like that, and then backed into in terms of 

the volume. So, there is no certainty around that number. There 
128 

is a large uncertainty band at 1,000, there is an uncertainty band 

around a 5,000. It is the best estimate currently. 

Senator BARRASSO. I want to ask the three of you about chemical 

dispersants, if you have experience in that area of expertise. I believe they are effective tools in containing oil spills. They are being 

used now, I think, intermittently, at the source of the leak. 

There have been some concerns that using them at this depth 

has not been tested. Has this worked well? Should we continue to 

use dispersants aggressively? And I will ask all three of you, if you 

feel comfortable addressing it. 

Mr. MCKAY. Dispersants have been very effective on this particular oil. It is a very light oil and they have been effective. The 

subsea dispersant, there have been three tests. They have looked 

promising. We had a 24-hour test, it ended at 4:40 this morning, 

or yesterday morning, I cannot remember. We would like to continue injection. 

I believe the EPA—I do not know the status, but I believe the 

EPA is looking to extend that injection status and allow us to continue. We think there are two benefits. One, we get it on the oil 

immediately. Second, we think that it has the ability to utilize less 

dispersant per effected volume of oil. 

Senator BARRASSO. Mr. Newman, any experience with that? 

Mr. NEWMAN. We do not have any relevant experience or expertise with respect to dispersants. 

Senator BARRASSO. OK. 

Mr. Probert. 

Mr. PROBERT. No relevant information regarding dispersants either. 

Senator BARRASSO. Thank you, Madam Chairman. 

Senator BOXER. Thank you. 

Just so everybody knows, I am making sure everybody gets a 

first round, and then we are going to do a second round. So, it will 

be Senator Udall, and if no Republican shows up, it will be Senator 

Carper, and then we will go to, I guess, me, and then Senator Lautenberg. Is that all right? Or I can give my time to you, Senator, 

if you need. 

Senator LAUTENBERG. [Off microphone.] 

Senator BOXER. If you need my time, I am happy to yield it to 

you because I can be here. It is fine. OK? 

Senator LAUTENBERG. OK. 

Senator BOXER. OK. So let us go, Senator. 

Senator UDALL. Thank you. Thank you, Madam Chair. 

I would like to focus in on the, what I call the cementing dispute. 

Mr. Newman’s testimony states that ‘‘the one thing we know with 

certainty is that on the evening of April 20th there was a sudden 

catastrophic failure of the cement, the casing, or both.’’ And then 

Mr. Probert’s testimony states, ‘‘Prior to that point, when Halliburton personnel would have set the final cement plug, the catastrophic incident occurred. As a result, the final cement plug was 

never set.’’ 

Mr. McKay, the Wall Street Journal reported today that BP 

asked permission from the MMS to remove the mud before finally 

plugging the well, and after the mud was taken out, the blowout 

occurred. The article quotes petroleum engineering experts that 
129 

this procedure was unusual. So, the Wall Street covered this. They 

checked with petroleum engineers. A very simple question. Is this 

procedure unusual? 

Mr. MCKAY. I have not read the cementing procedures, so I cannot answer whether that particular procedure is unusual. It is not 

unusual to displace certain weight fluids with other fluids. I do not 

know in this case. It will, obviously, be a part of the investigation 

that is live right now, to see if that procedure is valid and whether 

decisions made around that procedure were valid. 

Senator UDALL. But I still want to try to get you to answer the 

very, very simple question because you set the final cement plug, 

and then you take the mud out. And the understanding is, and 

what they are saying is unusual, is that it happened the other way 

around. You asked permission to take it out before the final cement 

plug was set. Is that unusual? You have petroleum engineering experts. You probably have the best ones in the world. Is it unusual? 

Mr. MCKAY. I am actually a petroleum engineer. I cannot say in 

this case whether it is unusual or not. I have not reviewed that 

procedure. 

Senator UDALL. You do not, there is not a standard in the practice for doing it this way? 

Mr. MCKAY. There are various ways to do cementing procedures 

in terms of setting plugs before you leave a well. So, I have not had 

a review of that. 

Senator UDALL. And you would not call it unusual to take the 

mud out first before you put the final cement plug in? 

Mr. MCKAY. I do not know enough right now to call it usual or 

unusual in this situation. 

Senator UDALL. Mr. Newman, do you have an answer to the 

question, you know, is this an unusual procedure? 

Mr. NEWMAN. Senator, as part of the well abandonment process, 

two things have to happen. A cement plug has to be placed into the 

casing, and the mud has to be displaced from the riser. I do not 

have any basis on which to characterize the particular order of 

those two steps as either usual or unusual. They both have to happen. 

Senator UDALL. And what order does it normally happen in? Normally, you do put the plug in place, and then the mud is removed. 

Is that not the case? 

Mr. NEWMAN. As I said, I do not have any basis for characterizing it as normal or abnormal. Both things have to happen 

and—— 

Senator UDALL. They do not happen in any order, in any particular order? 

Mr. NEWMAN. I am not aware of any drivers that would dictate 

in which particular order those two operations were, are performed 

in. Both of them have to happen as part of the abandonment process. 

Senator UDALL. And there is no standard in the industry for this, 

for this kind of procedure and this kind of cementing? How you 

would normally do it. 

Mr. NEWMAN. I do not believe that there is a dictated standard 

for the order in which those two steps are performed. 
130 

Senator UDALL. Mr. Probert, do you have an answer to the question? The very simple question is, is this an unusual procedure? 

Mr. PROBERT. I do not believe that it was an unusual procedure. 

It, the well—— 

Senator UDALL. You do not believe it was an unusual procedure? 

Mr. PROBERT. I do not believe that it was an unusual procedure. 

Senator UDALL. OK. 

Mr. PROBERT. The process that was undertaken was consistent 

with the well plan, which was established. And to the best of our 

knowledge at least, this process and this order has been performed 

previously in the Gulf of Mexico. 

Senator UDALL. The same order that occurred on the well that 

blew out? 

Mr. PROBERT. Correct. 

Senator UDALL. Yes. And without any problem? 

Mr. PROBERT. To the best of my knowledge, that would be correct, yes. 

Senator UDALL. Now, the MMS and the industry have been developing standards for well cementing for several years, but they 

have not become final. Do these standards allow for removing the 

mud before the final cement plug? 

Mr. PROBERT. There are two sets of recommended practices 

which were developed by the MMS and API. The first set was released, in fact, about 2 years ago. The second set is still under discussion with industry experts, the API and the MMS. But I am 

afraid I cannot comment specifically on what the content of those 

may be. 

Senator UDALL. OK, I will come back on the second round. 

Thank you, Madam Chairman. 

Senator BOXER. Yes, you certainly can. 

Senator Carper followed by Senator Lautenberg. 

Senator CARPER. Good. Gentlemen, thank you for joining us 

today and your responses to our questions. I have a short comment 

and then a question, if I could, and this would be for, again for you, 

Mr. McKay. 

One of the concerns that I have is that the American people 

might somehow be left at the inn paying for this disaster. We 

talked a little bit about that already today. But I think in your testimony you said that BP is committed to paying legitimate claims. 

Last week your colleague, the CEO of BP, is it Tony Hayward? 

Yes. Mr. Hayward was asked whether the company expected to 

pay, to spend money beyond the $75 million liability limit that is 

set by a law. Mr. Hayward said, I believe, that the cap was largely 

irrelevant and that all legitimate claims would be honored. 

It is my understanding, however, that under current law that 

any amount that BP spends over that $75 million is eligible for reimbursement from the Federal Government’s Oil Spill Liability 

Trust Fund, and if we exhaust the Trust Fund, then any additional 

funds will have to come from the U.S. Treasury. Some would say, 

in effect, you have every incentive to pay over your liability cap because under current law you will not have to bear any of that additional cost. However, you could receive a fair amount of credit even 

without paying that cost. 
131 

If citizens are receiving checks in letters from BP, they will have, 

they may have no idea that the Federal Government actually will 

be footing the bill at the end of the day. The American people, I 

do not think, should be left subsidizing that kind of effort, if there 

is such an effort. 

Today I am asking the General Accountability Office to examine 

how the Federal Government is protecting against fraudulent 

claims to the Oil Spill Liability Trust Fund. In addition, I am asking them to analyze BP’s claims review process to try to make sure 

that it is rigorous enough to protect the Trust Fund and the American people. 

That leads me to a question. And the question is this. And again, 

this is for you, Mr. McKay. Could you just comment on how stringent BP’s claims process actually is? And finally, can the Federal 

Government expect an invoice from BP sometime, maybe next year, 

if you do actually exceed that $75 million liability cap? 

So, two parts. Can you talk to us about the rigor of the evaluation process for going over claims, and second, if the cost runs over 

the $75 million liability cap, can the Federal Government expect a 

request for picking that up, picking up the tab? 

Mr. MCKAY. The claims process is designed to be very responsive 

and expeditious. The claims that are happening right now are 

mostly fisherman and folks who are impacted directly by loss of 

work right now. And those are being paid as fast as we can possibly pay them, on the spot, effectively, if they have got some substantiation for, you know, this amount of work over this amount of 

time. 

Senator CARPER. You said some substantiation. Will you just 

drill down on that for just a minute, please? 

Mr. MCKAY. I’m sorry? 

Senator CARPER. Could we just drill down on that term some 

substantiation, please? 

Mr. MCKAY. What I am saying is, we are paying people that say 

they are working, they cannot work because of this impact, and 

they can say, here is where I work or here is what I do. And we 

are being very, very aggressive and responsive about this. 

The—we have been very clear, and you are exactly right. Tony 

Hayward has said, we are going to pay all claims that are legitimate. We are, just so you know, just to be exceptionally clear, we 

have said the $75 million is irrelevant. And we have said we are 

not going to access the $1.6 billion Fund. 

So, the bill to the Federal Government, no. And we are a responsible party in this. We plan on living up to that. And that means 

paying for the clean up and all the operations that are occurring 

as well as the legitimate claims that are, because of the impact of 

this. And we have been very clear about that. 

The claims process is, right now, at the very front line of people 

being directly affected right now. It could affect tourism, it could 

affect hotels, those kinds of things. And the claims process is set 

up to evaluate those as quickly as possible. You know, income 

statements from last year, occupancy rates, those kinds of things, 

to help understand the quantification of the damages. 

There is also the Natural Resource Damage Assessment Study 

that is going on with NOAA, that we are paying for, which will 
132 

help to understand the injuries to resources, natural resources in 

the area, the restoration of those and the costs to do that. 

Senator CARPER. All right. Those are the questions I had. Those 

are the answers I was hoping for. Thank you. 

[The prepared statement of Senator Carper follows:] 

STATEMENT OF HON. THOMAS R. CARPER, 

U.S. SENATOR FROM THE STATE OF DELAWARE

I want to thank the Chairman for holding this hearing. My heart goes out to the 

folks impacted by this accident in the Gulf—to the families of the workers that were 

injured or died and to the fishermen that may lose everything. 

Before the accident in the Gulf, I had been open to limited expansion of offshore 

drilling as part of comprehensive energy and climate legislation as long as: 

• One—drilling could be done in an environmentally sensitive manner, and 

• Two—States and neighboring States had a say if drilling occurred near their 

shores. 

Unfortunately, the devastating spill in the Gulf has raised serious questions in 

my mind about our ability to safely drill offshore. 

I support the Administration’s decision to pause any new offshore drilling efforts 

until the Administration and Congress can investigate this incident fully. 

I am also interested in hearing more about President Obama’s proposal to split 

the agency that oversees offshore oil drilling into two agencies—one that enforces 

safety, and one that oversees leases. 

We need to put a stop to the leak, clean up the spill, find out what happened, 

and decide what new safeguards need to be put into place to prevent this type of 

disaster before we move forward. 

From today’s hearing, I want to know why more layers of safety procedures were 

not in place to protect from failure. 

I want to know what incentives are needed to change the oil industry’s culture 

into a safety culture. 

I also want to ensure any claims made out of the Oil Spill Liability Trust Fund 

aren’t fraudulent or abusive—and if this Committee needs to revisit the liability 

caps we put into place 20 years ago. 

The accident in the Gulf has shown me that our dependence on fossil fuels is 

much more costly than we ever anticipated. 

Senator BOXER. Thank you. 

Senator Lautenberg. 

Senator LAUTENBERG. Madam Chairman, thank you very much. 

I wanted to just get a couple of things squared away. And I ask 

whether or not, can anyone, all three of you, can you separately 

guarantee that a spill like this will never happen again in U.S. waters on your watch? 

Mr. McKay. 

Mr. MCKAY. I cannot guarantee that. 

Senator LAUTENBERG. Mr. Newman. 

Mr. NEWMAN. Senator, we will work very hard to understand 

what happened this time around, and we will implement whatever 

recommendations come out of that analysis such that this does not 

happen again. 

Senator LAUTENBERG. So, that you, you cannot guarantee it now, 

that it will not happen again? 

Mr. NEWMAN. I cannot guarantee it. 

Senator LAUTENBERG. Mr. Probert. 

Mr. PROBERT. I think, as others have said, we will work very, 

very hard. We will learn from this incident. We will continue to improve our processes and practices. But I am afraid that, with the 

best will in the world, I do not think any individual could guarantee that we will not see another oil spill as a result of drilling 

activity. 
133 

Senator LAUTENBERG. This, in all fairness, confirms our concerns 

about deep water drilling off the coasts. Because with it comes an 

automatic understanding. Pay attention. We are going to do our 

best to get a product that can be used by the American people, but 

there is significant risk associated with it. We cannot guarantee, 

we will not guarantee, the fact that we cannot see something like 

this happen again. 

Mr. McKay, in the plan you filed with the Federal Government 

for Deepwater Horizon, you outlined a worse case scenario for a 

blow out of 162,000 gallons of oil spilling a day. But the spill now 

exceeds 200,000 gallons each day according to the Government and 

the Wall Street Journal. It has reported estimates higher than possibly 1 million gallons a day. 

Now, did you deliberately moderate the worse case scenario, or 

is it just impossible to predict the consequences of a rig blow out? 

Mr. MCKAY. I believe that permit was 162,000 barrels a day was 

the worse case scenario, and I believe that was the application. 

Senator LAUTENBERG. Is that true? I am asking you. That, I am 

asking myself, because if that is the case, then I apologize for that 

error. 

Mr. Probert, this is the second time in the past year that there 

has been a major blow out and a spill on an oil rig where Halliburton was responsible for the cementing. You, in your testimony, 

repeatedly pointed to the well owner and said Halliburton did everything according to their specifications. 

Now, that suggests that BP’s specifications called for cementing 

to be done that would cause its half-billion dollar rig to explode and 

collapse. And you had no choice but to follow those specifications, 

is that correct? 

Mr. PROBERT. Oil rigs do not explode as a result of a failure of 

a cement job. What I said in my testimony I will stand by, which 

is that Halliburton executed its cement job consistent with the design which was agreed with the well owner. And I think we are 

still struggling to understand, as we have told you several times, 

that we still have data to collect to really be able, to be in a position to assess exactly what did take place on April 20th so that, 

collectively, the industry can put the steps in place to make sure 

that it never happens again. 

Senator LAUTENBERG. Mr. McKay, your company says that BP 

stands for Beyond Petroleum. Yet, BP’s investments in clean energy have recently declined, and they are dwarfed by its investments in fossil fuels. And I have mentioned before the good fortune 

that you have had, or the good skills that your company has had, 

to increase your earnings by over $3 billion in a quarter. It is 

shocking and wonderful, I say with some envy. 

But I look at what the American public is paying for those profits. This spill has shown the true costs of depending on oil to meet 

our transportation needs. Does this spill not show a more urgent 

need for big investments in clean alternatives to oil? 

Mr. MCKAY. We are investing quite a bit in alternative energy. We have committed to do $8 billion over 10 years, and we are on 

track to do that. We have concentrated, in the last year and a half, 

on investments in the United States on wind, solar and biofuels 

and carbon capture. And those businesses are growing. 
134 

Senator LAUTENBERG. How about the—has there been any decline in investments in other sources of energy besides oil? 

Mr. MCKAY. Our investments in alternative energy probably declined a little bit last year but the economy dropped so horrifically 

that a lot of our partners could not fund, so the projects were delayed. But the intent has not changed. 

Senator LAUTENBERG. OK, it was wonderful that your company was able to grow by $3 billion in a quarter. That is quite fantastic 

when things are in the kind of condition that they are in our economy and in our world. 

Thank you. 

Senator BOXER. Thank you, Senator. 

Since the relief well cannot be built for 90 days; is it 90 days you 

figure? Or more? How much oil do you estimate will spill between 

now and 90 days if, God forbid, we have not figured out another 

way to go to cap this well? 

Mr. MCKAY. Well, assuming that the rate is 5,000 barrels a day, 

that would be—— 

Senator BOXER. Give me a number please, if you could do the 

math for me. 

Mr. MCKAY. That would be 450,000 barrels. 

Senator BOXER. 450,000 barrels would spill before you do the relief well? 

Mr. MCKAY. We, we are drilling, we are drilling two relief wells. 

Senator BOXER. Right. 

Mr. MCKAY. It will take—it will take about 90 days to get to the 

18,000-foot level to be able to kill this well. 

Senator BOXER. Well, I just want to go back to Senator Lautenberg’s question. It was a pretty clear question. What can you say 

about other spills like this? He did not just say other spills. He said 

like this. And all of you said, it was almost the most discouraging 

thing I ever heard, we cannot promise anything. 

How much are you spending, Mr. McKay, on finding new ways 

to respond to oil spills? In other words, you said you are spending 

$8 billion over 10 years for clean energy. By the way, that does not 

rack up very well with the fact that you, that your profit was $5 

billion in the quarter, just in one quarter. And you are spending 

$8 billion over 10 years. That is obviously your decision. But I am 

asking you, how much are you spending on new ways to respond 

to oil spills? 

Mr. MCKAY. Well, we are spending a lot of money right now understanding how to handle this and—— 

Senator BOXER. Yes, I know. But what are you spending to try 

to come up with new ways to handle oil spills? 

Mr. MCKAY. Other than what we are doing right now, I cannot 

give you a number. 

Senator BOXER. OK. Well, how would you describe your safety 

record as a company, BP? 

Mr. MCKAY. In 2005 we had an accident at Texas City which was 

horrific. To give you a little background, I know we need to go 

quickly, that changed the foundation of the company. Leadership 

has been changed up and down the chain. Tony Hayward has come 

in. The company has been—in effect the core of the company is 

being re-founded on safety and operational excellence. I think a lot 
135 

of progress has been made. Our safety record in the Gulf of Mexico 

has been very, very good prior to this incident. 

Senator BOXER. So, how would you describe your safety record as 

a whole? 

Mr. MCKAY. In terms of statistics, it is according to what measure you want to use. But it is within the bandwidth of all the super 

majors. 

Senator BOXER. OK. I am going to put in the record this article 

from May 8, 2010, for BP a history of spills and safety lapses. 

[The referenced information was not received at time of print.] 

Senator BOXER. And I am going to ask you a few questions about 

this and how you could say that, you seem satisfied. You are not 

satisfied? 

Mr. MCKAY. I am never satisfied. 

Senator BOXER. So, you are not satisfied with the safety record 

even though you say it is no worse than your counterparts? 

Mr. MCKAY. I thought you were asking me to try to quantify in 

some ways. 

Senator BOXER. I was just asking a human question, you know, 

in other words, how do you feel? Well, I feel pretty good today, you 

know. 

Mr. MCKAY. No, I do not feel good at all today. 

Senator BOXER. No, I do not mean that. I am saying, I am asking 

you a conversational question. 

Mr. MCKAY. No—— 

Senator BOXER. I am not in a court of law. I am just asking you 

to describe your safety record. Well, let me be specific because I am 

going to ask you about a few things. 

In February 2010, 19 members of the House sent a letter to the 

Mineral Management Service questioning BP’s safety practices on 

its Atlantis platform in the Gulf of Mexico. The letter asks MMS 

to describe actions it will take in response to allegations by an oil 

industry whistle blower and a Houston-based oil industry safety expert that BP has skipped necessary engineering inspections and 

provided inaccurate engineering documents to the rig operator. 

These documents are critical to the safe operation of the oil rig. 

And that is a letter, February 2010. 

In October 2007, BP pled guilty to a criminal violation of the 

Clean Water Act, paid $12 million in fines as well as $8 million to 

address natural resources damages for oil spills that occurred in 

the North Slope of Alaska due to poor maintenance of a severely 

corroded pipeline. Also in October 2007, BP pled guilty to a felony 

and paid $50 million in fines for its actions in a 2005 Texas refinery explosion that killed 15 people and injured 170 more. 

In October 2009 the U.S. Department of Labor’s Occupational 

Safety and Health Administration, OSHA, issued $87 million in 

proposed penalties to BP for the company’s failure to correct potential hazards faced by employees as outlined in a settlement agreement BP entered with OSHA following the 2005 Texas refinery incident that you referred to. The fine is the largest in OSHA’s history. The prior largest total penalty, $21 million, was issued in 

2005. And then are other reports that there were multiple smaller 

fines. 
136 

Here is what is very concerning to me. None of you can give us 

assurances that something like this cannot happen again. Your 

statements to the MMS when you were making the case for quick 

approval of this particular project stated, very clearly, that even if 

there was a blowout, you use those words, there would be no problem because of the technology, the cleanup technology that you 

have. 

All of this, I have to tell you, is falling like a house of cards. 

There is just nothing there underneath your statements. If you look 

at your record, and you look at your statements, and you look at 

what is happening, it is very, very disturbing. 

Do you feel that we ought to now have a reform where we separate out the safety inspections from the permitting process? In 

other words, right now the permits are issued, and the safety inspections and everything, the EIRs, are all being done by MMS. Do 

you think we should separate out the functions so MMS deals with 

the mineral extraction and works with you on that, but there is an 

independent body that looks at your safety record and what you 

would do in the case of a spill? Would you support that type of reform? 

Mr. MCKAY. I would support working with any Government 

agency to make sure that this business gets safer based on what 

we learn here. 

Senator BOXER. So, you would not oppose that proposal? 

Mr. MCKAY. I would not oppose anything that comes out of this 

and makes this operation safer than before. 

Senator BOXER. Good. 

Do you feel the same way, Mr. Newman? 

Mr. NEWMAN. I would be supportive of continuing to work with 

the Administration and Congress, understanding what may come 

out of this investigation, and implementing any recommendations 

that will improve the safety of our business. 

Senator BOXER. And you, Mr. Probert? 

Mr. PROBERT. I think the industry has worked very hard on its 

safety over the course of the last decade or so, which is one of the 

reasons that it makes this incident such a tragic and be disappointing. But certainly, our company would definitely support 

anything that we can do to create a safer environment to operate 

in in the exploitation of oil and gas. 

Senator BOXER. All right. 

Senator Udall, do you have another round? 

Senator UDALL. Yes. 

Senator BOXER. Go ahead. 

Senator UDALL. Thank you, Madam Chair. 

I am having a hard time on this cementing issue with the answers that are out there. Can you all tell me, did you, each of you, 

just answer yes or no, did you read this Wall Street Journal article 

that I am reading here? 

Mr. MCKAY. No. 

Senator UDALL. The one from today, right? It is a front page 

story in the Wall Street Journal, and I think the headline is something along the line of two oil firms tie rig blast to plug. Front page 

1 of the Wall Street Journal, in today’s Wall Street Journal. Did 

you read it, Mr. McKay? 
137 

Mr. MCKAY. No. 

Senator UDALL. Mr. Newman. 

Mr. NEWMAN. Yes, Senator, I did read the article. 

Senator UDALL. OK. 

And Mr. Probert. 

Mr. PROBERT. Yes. 

Senator UDALL. Yes. So, two of you read it. Can you tell me, is 

there anything in that article that you disagree with strongly, that 

is just flat wrong? 

Mr. PROBERT. I would need to go back and read that article again 

to make sure that I assessed all the facts or non-facts in it, as the 

case may be, to give you an accurate response. 

Senator UDALL. But there is nothing that hits you right now in 

terms of that, you read it sometime today—— 

Mr. PROBERT. I think there were certainly some things in that 

article which would need to be questioned, yes. 

Senator UDALL. Well, I would like you, in your supplement to the 

questioning to the Committee to, we will submit question along 

that line. 

Mr. PROBERT. I would be very happy to provide a response. 

Senator UDALL. Yes. Thank you. 

Mr. Newman. 

Mr. NEWMAN. Our understanding—— 

Senator UDALL. Same question about disagreeing. 

Mr. NEWMAN. Our understanding—it has been a busy day, Senator, I do not recall, when I read the article, I do not recall reacting 

strongly negatively to anything that was written in the article. But 

I would like to go back and reread the article and refresh my memory. 

Senator UDALL. OK. Well, then I will submit additional questions 

and we will make that a part of the record. 

Mr. McKay, did your well plan call for removing the mud before 

capping the well? 

Mr. MCKAY. As I said earlier, I have not had a chance to review 

the well plan or the procedure of that particular well. 

Senator UDALL. And Mr. Newman, do you know what was provided in the well plan as far as removing the mud before capping 

the well? 

Mr. NEWMAN. Senator, I have not seen BP’s well plan for this 

well. 

Senator UDALL. And Mr. McKay, did you have to ask MMS for 

permission to follow this procedure that we are talking about, and 

if you did, why did you do that? 

Mr. MCKAY. I am sorry, I have not read that procedure, and I 

do not know what we filed, or if it is a procedure, I would imagine 

that MMS has looked at it. But I am not sure. 

Senator UDALL. But you do know whether or not you asked permission to do it in the way that you did? 

Mr. MCKAY. I am sorry; I do not know. 

Senator UDALL. OK. OK. 

Mr. Probert, I am asking now about Halliburton’s cement job in 

the Australian blowout. In what sequence did your company remove the mud in the Australian accident? Before or after the final 

cement plug? 
138 

Mr. PROBERT. A final cement plug, in this particular case, was 

never installed by the well owner. 

Senator UDALL. It was never installed? 

Mr. PROBERT. No. 

Senator UDALL. And so the blowout took place before the final cement plug? 

Mr. PROBERT. The blowout actually took place some 5 months 

after the well had been left without either blowout preventer or 

without well cap, at least according to the testimony which I have 

been able to read from the inquiry. 

Senator UDALL. Now, Mr. McKay, I have heard that standards 

for well cementing are still under discussion by the American Petroleum Institute and the MMS. Who does most of the technical 

work? The America Petroleum Institute or the MMS? 

Mr. MCKAY. I am not familiar with the way standards are set 

between the—in terms of the division of work and the technical 

work. 

Senator UDALL. And my understanding at this point, the reason 

we are not able to ask about what is in the standard is the process 

is not public at this point. There is not a public vetting of these 

standards that are out there right now. At some point it will be 

public, but there has been a lot of work between MMS, your industry, and the American Petroleum Institute in coming up with 

standards that deal with the cementing. Is that correct? 

Mr. MCKAY. I am sorry, I am just not familiar with the cement 

standards that are being set by API or MMS or the industry, to be 

honest. 

Senator UDALL. OK. OK. 

Mr. PROBERT. Senator, if I could just add something to that. 

Senator UDALL. Yes, please, please, Mr. Probert. 

Mr. PROBERT. These proposals are not standards. They are recommended practices. 

Senator UDALL. Recommended practices. 

Mr. PROBERT. There is a set which was issued approximately 2 

years ago. There is another set which is under development right 

now and seeking input from appropriate parties which would be 

API, MMS and industry experts to continue to improve those processes through time. 

Senator UDALL. Mr. Probert, in the ones that were set a couple 

of years ago, in those standards, and speaking specifically, I am 

asking specifically about the plug and the order of removing the 

mud, and this I have talked about earlier, is there a consistent 

standard in the industry for doing it a particular way? 

Mr. PROBERT. I am afraid that I would have to probably defer to 

one of our cementing experts to review that data, which we would 

be very happy to do for you based on the recommended practices. 

But I am afraid I do not personally have knowledge of that directly. 

Senator UDALL. Yes. But it sounds like there is a standard out 

there that deals with this particular issue. 

Mr. PROBERT. I am afraid that I am not sure of that. But we can 

certainly respond to the recommended practices. RP65–1 is the document which we would refer to. 

Senator UDALL. And can you answer the question that I asked, 

Mr. McKay? Is the bulk of the work that is done at this point on 
139 

a new standard, you are saying there was a set 2 years ago, we 

are going through a new standard, is the bulk of the work between 

API and MMS and not a public process at this point? 

Mr. PROBERT. I am sorry. I did not quite understand your question. Did you say it is a public process? 

Senator UDALL. It is not a public process at this point. It is not. 

It is not. 

Mr. PROBERT. It is, I mean, at the well, we describe the recommended practices that have been circulated for comment 

amongst industry experts from a variety of agencies and interests. 

Senator UDALL. OK. 

Thank you for your courtesies, Madam Chair. Thank you. 

Senator BOXER. Senator, you will be happy to know I am going 

to ask a round of questions about the cementing, picking up on 

your interest on this. 

I will do the last questioning, you will be happy to know. And 

I know it has been a long and exhausting day for you, and I appreciate your sticking with this. 

What I think my colleague is trying to do, as best we can, is, he 

is asking if there could be a connection between the lack of the 

plug and the explosion. 

Mr. Probert, do you have any opinion on that? 

Mr. PROBERT. Well, we have discussed the concept of barriers, 

and clearly it is always good, it is always required to have multiple 

barriers in place to protect the integrity of the well bore. And the 

final cement plug would have been the final barrier that would 

have been placed in the production casing prior to disconnecting 

the BOP which was, of course, in itself a barrier. 

Senator BOXER. The blowout preventer? 

Mr. PROBERT. The BOP or blowout preventer, yes. 

Senator BOXER. Well, let me just say this, Senator. In 2007, an 

MMS study examined 39 blowouts over 14 years. They found that 

cementing was a contributing factor in 18 of those incidents. In addition, cementing has been suggested as a contributing element to 

the Montara spill in the Timor Sea off of Australia’s coast which, 

as I understand it, Halliburton was also involved in. 

Mr. Probert, what did you learn from the Halliburton, from the 

Australian disaster in terms of safety and effectiveness of cementing jobs on offshore oil rigs? What did you learn from that? 

Mr. PROBERT. Well, first of all, if I could just comment to the 

MMS study. Of the 18 blowouts which were, of the 39, which had 

cementing as a factor in the blowout process, only one of those occurred in water depths greater than 400 feet. And therefore, by definition, the majority of those, all except one in fact, occurred in 

shallow water and primarily as a result of shallow gas and salt 

water flows, which has long been an issue in the Gulf of Mexico 

shelf operations. 

Senator BOXER. So, are you suggesting from that, by drawing 

this distinction, that it is more dangerous to do this in deeper 

water? 

Mr. PROBERT. No, I am saying the opposite. That in fact the 

record of the industry in deeper water is significantly improved 

over shallow water operations which are subject to shallow water 

gases—— 
140 

Senator BOXER. But you agree that in 18 of 39 blowouts over 14 

years, cement was a factor? You have agreed on that. So, what 

have you learned from the Australian disaster? 

Mr. PROBERT. Well, first let me comment. We have certainly 

learned from the experience from the MMS study which was focused, obviously, on the Gulf of Mexico. And though cement was a 

factor, there were a variety of activities that—— 

Senator BOXER. Well, I am asking about Australia, if I might get 

you back to that. 

Mr. PROBERT. OK. All right. With respect to Australia, I really 

think we are going to have to wait until the Commission provides 

its findings on that particular—— 

Senator BOXER. And when do you expect they will be finished? 

Mr. PROBERT. To the best of my knowledge, I think the testimony 

was collected in the last week or so, and some of that information 

is public, and the findings will be released, one would hope—— 

Senator BOXER. And this is a commission in Australia? Is this a 

commission in Australia? 

Mr. PROBERT. This is a commission in Australia, yes. 

Senator BOXER. OK. Well, we will follow that. 

Mr. McKay, residents across the Gulf Coast will be significantly 

impacted by this spill. And we know this. All of us agree. Commercial and recreational fisherman could be out of work for months, be 

forced to deal with fisheries for years. Hotel and restaurant owners 

and others dependent on tourism could see dramatic losses. We are 

hoping to mitigate that. We all agree that that is our prime intent. 

We have already heard concerns from local residents that the 

process for responding to claims and providing information to effected entities has left local business owners with lots of unanswered questions. 

Given the severe economic impacts that this may bring about, 

what is BP doing to ensure that information is provided in a timely 

and accurate way and that claims are processed as expeditiously as 

possible? And will you commit to immediately monitor the effectiveness of the claims process and take corrective action when problems arise? 

Mr. MCKAY. We are very intent on being responsive and expeditious with this. We are expanding the claims centers across the 

Gulf Coast. I think we have got, I think it is eight right now. We 

have got 21 community outreach centers by this weekend. 

So, we are expanding the network, so to speak. The process is 

getting smoother. You know, it started in Louisiana, and it has 

been moving across over to Florida. So, I think there are some 

growing pains, to be honest, but we are working those out. 

Senator BOXER. OK. So, this is my last question. It seems to us 

that the oil industry is truly in uncharted territory as it pushes the 

limits of drilling technology. When I asked you the question, what 

do you spend on finding better ways to react to a spill, you basically shrugged your shoulders and really did not have an answer 

for me. 

So, it does not appear that the safety and response technology 

has caught up with your zeal, the industry’s zeal, to move forward 

in these new leases, even when they have not drilled the leases 

they have owned for a long time. 
141 

It is really leaving great uncertainty with all of us. And it is a 

reason why a lot of us do feel, not all of us, that we have got to 

move to clean energy here. I mean, we have got to move to clean 

energy. I do not want my grandkids, when they are adults, dealing 

with the effects of people dying on a rig like this or in a mining 

accident. We have got to transition away from this. 

And it seems to me very important that we immediately put into 

place more oversight over what you are doing. And I was glad that 

you said that, at least I took from what you said, you are a little 

lawyer-like in answering it, but I took from what you said that you 

would support efforts for stronger safety oversight. 

So, I am going to be a little more specific in my question. In light 

of the recent oil spill and the rapidly changing drilling technologies, 

I know we believe we have to do anything we can to avoid another 

catastrophe. Right now, you cannot promise us that. You said that. 

You cannot promise us that. 

So, given that you cannot promise us this, and I am sitting here from California that has a $20 billion-plus recreation, tourism and 

fishing industry and a magnificent coastline that needs to be preserved because of its beauty but also because of its economic contribution that it makes and its beauty to our State, I would be derelict in my responsibility if I did not work to increase Federal oversight and give more opportunity for the public to come out and express themselves through laws like the National Environmental 

Policy Act to help ensure that all aspects of a project receive the 

evaluation that is necessary. 

I cannot rest. When I look back, Mr. McKay, and you are a very 

nice man, but I look back to what your company said to the MMS, 

no problem, just give us an expedited answer here even if a blowout occurs we can handle it, it is all going to be fine, and then this. 

When this happens, you say, my goodness, we are not prepared. 

So, I am going to ask unanimous consent that the statement of 

the U.S. Travel Association, which represents a broad range of 

travel industry companies, such as local visitor bureaus and members of the hospitality industry, be made part of the record. They 

are keenly interested in the impact of this spill on tourism, and I 

want their views to be included here. 

And it gets to my final question, which is, would you support, in 

your future endeavors as you move forward with more of these requests, going through the NEPA process, the entire NEPA process, 

and allowing the public comment, and no longer asking for expedited process when so much is at stake? 

Mr. McKay, would you reform the way you have done this? You 

do not have a good safety record. I hate to tell you this. I read a 

lot of it out loud. You promised nothing like this would ever happen. You honestly did. And it has happened now. 

And I am asking you, would you support making sure that when 

you come to, frankly, the U.S. Government, and you want to lease 

taxpayer owned leases, that you will allow, not only allow but support, the full NEPA process to take place? 

Mr. MCKAY. We will support and conform to any regulations that 

we need to. The NEPA process I believe you are talking about, the 

way it works now is that an environmental impact statement is 

done with the lease-sale, and then environmental assessments are 
142 

done by grid within that, and the well sits within those. So, in effect what we are doing is utilizing the environmental assessments 

that have already been done. And if there needs to be another regulation or do it differently, obviously we will do that. 

Senator BOXER. Well, my understanding is, but we will get back 

to you on this, that it is not automatic that a full-blown environmental impact statement is made and that you asked not to have 

that done and you asked for exemptions. 

And what I am trying to get at is this. Given what has occurred 

here, I will not ask you this question today, I will ask you to think 

about it tonight, and given your safety record, which is not good, 

that you consider a whole new approach here, which is when you 

want to go into an area like this that has all of these fragile ecosystems and all this tourism and travel and recreation industry 

that depends on a beautiful area, that you will not ask to be exempted, that you will not make these promises which you made 

and now you cannot make anymore. 

Will you consider the full-blown environmental process when you 

come back and ask for another well like this? 

Mr. MCKAY. We will consider anything that would make this 

safer—— 

Senator BOXER. Good. 

Mr. MCKAY. And we will utilize the environmental processes that 

we need to make sure it meets what we need to do. I know you 

do not want to go into it, but I think these environmental processes 

are in place and done by the MMS when the lease-sale is done and 

after that by grid, that we then tap into and utilize those environmental assessments. 

Senator BOXER. Well, I think if you go back to what you did, you 

essentially did not address the actual threat at all. And you glossed 

over it, and that was very, very damaging. 

We are now going to move to our next panel. 

[The referenced statement follows:] 
143 
144 
145 
146 
147 
148 

Senator UDALL. Madam Chair, can I just put this Wall Street 

Journal article into the record that I referred to? Thank you. 

Senator BOXER. Yes, you can put that Wall Street Journal article 

into the record. 

[The referenced article follows:] 
149 
150 
151 
152 

Senator BOXER. I just want to say to the three of you, you gave 

us your whole day since 2:30. I know you had given prior testimony, is that correct, to the Energy Committee? I know it has been 

a long and difficult day for you. 

I appreciate your being with us, and I hope we can work together 

so that we do not have to have any more of these moments in time 

where we say, oh, my God, what have we done, and how do we fix 

it, and what if we cannot? We just have to not have a repeat of 

this. And that is my goal, and you said it was your goal. So, let 

us hope we can find common ground. 

Thank you very much. And we will call the next panel forward. 

The next panel. 

We have Dr. Steve Bortone, Director of the Gulf of Mexico Fishery Management Council. Keith Overton, who is Chairman of the 

Board of the Florida Restaurant and Lodging Association. Dr. Eric 

May—who Senator Cardin really wanted to introduce, but he had 

leave—is a distinguished research scientist with the Living Marine 

Resources Cooperative Science Center at the University of Maryland. 

Meg Caldwell, a member of the Stanford Law School faculty 

where she directs the Environmental and Natural Resources Law 

and Policy Program. And Lieutenant General Thomas G. 

McInerney, who is a retired member of the United States Air 

Force, the Department of Defense Coordinator during the response 

to the Exxon Valdez spill from March 24 to September 15, 1989. 

He will testify today regarding lessons DOD learned in responding 

to the Valdez spill. 

I want to say to all of you, I know this has been a very long and 

difficult day, and I so appreciate your staying here with us. So, we 

will get right into your testimony. 

Dr. Bortone, Executive Director of the Gulf of Mexico Fishery 

Management Council. 

STATEMENT OF STEPHEN A. BORTONE, PH.D., EXECUTIVE DIRECTOR, GULF OF MEXICO FISHERY MANAGEMENT COUNCIL 

Mr. BORTONE. Thank you very much, Madam Chairman. 

I represent the Gulf of Mexico Fishery Management Council as 

its Executive Director. The Councils were established, eight of 

them, in 1976 as part of the Fishery Management Council Conservation and Management Act. 

It is the Council’s responsibility to submit fishery management 

plans designed to manage fishery resources from State waters out 

to the 200-mile limit. The Gulf Council has 17 voting members 

from each State in the Gulf, and it is composed of State fishery 

agency representatives and individuals from the commercial, recreational and scientific sectors. 

Since reauthorization of the Act in 1996, the Gulf Council has 

successfully improved fish stocks, many of them so that they are 

no longer categorized as over-fished, and has improved the status 

of the stocks of many other important species, such as red snapper. 

Current fishery management plans are in place to rebuild several 

stocks so that they are no longer over-fished. We were on our way 

to achieving this goal. 
153 

The recent and continuing uncontrolled release of unrefined oil 

into the northern Gulf of Mexico off Louisiana causes the Gulf 

Council members and me some concern. There are a number of 

short-term effects that are likely to cause harm to several fisheries 

and the ecosystem in which they occur. 

During the spring and early summer months many commercial 

and recreationally important reef fish species, such as groupers and 

red snapper, spawn in the area currently subjected to oil release. 

Eggs are released into the water column where there they are fertilized and float at or near the surface for 20 to 40 hours, depending upon the species. 

These newly hatched fish live as larvae at or near the surface for 

another 20 to 50 days. Subsequent to their larval stage, they settle 

out of the water column and become inhabitants of sea grass beds, 

coral reefs and other hard bottoms. Released oil floats to the surface and thus affects the life and condition of early life stages of 

these and other species, including the forage fish upon which they 

depend. 

Of additional concern is that many of the dispersants being used 

can also affect the health and condition of these species. 

Dispersants can make oil easier to ingest as the oil is often formed 

into smaller, bite-sized particles. Additionally, some dispersants 

can make oil more biologically available, and that oil is more easily 

taken up by fish when emulsified. 

The short-term impacts of the oil release will likely have immediate effects on the number of eggs and larvae of numerous fish 

species, not only those that are important to our fisheries. 

An extensive red tide event that occurred in the year 2005 in the 

Gulf of Mexico. Only now are we seeing the results and impacts of 

that. In other words, the 2005 year class has been affected. This 

indicates to me that a major event like this in the Gulf of Mexico 

is going to have long-term effects on our fisheries. 

Gulf fisheries is composed of a diverse range of fish species for 

both commercial and recreational sectors. As an industry the commercial industry annually produces 1.3 million pounds of fish a 

year, and shellfish, in the Gulf, with a dockside value of about $660 

million. Over 3.2 million individuals annually participate in its recreational fisheries. Around the Gulf Coast the economic well-being 

of many communities is related to providing services to these fishing-related sectors. 

The uncontrolled release of oil in the waters of the northern Gulf 

has already had an impact on the fishery-based economy of the region. Emergency fishing closures already implemented by the Fisheries Service was purposeful and done to protect lives and increase 

the safety of marine products. Lost revenues from the immediate 

closure are obvious. More significant are the long-term effects on 

fishing and fishing-related activities when a continued closure of a 

significant part of the Gulf of Mexico occurs. 

For example, charter boat operators suffer from immediate cancellations of reservations by participants throughout the Gulf of 

Mexico. Just as significant is the long-term impact of giving negative impression to the public. It may take a long time for the public 

to get over some of those impressions and return to that industry. 
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The charter boat fishery will likely suffer a bad year. It is also 

probable it will suffer a bad decade as a result of this. 

Commercial fishers will have to move to other areas. The impact 

of the oil release on their livelihoods will be potentially devastating 

in the long-term. If what occurs is projected on the larvae and eggs 

of many of the species, we are going to have to impart some more 

restrictive management measures in order to assure that these 

fisheries are rebuilt properly. 

We anticipate that in the short-term there will be an effect on 

eggs and larvae in the Gulf. This will result in long-term negative 

effects on abundance and health of the fisheries. The event will 

have long lasting impacts on the economic station of a host of sectors and communities that currently participate in and directly assist the fishing-based industries of the Gulf of Mexico. 

Thank you. 

[The prepared statement of Mr. Bortone follows:] 
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Senator BOXER. Thank you very much for that important testimony. 

Keith Overton is Chairman of the Board of the Florida Restaurant and Lodging Association and Senior Vice President and 

Chief Operating Officer of TradeWinds Island Resorts, the largest 

resort on the West Coast of Florida. 

Welcome, sir. 

STATEMENT OF KEITH OVERTON, CHAIRMAN OF THE BOARD, 

FLORIDA RESTAURANT AND LODGING ASSOCIATION; SENIOR VICE PRESIDENT AND CHIEF OPERATING OFFICER, 

TRADEWINDS ISLAND RESORTS 

Mr. OVERTON. I appreciate the opportunity to express the views 

of Florida’s hospitality industry related to the recent oil spill which 

has occurred in the Gulf of Mexico. I am humbled to be here today 

representing our great industry. 

And I very much appreciate Mr. McKay’s comments earlier that 

he is going to pay for all of the impacts done to the Gulf of Mexico 

neighboring States. That makes the content of my testimony today 

critically important. 

My name is Keith Overton. I am the Chief Operating Officer for 

TradeWinds Island Resorts. Our company is anchored by two privately owned world class resorts with a total of 796 guest rooms. 

We are on 25 acres situated on the Gulf of Mexico and St. Pete 

Beach, Florida. We employ about 750 people. 

We are all about entrepreneurialism through tourism. 

TradeWinds has become a brand name within Florida, and we have 

done this through our own sales and marketing efforts because we 

do operate independently. We have a precise understanding, as a 

result of that, of where our business comes from, and most importantly what influences tourism in Florida as well as to our destination. 

I can tell you that, as Chairman of the Board for the Florida Restaurant and Lodging Association, I am going to provide you with 

a perspective that our over 10,000 members share regarding this 

threat to their stake in Florida’s largest economic driver. 

Hospitality in Florida today represents a $57 billion industry, 20 

percent of Florida’s economy, $3.4 billion in sales tax revenue, and 

more than 900,000 employees are employed there, clearly the largest employer in the State of Florida. 

Tourism in Florida is clearly more important to Florida than the 

benefits of any offshore oil drilling near its shores. This is an unequivocal statement, and I want to make that clear. We need to 

have a voice in this. We need to be a part of the consideration. And 

I appreciate your comments, Senator Boxer, as it relates to what 

are measures that are going to be put into place. And I would like 

to address a couple of concerns here as we go. 

Visions of a vacation to Florida for most travelers have been consistent and attractive for nearly a century, and the unique experiences which can be found all around our State create fond memories of sugary white sand beaches, warm sunshine, blue waters, 

beautiful natural resources, fresh seafood and many fun attractions 

and theme parks for everybody visiting. 
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The mere thought of oil rigs in the nearby waters off of Florida’s 

shores and beaches changes that fantastic imagery instantly and 

permanently. Still yet many legislators in Tallahassee and right 

here in Washington, DC, have continued to push to exploit Florida’s natural resources at the risk of devastating its largest economic driver. It is unfortunate that today that risk has become a 

reality. 

I have included a page in the insert that you have from a study 

conducted by the Visit St. Pete/Clearwater Convention and Visitors 

Bureau in 2008. And basically the results of that, I think, are very 

indicative of all beachfront destinations when it comes to the desirability to come to Florida and visit the beach. 

We have over almost 2,300 miles of coastline and the top five 

most influential factors in choosing a beachfront destination are 

safe destination, beautiful beaches, a nice environment, they want 

to be able to relax, and they want to be able to suntan. Clearly, 

those things are at risk here today. 

The to-be-released 2010 Portrait of American Travelers by Y 

Partnership indicates that beautiful scenery and a beach experience are also both in the top five as important to American travelers who are interested in visiting Florida. Clearly, Florida stands 

to have many of its vital attributes tarnished as oil continues to 

pour into the Gulf of Mexico. 

Florida’s tourism continues to suffer due to a struggling economy 

which has resulted in cuts in spending on travel throughout all 

market segments. Add other factors, such as unseasonably cold 

winter and now the disaster in our Gulf waters that we see today, 

Florida’s hospitality for 2010 looks to endure another decline in 

revenues. 

Even further, a 10 percent or even smaller reduction in Florida 

tourism dollars could force many of our tourism-based businesses 

out of business. Profit margins are already thin, and the bank debt 

service coverage ratios are regularly at risk for many of our hotels 

and restaurants. 

Recognizing just how fragile Florida’s tourism has become, I fear 

the effects of this oil spill will be devastating and similar to those 

of the hurricanes that we saw in 2004. And what you saw then was 

that there were certainly parts of our State that were devastated. 

But there were many parts, most parts of our State, where Florida 

was open for business and in great health. We had a few tree limbs 

fall in our place, for example. But when you watched the national 

media and you read the newspapers, Florida was under water. 

And we are very concerned that this effect is already starting to 

happen. We are seeing cancellations in abundance. I have a colleague who is in the Destin area who operates a hotel there, and 

he told me that all reservations have just stopped completely. So, 

we are at risk. 

Imagine for a minute—— 

Senator BOXER. I am going to have to ask you to sum up. You 

are so eloquent, but I am going to have to ask you to sum up just 

given the time and the fact that I have a 7 that I have to be at. 

Mr. OVERTON. OK. I will do that. I apologize. 
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Senator BOXER. You can just sum up because I think we are getting your message loud and clear, and it is a very good message. 

So, sum it up for us. 

Mr. OVERTON. Let me just sum up by saying this. When those 

hurricanes occurred in 2004, Governor Bush at the time instituted 

an additional $25 million to Visit Florida, which is our marketing 

firm, and we had a total of $50 million to offset some of the concerns. It was not enough, frankly. Today, even in August and September 5 or 6 years later, we still cannot get the hotel occupancies 

that we need. 

And I would suggest that $100 million is probably not enough 

even to market this devastation throughout the country and the 

international markets. So, in summary, I will wrap up there. And 

thank you very much for allowing me to speak. 

[The prepared statement of Mr. Overton follows:] 
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Senator BOXER. Thank you so much. 

Eric May, he joins us from the University of Maryland, Eastern 

Shore. I am going to put into the record this eloquent introduction 

that Senator Cardin wants to make sure appears in the record. 

And we are looking forward to your comments. 

Dr. May. 

[The referenced document was not received at time of print.] 

STATEMENT OF ERIC B. MAY, DISTINGUISHED RESEARCH SCIENTIST, LIVING MARINE RESOURCES COOPERATIVE 

SCIENCE CENTER, DEPARTMENT OF NATURAL SCIENCES, 

UNIVERSITY OF MARYLAND EASTERN SHORE 

Mr. MAY. I thank you, Madam Chairman. I appreciate the opportunity to provide you with what is hopefully information that you 

can use in your deliberations. 

I am Eric May. I am one of thousands of scientists who are directly involved in, research on, or have working knowledge about 

the potential effects of oil spills on marine ecosystems and the longterm consequences of such events. 

I do not think any of us could give you an exact accounting of 

all the effects or consequences that could happen as a consequence 

of the Gulf oil, Gulf of Mexico spill. It is safe to say that there are 

going to be effects; there are going to be consequences. 

The current level of discharge is 200,000 gallons of crude every 

day. Basically, 1 million gallons every 5 days. You can do the math. 

It will begin to approach, if you will, the Exxon Valdez at 10 million gallons, the Prestige at 20 million gallons. The thought is staggering. And basically, all of these, in aftermath, have had significant effect, not just short-term, but long-term. 

I went to off the coast of Brittany 4 years post the event of the 

Amoco Cadiz. Flat fish on the bottom were still having ulcers, sole 

was tumors, liver tumors. A litany of health problems. So, these 

are not short-term effects. These are protracted effects. 

Oil is still seeping out of some of the sand in Alaska. After 10 

years, it seeped. So, it is not—what I am concerned about is not 

just short-term, long-term. We can project costs of clean up, but it 

is not going to be immediate. 

This spill is unique. It started in April. There is only case before 

that a major spill occurred in April. By all counts this is the perfect 

environmental storm. It is an uncontrolled leak near sensitive 

coastal waters, initially started out in unfavorable weather conditions, and at a time when everything is maximum biological activity, spawning, larvae. A litany of events is going on now which are 

the most sensitive time for fisheries. It is awesome. 

I attempted, in my written testimony, to give you some of the biological processes that will come into play. All of these will occur 

to some degree. The full extent of how they will occur will depend 

on how much more oil leaks into the system. 

Consequence are going to be loss of species diversity, loss of keystone species upon which other species depend, bioaccumulation of 

toxic compounds such as metals and organics, reduction in year 

classes for commercially and recreationally important species, nearterm economic impacts on individuals and communities that de-
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pend on the fisheries, long-term economic impacts at the local and 

national, and I think even the global levels are going to see this. 

The price of your shrimp cocktails is about to go up. The cost of 

getting to the restaurant to eat it is going to go up, too. We are 

all going to be impacted. We are all going to feel the effects. 

And if you do not believe it, we can look back at some of the 

things that happened with the Exxon Valdez. Thousands of papers 

and hundreds of books have been written on the subject. In the 

1980s, the oil companies held a forum on oil spill fate impacts on 

the marine environment. 

The scientific body collective has been telling you, will tell you, 

that placing oil wells near sensitive coastlines represents a serious 

significant environment risk. And it is a socioeconomic risk. I tell 

my students in Environmental Science 101, zero risk does not exist. 

No matter how much, how many safeguards you put, there will always be an accident, and it will always come with a consequence. 

The Gulf of Mexico is a tragedy in every sense of the word. If 

you go forward from this point, science can give you an idea of 

what will ensue, but is far from perfect in its ability to predict and 

provide a clear understanding. 

Let us make sure that ecological impacts are closely watched. Develop better protective tools such that the risks to our natural resources, so that we can better understand what will be the consequences. 

We benefit from oil. No doubt. But let us be sure that the benefits that may be derived from expansion of oil exploration are in 

keeping with the environmental and socioeconomic risks that are 

going to be faced. 

I thank you for your time. 

[The prepared statement of Mr. May follows:] 
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Senator BOXER. I think that last sentence summed it up pretty 

well. 

I am very proud of our next panelist. Meg Caldwell is a member 

of the Stanford Law School faculty where she directs the Environmental and Natural Resources Law and Policy Program. She also 

serves as the Executive Director of the Center for Ocean Solutions, 

and she served on the California Coastal Commission. 

And you know, I would say to you, when I heard—when I first 

heard about the spill, they started to talk about Venice because 

there is a little town called Venice, Louisiana. Well, we have a Venice, California, and I will tell you just hearing Venice just brought 

to mind the beachfront there, and it gave me the shivers just to 

think that, you know, this could happen to our State. It is a frightening thought. 

So, we welcome you here. 

STATEMENT OF MARGARET R. CALDWELL, DIRECTOR, ENVIRONMENTAL AND NATURAL RESOURCES LAW AND POLICY 

PROGRAM, SENIOR LECTURER IN LAW, STANFORD LAW 

SCHOOL; EXECUTIVE DIRECTOR, CENTER FOR OCEAN SOLUTIONS, STANFORD UNIVERSITY 

Ms. CALDWELL. Thank you. 

Chairman Boxer, Senator Whitehouse and dedicated staff, thank 

you for the opportunity to testify on the critical connection between 

healthy oceans and thriving ocean and coastal economies and how 

oil spills affect these linked human and natural systems. 

Our Nation’s ocean economy employs about 2.3 million people and pumps about $138 billion into our GDP. Two major biological 

and economic hot spots fueling this economy are the Gulf of Mexico 

and the Pacific waters off our western States. 

These two remarkably productive, locally valuable and globally 

significant ecosystems account for about 90 percent of this Nation’s 

wild commercial fisheries. In 2004 the total value of the Gulf 

States’ ocean economies was estimated at $29 billion, while California’s was valued at about $43 billion. 

Tourism and recreation are the largest portion of our Nation’s 

ocean economy, both in terms of jobs and dollar value. This industry, like fisheries, depends on clean, healthy and safe coastal and 

ocean environments. 

The Gulf contains the greatest expanse of wetlands in the Lower 

48, over 5 million acres. Its wetlands and oyster reefs provide vital 

shoreline protection, water filtration, nursery habitats for fisheries, 

as well as foraging and nesting habitats for scores of sea birds. Approximately 85 to 90 percent of fish and shellfish caught in the 

Gulf and 75 percent of the migrating water fowl that traverse the 

U.S. depend on the Gulf’s habitats, these wetlands. The true value 

of these Gulf wetlands has been estimated by Professor Robert Costanza on the order of $26 trillion per year. That is $5,200 per wetland acre. 

The Gulf is also home to 21 species of marine mammals and is 

the only known breeding ground in the Western Hemisphere for 

the endangered Western Atlantic bluefin tuna. My colleague, Dr. 

Barbara Block from Hopkins Marine Station, tracks these animals 

with electronic tags and knows that they reliably spawn at this 
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time of year in the area of the spill. And current tracking bears 

this out. 

The Gulf also serves as the world’s only nesting population for 

the most endangered sea turtle, the Kemp’s ridley. These turtles 

are now in the peak of their nesting season and have been observed 

foraging near the Deepwater Horizon oil slick. 

The inshore Gulf possesses a substantial shallow shelf supporting an abundance of benthic species, such as shrimp and crabs. 

They are particularly vulnerable to the effects of submerged oil 

which can persist in sediments at toxic levels for decades, as we 

have learned from the Exxon Valdez. As Senators Cardin and Nelson pointed out, the outer Gulf is 

dominated by the Loop Current, a precursor to the Gulf Stream 

that baths the Atlantic seaboard. Economically important species 

such as tuna, snapper and grouper begin their life cycle as larvae 

in this conveyor belt, migrating from spawning grounds to coastal 

and oceanic areas where they reside as adults. 

Drift seaweed, called Sargassum, also forms these mats, these 

vast mats on the current, providing a mobile nursery for the young 

stages of numerous fish and sea turtle species and providing a 

foundation for economically important fisheries. 

Containing the Deepwater Horizon spill before it reaches the 

Loop Current is not only a priority for the Gulf species that I just 

mentioned but also for the highly biologically vulnerable and economically valuable Florida Keys shallow reef habitat. And this is 

exactly where the current passes through on its way to the Atlantic. 

The history of oil exploration, production and transportation in 

the U.S. includes a number of notable, serious accidents and significant consequences. As Dr. Eric May pointed out, overall, hydrocarbons have been shown to affect marine organism survival, 

growth, physiology, behavior, and disease resistance. The true economic impact of just the $11 million Valdez spill is still unknown. But recreational fishing revenues dropped by $580 

million, and tourism revenues fell by $19 million just in the year 

of the spill alone. Many key species and human services still have 

not recovered. Recent spills in California, the Cosco Busan and the 

American Trader, were both much smaller but resulted in millions 

of dollars of resource and economic damage. 

We still will not know, we still do not know, the full volume, duration or extent of this current spill. But what we do know is that, 

because the Gulf functions as a major economic and ecological engine of national importance, we should anticipate the true direct 

and indirect impacts of the spill to be substantial. 

In short, the Deepwater Horizon spill will leave a legacy in economic and ecological terms that may endure for decades and in 

ways that cannot be simply reduced to dollars. 

Thank you very much. 

[The prepared statement of Ms. Caldwell follows:] 
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Senator BOXER. Thank you very much. 

Lieutenant General Thomas G. McInerney is a retired member 

of the United States Air Force. He was the Department of Defense 

Coordinator during the response to the Exxon Valdez oil spill from 

March 24 to September 15, 1989, and will testify regarding the lessons DOD learned in responding to the Valdez spill. 

Thank you so much. 

STATEMENT OF THOMAS G. MCINERNEY, LIEUTENANT 

GENERAL, U.S. AIR FORCE (RETIRED) 

Mr. MCINERNEY. Thank you, Madam Chairman, Senator 

Whitehouse. 

It is a privilege to appear before you and testify about DOD lessons learned as the DOD Coordinator during the Exxon Valdez oil 

spill from 24 March to 15 September, 1989, in Prince William 

Sound while I was the Commander of Alaskan Command. 

The U.S. Government has reorganized significantly with the creation of the Department of Homeland Security and the creation of 

Northern Command within DOD. And these changes are all positive with respect to my comments today. 

A quick refresh for the Committee on the DOD assets provided 

may be useful. Our initial support was an improvised command 

and control system called OASIS that provided the on scene Coast 

Guard Coordinator, Vice Admiral Clyde Robbins, and the Exxon coordinator with a visual digital map display of the oil spill location, 

beaches and other oil covered areas, sensitive environment and 

wildlife areas. 

In addition, the U.S. Navy provided two amphibious ships, Juneau and McHenry, for use as boatels to house the 11,000 workers 

who eventually worked in the area until Exxon could provide specially constructed barges to house them. 

I will now outline what I think were the most important lessons 

learned for military support to the oil cleanup operations based on 

this experience. 

Northern Command should be part of any initial task force established by DHS and the oil company responsible. Rapid formation is critical to ensure success. 

A joint force commander should be assigned to support the on 

scene Coast Guard Coordinator immediately. He and his staff 

should have the knowledge to provide systems and technology appropriate to support him, such as imagery from satellites or Unmanned Aerial Vehicles, or manned aerial reconnaissance surveillance such as the U–2 with its unique spectral imagery. 

These new technologies should be immediately deployed to give 

the national command authorities and all appropriate agencies involved the situational awareness that will enable swift identification of common cleanup objectives. I cannot emphasize this enough. 

The dominant responsibility of the oil company versus the U.S. 

Government was established for clean up, I believe, after the Exxon 

Valdez disaster. Therefore, I feel it is paramount that soldiers not 

be used for these manual operations. 

I do not object if specifically equipped Navy ships are used, as 

we did in Prince William Sound, or if the Navy has specific, specially equipped skimmers to assist. I feel that these disasters im-
200 

pact the local community so severely that the local population 

should benefit from the temporary jobs creation and for protection 

of their local environment. 

I mentioned earlier the OASIS command system that was immediately established as a command and control system for cleanup 

operations. This was of great value for all, especially the Exxon on 

scene coordinator along with his Coast Guard Commander. However, once the Exxon lawyers discovered that Exxon was funding 

this near real time information tool, they terminated this valuable 

tool for fear that the U.S. Government would have too much information for later legal battles. 

We should not have let this happen. But this advance command 

and control capability was not well understood at the time, and 

frankly there were too many other windmills to fight. 

With reference to the current oil spill in the Gulf and the relevancy of the Exxon Valdez experience, I would only say that the 

laws and protocols were changed and are in force today, which has 

enabled Secretary Napolitano and Admiral Allen to work very effectively with BP. 

There is no question that this oil spill is far more challenging 

with respect to the source from a surging well 5,000 feet below sea 

level. At the same time, the Gulf is not nearly as remote, and support assets are far more readily available to support the Oil Spill 

Task Force. This is an important plus. 

I would suggest that we have not used all of our latest imagery 

assets such as UAVs like Global Hawk or reapers and U–2 aircraft. 

I would do a test immediately to demonstrate the value of continuous digital radar, infrared and electro optical displays that will 

show the coordinators the exact positioning of the oil slicks, location of the over 300 ships to date supporting the coordinators, 

fouled beaches, and sensitive areas. This real time digital picture 

will be of immense value, I believe, and should be considered for 

use by DHS in all future disaster areas. 

We must develop the procedures to keep the national leadership 

and Governors’ situational awareness. Today, we give our battlefield commanders this capability, but not our leadership in 

CONUS. Satellites are helpful but not continuously real time. 

In summary, Madam Chairman, I believe most of the lessons 

learned from DOD’s experience in the Exxon Valdez disaster have 

been incorporated in the Gulf today with the exception of near real 

time imagery for command and control for modern UAVs. 

Thank you. 

[The prepared statement of Mr. McInerney follows:] 
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Senator BOXER. Thank you so much, Lt. General. 

And I want to say that you all were fantastic witnesses because 

you took a little slice of each of the issues that you are facing. 

And I wanted to say that if there is some way that Senator 

Inhofe and I could with you, Lt. General, because maybe it would 

be good to sit down with, for example, Janet Napolitano, and give 

her some of your information. Would you be willing to do that? 

Mr. MCINERNEY. Absolutely, Madam Chairman. 

Senator BOXER. Are you in the area? 

Mr. MCINERNEY. Yes. 

Senator BOXER. Good. Excellent. We will work with that. 

Mr. MCINERNEY. And I am readily available for any assistance 

you need. 

Senator BOXER. I mean, some of the things you said were just so 

right on target. 

I have asked Senator Whitehouse to ask a few questions, if he 

has some, and close down the hearing. 

I just want to say, again, thank you for your patience. What a 

day. I mean, I did not anticipate we would take so long, but I think 

we really had to. 

And I think, Mr. Overton, your point that you heard what BP 

said about paying the full costs. And so I think it would be great 

to write him a letter and say you sat through this, and on behalf 

on your tourism board you look forward to sitting down with him 

in the near future. 

Because when you said that already there are cancellations, my 

heart stopped because that is just—as we try to get out of this recession, this is not what we want. It was not what we need. So, 

we need to stop the oil from getting over there, and we need to 

make sure people know that they should still go to Florida. 

Thank you. 

And so I turn it over to Senator Whitehouse. 

Senator WHITEHOUSE [presiding]. Thank you, Madam Chair, and 

I will not be long. I know it has been a very long day for the witnesses. I am very grateful for your testimony and for your travel 

here and for your participation in our hearings as we begin to look 

into this really extraordinary occurrence. 

I just had a few questions that I would like to go through. The 

first, Dr. May, has to do with dispersants. You talked about the effect of dispersants in your testimony. Could you describe for me a 

little bit more clearly, if you would, how it is that a dispersant 

works and what the environmental advantage is of adding 

dispersants to an oil spill, particularly an oil spill of this magnitude? 

Mr. MAY. A dispersant really is a chemical that—much like oils 

in the stomach, it surrounds small droplets of oil, makes them repulse one another and also sink to the bottom of the ocean. The application of dispersants is considered controversial. I have read papers that essentially said this is a great idea, and I have read others that come with the feeling that there is a biological risk associated with dispersants. 

They break apart, then fall to the bottom. Prevailing currents on 

the bottom can bring the oil back up on shore. The dispersants 

themselves will more readily bio-degrade because there is bio-deg-
207 

radation that does occur. But nonetheless, it does go to the bottom 

and can affect bottom dwelling organisms, benthic organisms, organisms that live—the upper benthics, that live a little bit off the bottom. 

Senator WHITEHOUSE. If you were to take the water column and 

divide it into tranches, is it possible that the use of dispersants can 

minimize the effect or the harm at the surface of the water column 

but increase the harm at the bottom of the water column by accelerating the transit of oil to the benthic layer? 

Mr. MAY. It is going to go, as it goes down through the water column, larvae, the zooplankton, the larvae will be exposed to the oil. 

As it hits the bottom, it will spread out, and that is where it will 

be exposed to too many of the benthic organisms and our young 

larvae that have just settled. 

Senator WHITEHOUSE. In the water column from the surface top 

of the water down through to the benthic layer, at this time of 

year, which is the most productive part of the water column; at this 

point is there more larval activity and so forth going on at the 

benthic layer than on the surface? 

Mr. MAY. Depending on how close you are to the shore. If you 

are at 5,000 feet, 1 mile, it is within the Photic Zone, which is approximately maybe 100 feet, you have zooplankton, you have a very 

biologically active area, you have floating larvae; the fish larvae 

are feeding off of some of the phytoplankton. It is pretty much a 

very dynamic system, and as that oil moves through it will go 

ahead and be exposed to that. 

I think the argument is, is the alternative of having the floating 

oil stay and move in shore, is it worse than the risk of having it 

dispersed and sank? I have mixed emotions about that. 

Senator WHITEHOUSE. Is that argument to be made that the 

dispersants have more of a cosmetic effect by making it no longer 

visible on the surface than an actual benefit environmentally in the 

long run? 

Mr. MAY. I am not qualified at this point to say that. I do not 

think we really fully understand the risks associated with 

dispersants, particularly since the literature is at odds with itself. 

Senator WHITEHOUSE. But in your view there is some value in 

accelerating the bio-degrading of the oil on a net basis? You know, 

if you set aside the question of where it takes place and what the 

most productive areas are that the oil may or may not go to, all 

other things being equal, there would some enhanced bio-degrading 

effect of the use of dispersants? 

Mr. MAY. Yes. And I think you also have to kind of consider the 

consequence of the other side of it, too, which is if this oil slick gets 

to some of those marshlands, some of the wetlands, those are like 

sponges, they are going to absorb that oil, and so as it floats on the 

surface it is going to pose—when it gets on shore, it is going to pose 

a significant risk. 

Senator WHITEHOUSE. And those are exceedingly rich and productive areas, the marshlands? 

Mr. MAY. Yes. Very rich. And so this is one where you are going 

to have run some, you know, you are going to have to look at the 

risks versus the benefits. And I think in this case you may be finding that the benefits outweigh the risks. 
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Senator WHITEHOUSE. Yes. 

Dr. Bortone, you talked about the various fisheries impacts. I do 

not know if you are an expert in this area, but I found it a little 

bit difficult in your testimony to, in my mind, sort out which of 

those fisheries impacts would be recoverable as natural damages, 

natural restoration versus what would count as economic damages 

and potentially be subject to the $75 million limitation on economic 

damages. Have you looked at the fisheries damages that you talked 

about through that perspective? 

Mr. BORTONE. We have not because, as you pointed out, it is difficult to weigh that. What is the economic versus the ecological 

damage that we see? There is—right now we talked about cancellations of hotels. But people are canceling fishing trips already. So, 

that kind of thing is already occurring, and that will be calculable, 

but at some time in the future. 

Senator WHITEHOUSE. But it is not a natural resource damage. 

Mr. BORTONE. No. The natural resource damage that we are concerned about in the fisheries management side is we have plans in 

place to restore fisheries. We are going to be taking several steps 

back, maybe many steps back, still trying to recover these already 

damaged fisheries. And so it is time lag, but that time lag involves 

economics as well. 

Senator WHITEHOUSE. Ms. Caldwell, first of all, congratulations 

on your service on the California Coastal Council. My wife was, for 

years, the Chairman of Rhode Island’s Coastal Council, and I am 

familiar with the good work of the CC agencies around the country. 

California has dealt with offshore drilling. You see what is happening in the Gulf. You are an experienced regulator as well as a 

teacher in this area. What conclusions do you draw about the risks 

that offshore drilling presents based on this, and what policy would 

you recommend with respect to further drilling or exploration? 

Ms. CALDWELL. Thank you for that question. It is not an easy 

one to answer. But let me just share with you my experience on 

the California Coastal Commission when I served as Chair. 

Thirty-six oil leases under MMS just actually came up before the 

Coastal Commission for consistency review under CZMA. And so, 

that gave the Commission an opportunity to look at the kinds of 

risks, not all perfectly analogous, but the nature of the risks associated with offshore oil exploration and ultimately production. 

And in that case we actually found that there was insufficient information provided to us by MMS to actually fully characterize the 

risks. And on that basis we actually denied consistency review. 

I think this goes to the very heart of the problem that we have 

before us here, which is, were the risks appropriately characterized 

before Deepwater Horizon was put into place? Could we have done 

a better job of evaluation? Based on my review of the environmental documents, I would say yes. So, I think attention really 

needs to be paid to better characterization of the risks and the degree of harm that is possible, especially in vulnerable areas like the 

Gulf that we know are highly sensitive to this kind of incident. 

Senator WHITEHOUSE. General McInerney, we have had oil spills 

in Rhode Island. We had the North Cape Scandia oil spill. Before 

that we had the, I think it was called the Royal Prodigy oil spill. 
209 

In both of those cases, like the Exxon Valdez oil spill which you 

were in charge of responding to, there was a vessel with a limited 

amount of oil in it and you knew from the beginning, at least in 

one dimension, the amount of oil, what your worse case scenario 

was going to be. And you had the ability to plan a timing horizon 

around the result, knowing what your exposure was. 

This is a different problem because without successful efforts to 

cap or close off the leak it could be going on, as far as we know, 

indefinitely. And that creates an entirely different set of questions 

and concerns for somebody in charge of responding. 

Could you specifically address how you see the continuing nature 

of this threat that is creating differences from Exxon Valdez, or 

other type spills, that we should be attentive to here in Congress? 

Mr. MCINERNEY. When we responded, Senator, we knew exactly 

what we had almost immediately, 11 million gallons. What we do 

not know here is how long this will go, and clearly it is far more 

technologically difficult than any oil spill, I think, in history. 

When we went into Iraq in Desert Storm and Saddam Hussein 

torched those wells, we were able to have a finite handle on them 

and cap them in a certain timeframe. This, because of the 5,000- 

foot depth, is going to be, I believe, enormously difficult, and it 

could go on, as some of the previous speakers mentioned, it could 

exceed Exxon Valdez. 

Now, the heart of this is you have a continuous source, and you 

have got to be able to minimize the impact of the spill and the 

damage. There is no question that the outrage really has not come 

yet until you see it on the beaches like we saw it on the beaches 

in Prince William Sound, which we saw relatively quickly. And so, 

frankly, it has been rather muted. 

But once it starts rolling up on those beaches, in Panama City 

and those white beaches, in Alabama and Mississippi and New Orleans, then the outrage is going to go into political pressure to get 

something done. 

And that is why I feel that having a much better visibility on exactly where that oil is going. The dispersants we found up there, 

and the scientists that we worked with, you tended to break up the 

larger areas and some goes down. It mitigates the problem instead 

of having this huge blob hit the beaches. So, it helps mitigate it. 

But there are still problems without it, no question. 

But the scientists up there, and I think that we ought to research what they found because now it is 20 years, and discover 

the impact of the dispersants. In any case, it is better than having 

a huge blob hit the shore. 

In addition to what skimming can do, the water temperature is 

warmer so they can burn it off there. So, there are a lot of good, 

or more positive factors, to mitigate this impact. But again, you hit 

it. This source is continuing to gush out at 5,000 barrels a day. And 

that impact, none of us will really know, can fully understand. We 

just hope to get it terminated. 

And so you have the two problems, the continuing source and 

then, as it moves closer to the shores, on how much they are able 

to contain burn off, disperse, skim, all the different techniques. Finally, when it gets up to the beach, how they are able to clean this 
210 

up. And this is going to be a very, very demanding, I believe, situation for months and months, perhaps years to come. 

Senator WHITEHOUSE. Of course, there is a storm season in the 

Gulf when the hurricanes generated across the Caribbean tend to 

sweep through, and that would, obviously, severely compromise 

any kind of activities outside on the water or nearby. 

Mr. MCINERNEY. Another complication. The intense wave action 

tends to break it up also, and it drops down, but eventually it can 

come up. So, they do have that problem that they will be facing 

very shortly, the hurricane season. So, they have a lot of challenges 

out there. 

This is going to be very demanding. But that is why I believe 

there ought to be a digital picture so that those coordinators can 

see, using the new technology, of where this oil spill is going so to 

get in front of the problem. And when it is coming to sensitive 

areas, what they can do. 

Right now, they may be doing that, but I do not think they have 

nearly the tools with a satellite to get an electro optical, it is a 

LEO, low Earth orbital, and so it comes back every 4 to 6 hours 

or whatever it is, not the same place. Whereas I think they need 

a continuous picture of what is going on. So, that is why I believe 

certainly test to see what the new technology can do to help us. 

Senator WHITEHOUSE. I appreciate that, General. 

Last question, Mr. Overton, is the $75 million cap on economic 

damages under the prevailing law, how does the Florida Restaurant and Lodging Association feel about the adequacy of $75 

million to make whole the businesses in Florida that may be struck 

by this, assuming that all $75 million were to go to Florida, which 

is kind of a hypothetical? 

Mr. OVERTON. I will echo Mr. McKay’s comments in that that 

$75 million cap does not exist anymore because he just took it 

away. So, we are looking to them to fund whatever it takes to get 

tourism back on track. And as I said earlier, it is already struggling and this is just, you know, the nail in the coffin for us, so 

to speak, if we do not get this under control, and we do not get the 

word out that Florida is healthy and its beaches are beautiful. 

Senator WHITEHOUSE. Well, let us assume that we can take Mr. 

McKay’s word for that. But in the spirit of—I think it was President Reagan who said trust but verify, it may be better to get that 

in writing before you rely on it too much. And in the event that, 

by the time the lawyers are done with it, that promise gets a little 

spongier than it might seem right now. Does $75 million take a 

very big bite out of the consequential damages that you foresee? 

Mr. OVERTON. No. It does not touch it, honestly. And we know 

that from historical data in 2005 when we spent, you know, $50 

million on the promotion of tourism. 

But I will compliment you, Senator Whitehouse. The legislation 

that you put forth today for an independent commission will help 

us along the way in that regard. And I appreciate your championing that initiative. We think that is very important, and it is 

going to help in that regard. 

Senator WHITEHOUSE. Well, we, I appreciate you mentioning 

that. We also, that was sponsored by Chairman Boxer and by Sen-
211 

ator Menendez, so I am delighted that the two of them joined in 

that. 

We also put forth a bill co-sponsored by Chairman Leahy of the 

Judiciary Committee to reverse the limitation on punitive damages 

that the U.S. Supreme Court chose to protect Exxon with, and also 

to improve civil and criminal penalties under the Outer Continental Shelf Lands Act, which supervises offshore drilling. So, I 

hope that trio of bills will help be responsive to this. 

It is just about a minute before 7. You have all been here much 

longer than you expected to be. I just want to close by reiterating 

Chairman Boxer’s appreciation to all of you for weathering through 

the long day that you have had here, sharing with us your experience and your expertise. It has been very valuable. 

The hearing will stay open for an additional week if anybody 

chooses to add anything to the record of the hearing. But this particular hearing is now adjourned. Thank you. 

Two weeks. Change it to 2 weeks. 

[Whereupon, at 6:58 p.m., the full Committee was adjourned.] 

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