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[Senate Hearing 111-653, Part 4]
[From the U.S. Government Printing Office]



                                                 S. Hrg. 111-653, Pt. 4
 
                      OIL RIG DISASTER IN THE GULF

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                                   TO

RECEIVE TESTIMONY ON ISSUES RELATED TO THE DEPARTMENT OF THE INTERIOR'S 
 MAY 27TH REPORT: INCREASED SAFETY MEASURES FOR ENERGY DEVELOPMENT ON 
  THE OUTER CONTINENTAL SHELF, INCLUDING OVERSIGHT OF RECENT ACTIONS 
  RECOMMENDED BY THE DEPARTMENT TO ADDRESS THE SAFETY OF OFFSHORE OIL 
                              DEVELOPMENT

                               __________

                              JUNE 9, 2010


                       Printed for the use of the
               Committee on Energy and Natural Resources



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62-344                    WASHINGTON : 2010
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

BYRON L. DORGAN, North Dakota        LISA MURKOWSKI, Alaska
RON WYDEN, Oregon                    RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey          JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas         ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan            BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     3
Salazar, Hon. Ken, Secretary, Department of the Interior.........     5

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    43

                              Appendix II

Additional material submitted for the record.....................    47


                      OIL RIG DISASTER IN THE GULF

                              ----------                              


                        WEDNESDAY, JUNE 9, 2010

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:36 a.m. in room 
SD-366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 
chairman, presiding.

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW 
                             MEXICO

    The Chairman. OK. The hearing will come to order. The 
committee will come to order.
    Today, we are holding the fourth committee hearing here in 
the Energy and Natural Resources Committee on the devastating 
oil spill in the Gulf of Mexico. As large volumes of oil 
continue to wreak havoc in the Gulf, our thoughts are first 
with the people on the forefront of the disaster--the families 
of those who have lost their lives in the explosion, those who 
are working day and night to protect the places and the 
wildlife they care about and often their livelihood as well.
    I know all Americans are thinking of the residents of the 
Gulf region and are grateful to them and to the other 
responders for their work under these most difficult 
circumstances.
    It is clear that prior to the explosion of the Deepwater 
Horizon rig neither the companies involved nor the Government 
adequately appreciated or prepared for the risks involved in a 
deepwater drilling operation of this type. The results of that 
failure to properly assess risks and prepare for risks have 
been disastrous. Lives have been lost. The livelihood and way 
of life of many Gulf residents has been interrupted and in some 
cases destroyed. The environmental damage has been immense. 
Since BP has so far failed to stop the oil gushing into the 
Gulf, the extent of the further damage that will be suffered is 
not known.
    Our purpose today is to review near-term actions that have 
been taken and are planned to correct this longstanding failure 
to properly assess risk and to ensure the safety of this and 
other ongoing and future energy operations in the Outer 
Continental Shelf. According to the Department of the Interior, 
the Gulf of Mexico has nearly 7,000 active leases on the 
Federal Outer Continental Shelf, 64 percent of which are in 
deep water. As a result, there are now about 3,600 oil and gas-
related structures in the Gulf.
    In 2009, 80 percent of all U.S. offshore oil production, 45 
percent of natural gas production occurred in water depths in 
excess of 1,000 feet, and industry had drilled nearly 4,000 
wells to those depths. Operators have drilled about 700 wells 
that--like Deepwater Horizon's well--are in water depths of 
5,000 feet or greater on the Outer Continental Shelf.
    In 2009, production from the Gulf accounted for 31 percent 
of total domestic oil production and 11 percent of total 
domestic natural gas production. Offshore operations provided 
direct employment estimated at 150,000 jobs.
    We are all aware of our country's demand for oil. As a 
result of this accident, we are aware perhaps in a way that we 
were not before of the true potential costs of that demand.
    The challenge for regulators, and for Congress in enacting 
statutory responsibilities and authorities to those regulators, 
is to put appropriate requirements in place ensuring that this 
horrible price is not paid again. At the same time, we are 
reminded that we must continue with renewed vigor to find ways 
to reduce our dependence on oil for both national security, 
economic, and environmental reasons. It is particularly 
challenging to do so while we are still in the midst of a 
crisis.
    Investigations are ongoing into the cause of this disaster. 
We do not have certainty about what happened. The best minds in 
the country must be focused on stopping this oil leak and 
cleaning up the affected areas. Yet we must make sure, as an 
urgent matter, that ongoing operations are safe.
    Today, we hear from the Secretary of the Interior about the 
administration's actions in this regard. At the President's 
direction, his team has produced a report, on a 30-day 
timeline, to identify near-term safety measures that need to be 
taken. The regulators have acted quickly to impose some of 
these new safety requirements immediately on ongoing 
operations. In addition, the administration has taken measures 
to halt certain operations to ensure their safety, while 
allowing others to continue.
    We appreciate the Secretary's efforts and his work to 
ensure that there is an adequate response to the environmental 
and safety crises presented by this accident. We also 
appreciate his presence here today, look forward to working 
together with the administration on our shared and urgent goal 
of ensuring the safety of these operations.
    Let me turn now to Senator Murkowski for her opening 
remarks.
    [The prepared statement of Senator Landrieu follows:]

    Prepared Statement of Hon. Mary L. Landrieu, U.S. Senator From 
                               Louisiana

    Thank you, Mr. Chairman for holding this important hearing. I begin 
each hearing remembering those who lives were lost in this terrible 
accident. Our nation lost 11 men and our thoughts and prayers remain 
with their families of those lost and injured.
    Today we are here to discuss the Department of Interior's May 27th 
report that was requested by the President on April 30th. Only 10 days 
after the Deepwater Horizon explosion, the President requested a 
thorough report on additional safety mechanisms that could be put in 
place immediately to improve the safety of oil and gas exploration and 
production operations on the OCS.
    The intent of this report was to improve the safety of oil and gas 
production in the Gulf of Mexico, not shut it down. Unfortunately, the 
recommended 6 month drilling moratorium on deepwater leases, including 
shutting down the 33 rigs that were already in the process of drilling 
new wells, has halted all future production. And currently, no one 
knows when companies will be allowed to drill again.
    As such, this moratorium will exacerbate, rather than alleviate, 
the impacts of this spill upon Louisiana's economy and the environment.
    The immediate impacts to the economy are devastating. The idled 33 
rigs employed approximately 36,300 crewmen, deck hands, engineers, 
welders, ROV operators, caterers, helicopter pilots, etc. Many of these 
offshore crewmen and women are from Louisiana and the neighboring 
states.
    That's like closing 12 large motor vehicle assembly plants at 
once--with the impacts disproportionately in my state.
    In addition, all the service jobs will also be impacted. Losing 
tens of thousands of jobs will be a catastrophic blow to an already 
tragic situation.
    I know that many in the environmental community believe that 
shutting down offshore oil and gas production will protect our 
coastlines from oil washing ashore, but this is contrary to the facts.
    The reality is our country will continue to rely on oil and gas for 
years into the future as we move to more renewable and less carbon 
intense sources of energy. If we are not going to produce oil and gas 
domestically, then we will have to get it from somewhere else and 
transport it by tanker.
    On average, today's tankers carry about 2 million barrels of oil 
each, and according to the National Research Council, are four times 
more likely to be the cause of oil in the sea vs. an offshore drilling 
facility. Increasing tanker traffic will only increase this risk--and 
put our coastlines at greater peril--the opposite intent of the report.
    I agree that we must ensure that we are doing everything possible 
to increase the safety of OCS oil and gas production. I am supportive 
of a pause on drilling to ensure that all the right safety mechanisms 
are in place, but I do not believe a 6 month moratorium achieves the 
results intended.
    Once these drilling rigs get moved to international locations, they 
will not return immediately. It could be years before they return, 
leaving the U.S. more dependent on foreign oil, exporting jobs abroad, 
weakening our economy and putting our shorelines are greater risk.
    That is why I have asked the President to immediately reconsider 
the six-month moratorium on deepwater drilling.
    I hope for the sake of Louisiana's economy and shoreline, he 
listens.
    Thank you Mr. Chairman

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman. Good morning.
    Good morning to you, Secretary. It has been a couple of 
weeks now since you have been before the committee. I think 
last time you were here, the oil from the spill had not yet 
reached----
    [Interruption from audience.]
    Senator Murkowski. Mr. Chairman.
    The Chairman. Let me ask the protesters to please exit the 
room and allow us to proceed with our hearing.
    Senator Murkowski. Thank you, Mr. Chairman.
    Mr. Chairman, again, as I was saying, it has been several 
weeks now since you have been before the committee. At that 
time, the oil had not yet reached the shores and marshes of 
southern Louisiana. A couple of weeks ago, we had the 
opportunity, along with the chairman, to go, fly over that 
spill. I think we all recognize the gravity of the situation 
and the nightmare that it has become for the residents of the 
Gulf region.
    Today, we are examining the measures that the Interior 
Department has recommended and implemented so far in response 
to the Deepwater spill. We are examining not only the 4-page 
report on immediate recommendations for improved safety and 
environmental protections, but also we need to discuss the 
moratorium that the Interior Department has implemented for all 
deepwater exploration and the additional requirements and 
suspensions for some shallow water exploration as well.
    There can be no doubt, most certainly, that the public 
outrage and the political pressure has mounted for the 
Government to do more about this still-worsening situation, and 
I think we are all sympathetic to those demands. Yesterday, I 
had an opportunity to meet with an Alaskan--he is going to be 
testifying this morning in another committee here on the Hill, 
speaking on the long-term impacts of oil spills on fisheries as 
we experienced after the Exxon Valdez. Unfortunately, his story 
is familiar, very familiar to me and my constituents.
    But our conversation wasn't just about the fisheries. It 
was about the constant struggle in finding a balance between 
the exploration and the production of oil, which our State 
depends upon for the majority of its economy, against the 
critical and very compelling interests of maintaining our 
ecosystems, which support the remaining building blocks of our 
fisheries and our tourism economies. The Gulf is certainly 
faced with a stark picture of the associated tradeoffs right 
now.
    So I applaud the Interior Department for its efforts, as 
you have stated in the report, to address the fact that 
America's energy security is likely to carry exploration 
increasingly into very deep water environments, and how to 
reevaluate whether the best practices for safe drilling 
operations developed over the years might be adjusted for the 
unique challenges of drilling so very far under the sea.
    These are not just technical challenges, but they are human 
challenges as well, which we recognize can be difficult to 
regulate without successfully creating a culture, both at the 
regulatory and the industrial level, that prioritizes safety 
and, in turn, protects from anything like Deepwater Horizon 
ever happening again.
    I am sure that we will look back at the lessons that have 
been learned not only from what happened on April 20th, but 
from the various operational responses to the spill, and most 
certainly, we will learn lessons from our policy responses as 
well. I think we just need to look to the news yesterday that 
one of the largest independent offshore operators announced 
that it is packing up and moving three of its rigs to foreign 
waters.
    So, I think the question that needs to be asked is, is this 
consequence unintended? Is it something we are willing to 
accept?
    Mr. Chairman, there is certainly a lot to talk about here. 
I want there to be no effort or expense spared to bring the 
well under control and see to it that the victims of this spill 
are compensated fairly and expeditiously, and I am certainly 
working to make that happen. As we look at the policy moving 
forward, I simply reiterate that we carefully consider the 
impacts of this spill on long-term energy policy. We have got 
to get it right.
    Energy Secretary Chu announced yesterday that the 
department is providing online access to diagnostic results and 
other data about the malfunctioning blowout preventer. He said, 
and I quote, ``Transparency is not only in the public interest, 
it is part of the scientific process. We want to make sure that 
independent scientists, engineers, and other experts have every 
opportunity to review this information and make their own 
conclusions.''
    Mr. Chairman, I would echo Secretary Chu's statements. Let 
us reform policy in a transparent, reasoned manner where the 
public and the scientific community and all interested parties 
can review it. We certainly have a lot of work to do.
    With that, I appreciate the opportunity and look forward to 
the comments from the Secretary.
    The Chairman. Thank you. As Senator Murkowski said, we 
welcome you back to the committee, Mr. Secretary. Of course, 
your deputy David Hayes and your counselor Steve Black, we 
welcome them as well. So please go ahead with your statement.

  STATEMENT OF HON. KEN SALAZAR, SECRETARY, DEPARTMENT OF THE 
                            INTERIOR

    Secretary Salazar. Thank you very much, Chairman Bingaman 
and Ranking Member Murkowski and all the U.S. Senators, and I 
think all of you are former colleagues on this committee. So it 
is always good to come to this committee, even when we are 
dealing with difficult challenges that are facing our Nation.
    I have prepared a statement for the record that we will 
submit for the record. But I think in the interest of having a 
dialog with you, what I want to do this morning to is to focus 
in on a couple of key issues. The first is the status of 
offshore drilling and the safety program which the President 
has directed, which we are in the process of implementing. The 
second is the reform that we have underway at the Department of 
Interior with respect to the Minerals Management Service and 
moving forward with efforts to develop a new organization 
there.
    It may be useful at the outset, before I speak to those two 
central points here, to also just give you a quick overview of 
what is happening even this morning. We are in a position where 
we are directive of BP relative to making sure that they are 
doing everything humanly and technologically possible to stop 
the leak, to fight the oil on the seas, and to fight the 
damages as they occur on shore.
    This morning, Secretary Chu and I had our morning call with 
BP executives. We were informed that the Enterprise vessel, 
which is what they call the vessel that is doing the short-term 
containment, is capturing about 15,000 barrels of oil a day. At 
our insistence, they have moved forward with additional 
capacity to be able to capture additional amounts of oil and to 
make sure that the redundancies are built in over time so that 
at the end of the day, as much of the pollution as is leaking 
can be captured, will be captured.
    Our goal is to get to zero pollution emanating from this 
well and doing so in the interim, while they get to the final 
effort, which will be to kill the well through the relief wells 
which are penetrating the subsea and which now are close to 
8,000 feet below the surface of the sea. So those efforts 
continue. They are continuing in parallel, not in sequence, and 
nothing is being spared to bring this problem under control.
    In the headquarters at Houston, where I have now spent 
probably 10 days in the last 3 or 4 weeks, the scientists from 
the United States of America, from Sandia Labs, from Livermore, 
and from Los Alamos Laboratories, along with scientists from 
the United States Geological Survey, the Department of Defense 
experts are all assembled there, making sure that the best 
minds are being brought to focus in on the problem. That is at 
the direction of the President.
    Let me comment just then on two of the issues, and I know 
that the committee will have many questions on these matters. 
First, Deputy Secretary David Hayes has been involved on this 
effort--now I think we enter day 51 or 52--nonstop, like the 
rest of us. We are relentless. We haven't taken a day off from 
the beginning, and we will continue to work at this same level 
until we get this problem under control and we figure out the 
future with respect to oil and gas and the Outer Continental 
Shelf.
    Steve Black, who is the counselor to the Secretary, has 
been involved in all the energy issues at the Department of 
Interior and was one of the key architects of the safety report 
that was submitted to the President at his direction. So, he 
may have answers to some of the questions with respect to the 
safety report.
    Let me speak to the status of offshore drilling because I 
think that is something which many of you on this committee are 
very interested in, wanting to find out where we are. No.1, the 
President, following the Deepwater Horizon, directed the 
Department of Interior to develop safety recommendations within 
30 days.
    The goal is simple. If we are going to move forward with 
any kind of oil and gas production in the Outer Continental 
Shelf, it must be done in a safe manner, and assumptions that 
were made about safety in the past are not assumptions that 
will be made in the future. To the extent that offshore 
drilling will continue, it has to be done in a manner that we 
can assure that it can be done in a safe way. So, the multiple 
recommendations that came out to the President in the report 
are now in the process of being implemented at the Department 
of the Interior.
    Those recommendations include additional enforcement and 
safety measures. They include requirements, which essentially 
amount to a recall of blowout prevention mechanisms and the 
recertification of those blowout prevention mechanisms in the 
Outer Continental Shelf.
    They include requirements with respect to cementing and 
with respect to casing, with respect to rig safety and a whole 
host of other safety initiatives. They are being implemented 
through Notices to the Lessees, which we implemented yesterday 
by sending a Notice to Lessees that affects both deep water and 
shallow water. So there is a panoply of safety measures which 
are significantly enhanced from what had existed in the past 
that are already being implemented as we speak here.
    No.2, with respect to the status of offshore drilling, I 
wanted to comment on the moratorium and also what we are doing 
with respect to shallow water development. First of all, with 
respect to the moratorium that the President and I have put 
into place, it was our view that we needed to get to the 
bottom, that we needed to find out exactly what it is that 
happened out at the Deepwater Horizon so that as we move 
forward with any kind of deepwater exploration that we can 
assure the American public and we can assure everyone who is 
watching that, in fact, it can move forward in a safe way.
    The President's commission, which will take a look at all 
of these issues, will have a recommendation based on the 
President's directive within 6 months. Those recommendations 
will then be incorporated into how we move forward with Outer 
Continental Shelf drilling.
    But between now and then, it was our view, it was the 
President's directive that we press the pause button. That is 
important for all of you on this committee to know that word. 
It is the pause button. It is not the stop button, but it is 
the pause button. It is a pause button so that we can make sure 
that if we move forward with OCS drilling in the Outer 
Continental Shelf that it can be done in a way that is 
protective of people and protective of the environment as well.
    With respect to the shallow waters, which I defined 
essentially at a 500-foot level, we have allowed those oil and 
gas shallow water production efforts and drilling efforts to 
move forward if, in fact, the operators can certify to us that 
they can meet the safety requirements. For most good operators, 
they will be able to give us the requirements that we have 
imposed on them, including certification that their blowout 
prevention mechanisms, that their redundancies, that their 
cementing procedures, that their casing procedures are all 
working.
    So, we wanted to allow shallow water drilling to move 
forward if it could be done in a way that can assure safety, 
and the Notice to Lessees that went out yesterday hopefully 
will achieve that.
    Let me then speak to the second point I wanted to cover 
this morning, and that is with respect to the Minerals 
Management Service and the changes that we are undertaking 
within that agency. It is important to reflect back also at the 
work that has gone on with MMS over the last 16, 17 months at 
the Department of Interior, and there has been massive work 
that has gone on.
    From day one, we imposed ethics requirements on MMS that 
had not existed before. We made ethics requirements a part of 
the performance plans of supervisors within MMS. Those who were 
involved in wrongdoing were referred to prosecution, or other 
personnel action was taken with respect to people who had been 
involved in wrongdoing.
    Our purpose in taking those reforms was to change the 
culture at MMS, and I believe that we have made significant 
progress in moving on that agenda. Second, we also move forward 
with a whole new agenda with respect to renewable energy, 
recognizing oil and gas is important. We also have recognized 
that there is tremendous opportunity with respect to wind power 
in the offshore.
    Yesterday, I signed a memorandum of understanding with 10 
Governors along the Atlantic coast because we believe that a 
very significant amount of the electricity needed along the 
eastern seaboard can, in fact, be generated from wind power off 
of the Atlantic, and the States along the Atlantic coast are 
very interested and supportive of those initiatives. So we have 
moved forward with a major renewable agenda, energy agenda 
within MMS.
    Finally, on reform efforts, the plans which we announced at 
the end of March were a culmination of a very significant 
amount of work taking into account and consideration two 
different plans that have been put forward by the prior 
administration, the 2007-2012 plan, as well as their 2010-2015 
plan. The plan that we came out was very different from what 
had been proposed.
    We ended up postponing leases that had been planned in the 
Chukchi and the Beaufort Sea, as Senator Murkowski well knows, 
in large part because of the fact that we felt we needed 
additional science and we needed additional information with 
respect to oil spill response capability. We looked at places 
like Bristol Bay in Alaska, and we said it was too special and 
had the kind of ecosystem values there that needed to be 
protected for the long term.
    But we were also looking at making sure that those areas 
where you had the right infrastructure, where you had the 
support of, say, governments, where we had the geophysical 
information, that we allowed oil and gas production to move 
forward. Certainly, that was what we put forward with respect 
to the Gulf of Mexico.
    There are other places on the Atlantic, and I know Senator 
Menendez and others have been very interested with respect to 
the Atlantic. In the North Atlantic, we took that off the table 
from any drilling exploration. In the Mid-and South Atlantic, 
what we said we would do there is essentially develop 
additional information so that we can make thoughtful decisions 
relative to the future of the OCS. So that a plan that we came 
up with, in fact, was a part of what I consider to be one of 
the most significant changes that we came up with MMS.
    Now, moving ahead, how do we take this very critical 
function of the Department of the Interior of the United States 
of America and organize it in a way so that we can make sure 
that the functions of Government are being performed and being 
performed well?
    We have, through Secretarial Order, ordered the dismantling 
of MMS as we knew it into what now will be three components 
going forward. You all know on this committee that MMS exists 
by virtue of a Secretarial Order. The Secretarial Order that I 
have signed envisions the creation of a new direction forward 
in terms of how we are organized, and let me just quickly walk 
through that, and I will conclude my testimony.
    The first is that we are separating the revenue collections 
of MMS totally away from that part of the department. MMS has 
historically been located within the Assistant Secretary of 
Land and Minerals Management. There are approximately 900 
people who work in that part of the department. Their job is to 
go out and collect the money on behalf of the American 
citizens, which they have done in good ways for a long time, 
including an average of $13 billion a year.
    Thirteen billion a year that comes into the Federal 
Treasury from oil and gas, and most of it coming from offshore. 
They do that day in and day out. Those functions of revenue 
collections will be moved away from Land and Minerals and put 
over into the Assistant Secretary of Policy Management and 
Budget, who is an Assistant Secretary appointed by the 
President, confirmed by the Senate. So, that will be a complete 
separation of the revenue collections from the permitting and 
the enforcement side.
    Then what we will do with the rest of the agency is we will 
divide it into two bureaus. One will be the Bureau of Ocean 
Energy Management, which will have the responsibility for 
moving forward with the lease sales, moving forward with the 
environmental analysis, and moving forward with making sure 
that the resource in the Outer Continental Shelf, both with 
respect to conventional energy and renewable energy, is being 
managed in the appropriate way.
    We will also create a Bureau of Safety and Environmental 
Compliance, which will be separate and apart from the agency 
that has the responsibility for giving out the leases. That 
will allow essentially the police function of Government to 
operate independently of the part of the Government that will 
be providing the leases and the planning with respect to the 
OCS.
    Now, how did we come up with this plan? I mean, we have 
been working on a new reorganization for MMS for several 
months. This plan, in large part, reflects what has happened as 
well in places like the UK and Norway, where after horrific 
incidents that they also had in their outer continental shelf, 
they reorganized their departments relative to how they oversee 
the outer continental shelf.
    So as we move forward with the reorganization, Chairman 
Bingaman and Senator Murkowski and the distinguished members of 
this committee, I want to work closely with you to make sure 
that the organization that we put into place will ensure the 
goals which were articulated by you, Senator Bingaman, and that 
is that we have safety and environment as a critical concern of 
how we move forward with development in the OCS.
    With that, Mr. Chairman, I would be happy to take your 
questions.
    [The prepared statement of Secretary Salazar follows:]
 Prepared Statement of Hon. Ken Salazar, Secretary, Department of the 
                                Interior

    Thank you, Chairman Bingaman, Ranking Member Murkowski, and Members 
of the Committee for the opportunity to be here today. I appreciate the 
opportunity to discuss our ongoing safety and management reform efforts 
related to offshore energy activities.
    Since I last appeared before you several weeks ago, we have 
continued our aggressive response to the BP oil spill in the Gulf of 
Mexico and efforts to improve the Department of the Interior's ability 
to respond to help prevent such events in the future.
    I will discuss these reforms in more detail later in my statement, 
but I want to be clear from the beginning that the changes that we have 
been making are substantive and systemic, not just cosmetic. These 
reforms are critical to help us prevent future occurrences of events 
like the Deepwater Horizon drilling rig explosion and the subsequent BP 
oil spill.

                      SUSTAINED EFFORT IN THE GULF

    At the direction of the President, Department of Energy Secretary 
Chu and I returned to Houston last week. Secretary Chu and I spent most 
of the week with BP officials and engineers and federal scientists 
continuing our work on ways to leverage the best science and 
engineering minds from across the federal government, academia, and the 
private sector to contain the BP oil spill. We have been monitoring 
BP's containment operations, conducting independent analysis of the 
data and operational plans to help maximize the chances of success.
    Under the command of Admiral Thad Allen, I directed Dr. Marcia 
McNutt, Director of the U.S. Geological Survey, to lead the effort for 
an independent estimate of the flow rate for the out-of-control well. 
We carried out this effort because we wanted our own assessment, 
independent of the estimates provided by BP. This preliminary 
scientific assessment, performed in collaboration with federal 
scientists and respected members of the academic community, is an 
independent estimate of the flow rate that will ensure that BP and 
other responsible parties will be held accountable for the oil spill, 
and will inform the response effort that is underway. The Flow Rate 
Technical Group, chaired by Dr. McNutt, is now in the process of 
determining a revised estimate of flow that takes into account the 
cutting off of the riser.
    Deputy Secretary David J. Hayes has continued to work virtually 
around the clock on Gulf-related response activities, coordinating the 
many efforts undertaken by the Department in responding to the spill, 
both in terms of capping the well, implementing new safety measures 
included in my recent report to the President, and in working to 
protect our trust resources from damage from the spill.
    Recently I named Bob Abbey, Director of the Bureau of Land 
Management, as the acting director of the Minerals Management Service 
(MMS) while we transition to new leadership. Bob has been one of our 
leaders on onshore energy reform and I believe he has the kind of 
experience we need as we continue moving forward with our reform and 
restructuring of the MMS offshore leasing and development and revenue 
collection programs.
    My top natural resources and science leadership continue their 
collective efforts on the Gulf Coast. Tom Strickland, Assistant 
Secretary for Fish and Wildlife and Parks; Jon Jarvis, Director of the 
National Park Service; and Rowan Gould, Acting Director of the U.S. 
Fish and Wildlife Service are working hard and leading the efforts to 
protect and assess damage to the complex ecology of the Gulf Coast in 
our National Wildlife Refuges, National Parks, and National Seashores. 
They and their bureau staffs are helping to develop and provide data 
and information for use by the Unified Command.

                          A BACKDROP OF REFORM

    When I appeared before you last time, I reviewed the major changes 
that we have made at MMS. Since January 2009 we have taken the bureau 
in a bold new direction, as exemplified by our massive undertakings to 
tackle the ethics challenges at MMS, develop a new plan for oil and gas 
development on the Outer Continental Shelf, and create the renewable 
energy program.
    We have worked to reform the MMS's culture of doing business by 
issuing new ethics standards for all MMS employees during my first 
weeks here at the Department in January 2009. I terminated the Royalty-
in-Kind program. I have implemented recommendations to improve MMS's 
royalty collection program that came from the Department's Inspector 
General and a committee chaired by former Senators Bob Kerrey and Jake 
Garn.
    We have also made major changes to the way that the offshore 
program does business. I cancelled lease sales in the Chukchi and 
Beaufort Seas because of concerns about the sensitivity of the Arctic 
and its unique vulnerability to oil spills. I cancelled the oil and gas 
lease sale scheduled for the magnificent fishing grounds of Bristol Bay 
in Alaska. The President formally withdrew Bristol Bay from any oil and 
gas leasing through June 30, 2017.
    Taking a similar, bold approach to change the direction at MMS, I 
extended the public comment period by 180 days on the Draft Proposed 5-
year Program for the OCS produced by the previous Administration. I 
held regional meetings with thousands of stakeholders in Alaska, 
California, Louisiana, and New Jersey.
    The information and input gained from these additional meetings led 
to our announcement, on March 31st, of a new and balanced strategy for 
exploring and developing our oil and gas resources on the OCS. This 
plan is intended to focus on development in the right ways and in the 
right places, provide order and certainty to industry and investors, 
and deliver a fair return to American taxpayers for the use of their 
resources.
    As we evaluate new areas for potential exploration and development 
on the OCS, we will conduct thorough environmental analysis and 
scientific study, gather public input and comment, and carefully 
examine the potential safety and spill risk considerations.
    Even before this occurred, I directed the National Marine Board, an 
arm of the highly respected National Academy of Sciences, to conduct an 
independent review of MMS's inspection program for offshore facilities. 
And our fiscal year 2011 budget request provides funding to increase 
the number of inspectors available for the offshore oil and gas program 
by more than 10 percent.
    This tragedy has also served to underscore the need to develop 
clean, renewable sources of energy. Since the beginning of the Obama 
Administration, the Department has been focused on these issues and has 
set priorities for the environmentally responsible development of 
renewable energy on our public lands and the OCS. As we have moved 
forward to implement the President's clean energy goals, we have 
expanded the scope of the MMS's portfolio to include a stronger and 
more effective renewable energy program.
    On March 11, 2009, I issued a Secretarial Order that made 
facilitating the production, development, and delivery of renewable 
energy on the Outer Continental Shelf and on public lands top 
priorities at the Department. These goals are being accomplished in a 
manner that does not ignore, but instead protects our signature 
landscapes, natural resources, wildlife, and cultural resources, and 
working in close collaboration with all relevant federal, state, Tribal 
and other agencies with natural resource stewardship authority.
    In April 2009 Chairman Wellinghoff of the Federal Energy Regulatory 
Commission and I signed an agreement clarifying our respective 
agencies' jurisdictional responsibilities for leasing and licensing 
renewable energy projects on the OCS. This agreement allowed us to move 
forward with the regulatory framework for OCS renewable energy 
development that standardized the process and brought certainty to the 
application process for OCS wind, solar and hydrokinetic resources. 
This framework is important as it provides the ``rules of the road'' 
for states and companies to pursue development of projects on federal 
submerged lands.
    I also approved the Cape Wind project off Massachusetts' coast, and 
we have taken the first steps to stand up major wind projects off the 
coasts of New Jersey and Delaware. I am working with the Atlantic Coast 
Governors to give renewed impetus to developing the potential for 
offshore wind projects. In keeping with this goal, yesterday I 
announced that the governors of East Coast states and I signed a 
Memorandum of Understanding formally establishing an Atlantic Offshore 
Wind Energy Consortium to promote the efficient, orderly, and 
responsible development of wind resources on the Outer Continental 
Shelf through increased federal-state cooperation. Under the MOU, the 
consortium will develop an action plan setting forth priorities, goals, 
and specific recommendations and steps for achieving the objectives 
outlined in the agreement.
    I also announced the establishment of a regional renewable energy 
office, located in Virginia, which will coordinate and expedite, as 
appropriate, the development of wind, solar, and other renewable energy 
resources on the Atlantic Outer Continental Shelf.
    The effort that we have put forward at the Department since January 
2009 has been a massive effort to chart a new direction for the 
Department of the Interior, including MMS.

                 SUBSTANTIVE AND SYSTEMIC IMPROVEMENTS

    The tragedy and the massive spill for in the Gulf have made the 
importance and urgency of this reform agenda clear. I have issued 
Secretarial Order No. 3299 announcing the reorganization of the MMS and 
the establishment of the Bureau of Ocean Energy Management; the Bureau 
of Safety and Environmental Enforcement; and the Office of Natural 
Resources Revenue.
    Under the supervision of the Assistant Secretary for Land and 
Minerals Management, the Bureau of Ocean Energy Management will ensure 
the environmentally responsible and appropriate development of the 
Outer Continental Shelf for both conventional and renewable energy in a 
predictable and effective manner. The Bureau of Safety and 
Environmental Enforcement will ensure that all production operations 
are safe and that potential negative impacts on marine ecosystems and 
coastal communities are appropriately considered in each phase of 
development and mitigated to the fullest possible extent through its 
independent regulation, oversight, and enforcement powers.
    Under the supervision of the Assistant Secretary for Policy, 
Management and Budget, the Office of Natural Resources Revenue will be 
responsible for the royalty and revenue management function ensuring 
the full and fair return to the American people for the utilization of 
these resources.
    I have asked the Assistant Secretary for Policy, Management and 
Budget, Rhea Suh, the Assistant Secretary for Land and Minerals 
Management, Wilma Lewis, and one of my Senior Advisors, Chris 
Henderson, to oversee these reorganization and reform efforts. They all 
have strong organizational skills and outstanding experience and 
expertise in strategic planning, business administration, and 
performance management in the public and private sectors that will be 
invaluable assets as we move forward to implement this effort, which 
will ensure the independence of the agency's inspections and 
enforcement mission.
    Mr. Chairman, I have testified before your Committee in support of 
organic legislation for the functions now performed by MMS. The OCS 
currently provides 31 percent of the Nation's domestic oil production 
and almost 11 percent of its domestic natural gas production. The MMS 
is one of the largest collectors of non-tax and non-trust revenue for 
the Treasury, and has collected an average of more than $13 billion 
annually for the past 5 years. Agencies with responsibilities of this 
magnitude should be governed by thoughtfully considered organic 
legislation.
    The President submitted to Congress, along with other 
Administration proposals to address the BP oil spill, legislation 
requesting additional funds for the Department to inspect offshore oil 
and gas platforms, draft enforcement and safety regulations, and carry 
out studies needed in light of this event. The legislation would also 
extend the time allowed by statute for MMS to review and approve oil 
and gas exploration plans from 30 to 90 days.

                      A STEADFAST FOCUS ON SAFETY

    Following the tragic and unprecedented explosion of the Deepwater 
Horizon drilling rig, I ordered immediate inspections of all deepwater 
oil and gas drilling operations in the Gulf of Mexico, and we issued a 
safety notice to all rig operators reminding them of their 
responsibilities to follow our regulations and to conduct full and 
thorough tests of their equipment.
    I also established an Outer Continental Shelf Safety Oversight 
Board comprising top Departmental officials charged with strengthen 
safety and improving overall management, regulation, and oversight of 
operations on the Outer Continental Shelf.
    On May 27th I delivered to the President the results of the 30-day 
safety review that he ordered us to undertake. The purpose of that 
Safety Report was to evaluate oil and gas safety measures that could be 
put in place on an interim basis before the on-going investigations to 
identify the root cause of the BP oil spill disaster have been 
completed. We consulted with a wide range of experts from industry, 
government, and academia in drafting this report, and the draft 
recommendations contained in it were reviewed by independent 
engineering experts.
    The report recommends a number of specific measures that can be 
taken on both a short and longer term basis to improve the safety of 
offshore oil and gas activities, including aggressive new operating 
standards and requirements for offshore energy companies. Key 
recommendations include a recertification of all Blowout Preventers for 
new floating drilling operations; stronger well control practices, 
blowout prevention and intervention procedures; tougher inspections for 
deepwater drilling operations; and expanded safety and training 
programs for rig workers.
    After reviewing the report, the President ordered us to immediately 
implement a number of actions, including a continuation of the existing 
moratorium and a suspension of the issuance of new permits to drill new 
deepwater wells until the Presidential Commission investigating the BP 
oil spill has completed its six-month review. We are taking these 
immediate actions now, and we are laying the groundwork for additional 
measures in the future. Just yesterday, for example, I announced the 
release of a ``Notice to Lessees'' that provides an initial set of new 
safety requirements that all offshore operators must meet, based on the 
Safety Report.

                               CONCLUSION

    Mr. Chairman, I look forward to working with you over the coming 
weeks as we continue to implement real reform to improve the safety, 
transparency, and efficiency of oil and gas exploration and production 
operations on the Outer Continental Shelf.

    The Chairman. Thank you very much.
    Let me just start, ask about the moratorium that you put in 
place. You have referred to it as ``pressing the pause 
button.'' How does that affect producing wells in the Gulf? Are 
there requirements you are putting on the wells that are 
currently producing wells, not those that are being developed, 
but those that have been in production and closed in and 
operating?
    Secretary Salazar. Senator Bingaman, with respect to the 
moratorium and its application, we have the moratorium in 
place, including with respect to the 33 deepwater drilling 
operations that were underway. What we have ordered those 
drilling rigs to do is to continue drilling to the point where 
they can get to a safe place and then secure the well. At that 
point in time, drilling will stop until we complete the safety 
reviews and the Presidential commission reports and we can make 
a determination about how we are going to move forward.
    With respect to your question on production, production 
continues in the Gulf of Mexico. There has been very little 
interruption because of the Deepwater Horizon on production 
from the Gulf of Mexico. We continue to do inspections and have 
asked for additional inspectors through the request to the 
Congress so that we can continue to inspect those facilities, 
including those production facilities.
    The Chairman. Let me ask on the--you mentioned the 15,000 
barrels per day that were captured, I believe you said, by BP 
in this effort they are making yesterday. Obviously, the key 
question is not how many barrels are captured, but how many 
barrels are coming into the Gulf that are not captured and how 
much oil is there that is continuing to add to the 
environmental damage and economic damage that that part of our 
country is suffering.
    Can you give us any more insight into how large that number 
is?
    Secretary Salazar. Senator Bingaman, I hope that in the 
next several days we will have a number that is based on 
science and includes pressure readings and the visuals of the 
plume that is coming out. We have, at my direction and under 
the command of Admiral Thad Allen, had Marcia McNutt, the 
Director of the United States Geological Survey, come up with 
our own independent numbers. We did not want to rely on BP to 
come up with their numbers.
    Before the riser was cutoff, the scientific group had come 
up with an estimate that was between 12,000 and 19,000 barrels 
per day. Now that the riser has been cutoff, there is an 
additional effort to take a look at what is coming out of the 
leaking well, and we hope to be able to have the scientists 
that are looking at that issue have some numbers that we will 
share with the American public and obviously with the members 
of this committee relatively soon.
    The Chairman. Is there any thought that perhaps the 
procedure that BP went through to cutoff the riser added to the 
quantity of oil coming out?
    Secretary Salazar. You know, Chairman Bingaman, I will say 
this and something that you might want to confirm with 
Secretary Chu and the scientists from the labs that have been 
involved in this. But their view, as it has been communicated 
to me, is that the range of increase may have been somewhere 
between 4 and 5 percent over what it was before.
    The Chairman. OK. All right. Let me ask what do you expect 
this other report, the one the President continues to refer to, 
which is this 6-month report, what do you expect that to yield 
in the way of is it going to make another series of 
recommendations similar to the recommendations that came out of 
your 30-day report? Or is it going to be trying to do something 
different?
    Secretary Salazar. I will have the Deputy Secretary David 
Hayes respond to that because he is in charge of the 
investigations and helping with the setting up of the 
commission. But there are multiple investigations that are 
going on, many reports that are coming in, and we are getting 
to the root causes. Everything that is happening here and will 
happen over the next several months will be fed into the 
Presidential commission.
    So, at the end of the day, there will be one report. But I 
will have the Deputy Secretary provide some additional 
information on that question.
    Mr. Hayes. Senator, could I ask you again which report is--
--
    The Chairman. The President has said that the moratorium 
will be in place until he gets his 6-month report, and that is 
the one that I am just interested in knowing what are we going 
to learn from that report, or is it going to be another series 
of recommendations in addition to an investigation, or what is 
it going to be?
    Mr. Hayes. Yes. Yes, thank you.
    That is a report from the new commission that has been 
established with Senator Graham and Bill Reilly. That 
commission we will be working with closely, per the Secretary's 
comments, to fold in everything that is going on so that they 
have in front of them the full record.
    There is, of course, a Minerals Management Service-United 
States Coast Guard joint report that is going on right now, 
joint investigation that will be fed into the Presidential 
commission. There is an independent evaluation by the National 
Academy of Engineering that will be fed into the commission, 
and the commission itself will be undertaking its own 
investigation. So we will be looking to the commission 
ultimately, and we expect to be in dialog to make sure that 
they have every piece of information potentially important for 
their deliberations on what their long-term recommendations 
are.
    The Chairman. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Secretary Salazar, you mentioned the decision as it related 
to the Chukchi and the Beaufort and your request for additional 
science and information. I don't know whether you have had an 
opportunity to review the white paper that has been presented 
by the U.S. Arctic Research Commission. They essentially are 
advocating for additional research in sub Arctic conditions.
    It is something that this commission has been focused on 
for some time, spent a fair amount of study on. It is a final 
draft, but I want to make sure that you have had an opportunity 
to at least review that. So we will make sure that you get a 
copy if you and your staff haven't.
    I wanted to ask you about the study or the review that was 
conducted, this 30-day review, prior to the new deepwater ban. 
There was an immediate inspection ordered by you to review all 
the deepwater OCS facilities. Can you give any more detail in 
terms of the results of those inspections, and did you unearth 
anything that was particularly revealing in terms of possibly a 
culture of unsafe activities?
    I know it was a very quick review, and you are now going 
into the longer term review. But was there anything that was 
noticeable in that initial review?
    Secretary Salazar. No, we ordered the immediate inspection 
of all 33 operations that were underway, and as I recall, the 
information that came back to us is that they were all in 
compliance with the requirements of the regulations and with 
the exception of two or three. The incidence of noncompliance 
were relatively minor.
    I will say this, Senator Murkowski, that one of the things 
that has been learned here is that there is much more that can 
be done with respect to what we are doing concerning the safety 
requirements imposed on companies. For example, the testing of 
blowout prevention mechanisms, one of the things that I think 
has already been learned by the Deepwater Horizon incident as 
they have moved forward and started to drill the relief wells, 
the two relief wells, which are the ultimate solution to this 
particular spill, they have done the testing of these blowout 
preventers in the subsea in ways that they haven't done before.
    So, the new requirements that we imposed through the Notice 
to Lessees that we sent out yesterday has significant 
additional requirements, and so there will be a whole panoply 
of those requirements that will now have to be met.
    Senator Murkowski. Let me ask you specifically about that 
because it was my understanding that the blowout preventer with 
the Deepwater Horizon had actually undergone a couple of tests 
only days before it failed, and those tests actually were 
successful. So how are we going to--I mean, I understand the 
purpose and don't disagree with additional testing. But do we 
really believe that recertification of the BOP would have done 
anything to enhance the reliability of that testing? Are we 
doing the right test I guess is the question?
    Secretary Salazar. There is a whole host of things that are 
going to come out with respect to blowout preventers, including 
the kinds of redundancies that are built in, additional casing 
shear rams which we will be requiring and additional 
redundancies in their actuation. So the safety report sets out 
a number of recommendations, and I will ask Steve Black to 
comment just briefly on the report because he was the principal 
author of the report on the safety recommendations.
    Senator Murkowski. When you do that, Mr. Black, in addition 
to understanding that, I am curious to know there is going to 
be a lot of new technical requirements that will be required 
going forward, and I understand that. But what about 
instituting some minimum training standards? For instance, if 
you are going to have new standards on certification, will you 
also require certification of people on the rig that are 
working in these areas that are related to safety and control?
    So you have got the technological side, but you also have 
the human side. I think we recognize that there has been human 
error here as well. So how does that integrate as well, if you 
can address that?
    Mr. Black. Thank you, Senator Murkowski. Mr. Chairman, 
thank you for the courtesies of sitting here today with the 
Secretary.
    To your first question, Senator Murkowski, with respect to 
the blowout preventer and the testing, I think it is important 
to remember that this safety report doesn't presuppose any 
investigation or the outcome of any investigation that is 
currently ongoing. It instead attempts to identify safety 
measures that can be taken immediately and improve the margin 
of safety with respect to offshore drilling.
    The blowout preventer on the Deepwater Horizon was, in 
fact, tested. But I think what we have learned is that those 
tests, as you suggest, didn't reveal perhaps modifications to 
the blowout preventer equipment or incompatibility between the 
ROV hot stabs and the ROV interface panel on the blowout stack.
    So we want to make sure that all blowout preventers, all 
subsea BOPs and surface BOP stacks, are reinspected in 
accordance with the original manufacturer specifications and 
that any repair or modification that has been made to the BOP 
stack is properly reported and understood so that in the event 
of an emergency, an intervention can occur.
    With respect to training, the report does, in fact, 
recommend that MMS, in conjunction with other stakeholders, 
develop new guidance and new regulations with respect to 
training, inspections, and a variety of other safety measures. 
So those, in fact, will occur. The department will lead that 
effort through workgroups that we set up at the department, but 
we do very much intend to work with industry, work with other 
stakeholders to develop that kind of requirement.
    Senator Murkowski. Thank you, Mr. Chairman.
    The Chairman. Senator Udall, is he here? I don't see him at 
this point.
    Let me go to Senator Shaheen.
    Senator Shaheen. Thank you, Mr. Chairman.
    Mr. Secretary, I appreciate the efforts that you have taken 
and that you have talked about this morning to reform the 
culture of corruption that has existed within MMS and recognize 
that this is a culture that has been created over a number of 
years, that you inherited when you took over this job. But I 
continue to be concerned about whether reorganization efforts 
will really address some of the corruption that exists there 
and the individuals who may have been part of that.
    Whether it is a reshuffling of the deck or whether it will 
really allow you to deal with that culture and get rid of the 
folks who have not been operating in a manner that they should 
be as they are looking at what needs to be done to regulate 
this industry. So can you talk a little bit about how confident 
you are about the reorganization that you have underway?
    Secretary Salazar. Senator Shaheen, it is a very good 
question, and let me say our reorganization is not cosmetic. 
Our reorganization is essentially blowing up MMS and putting it 
into different parts of the department and separating functions 
to avoid both perceived and real conflicts of interest. So it 
is an overhaul of this function of the Government in every 
complete sense of the way.
    Now it doesn't mean that things that we did before will be 
taken away. For example, still requiring ethics training and 
having ethics counselors and having ethics part of the 
performance standards, that all will be done as well. But what 
we have done under the Secretarial Order and will be 
implementing is a complete reconstruction of the MMS function.
    Deputy Secretary David Hayes would like to comment on that 
as well.
    Mr. Hayes. Senator, you raise a point that is central to 
our thinking in terms of the reorganization effort, and our 
view is that what is most necessary is a clarity of mission.
    Under the current structure, where you have the folks 
forward leaning under the statute leasing and being encouraged 
to do more and more leasing, more and more permitting, almost 
by virtue of the statutory structure, you have the employees 
accepting that mission and executing it. There has not been as 
clear a mission on the enforcement and safety side, candidly. 
We think that, structurally, by separating these functions, 
creating a clear mission, there will be execution.
    It has become evident to us, frankly, in the last 50 days 
that the employees can execute a mission. We have asked them to 
turn on a dime, to put in place some significant new safety 
requirements, and they are doing it. So we have some views that 
we can do this if we get clarity of mission by separating these 
functions.
    Senator Shaheen. Thank you.
    I want to switch the topic a little bit. I know that 
everyone is focused right now on ending the current spill and 
dealing with the cleanup. But one of the things that struck me 
when we had the principals from BP, Halliburton, and Transocean 
here before this committee was their response when I asked them 
what they were doing to address research on deepwater spills 
and cleanup. The answer from all three was zero. They are 
committing no resources to doing anything about how we deal 
with these kinds of situations in the future.
    As I am sure you all know, right now, we are spending about 
$50 million a year as the Federal Government to fund R&D for 
exploration and production of oil and gas in ultra deep waters, 
but we are not spending nearly that amount to address cleanup 
and containment and what happens when we get into the kind of 
situation that we are in right now.
    We are fortunate at the University of New Hampshire to have 
the Coastal Response Research Center, which is one of the 
premier centers in the country that is looking at these issues, 
and in talking to their director, Dr. Nancy Kinner, one of the 
points that she made to me is that right now what we really 
lack is any funding, either in the industry or from the Federal 
Government, to address this kind of research.
    So can you talk about whether you think we should be 
spending at least as much on cleanup and containment as we are 
spending right now on how to drill in deep water and if you 
have thoughts about how we should be looking at this issue in 
the future and where the resources should come from?
    Secretary Salazar. Senator Shaheen, this will be and is one 
of the questions that will be addressed by the Presidential 
commission and we are addressing as well. The fact is that BP 
did have an oil spill response plan. The fact is that that plan 
contemplated the ability to respond to a spill of several 
hundred thousand barrels per day. The fact also is that that 
plan has not been effective in protecting the sensitive ecology 
of the Gulf of Mexico and the people of the Gulf of Mexico. So, 
there will be a review of all of these issues to determine what 
is it that is needed.
    There is research underway with respect to oil spill issues 
all of the time. In fact, in Senator Menendez's State of New 
Jersey, there is an oil spill laboratory which looks at oil 
spills and how to contain oil spills. So, this is an area, 
obviously, which will be one of those lessons to be learned.
    Senator Shaheen. But would you agree that, in fact, the 
resources to really look at this issue have not existed?
    Secretary Salazar. The answer to that is yes. I mean, the 
resources in terms of looking at spill response and dealing 
with some of the deepwater issues I don't think have been 
there.
    Senator Shaheen. Thank you.
    The Chairman. Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for your directness. You have 
talked to us directly. You haven't used notes. You obviously 
have got your head straight on the challenges you face, and we 
appreciate that. I want to work with you to deal with this 
crisis.
    We are now in the 51st day, and the people I talk to in my 
State are concerned. They are concerned that we are not doing 
enough to stop the flow, and they are concerned about the 
effectiveness of our barriers and so forth.
    I will say that Thursday and Friday of last week, I was in 
Mobile and met with the Coast Guard and BP officials. We met 
Friday with local mayors, county commissioners, State 
representatives under the leadership of Governor Riley, who has 
personally been committing much of his time to this effort, and 
the mood was not good. People felt like that there had been a 
lot of promises made, a lot of uncertainties there that they 
still haven't gotten true facts about. But I believe our people 
are determined. They want to bounce back from this, and I am 
confident that we will. But we don't need to make any more 
mistakes. We need to be as effective as we can.
    So with regard to particularly a problem that I believe 
resulted from a violation of an agreement with the Governor of 
Alabama concerning the boom material that was removed from our 
State, I do believe that you have responded to that, and there 
has been some progress in restoring at least some of that. I 
think that is important. It is just a matter of good faith.
    If you are working with the Governor and you make 
commitments, you need to try to make sure that that happens. I 
guess this was a Coast Guard decision, but it is a matter that 
was important as we build the kind of State, local, and Federal 
teamwork that we need to deal with this crisis.
    To follow up on the chairman's question about the flow, 
first of all, I would like to get a little better picture about 
the flow, how much is coming out. You have indicated that it 
was originally projected to 12,000 to 19,000 barrels a day? Is 
that correct? That is the last report you have, and you have 
another report coming out soon?
    Secretary Salazar. Yes, and I will speak more to it when 
you finish your question.
    Senator Sessions. That would be my question. What is the 
status of the flow today? Do you expect to see any changes in 
your report in the future, and I would like to follow up on 
about how much is being captured and how much there has been a 
reduction in the flow, if any?
    Secretary Salazar. Let me make a comment, and then I will 
have David Hayes, who has been working for most of the night on 
this issue of the flow rate, also comment on it.
    It was important for us to have our own independent 
assessment with respect to the flow rate because there are 
legal consequences, as you well know, from every barrel that is 
spilled. So we have not relied on BP for the flow rate analysis 
that has been done. Under the command of Admiral Thad Allen, 
there has been a flow rate group that has been established, 
which is headed by Marcia McNutt, the Director of the U.S. 
Geological Survey.
    A group of scientists came up with those initial ranges of 
12,000 to 19,000. There is additional information that has been 
developed now, post riser cut, which those scientists are 
working on very hard to try to come up with a clear answer so 
that the American public knows what the flow rate is and so 
that we can make sure that we are as prepared as possible to 
carry out the response----
    Senator Sessions. Can I interrupt you? The information is 
so different. For example, you indicated that after the cut of 
the riser, we may have had a 4 or 5 percent increase in flow 
rate, but originally, I think there was a projection from some 
official source of a 20 percent increase. I see some people 
have projected far more than that. How confident are you that 
we have sustained just a 4 to 5 percent increase?
    Secretary Salazar. Let me say that it is important for us 
to have the right number, and that is what is being worked on 
right now. In fact, Secretary Chu and Marcia McNutt and I have 
a meeting on this coming up today to make sure that we get to 
the right number.
    We will get to that right number because the American 
people need to know it. It has been difficult to get to the 
right number because of the subsea conditions that have been 
operated, and I am going to have David comment on that.
    But I want to just respond, Senator Sessions, my friend, 
that the issues relating to Alabama and the issues of boom, the 
President and Thad Allen, who is the national incident 
commander on this, he calls it as he sees it, and I think he 
has resolved those issues with the Governor, including putting 
in writing what was supposed to happen.
    So let me just say that on the part of Thad Allen with whom 
I work with multiple times every day, no effort is being spared 
to make sure that the people of the Gulf coast are being 
protected. If you find that there are things that are not going 
on, Senator Sessions, in your State, please give me a call, and 
we will get to Thad Allen immediately.
    I would like, just because he has been working on it all 
night and may have more recent information on the flow rate, 
maybe to kind of give you a sense of what is going on because I 
think it is of interest to the chairman, as well as to all the 
members of the committee. So if that would be OK with you, Mr. 
Chairman?
    Senator Sessions. While you do that, Mr. Hayes, my question 
is over. I would just hope that you would talk about how much 
is being captured and what you project is a reduction, if any, 
in the flow.
    Mr. Hayes. Certainly, Senator. Let me sort of paint the 
picture here of the Government's effort to identify the flow 
rate. As the Secretary testified, a flow rate technical group 
was formed, and Dr. Marcia McNutt, the Director of the USGS, is 
in charge of that. There are seven independent scientists that 
are on that group.
    A couple of weeks ago, they--before the riser was cut, 
looked at a variety of data streams to do an estimate of how 
much might be leaking out. At that time, there were some leaks 
in the kink of the riser and then at the end of the riser. Also 
at that time, there was a tool that was bringing some of the 
material up from the end of the riser, you will recall, and 
collecting some of that material.
    They had several different work streams. They had video 
that they ordered, the Government required BP to provide the 
video so they could look at the video and attempt to calculate 
how much might be coming out. They also did a mass balance 
based on aerial work and subsea work to try to estimate how 
much was on the surface, how much had evaporated, and sort of 
back-calculate how much might be coming out. Those were the 
primary approaches.
    What they came up with was a range. Two of the workgroups 
came out with a range of 12,000 to 19,000 barrels a day. The 
video workgroup came up with 12,000 to 25,000 barrels a day as 
the potential estimate with a lot of uncertainty because there 
was not good information about what the oil-to-gas ratio was. 
So when you are looking at the video, it was difficult to 
figure out, essentially, how much would be oil versus the gas, 
which behaves differently.
    They also were asked to estimate--this is to your question, 
Senator--how much if we cutoff the riser would there be an 
increase in the amount of flow. The Government scientists in 
Houston, including Dr. McNutt, with the BP folks did a variety 
of calculations and came up with a range of 6 to 20 percent as 
a potential increase by virtue of losing some of the resistance 
in the riser.
    The Government scientists came out and said it could be as 
much as 20 percent. That is not something BP wanted to say. In 
fact, they did not say that. The Government said it could be as 
much as 20 percent. The decision was made to do the riser cut 
anyway because of the potential to capture more of that oil 
through the top hat, which is now occurring.
    What is happening now is a reevaluation of all of this, 
both in terms of the original estimates and also we have new 
information now that the riser is cut. We have ordered BP to 
give us high-resolution video that the same group that looked 
at and estimated the flow based on the video looked at. It is 
much harder, frankly, to discern and evaluate leaks in the kink 
and at the end of the riser, they are now looking at a single 
point with high-resolution video.
    We now have much better information on the oil-to-gas ratio 
because of the material that has been coming up to the riser. 
So we think that that group that is now looking at the video 
and applying a gas-to-oil ratio will come up with a much better 
estimate of how much is coming out of the riser.
    As the Secretary alluded to, we are also getting additional 
data. We have more information about relative pressure points, 
and there is a lot of speculation, frankly, that the increase 
may have been substantially less than 20 percent from the 
cutting off of the riser. But we are going to find out very 
soon from this group that is looking at this issue very hard.
    In fact, all seven of these scientists just received what 
they required of BP; very specific segments of the video from 
the post riser cut. They actually had to take it--they got the 
whole hard drive from BP, we required it. They got some 
specialists to take the segments that they needed to look at. 
They are now reviewing it. We expect to have additional 
information very soon on that point.
    They are also relooking at the earlier estimates. So you 
will see a new Government estimate very soon on the flow rate. 
In terms of the amount collected, we want that new flow rate, 
and we will have it very soon and then can back-calculate 
essentially how much we believe, therefore, has been out from 
day one. I don't have that number, Senator, right now, but we 
expect to have a much better number very, very soon. Thank you 
for your patience.
    Senator Sessions. You said 4 to 5 percent increase. Is that 
some sort of an estimate to date that you think is accurate? Is 
that Secretary Chu's----
    Mr. Hayes. I think there is in terms of the group of 
Government scientists that are looking at this, they are seeing 
some data that suggests that the increase that occurred when 
the riser was cutoff was less than we were afraid it might be. 
So we hope to confirm that soon.
    Senator Sessions. Soon? Soon, this is almost 2 months----
    The Chairman. Let me move on to other questions here. You 
have had more than 10 minutes.
    Senator Sessions. Over time, I know.
    The Chairman. Yes. Senator Menendez, go ahead.
    Senator Sessions. I think they need a good number soon.
    Senator Menendez. Thank you, Mr. Chairman.
    Mr. Secretary, let me start off by applauding the 
administration's decision, at least at this point, to cancel 
lease sale, Virginia lease sale 220. I opposed it from the very 
beginning. It puts the New Jersey shore directly at risk. You 
know, that risk I think is more palpable today, as we have 
tried to make the case for some time that oil cannot be 
contained in neat little boxes in the ocean. It is certainly 
not being contained in the Gulf of Mexico.
    Now that we are entering hurricane season, even the natural 
loop current and where the projections of the trajectory of 
that oil is, is subject to mother nature. If you have hurricane 
season and the hurricane hits the Gulf, the consequences of 
where that oil goes for those of us on the east coast is 
increasingly of concern. So I think it was smart at this point.
    I appreciate the administration's decision to support 
moving toward unlimited liability as it relates to the 
responsibility of oil companies. It seems to me that if you 
take and create unlimited consequences that you should have 
unlimited liability. I think it is an opportunity for oil 
companies to also have discipline knowing that if that is their 
liability obligations that they will discipline themselves not 
to take short cuts or to cut corners, as some have suggested 
happened in this particular incident. I think that is important 
as well.
    But I heard when you said we are only having a pause 
button. For those of us along the Atlantic, we want to see much 
more than a pause button. We want to see an effort that clearly 
makes it clear that we are not looking to put multi-billion 
dollar--just New Jersey alone is a $50 billion coastal tourism 
industry. So I hope that we understand that.
    Let me just ask two questions that I think are critically 
important. All the regulations in the world are good, but if 
they are not enforced, it doesn't mean much. I know you know 
that as a former Attorney General. The reality is, is that when 
I look at BP's response plan, it doesn't take a rocket 
scientist to know they couldn't have been very serious because 
when they had sea otters, walruses, and seals as part of the 
response that they would have to animals in the Gulf, last time 
I looked, we don't have those animals in the Gulf.
    Obviously, they didn't really have a plan to deal with the 
worst-case scenario. It is something we have to look going 
forward as to what, in fact, we permit. I mean, I don't 
understand who reviewed that plan and saw those elements in 
their plan and said you can't be serious. Maybe in the Arctic, 
but not in the Gulf of Mexico. It doesn't take a rocket 
scientist to figure that out. So you really have to question 
who is reviewing these things.
    Second, MMS--a Houston Chronicle review of accidents 
investigated by MMS found that of nearly 400 offshore safety 
investigations, MMS collected only 16 fines of 400 
investigations. So I know that you are reforming MMS. The 
question is are we going to have the right regulatory oversight 
and vigorous oversight so that we don't relive this, including 
on response plans?
    Last, are we--in challenge, there have been some reports 
that there is another drilling rig near the Deepwater Horizon 
called the Ocean Saratoga that appears to be leaking with a 10-
mile long slick visible from satellite images. It was only 
discovered because of the images of the Deepwater Horizon. Do 
you have any information on whether that is, in fact, a spill 
that is occurring? If so, what is being done to stop it?
    Secretary Salazar. Let me, Senator Menendez, I appreciate 
your comments and I know your passionate views on these issues 
for a long time. Let me assure you that they are taken into 
consideration.
    With respect to the other spill that you speak about, my 
understanding is that it is a remnant left over from Hurricane 
Ivan and that it is leaking, I guess, at approximately about a 
third of a barrel a day. But we will get some additional 
information for you on that.
    With respect to your----
    Senator Menendez. Can you get for the whole committee, but 
certainly I would like to know----
    Secretary Salazar. Sure.
    Senator Menendez [continuing]. How long that has been going 
on as well?
    Secretary Salazar. Sure. We will----
    Senator Menendez. What is the intent to close it down?
    Secretary Salazar. We will get that information to you.
    With respect to the enforcement of regulations, it is 
precisely the reason why we are moving forward with the 
creation of a Bureau of Safety and Environmental Enforcement. 
It needs to have the kind of police power to make sure and the 
personnel and the culture to make sure that regulations are, in 
fact, enforced. So, that is part of the reorganization and 
overhaul of MMS that we are undertaking.
    The goal is one which I very much share with you, Senator 
Menendez, and that is we must have vigorous and complete 
enforcement mechanisms in place with respect to any oil and gas 
activities in the Outer Continental Shelf.
    Senator Menendez. I will close. My time is finished. But 
let me just say you can't be coach and referee. MMS has, as it 
was constituted before, been both an advocate for the industry 
and supposed to be the referee of making sure that safety and 
soundness and a whole host of other things were observed. That 
simply didn't happen. We had a police officer that was asleep 
at the switch.
    If you look at the response plan and see that it doesn't 
make any sense, then alarm bells should have risen that, in 
fact, these people really are not prepared for the worst-case 
scenario. I hope we learn from that as we move forward.
    Thank you, Mr. Chairman.
    The Chairman. Senator Corker.
    Senator Corker. Thank you, Mr. Chairman, and thanks for 
having this hearing.
    Mr. Secretary, I welcome you back. I am struck by the 
dignity and directness with which you have presented today. I 
thank you for that--and your two colleagues who are with you. 
It actually has raised a question as I have watched you. I 
watched, on the other hand, the White House, which seems to 
exhibit some characteristics of adolescence or something like 
that. I am wondering what is the relationship that we have at 
present with BP?
    I know you talked about the fact is that you don't have the 
equipment. They have the equipment. What is that true 
relationship? Do the machinations that come out of the White 
House, do they contribute in a positive way toward that 
relationship? Where are we with BP as far as carrying it out? 
What is the actual direct relationship that you have with them 
in causing this crisis, which is a national tragedy?
    For what it is worth, I have said no critical comments 
regarding that because it is just a national tragedy. We need 
to all figure out the best way of dealing with it, and we can, 
after the fact, do some quarterbacking. But what is that 
relationship, and how are you carrying out these daily 
operations?
    Secretary Salazar. Thank you, Senator Corker.
    The relationship is one in which we, the U.S. Government, 
are directive of the things that are going on with BP. There is 
a structure which is part of the national framework and the 
national contingency plans, which are required by law which 
have been effectuated. So, we have a commander, a unified 
commander in Thad Allen, who is overall responsible for 
everything that is going on.
    But I think perhaps, to answer your question, even over the 
last several days, what we have done is crafted orders that 
have gone to BP that require them to move forward with leak 
containment mechanisms, expanded beyond the amount that they 
had contemplated initially. So they are responsive to the 
orders and directives that we have given them.
    Related in part to Senator Sessions's questions on flow 
rates, for example, we are requiring them to provide additional 
pressure information and take additional pressure readings so 
that we can have better estimates with respect to flow rate. So 
the relationship under the law and under the President's 
direction has been to be one of being directive to BP, and we 
have been carrying that out every day, whether it is in 
Houston, whether it is in any of the Gulf States, or whether it 
is----
    Senator Corker. So, on a daily basis, do you get up and you 
direct BP as to what to do?
    Secretary Salazar. On a daily basis, 51 days into this 
spill, let me just say we are on top of it with everything that 
we have, and that is the President of the United States. It is 
the White House personnel who have been involved in this effort 
with us. It is my colleagues on the Cabinet, including 
Secretary Napolitano, who oversees the Coast Guard.
    Senator Corker. But let me just--and again, I really 
respect you, and you know that. We have had a good friendship. 
Do you all like tell them on a daily basis what activities to 
engage in?
    Secretary Salazar. We----
    Senator Corker. I mean, that is what I am taking from this. 
I am just----
    Secretary Salazar. I receive, and it was at my order and 
Thad Allen's order, a review from BP of what their work streams 
are, all running in parallel because we didn't want them to run 
sequentially. Those are received daily. That is at our 
direction.
    I have a personal conversation with Andy Inglis, who is the 
head of BP running the operations out of Houston, to get an 
update every morning. Secretary Chu joins me on some of those 
meetings. When we find deficiencies, such as looking at the 
fact now that we believe they need to have additional 
redundancies in place, as you look at hurricane season before 
you get to the ultimate sealing of the relief wells, we order 
them to provide those additional containment capacities and 
redundancies.
    So it is a dynamic relationship, but it is a directive 
relationship between the United States and BP, which is what is 
contemplated, Senator Corker, by the law. I mean, the law is 
very clear. BP is the responsible party.
    They are responsible with respect to dealing with the oil 
spill. They are responsible for dealing with all the damages 
that flow from the oil spill. They are responsible for 
compensating those that are damaged from the oil spill, and the 
President has been very clear and very direct, as all his team 
has been, that we will hold BP accountable.
    The Chairman. Are you through with your----
    Senator Corker. I have more questioning, but I will opt to 
honor the time. Again, thank you for the way you conducted 
yourself today. I appreciate that very much.
    The Chairman. Senator Stabenow.
    Senator Stabenow. Thank you, Mr. Chairman.
    Welcome, Secretary Salazar. It is always wonderful to see 
you, although these circumstances are ones that we all wish we 
were not having to be involved in. To all of you, thank you for 
your service. This is a horrendous situation.
    I appreciate the efforts that you are taking and have taken 
since the beginning of your term to focus on reforming what has 
clearly been a broken process. I think it is important that we 
learn lessons from history, from the past. Otherwise, we are 
condemned to repeat them. That is certainly a very famous 
phrase, and I think it is very, very true today in terms of the 
way we approach the public interest in our jobs as it relates 
to overseeing what is done in the private sector when it 
relates to public risk.
    In my judgment, this has been a perfect storm of a 
particular company that has had, according to the records, 97 
percent of all of the egregious and willful safety violations 
being brought by this company, coupled with a philosophy that 
has been in place for the last decade and other times in our 
history that basically said step back and let industry police 
itself, even when there is tremendous risk to the American 
public if they cut corners.
    We have seen that on Wall Street. We saw it with miners' 
lives being lost. We are now seeing it with oil companies. So, 
I would like you to respond to how we move forward to correct 
that a little bit more.
    But I do want to enter into the record something, a piece 
of what was in the Washington Post yesterday because I think it 
is very important. The headline was ``BP Had A History of 
Problems.'' This goes to how we go forward on these kinds of 
situations with companies with these kinds of histories. ``A 
series of internal investigations over the past decade warned 
senior BP managers that the oil company repeatedly disregarded 
safety and environmental rules and risked a serious accident if 
it did not change its ways. The confidential inquiries, which 
have not previously been made public, focus on a rash of 
problems at BP's Alaska oil drilling operations. They describe 
instances in which the management flouted safety by neglecting 
aging equipment, pressured employees not to report problems''--
and we have heard the same thing here with this instance--``cut 
corners, delayed inspections to reduce production costs.
    ''Similar themes about BP operations elsewhere were sounded 
in interviews with former employees in lawsuits and little-
noticed State inquiries, as well as emails. Taken together, 
these documents portray a company that systematically ignored 
its own safety policies across its North American operations 
from Alaska to the Gulf to California. Executives were not held 
accountable for the failures. In fact, some were promoted 
despite them.``
    It is pretty outrageous. Pretty outrageous. So, my question 
relates to knowing that this landed in your lap. I mean, I 
understand with the new administration, whether it was trying 
to put us back from the edge on the financial crisis or 
millions of people unemployed that landed in the laps of this 
administration or whether it is this situation, the reality is 
we have got to make sure that going forward we are changing the 
philosophy.
    The philosophy that got us here doesn't work in the public 
interest. Just it hasn't worked. Millions of people are paying 
the price--taxpayers, people who have lost their jobs, the 
environment, and so on.
    So, Secretary, as we look at going forward, the ethics 
reform you have put in place, the March plan that you put in 
place to begin to review permits and so on, the dismantling of 
MMS, dividing it up, all of the important work that you are 
doing now, do you see these kinds of things, a company like 
this with their track record, coming forward that there will be 
the new tools in place for you and for MMS or for the new 
entities to be able to say no, to be able to stop these kinds 
of things that have gone on in the past?
    Secretary Salazar. Senator Stabenow, the answer is yes. 
That is what our full intent and purpose is as we move forward. 
I would respond in two ways. First, the Presidential commission 
that has been formed and the investigations that are underway 
will get to the root cause of what happened here. We have 
preliminary information that points some to human error, some 
to signs that were not caught, problems with cementing, 
problems with casing, problems with some of the backup 
redundancy systems, the safety systems, and so on.
    So all that is going to be made public, and the American 
people and the U.S. Government will know what exactly happened 
here. With the root cause known and the actors known, it will 
lead to whatever results they will lead, including whatever 
culpability under the laws of the United States of America. So 
that is our intention there.
    We, in our overhaul of MMS, understand the importance of 
the critical missions of MMS and the importance of separating 
out the functions from the revenue collector from the part of 
the agency that gives out the leases. So the Bureau of Safety 
and Environmental Enforcement, which we are creating, will 
provide us with that kind of vigorous enforcement, which you 
want and which the American people want.
    Senator Stabenow. Thank you.
    The Chairman. Senator Burr.
    Senator Burr. Thank you, Mr. Chairman.
    Mr. Secretary, welcome. I am not going to ask you about 
what went wrong because I truly believe that the President 
understands that this is going to take a great deal of review, 
and that is the purpose of the commission. I want to commend 
you because I think that you have stayed focused on the 3 most 
important things--one, to stop the leak; 2, start the cleanup; 
three, then assess what went wrong and, more importantly, what 
changes we need to make. I believe I have consistently heard 
that out of you.
    Let me ask you, can you comment on the agency's involvement 
in preparing the Atlantic coast for any potential oil fallout 
from the loop current?
    Secretary Salazar. Let me just say that Thad Allen, who is 
the commander on this, has been working tirelessly on making 
sure that we are anticipating for the problems that will occur. 
Right now, in terms of the States that are at risk are the ones 
that are in the Gulf coast, but we are prepared for the worst-
case scenario. He is preparing for the worst-case scenario.
    Senator Burr. I would encourage at the earliest point that 
you can share that with the Atlantic coast States, we would be 
happy to hear that and, more importantly, prepare as well.
    Do you believe the areas in which you have implemented new 
safety requirements cover the issues that caused Deepwater 
Horizon's accident?
    Secretary Salazar. I think that the areas where the safety 
recommendations are being implemented will help have a safer 
environment for drilling activities in the Outer Continental 
Shelf. Those recommendations, which Steve Black led on my 
behalf, came about through input, including from the National 
Academy of Science's arm of engineering. So, my view is that 
they are very good, and we are headed in the absolute right 
direction.
    Whether there will be additional requirements that will 
come forward from the Presidential commission, we are open to 
ideas. The goal is here that we need to have assurance of 
safety whenever we are conducting any kind of OCS operations.
    Senator Burr. Sure. Let me ask you for a very candid 
answer, and David is closer to it, in case he wants to comment. 
Has BP at any point refused to do what the Government has 
asked?
    Secretary Salazar. We have had a directive relationship 
with them. So, we have wanted them to do something, it is 
ordered and----
    Senator Burr. Have they ever refused?
    Secretary Salazar. They have not refused anything that I 
have ordered them to do. Now, whether--but I am not running the 
operation, and this is a national incident. So, it is----
    Senator Burr. If you would like to check back on that and--
--
    Secretary Salazar. I will check with Secretary Napolitano 
and with Thad Allen.
    Senator Burr. I was told by an industry technician that I 
called in that didn't work for BP what steps the entire 
industry and the science community were attempting, and he 
said, Senator, everybody, every smart person is at the table. 
Everybody from industry, regardless of the company, everybody 
from the science community that might have input is at the 
table making the decisions, evaluating the steps forward. Is 
that an accurate statement?
    Secretary Salazar. Let me just respond to that because I 
have spent--the last 51 days on this and it has consumed most 
every waking moment that I have had. I will say this, that in 
the day or days after the explosion, I pulled together all of 
the CEOs of companies that have operations in the Outer 
Continental Shelf, directed BP to take their input and to make 
sure that they were reaching out and getting the best science 
of the world.
    The President directed Secretary Chu and the Federal labs 
also to be involved in making sure that those minds were being 
brought to bear on the problem. So, from the point of view 
which I have the best minds of the world are focused on this 
issue and stopping the leak and resolving the problem.
    Senator Burr. I appreciate the confirmation of what I have 
been told.
    The last question, Mr. Chairman, is the purpose of the 
Graham commission to determine what failed and to make 
recommendations on what changes should be made for the future?
    Secretary Salazar. Yes.
    Senator Burr. All right, thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Cantwell.
    Senator Cantwell. Thank you, Mr. Chairman.
    Secretary Salazar, good to see you. I wanted to ask you a 
couple of questions about your recommendations today and just 
to make sure that I am clear about them. Many of the 
recommendations that are in your report apply to floating 
vessels and floating drilling operations. But I think this 
could potentially leave out about one-third of what are called 
mobile offshore drilling units because only about one-third of 
these are considered floaters and would be under this 
definition of regulation.
    So are you considering that definition and how to have a 
tighter consideration and make sure we don't have a loophole 
there, or is there something I am missing about the difference 
between these facilities? Maybe Mr. Black is better to answer 
this, I don't know.
    Secretary Salazar. Let me just say we are aware of the 
distinction, and the moratorium in place applies to deepwater 
drilling. The Notice to Lessees that I talked about earlier 
that imposes safety requirements for drilling that will occur 
is now in the shallow waters that we define to be 500 feet or 
less.
    I will have Steve Black comment on the concept of the 
floating vessel because that was a central component of the 
report.
    Mr. Black. Senator Cantwell, thank you.
    If I understand your question correctly, floating rigs are 
rigs that are not either jack-up rigs and anchored on the sea 
floor or moored rigs, but instead mobile rigs that are 
dynamically positioned and, therefore, have different risks, a 
different risk profile and usually a subsea BOP stack. So the 
recommendations are intended to cover all of the mobile 
drilling rigs.
    We may need to get more information from you just to 
clarify that answer, but that is our intent.
    Senator Cantwell. Yes, I think that in the term and in 
definition I think you are missing some of those mobile 
offshore drilling units. So I think a big number. So we should 
look at that.
    Then also I wanted to clarify the report has recommendation 
to include third-party verification and validation of 
technology in use and aspects of blowout preventers, but it 
doesn't include a requirement for a full top-to-bottom look at 
a system or classification by somebody like ABS, the American 
Bureau of Shipping. So why not do that?
    Mr. Black. Senator Cantwell, the third-party verification 
requirement is an attempt, it is sort of one of the principles 
of the safety recommendations. In addition to ensuring 
redundancy, the Secretary recommended to the President, and the 
President agreed, that with respect to recertification of 
blowout safety equipment that those inspections should be 
verified by a third party not affiliated with the company or 
the drilling contractor.
    That third party and the qualifications of that party, you 
know, in the Notice to Lessees that the Secretary put out 
yesterday, we specified that the company needs to hire a 
qualified third-party verifier. So it may very well be that 
someone with those qualifications would meet that test.
    Senator Cantwell. I think we need to be more specific here, 
too, on your recommendations because you don't want somebody 
looking just at a blowout preventer and whether that works. You 
are looking at the blowout preventer as part of a system, and 
you want to understand whether the system is going to fail.
    Or I am just going off of some of the testimony we have had 
before us from the various people involved, and everybody down 
the line pointed the finger at somebody else. ''Oh, well, it 
was supposed to work, but you didn't have the right hydraulic 
fluid,`` or this was supposed to happen.
    So we want to make sure that we are looking at a validation 
of this, I believe, by third parties. So, we would like to 
suggest some language to you on that as well.
    Secretary Salazar. Senator Cantwell, if I may, we are 
obviously open to whatever recommendations that you might want 
to give us. The safety recommendations dealt with much more 
than just the blowout prevention mechanisms. They dealt with 
cementing. They dealt with casing. They dealt with training and 
a whole host of other things.
    So there is a panoply of recommendations that we are 
implementing at this point. If there are things that we have 
missed, please let us know, and I am sure that as we go 
forward, including getting the recommendations from the 
Presidential commission, there will be additional requirements 
that will have to be imposed.
    Senator Cantwell. I think the American Bureau of Shipping 
has provided a good third-party validation of these various 
technologies, and I think we should continue to use them. But I 
think getting the definition right so that people don't just do 
a cursory look at it, but actually a systematic operation that 
is going to be critical for moving forward.
    So I thank the chairman and also the Secretary.
    The Chairman. Thank you very much.
    Senator Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman.
    Mr. Secretary, I want to thank you for all of your hard 
work on this. As you said, you have been working relentlessly, 
and I think every member of this panel, both sides of the 
aisle, think absolutely you have been working relentlessly on 
this national tragedy. So I want to thank you.
    A couple of questions, and you referred specifically to 
pushing the pause button with regard to the 6-month moratorium. 
I am concerned about jobs and the economy and want to visit 
with you a little bit about that.
    According to the Houston Chronicle, there are about three 
dozen deepwater drilling rigs that are affected by the 
moratorium that are expected to exit the Gulf and have new 
multiyear contracts in Brazil, other deepwater hot spots. That 
could lead to costly delays of projects and endanger jobs that 
would otherwise be there for folks in the Gulf.
    I think the Interior Department's May 27 report highlights 
the importance of offshore oil and gas production. It said that 
the OCS oil and gas industry provides high-paying jobs in 
drilling and production activities. It estimated 150,000 jobs.
    So there was an editorial in the Wall Street Journal today 
called ''A Second Oil Disaster,`` and it talked specifically 
about the specifics of the economics of those jobs. I am 
wondering if, in any way, you are looking at or giving 
consideration to lifting the moratorium, pushing that pause 
button sooner than the 6 months in order to help protect the 
jobs and the economy of that region from suffering a second 
hit?
    Secretary Salazar. Senator Barrasso, the importance of the 
jobs that are at stake here has been very much on the mind of 
the President and my mind as well. What we want to assure is 
that as we move forward with programs on the OCS, that they are 
going to be safe and that this circumstance that we are facing 
with the Deepwater Horizon never happens again.
    If it can be done before 6 months, then there is a 
possibility that we could take a look at it before then. But 
right now, we have multiple investigations that will culminate 
through the President's commission, and I think it would be 
unwise for us to move forward with deepwater drilling until we 
have those recommendations that are in front of us that we can 
then implement.
    Senator Barrasso. Just looking at the BP 58-page oil spill 
response plan for the region that was approved, I am trying to 
think how long it is going to take to work through all of this. 
For this specific well, the plan includes how to protect 
walruses, sea lions, and seals, none of which actually live in 
the Gulf. There was really minimal discussion on how to 
actually stop a worst-case scenario oil spill.
    So, I look at that and say can we be assured that at 6 
months that the pause button will be pushed, or do we look at 
possibly having a stop button and extending this even a longer 
period of time, again focusing on the economics in that region.
    Secretary Salazar. Senator Barrasso, the frank answer to 
that question is I don't know today, and that is because 
information is still being developed as to the root cause of 
this particular incident, as to recommendations that we will 
implement with respect to safety, as to the reorganization of 
parts of the Department of Interior which I think are 
essential, which I hope to work with the members of this 
committee on so that we have organic legislation for these 
functions.
    But we are not waiting. The 30-day report that we submitted 
to the President, we worked on that very hard and included 
outside experts, including the engineering academy that was 
very helpful with their recommendations. So we are not waiting. 
We are moving forward to developing information and the 
implementation of programs even in the interim as we speak.
    Senator Barrasso. You had mentioned Admiral Thad Allen and 
his involvement. He had said that BP has the means to fix the 
problem, and they need to be held accountable to do it, but 
with proper oversight, he said, and that is our job.
    I was struck yesterday to hear that the CEO of BP said he 
had not actually talked directly to the President of the United 
States, and the President of the United States confirmed that 
in an interview I think with Matt Lauer yesterday. I think a 
lot of Americans were surprised because you would think that 
there would be some value in the two of them talking.
    Senator Burr a little earlier asked had BP refused to do 
anything that the Government asked? Kind of a follow-up to that 
is has the Government refused to do anything that BP has asked 
in terms of trying to be helpful to stop this leak?
    Secretary Salazar. I am not aware that the Government has 
refused any request in terms of science from the labs, in terms 
of Department of Defense capabilities if they are needed. Thad 
Allen has the power and the ability to call on those resources.
    Let me respond to your first question, if I may, Senator 
Barrasso, and your comment on the President. The fact of the 
matter is from the very beginning of this, we have been having 
a directive relationship with BP. Whether it is Tony Hayward or 
Andy Inglis or Lamar Alexander, I met with them on multiple 
times. I pushed them to give the statement they have made to 
the America people that they will not hide behind liability 
caps and that they will pay for every cent of response cost, as 
well as any damages that occur from this national tragedy.
    So we have had the directive relationship, which I 
characterized at one point as the Buddha on the neck of BP. I 
told BP at the beginning that that was what the relationship 
was going to be, and we will continue to have that kind of 
relationship until we get a conclusion of this incident.
    Senator Barrasso. Thank you, Mr. Secretary, for your hard 
work.
    Thank you, Mr. Chairman.
    The Chairman. Senator Landrieu.
    Senator Landrieu. Thank you, Mr. Secretary. I appreciate 
your focus and attention on this issue, which is, of course, 
extremely important to the people of Louisiana and the Gulf 
coast in a very particular personal and emotional way because 
of what is happening right off of our shore.
    But it is what is happening on the shore that has me 
concerned right now. You know what my question is going to be, 
and it is one that everyone in Louisiana is asking, as well as 
people from Mississippi, Texas, and Alabama.
    In the appendix of this report, May 27, it lists the names 
of 15 experts that you consulted with on your report. I 
received a letter yesterday from 8 of them, a majority, that 
say they disagree with your decision to impose the 6-month 
moratorium.
    In their words, ''The report does not justify the 
moratorium as written. The moratorium as changed will not 
contribute measurably to increased safety and will have an 
immediate and long-term economic effect.``
    These experts believe, and I agree, that this report 
includes some important recommendations. But I don't believe, 
like they don't believe, that this temporary pause, if it lasts 
very much longer than a few months--not 6, just a few months--
it could potentially wreak economic havoc on this region that 
exceeds the havoc wreaked by the spill itself.
    I am going to submit to the record testimony from companies 
that no one on this panel will recognize because they are not 
oil companies. Aker Solutions employs 750 employees in Texas 
and Alabama. Bollinger Shipyards has been in business for 64 
years. They have testified to us they have never experienced 
such an uncertain future. They could be laying off thousands of 
workers.
    Broadpoint, Inc., 27-year-old privately held company, 100 
employees based in the Gulf coast, their operations will be 99 
percent affected almost immediately. C&C Technologies, they 
provide mapping. They are not even an oil company. They expect 
layoffs immediately.
    The consequences of this moratorium on the 33 deepwater 
rigs where 100 to 200 people work on each one, and for every 
one on the rig, there are four or five jobs directly supporting 
that job, not counting the 10,000 jobs, this could be 
devastating to our State and to the Gulf coast, an area that is 
fragile economically from the ravages of the storms just 
recently.
    So, on behalf of the people I represent, I am asking can 
you give any time certain, can you give any confidence that we 
can keep our people at work, get our people back to work, 
understanding there are some safety issues. If not, what are 
you going to tell the potentially--according to the documents 
that I am going to submit to the record, Mr. Chairman, it could 
affect 330,000 people in Louisiana alone. I don't have the 
Mississippi numbers. I don't have the Texas numbers. I don't 
have the Alabama numbers.
    Three hundred thirty thousand people, that is 13.4 percent 
of Louisiana's work force. Now I know not this whole work force 
is focused on deep water. It is on shallow. But if not a time 
certain, a shorter time than 6 months, some confidence that you 
are doing everything and the President is doing everything they 
can to get to the root of safety implemented so we can produce 
the oil not just for ourselves, Mr. Secretary, but for the 
country that needs it.
    Secretary Salazar. If I may, Senator Landrieu, respond to 
the question in three ways. First, the experts that were 
involved in crafting the report gave us their recommendations 
and their input, and I very much appreciate those 
recommendations. It was not their decision on the moratorium. 
It was my decision and the President's decision to move forward 
with the moratorium, but I do appreciate the experts and their 
involvement and their point of view.
    Second, the jobs are a concern to us. But we want to make 
sure that as OCS development takes place that it is going to be 
done in a safe way. That is why the Notice to Lessees that went 
out yesterday will allow the shallow water development programs 
still to continue.
    The third point I would make, Senator Landrieu, to frame 
the discussion perhaps in this committee, it seems to me that 
we have three options. One would be to say full speed ahead. 
The 33 drilling rigs that are out there----
    Senator Landrieu. Nobody is suggesting----
    Secretary Salazar [continuing]. Just go, don't stop. Move 
forward. Another option would be what some Members of the 
Congress would want us to do and other members of the public, 
and that is just to stop and say no more drilling or 
exploration activities in the Outer Continental Shelf.
    The place where the President of the United States and I 
have arrived at this issue is we have put the pause button 
until we can have a sense of safety that this is never going to 
happen again. Now when we lift our hand from the pause button 
will be dependent on when we can get to that point.
    Senator Landrieu. OK. Let me ask this and submit one thing 
to the record, and I appreciate the chairman's leeway here. But 
for the record, Texas uses, just the State of Texas, 1.1 
billion barrels of oil a year. California uses 750 million. New 
Jersey uses 226 million. Connecticut is the least. It is 795.
    Now, nobody is suggesting these consumption numbers are 
going to go down any time soon. So there are some economic 
risk, some national security risk in terms of less oil being 
produced domestically, as well as environmental risk. I am just 
saying that needs to be balanced, and I know that you 
understand that.
    Then, finally, the question is, and you can answer it now 
or in writing, if these long list of companies that are not oil 
companies, but oil service companies have to either go out of 
business or take bankruptcy or lay off thousands of works, are 
you going to ask BP to pick up their salaries and to make them 
whole?
    Secretary Salazar. The answer to that is, yes, we will. BP 
is responsible, and BP is responsible for all the damages that 
flow from the BP oil spill, and these are some of the 
consequences from that oil spill.
    Senator Landrieu. Thank you.
    The Chairman. Senator Bennett.
    Senator Bennett. Thank you very much, Mr. Chairman.
    I have listened through the testimony waiting to ask my 
question, and no one else did until Senator Landrieu just 
covered all of the issues I had in mind. She did it very 
eloquently. So I won't take my full time, but simply call your 
attention, which Senator Landrieu has done, to the comments 
made by the outside experts that you turned to.
    Specifically, the National Academy of Engineering 
recommended a group of people as contributors and reviewers of 
the department's 30-day review of the oil spill. A group of 
them have signed a statement saying we were chosen because of 
our extensive petroleum industry expertise and independent 
perspectives.
    Then they quote the report, say we broadly agree with the 
detailed recommendations in the report and compliment the 
Department of Interior for its efforts. However, we do not 
agree with the 6-month blanket moratorium on floating drilling. 
The moratorium was added after the final review and was never 
agreed to by the contributors. Then they quote the report as 
they reviewed it and then quote the report as it was changed.
    You are correct, Mr. Secretary, you made the decision, and 
it is your legal and proper right to make that decision. I am 
not questioning that in any way. But simply quote the comments 
of these folks, they say, ''We believe the moratorium as 
defined in the draft report addresses the issues evident in the 
case. We understand the need to undertake the limited 
moratorium and actions described in the draft report to assure 
the public that something tangible is being done. A blanket 
moratorium is not the answer. It will not measurably reduce 
risk further, and it will have a lasting impact on the Nation's 
economy, which may be greater than that of the oil spill.``
    So this is signed by Kenneth E. Arnold, Dr. Robert Bea, Dr. 
Benton Baugh, and Ford Brett. Along with the material--oh, I am 
sorry--Dr. Martin Chenevert, Dr. Hans Juvkam-Wold, and Skip 
Ward, and Thomas Williams. I would ask unanimous consent that 
their statement be included, along with that of Senator 
Landrieu as presented.
    Mr. Secretary, I join with the comments of all of my 
colleagues in thanking you for your diligence and recognizing 
the kind of burden that this has put upon your department. You 
didn't sign up to deal with an oil spill. You thought you were 
going to be worrying about jack rabbits in the West and an 
occasional wilderness issue, and you have had to take this on, 
and you deserve all of the compliments that you have received 
from this committee.
    I don't want to add to your burden, but I do want to put 
this in the record as my own observation with respect to the 
issues that Senator Landrieu has raised.
    The Chairman. We will be glad to include whatever you have 
there in the record and what Senator Landrieu offered as well.
    Do you wish to respond to anything there, Secretary 
Salazar?
    Secretary Salazar. Just very quickly. I think I answered 
the question already. I appreciate the comment on the role that 
the engineers played and will continue to play as we try to 
move forward with the new safety regime for OCS.
    Let me also just comment, Senator Bennett, that when I 
signed up for this job, I signed up for it in large part 
because it is, in my view, the Department of America, and I 
often describe it as going from sea to shining sea as well as 
the 1.75 billion acres of the Outer Continental Shelf. We have 
a job to do all over this country, and one of the jobs that we 
have to do right now is to deal with this spill and to deal 
with the future plans for the OCS, and we will get it done.
    The Chairman. Senator Johnson.
    Senator Johnson. Thank you, Mr. Chairman.
    Welcome, Secretary Salazar. You have been doing a great 
job. I associate myself with the remarks of Senator Stabenow, 
and the last decade has been a hands-off policy, and you are 
responsible for changing that policy.
    Do you know whether the moratoriums and other actions will 
have any effect on U.S. oil production? If so, what effects do 
you anticipate?
    Secretary Salazar. Senator Johnson, there will be, I think, 
a report from the Energy Information Agency indicates that 
there will be an economic consequence and a production 
consequence that rises from this moratorium that we have 
imposed. So we are aware of the fact that there will be some 
reduction in oil and gas production. I don't have this document 
in front of me, but I recall reading it sometime late last 
night.
    I think it said that there could be about a 5-day amount of 
production that is consumed in the United States that would be 
affected by the moratorium. So there will be an effect, and I 
would be happy to get back to you with a more specific number.
    Senator Johnson. What percentage would that accrete to, 
daily production of the United States?
    Secretary Salazar. I don't have those specific numbers in 
front of me, but I would be happy to get those to you, Senator 
Johnson. I don't know if Deputy Secretary David Hayes or Steve 
Black, whether you have those numbers?
    We would be happy to get those to you, Senator Johnson.
    Senator Johnson. Are any shallow water production 
operations halted as a result of Mr. Abbey's June 2 memorandum, 
or does the action only affect wells currently in development 
and not yet producing oil?
    Secretary Salazar. Senator Johnson, the shallow water 
drilling activities still have to comply with these safety 
requirements, and our view is that companies that are out there 
that are doing a good job will be able to comply with these 
safety requirements to make sure that we have this added level 
of safety which we must have with respect to OCS. So our view 
is that shallow water development will be able to proceed and 
that the safety requirements are ones that will be able to be 
met by most of the companies.
    Senator Johnson. Would you explain which oil and gas 
operations are continuing in the Gulf of Mexico and which have 
been halted by your moratorium?
    Secretary Salazar. The oil and gas operations in the Gulf 
of Mexico that continue are in large part all the production 
activities. Production from the Gulf of Mexico has not been 
significantly affected. It has only been minimally affected by 
the Deepwater Horizon spill. So the production that was online 
continues to produce much of the energy that we are using here 
in this Nation today.
    What has been affected, as Senator Landrieu and others 
spoke about, has been the continuation of drilling activities, 
especially in the deep water. Those have been halted, including 
the wells that were being drilled from the 33 deepwater 
drilling rigs that were out there. We ordered those companies 
to get to a place where they could secure the well and then to 
stop until we give them further orders.
    Senator Johnson. Will you be revisiting the MOUs to confirm 
that each operation has been temporarily suspended and complies 
with the system regulations for a temporary plug and 
abandonment?
    Secretary Salazar. Senator Johnson, we will be making sure 
that the orders that we have given to lessees are, in fact, 
followed. The latest of those notices was one that was sent out 
yesterday, and that went to all lessees in the Gulf, including 
those in shallow and deep water.
    Senator Johnson. Thank you, Mr. Secretary.
    Secretary Salazar. Thank you very much, Senator Johnson.
    The Chairman. Senator Dorgan.
    Senator Dorgan. Mr. Chairman, thank you very much.
    Let me just say my colleague Senator Corker, I don't think 
he meant it quite as harshly as it sounded with respect to the 
issue of adolescence and actions by the White House. You know, 
my sense here is I agree with Senator Corker that this is a 
natural disaster. The President didn't punch that hole in the 
planet. He can't plug it either.
    But this President, the administration, you, Mr. Secretary, 
the Secretary of Energy, Dr. Tom Hunter, who I met with this 
morning are all working hard. There is a seriousness of purpose 
here that has brought together the best minds we have in this 
country to work with all of you, and I know this is very tough. 
You are as frustrated as we are on this committee that that 
hole hasn't been plugged yet. I wish it had been plugged the 
next day.
    But this proves to be very difficult and raises questions 
about regulations with respect to particularly deepwater 
drilling and so on. But I don't think it was meant as harshly 
as it sounded to me. I don't think there is any adolescent 
behavior here at all. I think there has been a seriousness of 
purpose by this administration and by everybody that is 
interested in trying to stop this gusher in the Gulf of Mexico.
    Let me ask a couple of questions. No. 1, you talked about 
BP, their responsibility, their pledge and their commitment. 
The fact is there is nothing legally binding in that. I asked 
the Justice Department if the fact that BP made a pledge was 
that binding on them? The answer is no.
    I think it is time now, and I think BP should be standing 
behind their pledge, as they have indicated they will. But who 
knows 6 months or 16 months or 6 years from now whether that 
will remain the commitment. I think it is time to ask for a 
portion of funds. I propose $10 billion, which is a bit more 
than the first quarter profits of BP, $6 billion or $7 billion, 
be put in a Gulf coast recovery fund that is run by a master 
who would be selected and perhaps a counselor from BP so you 
would have joint management of that designated fund.
    But in any event, I think it is time to move from a pledge 
to some sort of binding requirement by BP. If BP would say, no, 
we are not at this point going to direct money in a Gulf coast 
recovery fund, then I think Congress ought to be considering 
what we would do to secure that funding from BP, which is a 
possibility.
    There are people now who are sitting on an empty dock in a 
small town on the coast who own a boat, a fishing boat that is 
not being used, and they have got to make a payment at the end 
of the month. That is a substantial cost. There is a person 
perhaps there that is running a small cafe and nobody is going 
there, and they have got to make payments.
    So my point is I think it is time to start finding a way to 
create a binding requirement here, and I won't ask your 
evaluation of that. But I will ask you to consider that, and I 
have passed that recommendation along to Justice and the 
administration as well.
    Let me ask two other things. One is this issue of shallow 
water versus deep water. My guess is this gusher is going to 
change everything about underwater drilling and probably 
certainly for the better because there will be more regulations 
and more requirements that have a greater margin of safety as 
we do these things in the future.
    Is there a substantial difference in shallow versus 
deepwater drilling with respect to this type of accident? Had 
this accident occurred in water of 500 feet or 750 feet, do you 
think that the flow would have now been stopped?
    Secretary Salazar. The answer to that is yes because it is 
much easier to deal with these kinds of issues in shallower 
water than in deep water. When you are 5,000 feet below the 
sea, you can see the effort that BP has put together to try to 
stop this leak, and we are now 51 days into the continuing 
leak. It speaks for itself just the difficulty of operating at 
those depths.
    Some ask the seriousness of BP in stopping the leak. I have 
seen the multiple plans that are running parallel in nature to 
stop or contain this leak. As I have said before publicly, it 
is an existential issue for BP. So I do believe that they are 
throwing everything that they have at the problem and trying to 
contain it.
    We also believe that we ought not to allow BP to do it by 
themselves, and that is why the President's directive has been 
to bring people like Tom Hunter and other scientists to make 
sure that we are riding herd, as the President has said, over 
BP.
    Senator Dorgan. There is a public interest here. BP has its 
interest. Clearly, its interest must be to shut down this 
gusher. I understand that. But it also, in terms of evaluating 
various alternatives, is going to find a way to make certain on 
behalf of its shareholders its interest is met. There is also a 
public interest.
    They may well run parallel in all cases, but at times maybe 
not. But that is why there needs to be this concerted effort by 
those who represent the public interest. I want to----
    Secretary Salazar. If I may, just on that point?
    Senator Dorgan. Yes.
    Secretary Salazar. Because you mentioned Tom Hunter. I have 
gotten to work with people like Tom Hunter a lot over the last 
51 days. They are truly the best of scientists that America 
has, and as it is at the President's direction that you have 
people like Secretary Chu and Tom Hunter and Marcia McNutt, a 
whole host of others essentially that are overseeing these 
efforts.
    Senator Dorgan. Dr. Tom Hunter, for those that don't know, 
is the Director of Sandia National Laboratory, an extraordinary 
American. But he is just one of a group of the best thinkers in 
our country brought together by the administration to try to 
figure out what do we do here.
    If I have just another moment, and let me just say that you 
all look like you could use like 10 to 15 hours of sleep. I 
know the hours that you are likely working, and we thank you 
for that.
    Let me ask about when a hurricane enters the Gulf of 
Mexico, in normal times rigs and production platforms are 
prepared, are shut down, and personnel are evacuated to land. 
Is there now a written plan for that? Because we are now going 
into that season, and you have got a catastrophe out there with 
this gusher. Yet, we may well have during hurricane season 
something come along, and companies normally have had 
procedures to deal with that situation. Is there a written plan 
at this point for this circumstance?
    Secretary Salazar. The answer to that is, yes, Senator 
Dorgan, with respect to hurricanes that when they happened in 
the past there is a shutdown that occurs within the Gulf of 
Mexico. The answer also with respect to this particular leak is 
that it is one of the issues which Secretary Chu and I have 
insisted there be the capacity to deal with these issues even 
as this leak continues in the month or two ahead as they get to 
the relief well. So it is part of the program.
    Senator Dorgan. Let me say I don't mean that the three of 
you look awful----
    [Laughter.]
    Senator Dorgan [continuing]. When I said you need sleep. 
But I know that you are weary because this has been a long 
period of time, and you have not had a day off, I guess, in 51 
days. So, thanks for your work, good for you. I think this 
Congress wants to do everything possible it can do to be 
supportive.
    The Chairman. Senator Wyden.
    Senator Wyden. Thank you, Mr. Chairman.
    Mr. Secretary, the folks in the Gulf are hurting. As 
Senator Dorgan noted, you all are putting in prodigious numbers 
of hours at this point. I just want to ask you about two policy 
questions that relate to the report that you are making 
actually are, in my view, areas that the report doesn't get 
into.
    I feel very strongly that for the future, it is going to be 
absolutely critical to close the revolving door between the 
Interior Department and the oil and gas industry. There is a 
specific law governing officers and employees of the department 
involving the Outer Continental Shelf oil and gas program, but 
it sure doesn't look to me like it is closing the revolving 
door. Let me give you two examples.
    The first comes from the Bush administration. An MMS 
inspector applied for, got a job with the company that he was 
inspecting. The second one I think concerns me even more. That 
is, as of March 1, 2010, the previous Director of MMS is now 
the president of the Ocean Industries Group. This is the 
offshore oil and gas industry that he used to regulate. This is 
as of March 1, 2010.
    Now I am not saying this is breaking the law, but it sure 
suggests to me that the rules to block this revolving door are 
not tough enough. The report doesn't go into this. My question, 
the first question is would you be willing to work with me--we 
have worked together often--to toughen the conflict of interest 
and ethics requirements in this area to finally, once and for 
all, shut the revolving door?
    Secretary Salazar. Senator Wyden, the answer to working 
with you, absolutely. If there are things that need to be done 
to enhance the ethics mandates which we have put into place 
since I became Secretary of Interior and they can be enhanced, 
we obviously would want to do that.
    You know the history of MMS perhaps better than I think 
almost anybody else that I have worked with, and there were 
huge problems there. That is why people have been terminated. 
People have gone to jail. People have been reprimanded. 
Ultimately, what is essentially this blowup of MMS and the 
reconstruction of it and the way that we have ordered under the 
new Secretarial Order I think is essential, and the revolving 
door issue is an issue which we need to make sure doesn't 
happen.
    Senator Wyden. Let us follow up on it, Mr. Secretary, and 
particularly look at this one that I cited involving March 1, 
2010, because that is an example to me where my initial take is 
that the law may not have been broken. But for somebody who is 
the previous director now at the offshore oil and gas industry, 
let us follow it up.
    Here is my second question. With respect to the emergency 
response issue, I think there is a general consensus now that 
the emergency response has not been adequate. The Federal 
Government doesn't have the equipment to stop a gusher or deal 
with it as fast as you and I would like. BP doesn't either.
    What do you think about the idea of Congress requiring the 
oil industry, not on a company by company basis, to establish a 
permanent oil spill response capability. I am just putting this 
out by way of trying to get an initial assessment of it. The 
Congress has looked at previous approaches. The industry has a 
check-off program for R&D, for propane, the oil heat industry. 
There are other approaches that resemble this.
    But if it is going to be important to strengthen the oil 
spill response capability, do you think that this is an issue 
that ought to be examined?
    Secretary Salazar. Senator Wyden, it is an issue that needs 
to be examined and will be examined. I know the President 
himself has an interest in this and that we will look at the 
report from the Presidential commission that I think will very 
much address this issue.
    Senator Wyden. So that would be--I appreciate the answer, 
and I think what you have told me, it is on the table. That is 
what I was hoping for. Let us go to work, as you and I have so 
often in the past. Let us toughen up the conflict rules, 
particularly as it relates to the revolving door. Let us work 
on the emergency response capability, and we will look forward 
to talking to you some more after you get some sleep.
    Thank you, Mr. Chairman.
    Secretary Salazar. Thank you, Senator.
    The Chairman. That completes one round of questions. I have 
no questions in addition to that.
    I think Senator Murkowski indicates she does not have 
additional questions.
    Senator Corker, do you have----
    Senator Corker. I have just one.
    The Chairman. Go ahead.
    Senator Corker. Just I wasn't going to bring up the issue 
again. I know Senator Dorgan has elaborated. I want to say that 
I was trying to contrast what appears to me to be a very 
professional response from your department and other 
professionals to the political responses that occur, and that 
is all I was trying to do. I was trying to say that I 
appreciate the maturity that it seems that you have displayed.
    I realize on the political side people sort of move around, 
try to figure out where best to be. I do think, for what it is 
worth, that does affect the chain of command. It does affect 
how professionals end up dealing with a crisis when, in fact, 
the political side of it is trying to figure out where to be. I 
think that creates some issues, and I think I may talk with you 
offline about that. But if there are concerns about how you 
carry out a rescue mission like this with all the flitting 
around that seems to be taking place through the political 
side.
    But my question is one of Senator LeMieux--and he may have 
already talked to you about this--has been on television I know 
a couple of times and talked in our caucus a little bit about a 
story that appeared in the Mobile Register on April 29, and it 
talked about having nonflammable boom available so that when a 
spill like this occurs--and apparently, there was a preapproval 
process that took place so that when an emergency happens, you 
burn off the oil immediately. But you have to do that within 24 
hours, or the oil ends up being mixed up with the water, and 
you cannot burn it.
    That didn't occur in this case, and I know he has raised 
that several times with Admiral Allen, and I think he has 
written a letter to the Administrator of NOAA. But since you 
are here and since I know he has been talking about that 
publicly, I am sure you have a point of view on that, and I 
wondered if you might share it?
    He seems to think that 90 percent of the oil could have 
been burned if that process--I am just repeating, OK? I hope I 
am not repeating inaccurately. But much of it could have been 
done away with very quickly if that had occurred in the first 
24 hours.
    I have heard people talk about the weather and other kinds 
of things that may have been impediments, and I just thought I 
might give you the opportunity to respond since I know it is 
out there moving around in the public.
    Secretary Salazar. Senator Corker, Secretary Napolitano in 
so many ways, with Admiral Allen, has really moved forward to 
do everything within human capacity to deal with the boom 
issue. I know that they are doing everything that they can with 
respect to the boom.
    In terms of burns and booms that could contain oil close to 
the vicinity of the blowout and then having burns conducted, 
there have been literally dozens, in fact, I think over 100 
burns that have already been conducted to basically burn the 
oil on the sea. So it is a very active part of the leak 
containment program that is underway.
    As Admiral Allen often says, we are fighting the battle on 
multiple fronts. We are fighting it in the subsea to stop the 
leak. When the oil comes to the surface, we are fighting it on 
the surface. When the oil comes close to the shore, we are 
fighting to keep it from coming onshore. When it has come 
onshore, we are fighting it there as well.
    So, it has been a relentless effort. I would only comment 
on this last point, Senator Corker, with respect to the 
President's own involvement in this, I can tell you because I 
work with him a lot. He has been relentless in terms of pushing 
not only BP, but also the U.S. Government to do everything 
possible to protect the people of the Gulf coast and to protect 
the environment of the Gulf coast, and I can tell you that from 
Cabinet meetings to meetings that I have had with him in the 
Oval Office.
    He is the reason some people may say I am tired today. It 
is because there is a 51-day march that we have been on, and we 
will continue on this march under the President's direction 
until this problem is fixed and we figure out the way forward.
    Senator Corker. Back to the question at hand then, what you 
are saying is that is absolutely not an issue, that having 
flammable boom available to jump on that right away, for 
somebody to make a comment in that regard you are saying is 
totally off base?
    Secretary Salazar. Let me do this, Senator Corker. I will 
have either Secretary Napolitano or Admiral Allen get back 
directly to Senator LeMieux on the issue.
    Senator Corker. That would be good. But since I have raised 
the issue, too, I would love to hear about that.
    Secretary Salazar. I will have them get back to you as 
well.
    Senator Corker. All right. Thank you.
    The Chairman. Secretary Salazar, thank you very much for 
your time, and Godspeed in getting this problem solved.
    That concludes our hearing.
    Secretary Salazar. Thank you, Senator.
    [Whereupon, at 11:44 a.m., the hearing was adjourned.]


                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

    Responses of Hon. Ken Salazar to Questions From Senator Menendez

    Question 1. Relief wells are the only proven effective way to stop 
major oil spills--should operators be required to drill a relief well 
alongside and at the same time they drill exploratory wells in case a 
major accident happens? If not, why not? If the Department has 
determined that costs outweigh the benefits, where can I access that 
analysis?
    Answer. Regarding the drilling of relief wells, it may seem 
reasonable to assume that relief wells reduce risk, and that we could 
save time responding to any blowout by requiring operators to drill a 
relief well alongside each well drilled in the Gulf of Mexico. However, 
the risk of a blowout in the relief well may be the same as the risk of 
a blowout in the initial well. This increased risk is a direct result 
of drilling twice as many wells into a formation. Each well drilled 
increases the risk of a blowout simply because each well presents its 
own unique geologic and engineering risks. Relief wells have 
historically been an effective method to stop the flow of oil from the 
bottom of a well blowout and begin the process of pumping cement to 
abandon the well. However, both the risk and costs of drilling relief 
wells dictate that they are typically only drilled when necessary to 
respond to a well blowout. As demonstrated with the Deepwater Horizon 
response, there are other deepwater well containment options that may 
be faster and equally effective in reducing or stopping the flow of oil 
into the ocean. BOEMRE is in the process of establishing enforceable 
mechanisms to ensure the availability of blowout containment resources. 
And industry commitments have been made for new investments in 
designing and developing a multi-scenario, multi-component containment 
system.
    In fact, on July 21 four of the nation's largest oil companies 
announced that they have committed $1 billion to set up a rapid oil 
spill response system to deal with deep-water blowouts in the Gulf of 
Mexico. Exxon Mobil Corp., Chevron Corp., ConocoPhillips and Shell said 
the system of underwater capture devices and surface containment 
vessels will be similar to those used by BP to control the Macondo well 
and will be designed to capture up to 100,000 barrels of oil a day 
before it spills into the sea from wells sitting in water as deep as 
10,000 feet.
    The reality of future wells and production from the Gulf of Mexico 
is that most of the remaining oil and gas resources are located in deep 
formations with high pressures and temperatures, and exploratory and 
development wells as well as any potential simultaneously drilled 
relief wells all carry a risk of a blowout.
    Question 2. Has the Interior Department been submitting all 
government expenses to BP for reimbursement, including travel, lodging, 
and even meals, for all federal employees who have gone to the Gulf to 
respond to this spill? Is BP paying for your personal travel to 
Louisiana? Your meals? Your lodging? If not why not?
    Answer. Costs which fall within the statement of work under the 
Pollution Removal Funding Agreement (PRFA) the Department has with the 
U.S. Coast Guard are being reimbursed through a coordinated department-
wide process. Every bureau and office with a Deepwater Horizon related 
PRFA is tracking these costs according to the USCG's PRFA reimbursement 
guidance. Currently efforts to prepare and process reimbursement 
packages for costs incurred beginning on April 21, 2010 within the 
various PRFA agreements throughout the Department are underway. These 
packages will be prepared and submitted to the USCG on a regular basis 
until all Deepwater Horizon work is complete and expenses under the 
PRFA's are reimbursed. The Administration regularly bills responsible 
parties for oil removal costs, and has sent seven bills, to-date, of 
which the first six have been paid in full by BP, totaling $518.4 
million.More information about oil spill costs and the reimbursement 
process--including copies of the bills that have been sent to 
responsible parties--is available here: http://www.restorethegulf.gov/
release/2010/10/13/oil-spill-cost-and-reimbursement-fact-sheet.
    Departmental costs that are identified as not currently being 
reimbursed through one of the various PRFAs will be tracked in 
accordance with interagency guidance and provided to DOJ for their 
determination of whether to pursue reimbursement from the responsible 
parties.
    Question 3. What specific, near-term actions are being taken at MMS 
to ensure that all existing oil response plans accurately describe 
operators ability to respond to a worst-case scenario spill?
    Answer. BOEMRE has been proactive in assuring that operators of 
offshore facilities are able to respond to such an event in the Gulf of 
Mexico. Relevant, near-term actions taken by the bureau include the 
following:

   On May 19, 2010, BOEMRE inspected the Marine Spill Response 
        Corporation and the National Response Corporation spill 
        response equipment stockpiles in Tampa, Florida to ensure its 
        operational status and contractor training.
   BOEMRE continuously tracks the spill response equipment 
        inventory for the three major equipment providers here in GOMR.
   BOEMRE worked with USCG concerning allocation of response 
        assets in the event of another spill.
   BOEMRE consulted with USCG and the Environmental Protection 
        Agency regarding the emergency rule for Temporary Suspension of 
        Certain Oil Spill Response Time Requirements to support the 
        Deepwater Horizon Oil Spill Response. This temporary interim 
        rule allowed release of response equipment and vessels from 
        around the country for response to the Deepwater Horizon Spill 
        of National Significance. The USCG and EPA encouraged an 
        increase in available response resources for this response by 
        temporarily releasing these facilities and vessels from USCG 
        and EPA regulatory response time requirements, and EPA response 
        equipment identification and location requirements, if they 
        have had their own or contracted response resources relocated 
        to the Gulf of Mexico in support of the response to the 
        Deepwater Horizon spill. Additional information on this can be 
        found at: http://edocket.access.gpo.gov/2010/pdf/2010-15853.pdf
   BOEMRE developed a method to verify the worst case discharge 
        volumes for wells through the Exploration Plan/Development 
        Operations Coordination Document (EP/DOCD) review process as 
        prescribed in NTL 2010-N06, Information Requirements for 
        Exploration Plans, Development and Production Plans and 
        Development Operations Coordination Documents on the OCS that 
        became effective on June 18, 2010.
   BOEMRE is reviewing its ability to plan, implement, verify, 
        and adjust Oil Spill Response Plans given existing regulations, 
        in particular 30 CFR 254.30(e)(2), when relevant staff has 
        identified potential inadequacies based on the Deepwater 
        Horizon response.

    Question 4. At the hearing, I asked you to confirm reports of a 
second oil spill from another drilling rig, the Ocean Saratoga, near 
the Deepwater Horizon, which you confirmed, and said may have begun 
with Hurricane Ivan, in 2004. I request that you expeditiously provide 
follow-up information about this spill to the Committee, including when 
it began, the estimated flow rate, plans to clean up and investigate 
the spill, and future monitoring plans of the Department to ensure all 
oil spills are detected and addressed in a timely manner.
    Answer. The oil leaks in the vicinity of the Diamond Ocean Saratoga 
drilling rig are from wells originally drilled from a now downed 
platform destroyed by Hurricane Ivan in September 2004. The platform is 
located in 440 feet of water approximately 15 miles southeast of the 
Mississippi River delta. The Ocean Saratoga is under contract to Taylor 
Energy LLC, as operator of the Mississippi Canyon Block 20 (MC020) 
platform destroyed by Hurricane Ivan, to drill relief wells and set 
plugs in the destroyed wells to prevent future oil pollution.
    The Mississippi Canyon Block 20 Project is managed under a Unified 
Command consisting of the USCG, BOEMRE, and Taylor Energy, which holds 
monthly operational meetings with Taylor Energy and contractors to 
manage the well abandonments and site clearance operations for the 
MC020 platform. Taylor Energy no longer operates active oil and gas 
leases in the Gulf of Mexico, but is the operator of the MC020 Project 
under a trust agreement created with the then-Minerals Management 
Service in March 2008. Taylor Energy is reimbursed for well abandonment 
and site clearance work from the trust fund after review of completed 
work by the Unified Command. The oil leak flow rates in MC020 are 
generally measured in gallons (i.e. less than one barrel per day). 
While the wells have periodically discharged volumes exceeding several 
barrels per day, the leaks have subsided due to the plugging of six 
wells and the installment of an oil containment system. Taylor Energy 
LLC and contractors designed, fabricated, and installed a containment 
system of collection domes and a collection tank for containment of 
these leaks. Under the direction of the Unified Command, Taylor Energy 
has also contracted with an oil spill observer contractor to fly over 
the MC020 site and report estimates of oil leak volumes to the Unified 
Command.

                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

  The Primary Recommendation in the May 27, 2010 report, ``INCREASED 
SAFETY MEASURES FOR ENERGY DEVELOPMENT ON THE OUTER CONTINENTAL SHELF'' 

 Given by Secretary Salazar to the President Misrepresents our Position

    The National Academy of Engineering recommended us as contributors 
and reviewers of the recent Department of Interior ``30 Day Review'' of 
the BP Oil Spill. We were chosen because of our extensive petroleum 
industry expertise, and independent perspectives. The report states:
    ``The recommendations contained in this report have been peer-
reviewed by seven experts identified by the National Academy of 
Engineering. Those experts, who volunteered their time and expertise, 
are identified in Appendix 1. The Department also consulted with a wide 
range of experts from government, academia and industry.''
    The BP Macondo blow out was a tragedy for eleven families, and an 
environmental disaster of worldwide scale. We believe the blowout was 
caused by a complex and highly improbable chain of human errors coupled 
with several equipment failures and was preventable. The petroleum 
industry will learn from this; it can and will do better. We should not 
be satisfied until there are no deaths and no environmental impacts 
offshore--ever. However, we must understand that as with any human 
endeavor there will always be risks.
    We broadly agree with the detailed recommendations in the report 
and compliment the Department of Interior for its efforts. However, we 
do not agree with the six month blanket moratorium on lfoating 
drilling. A moratorium was added after the final review and was never 
agreed to by the contributors. The draft which we reviewed stated:

          Along with the specific recommendations outlined in the body 
        of the report, Secretary Salazar recommends a 6-month 
        moratorium on permits for new exploratory wells with a depth of 
        1,000 feet or greater. This will allow time for implementation 
        of the measures outlined in this report, and the consideration 
        of information and recommendations from the Presidential 
        Commission as well as other investigations into the accident.
          In addition, Secretary Salazar recommends a temporary pause 
        in all current drilling operations for a sufficient length of 
        time to perform additional blowout preventer function and 
        pressure testing and well barrier testing for the existing 33 
        permitted exploratory wells currently operating in deepwater in 
        the Gulf of Mexico. These immediate testing requirements are 
        described in Appendix 1.

    We agree that the report and the history it describes agrees with 
this conclusion. Unfortunately after the review the conclusion was 
modified to read:

          The Secretary also recommends temporarily halting certain 
        permitting and drilling activities. First, the Secretary 
        recommends a six-month moratorium on permits for new wells 
        being drilled using floating rigs. The moratorium would allow 
        for implementation of the measures proposed in this report and 
        for consideration of the findings from ongoing investigations, 
        including the bipartisan National Commission on the BP 
        Deepwater Horizon Oil Spill and Offshore Drilling.
          The Secretary further recommends an immediate halt to 
        drilling operations on the 33 permitted wells, not including 
        the relief wells currently being drilled by BP, that are 
        currently being drilled using floating rigs in the Gulf of 
        Mexico. Drilling operations should cease as soon as safely 
        practicable for a 6-month period.

    We believe the moratorium as defined in the draft report addresses 
the issues evident in this case. We understand the need to undertake 
the limited moratorium and actions described in the draft report to 
assure the public that something tangible is being done. A blanket 
moratorium is not the answer. It will not measurably reduce risk 
further and it will have a lasting impact on the nation's economy which 
may be greater than that of the oil spill.
    The report highlights the safety record of the industry in drilling 
over 50,000 wells on the US Outer Continental Shelf of which more than 
2000 were in over 1000 feet of water and 700 were in greater than 5000 
feet of water. We have been using subsea blowout preventers since the 
mid-1960s. The only other major pollution event from offshore drilling 
was 41 years ago. This was from a shallow water platform in Santa 
Barbara Channel drilled with a BOP on the surface of the platform.
    The safety of offshore workers is much better than that of the 
average worker in the US, and the amount of oil spilled is 
significantly less than that of commercial shipping or petroleum 
tankers. The US offshore industry is vital to our energy needs. It 
provides 30% of our oil production, is the second largest source of 
revenue to the US Government ($6 Billion per year), and has a direct 
employment of 150,000 individuals. The report outlines several steps 
that can be taken immediately to further decrease risk as well as other 
steps that should be studied to determine if they can be implemented in 
a way that would decrease risk even more.
    This tragedy had very specific causes. A blanket moratorium will 
have the indirect effect of harming thousands of workers and further 
impact state and local economies suffering from the spill. We would in 
effect be punishing a large swath of people who were and are acting 
responsibly and are providing a product the nation demands.
    A blanket moratorium does not address the specific causes of this 
tragedy. We do not believe punishing the innocent is the right thing to 
do. We encourage the Secretary of the Interior to overcome emotion with 
logic and to define what he means by a ``blanket moratorium'' in such a 
way as to be consistent with the body of the report and the interests 
of the nation.
    The foregoing represents our views as individuals and does not 
represent the views of the National Academy of Engineering or the 
National Research Council or any of its committees.
                    Kenneth E. Arnold, PE, NAE; Dr. Robert Bea, 
                            Department of Civil and Environmental 
                            Engineering, University of California at 
                            Berkeley; Dr. Benton Baugh, President, 
                            Radoil, Inc.; Ford Brett, Managing 
                            Director, Petroskills; Dr. Martin 
                            Chenevert, Senior Lecturer and Director of 
                            Drilling Research Program, Department of 
                            Petroleum and Geophysical Engineering, 
                            University of Texas; Dr. Hans Juvkam-Wold, 
                            Professor Emeritus, Petroleum Engineering, 
                            Texas A&M University; Dr. E.G. (Skip) Ward, 
                            Associate Director, Offshore Technology 
                            Research Center, Texas A&M University; 
                            Thomas E. Williams, The Environmentally 
                            Friendly Drilling Project.
                                 ______
                                 
       Service Companies Impacted by Deepwater Horizon Moratorium
Aker Solutions

   Aker Solutions is a leading global provider of engineering 
        and construction services, technology products and integrated 
        solutions to the offshore oil and gas industry.
   The moratorium will impact Aker Solutions' offshore related 
        operations on the Gulf Coast which include about 750 employees 
        in Texas and Alabama.
   The company has already started to refocus their efforts to 
        international projects that hopefully can replace some of the 
        void.
   Some of their offshore services work is coming to a halt 
        already; and unless they can refocus that workforce, including 
        vessels and tools, to international projects they are at risk 
        of losing jobs in Texas over the next few months.
   Manufacturing jobs in Alabama are at risk from early 2011, 
        as the backlog runs out with no new orders of deepwater subsea 
        equipment coming in.
   Engineering jobs in Houston are at risk of being reduced, 
        but may be able to be refocused internationally.
   In summary, part of their workforce will be affected 
        directly or indirectly by the moratorium. Their goal is to try 
        to mitigate this by securing international projects.

ATP Oil & Gas Corporation
   ATP Oil & Gas Corporation is an independent oil and gas 
        producer headquartered in Houston, Texas.
   The moratorium has caused ATP to stop the drilling of a 
        natural gas development well (the Mississippi Canyon 305 # 2 
        well) and release the deepwater drilling rig. The MC 305 #2 
        well would have produced approximately 40 million cubic feet of 
        gas per day with a very small amount of condensate.
   Additionally, ATP will not be able to drill and complete two 
        development wells (MC 941 #4 well and MC 942 # 2 well) using a 
        drilling configuration with two blowout prevention (BOP) 
        stacks, one on the seafloor and one at the surface. This is a 
        new design for improved safety, a first in the US Gulf of 
        Mexico and one that the company planned 3 years ago.
   These wells were originally planned to be completed and 
        placed on production in 2010 at a combined rate of 
        approximately 14,000 barrels of oil per day using a platform 
        drilling rig attached to the ATP Titan platform.
   As a result of the moratorium and the suspension of 
        operations, ATP expects to incur additional costs of 
        approximately $30,000,000 that otherwise would not have been 
        spent.
   Additionally, ATP will defer revenues of more than 
        $1,000,000 per day as a result of not being able to drill and 
        complete the development wells planned for 2010.

Bollinger Shipyards, Inc.
   Bollinger Shipyards, Inc. and its affiliated companies are 
        the leading provider of quality marine construction, repair and 
        conversion products, servicing both the military and commercial 
        marine industry. They also own and operate a fleet of Offshore 
        Supply Vessels that service the deepwater activities of the 
        OCS. Family owned and operated since 1946, Bollinger Shipyards 
        employs 3,000 people.
   ``In the 64 years of our existence, we have never been faced 
        with such an uncertain future. This moratorium has created an 
        environment leaving Bollinger Shipyards no choice but to 
        downsize our company thereby eliminating good paying jobs.''

Broadpoint, Inc.
   Broadpoint is a 27 year old privately held company with a 
        100 employees based along the Gulf Coast with its headquarters 
        in Houston and a Network Operations Center in New Orleans with 
        an additional office in Lafayette, LA.
   Their operations are 99% directly related to providing 
        telecommunication services in the Gulf of Mexico through 
        satellite communications and the ownership and management of a 
        100,000 square mile GSM/GPRS/Edge network operating in the 
        Gulf.
   Broadpoint and its clients will be adversely affected as a 
        result of this shutdown and it will directly affect their 
        ability to operate. Reliable communications is essential for 
        the health and safety of individuals in the Gulf of Mexico.

CapRock Communications, Inc.
   CapRock Communications is a 29 year old privately held 
        company employing 750 employees globally with headquarters in 
        Houston and operational offices in Lafayette and New Orleans, 
        LA.
   Their operations are related to providing satellite 
        communication solutions that enable the oil and gas industry to 
        operate more efficiently in today's environment, serving the 
        communications needs of rig owners, service companies and 
        operators working on drilling rigs, production platforms and 
        other assets in the Gulf.
   They currently have over 50 field service and operations 
        personnel supporting clients in the Gulf of Mexico and this 
        shutdown will directly impact their ability to maintain 
        operations.
   Their field service personnel install and manage 
        communication systems onboard drilling rigs and energy support 
        vessels throughout the Gulf of Mexico. As their customers are 
        now required to cease or limit their operations, the amount of 
        business their company receives and the work they have for 
        their personnel in the region significantly declines.
   They will be forced to redeploy personnel to different 
        regions or support them in finding other opportunities.

C&C Technologies, Inc.
   C & C provides a wide range of survey and mapping services 
        for the land and offshore oil and gas industry, the 
        telecommunications industry and the U.S. government.
   C&C expects to lay off approximately 10 employees as a 
        result of the moratorium, and will not be hiring the dozen or 
        so workers they expected to hire in the coming months.

Cobalt International Energy, Inc
   Cobalt International Energy, Inc. (Cobalt) is an independent 
        oil and gas exploration and production company focused on the 
        deepwater U.S. Gulf of Mexico and the deepwater offshore Angola 
        and Gabon.
   Cobalt was formed in 2005 and is headquarters in Houston, 
        Texas with an operational base in Port Fourchon, L.A. for their 
        deepwater GOM exploration activities, and an (soon to be 
        established) operational base in Luanda Angola for their Angola 
        exploration activities. At present Cobalt have some 65 
        employees and 25 consultants.
   The GOM Drilling Moratorium has significantly impacted 
        Cobalt's GOM deepwater 2010 exploration and appraisal program 
        from a multitude of perspectives:

    --Cobalt's exploration and appraisal drilling program for the 
            remainder of 2010 (3 wells of which 1 had all of the 
            necessary permits/insurance in place) is now on hold. Thus, 
            the exploration drilling rigs, services, vessels, tools, 
            people etc., that were contracted to support the drilling 
            programs have been released.
    --Cobalt invoked the Force Majeure provision in a recent rig 
            contract, thus the company is paying capital for a period 
            of time while the rig is idle as well as the associated key 
            services (e.g. vessels). Cobalt has also experienced 
            unanticipated legal costs as a result.
    --There is a follow-on impact in the form of delay in executing 
            their 2011 exploration and appraisal program (approx 9 
            wells) in the deepwater GOM. Thus the program has been 
            extended further/delayed into the future which will affect 
            the timing and thus cash flow they would have anticipated 
            sooner.
    --As the deepwater GOM is a key focus area for Cobalt in light of 
            the position established (some 227 deepwater leases) in the 
            last few years, the company stock has been significantly 
            impacted (dropped 40%) amid concerns regarding the GOM 
            Drilling Moratorium; the value of the company has thus been 
            impacted by some $1.5 billion in the market.
    --Cobalt will shift its capital spending program and resources to 
            their West Africa business. Resumption of their investment 
            program in the United States is completely dependent on the 
            termination of the GOM Drilling Moratorium.

Davis-Lynch, Inc.
   Davis-Lynch is a privately owned company founded in 1947 
        that manufactures, sells, and services down-hole equipment for 
        the offshore oil and gas industry.
   They employed over 300 people in 2009, but reduced their 
        workforce by approximately 100 people as a result of an 
        industry downturn. In 2010 with an upswing in business they 
        have recalled some of the people released in 2009.
   Approximately 20% of their business is dedicated to 
        providing products and services to the offshore drilling 
        industry in the Gulf of Mexico, with a large portion associated 
        with water depths greater than 500 feet.
   The moratorium leaves them no alternative other than to 
        implement another reduction in their workforce in locations 
        including Lafayette, LA; Houston, TX; and Corpus Christi, TX.

Delmar Systems, Inc.
   Delmar Systems, Inc. is a leader in offshore mooring, 
        providing mooring solutions for the offshore oil and gas 
        industry.
   Delmar is a 42 year old privately held company employing 300 
        employees based along the gulf coast with a technical office in 
        Houston and large operational base at Port Fourchon, LA.
   Operations are 100% directly related to mooring deepwater 
        semi-submersibles in the Gulf of Mexico and as a result of this 
        shutdown, will directly affect ability to operate.
   Thirteen of the thirty three deepwater wells involved 
        ``moored'' or anchor semi-submersible rigs owned by four 
        drilling contractors.

Heerema Marine Contractors
   Heerema is a 48 year old privately held Dutch company who 
        has been working in the Gulf of Mexico for 32 years and has 
        installed approximately 75% of all deep water facilities 
        currently producing in the Gulf . They own and operate three of 
        the four largest construction vessels in the world and the US 
        Gulf has always been a significant part of the revenue stream 
        of their company.
   They currently employ 50 people between offices in Houston, 
        TX and an operational base at Port Fourchon, LA.
   Their U.S. operations are directly related to installation 
        of new facilities and sub sea infrastructure in the deep water 
        Gulf of Mexico and as a result of this shutdown, their business 
        future is in a state of uncertainty here in the US.

Laborde Marine, LLC
   Laborde Marine is a family-owned business headquartered in 
        New Orleans which owns and/or operate 21 vessels, all built in 
        U.S. shipyards; while employing over 300 people with a $14 
        million annual payroll.
   They invested over $150 million to build or acquire this 
        fleet.
   The moratorium is essentially telling them to ``park'' their 
        vessels for six months.
   For Laborde to move internationally, they would have to 
        compete with vessels built in foreign ship yards at a much 
        lower cost and often subsidized by foreign governments.
   ``The moratorium may well be the death-knell for U.S. 
        businesses engaged in the energy service sector.''

J. Ray McDermott, Inc.
   J. Ray McDermott is a Houston headquartered Company with 
        approximately 1,200 employees in Morgan City and New Orleans, 
        Louisiana and Houston, Texas.
   The company provides engineering and construction services 
        to the offshore energy sector worldwide as well as in the Gulf 
        of Mexico through the engineering, construction and offshore 
        installation of the infrastructure necessary to develop and 
        produce offshore oil and gas fields.
   According to the company, the shutdown of deepwater drilling 
        in the Gulf of Mexico will create a domino effect (movement of 
        rigs and other equipment out of the area, loss of jobs, etc.) 
        that will no doubt affect the timing of future developments and 
        the economic recovery of the region for years to come.

Oceaneering International, Inc.
   Oceaneering is a global oilfield provider of engineered 
        services and products, primarily to the offshore oil and gas 
        industry, with a focus on deepwater applications.
   Oceaneering reduced its 2010 earnings forecast on 
        expectations that the U.S. government's moratorium on deepwater 
        drilling activity in the Gulf of Mexico will hurt demand for 
        its deepwater services.
   The oilfield-services and products company said it expects 
        the moratorium will cut second-half earnings by 45 cents a 
        share and is now looking for 2010 profit of $2.80 to $3.10 a 
        share.
   Nearly one-quarter of Oceaneering's remotely-operated 
        vehicles operate in the Gulf, with about half of those in 
        drilling support services.
   The company anticipates some early terminations and revised 
        contracts.
   The stock is down 27% this year amid concerns about the Gulf 
        oil spill.

Otto Candies, LLC
   Otto Candies is a marine transportation company started 68 
        years ago with a fleet of 40 vessels.
   500 of their 600 U.S.-based employees could be impacted by 
        the moratorium, with some possibly needing to be relocated to 
        Brazil, Mexico, or West Africa.

Stone Energy Corporation
   Stone Energy Corporation is an independent oil and natural 
        gas exploration and production company headquartered in 
        Lafayette, Louisiana, with additional offices in Houston, Texas 
        and Morgantown, West Virginia.
   Stone has already experienced a 40% drop in the value of 
        their company in anticipation of punitive legislation and 
        regulation.
   They will be forced to reduce jobs as will other operators.
   Stone has a shelf platform rig at MC 109 which has been shut 
        down, wasting over $10 million dollars by having an idle rig 
        sitting there doing nothing.
   This cash cost will be far exceeded by the lost revenue of 
        the five wells being drilled from the facility.
   The 5 wells were anticipated to each produce approximately 
        1,000 barrels per day, assuming $70 per barrel, resulting in 
        $350,000 per day in potential lost revenues.
   Stone also has a half-dozen exploratory wells that will be 
        delayed a year or more. This hurts their ability to sustain 
        reserves to convert to future production and growth.
   One rig that was going to be used in this exploratory 
        program, the Deepwater Mariannas, is expected to be leaving the 
        Gulf for opportunities in foreign countries.

Southern States Offshore, Inc.
   Southern States Offshore, Inc. is a privately held company 
        incorporated in 1996 and wholly owning and operating seven 
        offshore service and supply vessels, six of which were built 
        and delivered in Louisiana and Alabama in 1998, 2005, 2007, 
        2009 and 2010 at a cost of 48 million dollars.
   They employ 53 mariners who live in Texas, Louisiana and 
        Alabama; with an office staff in Houston, Texas of ten 
        employees, all Texas residents.
   According to the company, their employees, their families, 
        the ship yards, vendors, tax authorities, etc. that depend on 
        this industry to pay their mortgage, health care bills, cloth 
        their families and send their children to school all are at 
        risk of losing everything.

Zupt, LLC
   Zupt is a privately owned, international service and 
        manufacturing company specializing in the integration and 
        application of inertial technologies to onshore and offshore 
        survey and positioning services to make operations more 
        efficient.
   Were under contract with an operator who was 8 to 12 days 
        away from completing a well and Zupt was preparing to conduct 
        the metrology survey work when the operator was told to shut 
        the well. No metrology survey was conducted, an immediate loss 
        of revenue.
   One of Zupt's engineers was laid off due to the near term 
        lost revenue.
   During the moratorium the company is forced to seek work in 
        West Africa and the North Sea, and if unsuccessful they 
        anticipated being out of business within four months.
                                 ______
                                 
           REPORTS AT BP OVER YEARS FIND HISTORY OF PROBLEMS
    By Abrahm Lustgarten and Ryan Knutson
    Tuesday, June 8, 2010; A01

                               PROPUBLICA

    A series of internal investigations over the past decade warned 
senior BP managers that the oil company repeatedly disregarded safety 
and environmental rules and risked a serious accident if it did not 
change its ways.
    The confidential inquiries, which have not previously been made 
public, focused on a rash of problems at BP's Alaska oil-drilling 
operations. They described instances in which management flouted safety 
by neglecting aging equipment, pressured employees not to report 
problems and cut short or delayed inspections to reduce production 
costs.
    Similar themes about BP operations elsewhere were sounded in 
interviews with former employees, in lawsuits and little-noticed state 
inquiries, and in e-mails obtained by ProPublica. Taken together, these 
documents portray a company that systemically ignored its own safety 
policies across its North American operations--from Alaska to the Gulf 
of Mexico to California and Texas. Executives were not held accountable 
for the failures, and some were promoted despite them.
    Tony Hayward has committed himself to reform since becoming BP's 
chief executive in 2007. Under him, the company has worked to implement 
an operating safety system to create ``responsible operations at every 
BP operation,'' said Toby Odone, a company spokesman. BP has used the 
system at 80 percent of its operations and expects to bring it to the 
rest by the end of the year, he said.
    Odone said the notion that BP has ongoing problems addressing 
worker concerns is ``essentially groundless.''
    Because of its string of accidents before the April 20 blowout in 
the Gulf of Mexico, BP faced a possible ban on its federal contracting 
and on new U.S. drilling leases, several senior former Environmental 
Protection Agency department officials told ProPublica. That inquiry 
has taken on new significance in light of the oil spill in the gulf. 
One key question the EPA will consider is whether the company's 
leadership can be trusted and whether BP's culture can change.
    The reports detailing the firm's Alaska investigations--conducted 
by outside lawyers and an internal BP committee in 2001, 2004 and 
2007--were provided to ProPublica by a person close to the company who 
thinks it has not done enough to fix its shortcomings.
    A 2001 report noted that BP had neglected key equipment needed for 
an emergency shutdown, including safety shutoff valves and gas and fire 
detectors similar to those that could have helped prevent the fire and 
explosion on the Deepwater Horizon rig in the gulf.
    A 2004 inquiry found a pattern of the company intimidating workers 
who raised safety or environmental concerns. It said managers shaved 
maintenance costs by using aging equipment for as long as possible. 
Accidents resulted, including the 200,000-gallon Prudhoe Bay pipeline 
spill in 2006--the largest spill on Alaska's North Slope--which was 
blamed on a corroded pipeline.
    Similar problems surfaced at BP facilities in California and Texas.
    California officials alleged in 2002 that the company had falsified 
inspections of fuel tanks at a Los Angeles area refinery and that more 
than 80 percent of the facilities didn't meet requirements to maintain 
storage tanks without leaks or damage. Inspectors had to get a warrant 
before BP allowed them to check the tanks. The company eventually 
settled a lawsuit brought by the South Coast Air Quality Management 
District for more than $100 million.
    Three years later, a Texas City refinery exploded, killing 15 
people. An investigation found that a warning system failed, and 
independent experts found that ``significant process safety issues 
exist at all five U.S. refineries, not just Texas City.''
    BP spokesman Odone said that after the accident, the company 
adopted a plan to update its safety systems worldwide. But last year, 
the Occupational Safety and Health Administration fined the firm $87 
million for not improving safety at that same Texas plant.

                        `ENVIRONMENTAL CRIMINAL'

    BP has had more high-profile accidents than any other company in 
recent years. And now, with the disaster in the gulf, independent 
experts say the pervasiveness of the company's problems, in multiple 
locales and different types of facilities, is striking.
    ``They are a recurring environmental criminal and they do not 
follow U.S. health safety and environmental policy,'' said Jeanne 
Pascal, a former EPA lawyer who led its BP investigations. Since the 
late 1960s, the company has pulled oil from under Alaska, usually 
without problems. But when it pleaded guilty in 1999 to illegal dumping 
at an offshore drilling field there, it drew fresh scrutiny and set off 
a cycle of attempted--and seemingly failed--reforms that continued over 
the next decade.
    To avoid having its Alaska division debarred--the official term for 
a contract cancellation with the federal government--the firm agreed to 
a five-year probationary plan with the EPA. BP would reorganize its 
environmental management, establish protections for employees who speak 
out about safety issues, and change its approach to risk and regulatory 
compliance.
    Less than a year later, employees complained to an independent 
arbitrator that the company was letting equipment and critical safety 
systems languish at its Greater Prudhoe Bay drilling field. BP hired 
independent experts to investigate.
    The panel identified systemic problems in maintenance and 
inspections--the operations that keep the drilling in Prudhoe Bay 
running safely--and warned BP that it faced a ``fundamental culture of 
mistrust'' by its workers.
    ``There is a disconnect between GPB management's stated commitment 
to safety and the perception of that commitment,'' the experts said in 
their 2001 report.
    The report said that ``unacceptable'' maintenance backlogs 
ballooned as BP tried to sustain North Slope profits despite declining 
production. The consultants concluded that the company had neglected to 
clean and check valves, shutdown mechanisms and detection devices 
essential to preventing explosions.
    In May 2002--less than seven months later--Alaska state regulators 
warned BP that it had failed to maintain its pipelines. Alaska 
struggled for two years to make the firm comply with state laws and 
clear the pipeline of sedimentation that could interfere with leak 
detection.
    Soon after, BP hired another team of outside investigators to look 
into worker complaints on the North Slope. The resulting 2004 study by 
the law firm Vinson & Elkins warned that pipeline corrosion endangered 
operations.
    It also offered a harsh assessment of BP's management of employee 
concerns. According to the report, workers accused the company of 
allowing ``pencil whipping,'' or falsifying inspection data. The report 
quoted an employee who said employees felt forced to skip key 
diagnostics, including pressure testing, pipeline cleaning and 
corrosion checks.
    The report said that Richard Woollam, the manager in charge of 
corrosion safety in Alaska at the time, had ``an aggressive management 
style'' and subverted inspectors' tendency to report problems. 
``Pressure on contractor management to hit performance metrics (e.g. 
fewer OSHA recordables) creates an environment where fear of 
retaliation and intimidation did occur,'' it said. Woollam was soon 
transferred.

                             MORE ACCIDENTS

    Two years later, in March 2006, disaster struck. More than 200,000 
gallons of oil spilled from a corroded hole in the Prudhoe Bay 
pipeline. Inspectors found that several miles of the steel pipe had 
corroded to dangerously thin levels.
    When Congress held hearings later that year, Woollam pleaded the 
Fifth Amendment. He now works in BP's Houston headquarters. Reached at 
his Texas home last week, he referred questions to the BP media office, 
which declined to comment.
    In August 2006, just five months after the Prudhoe Bay spill, a 
pipeline safety technician for a BP contractor in Alaska discovered a 
two-inch snaggletoothed crack in the steel skin of an oil transit line. 
Nearby, contractors ground down metal welds, sending sparks across the 
work site. Technician Stuart Sneed feared that the sparks could ignite 
stray gases, or that the work could worsen the crack, so he ordered the 
contractors to stop working.
    ``Any inspector knows a crack in a service pipe is to be considered 
dangerous and treated with serious attention,'' he told ProPublica.
    Sneed said he thought the Prudhoe Bay disaster had made BP 
management more amenable to listening to worker concerns about safety. 
The company had replaced its chief executive for North America with 
Robert Malone, who focused on reforming BP's culture in Alaska.
    But instead of receiving compliments for his prudence, Sneed--who 
had also complained that week that pipeline inspectors were faking 
their reports--was scolded by his supervisor, who hadn't inspected the 
crack but believed it was superficial, according to a report from BP's 
internal employer arbitrators.
    The next day, the report said, that supervisor criticized Sneed at 
a staff briefing, then solicited complaints from colleagues that could 
be used to justify Sneed's firing. Two weeks later, Sneed was gone.
    During the investigation, BP inspectors substantiated Sneed's 
concerns about the cracked pipe. The arbiter also confirmed his account 
of what happened when he reported the problem. His dispute with the 
company is unresolved.
    The following year saw another BP shakeup. The company had replaced 
its chief executive of Alaskan operations with Doug Suttles--who is now 
in charge of offshore operations and cleanup of the gulf disaster. In 
May 2007, it also named Hayward its new global chief executive.
    But worker harassment claims continued in Alaska and elsewhere, and 
more problems with the Alaska pipeline systems emerged.
    In September 2008, a section of a gas line on the slope blew apart. 
A 28-foot-long section of steel--the length of three pickup trucks--
flew nearly 1,000 feet through the air before landing on the Alaskan 
tundra. Sneed had raised concerns about the integrity of segments of 
the gas line system.
    Three more accidents rocked the same system of pipelines and gas 
compressor stations in 2009, including a near-catastrophic explosion. 
According to a letter that members of Congress sent to BP executives, 
obtained by ProPublica, the near-miss resulted from malfunctioning 
safety and backup equipment.
    Odone said that BP is continuing to roll out a company-wide 
operating management system to help track and implement maintenance. He 
said the company reduced corrosion and erosion-related leaks in Alaska 
by 42 percent between 2006 and 2009.

                             NONCOMPLIANCE

    As BP battled through the decade to avoid accidents in Alaska, 
another facility operating under a different business unit, BP West 
Coast Products, had similar problems.
    For years, the subsidiary that refined and stored crude oil was 
allowed to inspect its own facilities for compliance with emission laws 
under the South Coast Air Quality Management District, the agency that 
regulates air quality in Los Angeles.
    In 2002, inspectors with the management district thought BP's 
inspection results looked too good to be true. Between 1999 and 2002, 
BP's Carson Refinery had nearly perfect compliance, reporting no tank 
problems and making virtually no repairs. The district suspected that 
BP was falsifying its inspection reports and fabricating its 
compliance.
    According to Joseph Panasiti, a lawyer for the management district, 
the agency had to get a search warrant to conduct inspections required 
by state law. When the regulators finally got in, they found equipment 
in a disturbing state of disrepair. According to a lawsuit the 
management district later filed against BP, inspectors discovered that 
some tanker seals had extensive tears, tank roofs had pervasive leaks 
and there were enough major defects to lead to thousands of violations.
    ``They had been sending us reports that showed 99 percent 
compliance, and we found about 80 percent noncompliance,'' Panasiti 
said.
    The district sued BP for $319 million. After lengthy litigation, 
the firm agreed to pay more than $100 million without admitting guilt. 
Colin Reid, the plant's operations manager, was later promoted to a 
vice president position in the United Kingdom. He recently left BP and 
did not respond to requests for comment.
    Allegations that BP or its contractors falsified safety and 
inspection reports are a recurring theme. Similar allegations were 
attributed to workers in 2001 and 2004 internal reports on Alaska, but 
the internal auditors did not confirm that fraud had occurred.
    Among the safety equipment that BP was criticized for not having in 
place in its Alaska facilities, according to its own 2001 operational 
integrity report, were gas and fire detection sensors and emergency 
shutoff valves.
    Now investigators are learning that similar sensors and their 
shutoff systems were not operating in the engine room of the Deepwater 
Horizon rig that exploded in the gulf.
    In testimony before a Deepwater Horizon joint investigation panel 
in New Orleans last month, Deepwater mechanic Douglas Brown said that 
the backstop mechanism that should have prevented the engines from 
running wild apparently failed--and so did the air-intake valves that 
were supposed to close if gas entered the engine room.
    He said the engine room wasn't equipped with a gas alarm system 
that could have shut off the power.
    Minutes later, the rig exploded in a ball of fire, killing 11 
workers before sinking to the seafloor, where it left a gaping well 
pipe that continues to gush oil and gas.
                                 ______
                                 
Fax to: Gov. Jindal: 225-342-7099
Senator Landrieu: 202-224-9735
Senator Vitter: 202-228-5061

From: Kenneth E. Arnold, PE, NAE,
3031 Shadowdale, Houston TX.

    A group of those named in the Secretary of Interior's Report, 
``INCREASED SAFETY MEASURES FOR ENERGY DEVELOPMENT ON THE OUTER 
CONTINENTAL SHELF'' dated May 27, 2010 are concerned that our names are 
connected with the moratorium as proposed in the executive summary of 
that report. There is an implication that we have somehow agreed to or 
``peer reviewed'' the main recommendation of that report. This is not 
the case.
    As outlined in the attached document, we believe the report itself 
is very well done and includes some important recommendations which we 
support. However, the scope of the moratorium on drilling which is in 
the executive summary differs in important ways from the recommendation 
in the draft which we reviewed. We believe the report does not justify 
the moratorium as written and that the moratorium as changed will not 
contribute measurably to increased safety and will have immediate and 
long term economic effects. Indeed an argument can be made that the 
changes made in the wording are counterproductive to long term safety.
    The Secretary should be free to recommend whatever he thinks is 
correct, but he should not be free to use our names to justify his 
political decisions.

                                    
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