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DRILLING DOWN ON AMERICA’S ENERGY FUTURE: 

SAFETY, SECURITY, AND CLEAN ENERGY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

JUNE 15, 2010 

Serial No. 111–134 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 


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COMMITTEE ON ENERGY AND COMMERCE 

HENRY A. WAXMAN, California, Chairman 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

ANTHONY D. WEINER, New York 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

CHRISTOPHER S. MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

BETTY SUTTON, Ohio 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 


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SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

EDWARD J. MARKEY, Massachusetts, Chairman 

MICHAEL F. DOYLE, Pennsylvania 

JAY INSLEE, Washington 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

JOHN D. DINGELL, Michigan 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

ELIOT ENGEL, New York 

GENE GREEN, Texas 

LOIS CAPPS, Calfornia 

JANE HARMAN, California 

CHARLES A. GONZALEZ, Texas 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

JOHN BARROW, Georgia 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

STEVE BUYER, Indiana 

GREG WALDEN, Oregon 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

MICHAEL C. BURGESS, Texas 


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C O N T E N T S 

Page 

Hon. Edward J. Markey, a Representative in Congress from the Commonwealth of Massachusetts, opening statement .................................................... 1 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 3 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 4 

Hon. Joe Barton, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 6 

Prepared statement .......................................................................................... 9 

Hon. Bart Stupak, a Representative in Congress from the State of Michigan, 

opening statement ................................................................................................ 11 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 12 

Hon. John D. Dingell, a Representative in Congress from the State of Michigan, prepared statement ...................................................................................... 15 

Hon. Michael F. Doyle, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 17 

Hon. Parker Griffith, a Representative in Congress from the State of Alabama, opening statement .................................................................................... 18 

Hon. Jay Inslee, a Representative in Congress from the State of Washington, 

opening statement ................................................................................................ 19 

Hon. Ralph M. Hall, a Representative in Congress from the State of Texas, 

prepared statement .............................................................................................. 21 

Hon. Doris O. Matsui, a Representative in Congress from the State of California, opening statement .................................................................................... 24 

Hon. Mary Bono Mack, a Representative in Congress from the State of 

California, opening statement ............................................................................. 24 

Hon. Jerry McNerney, a Representative in Congress from the State of California, opening statement .................................................................................... 25 

Hon. Cliff Stearns, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 26 

Hon. Gene Green, a Representative in Congress from the State of Texas, 

opening statement ................................................................................................ 26 

Hon. Roy Blunt, a Representative in Congress from the State of Missouri, 

opening statement ................................................................................................ 27 

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

Hon. Lois Capps, a Representative in Congress from the State of California, 

opening statement ................................................................................................ 31 

Hon. Joseph R. Pitts, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 31 

Hon. Jane Harman, a Representative in Congress from the State of California, opening statement .................................................................................... 32 

Hon. Steve Scalise, a Representative in Congress from the State of Louisiana, 

opening statement ................................................................................................ 33 

Hon. Tammy Baldwin, a Representative in Congress from the State of Wisconsin, opening statement ................................................................................... 34 

Hon. Mike Ross, a Representative in Congress from the State of Arkansas, 

opening statement ................................................................................................ 35 

Hon. Peter Welch, a Representative in Congress from the State of Vermont, 

opening statement ................................................................................................ 35 

Hon. Jim Matheson, a Representative in Congress from the State of Utah, 

opening statement ................................................................................................ 36 

Hon. G.K. Butterfield, a Representative in Congress from the State of North 

Carolina, opening statement ............................................................................... 37 


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VI 

Hon. Charles A. Gonzalez, a Representative in Congress from the State 

of Texas, opening statement ................................................................................ 38 

WITNESSES

Rex W. Tillerson, Chairman and Chief Executive Officer, Exxon Mobil ............ 39 

Prepared statement .......................................................................................... 42 

Answers to submitted questions ...................................................................... 140 

John S. Watson, Chairman and Chief Executive Officer, Chevron ..................... 45 

Prepared statement .......................................................................................... 47 

Answers to submitted questions ...................................................................... 144 

James J. Mulva, Chairman and Chief Executive Officer, ConocoPhillips .......... 52 

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

Answers to submitted questions ...................................................................... 156 

Marvin Odum, Director of Upstream Americans and President, Shell Oil 

Co. .......................................................................................................................... 58 

Prepared statement .......................................................................................... 60 

Answers to submitted questions ...................................................................... 158 

Lamar McKay, Chairman and President, BP America, Inc. ................................ 66 

Prepared statement .......................................................................................... 68 

SUBMITTED MATERIAL

Letter to the editor by Tony Barr, President of Samson Oil & Gas Company, 

Wall Street Journal, submitted by Mr. Shadegg ............................................... 132 

Letter from a panel named in a report dated May 27, 2010, by the Secretary 

of Interior, submitted by Mr. Scalise .................................................................. 134 


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DRILLING DOWN ON AMERICA’S ENERGY FUTURE: SAFETY, SECURITY, AND CLEAN ENERGY 

TUESDAY, JUNE 15, 2010 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ENERGY AND ENVIRONMENT, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 9:36 a.m., in Room 

2123, Rayburn House Office Building, Hon. Edward J. Markey 

[chairman of the subcommittee] presiding. 

Present: Representatives Markey, Doyle, Inslee, Butterfield, Matsui, McNerney, Welch, Dingell, Engel, Green, Capps, Harman, Gonzalez, Baldwin, Ross, Matheson, Barrow, Waxman [ex officio], 

Upton, Hall, Stearns, Whitfield, Shimkus, Shadegg, Blunt, Pitts, 

Bono Mack, Sullivan, Burgess, Scalise, Griffith, and Barton [ex officio]. 

Also Present: Representatives Stupak, Jackson Lee, Weiner, 

DeGette, and Cao. 

Staff Present: Phil Barnett, Staff Director; Kristin Amerling, 

Chief Counsel; Bruce Wolpe, Senior Advisor; Greg Dotson, Chief 

Counsel, Energy and Environment; Alexandra Teitz, Senior Counsel; Jackie Cohen, Counsel; Michal Freedhoff, Counsel; Alex Barron, Professional Staff Member, Melissa Cheatham, Professional 

Staff Member; Caitlin Haberman, Special Assistant; Peter 

Kethcham-Colwill, Special Assistant; Dave Leviss, Chief Oversight 

Counsel; Meredith Fuchs, Chief Investigative Counsel; Scott 

Schloegel, Investigator; Karen Lightfoot, Communications Director, 

Senior Policy Advisor; Elizabeth Letter, Special Assistant; Earley 

Green, Chief Clerk; Jen Berenholz, Deputy Clerk; Mitchell Smiley, 

Special Assistant; Mary Neumayr, Minority Counsel, Oversight/Energy; Aaron Cutler, Minority Counsel, Energy and Oversight; Andrea Spring, Minority Professional Staff Member, E&E; and Garrett Golding, Minority Legislative Analyst, Energy/EHM/Telecom. 

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF MASSACHUSETTS 

Mr. MARKEY. The committee will come to order. Fifty-seven days 

ago, in the dead of night, the worst environmental nightmare in 

U.S. history began. On a screen here and in homes across the country, we now see the live video of tens of thousands of barrels of oil 

billowing into the Gulf of Mexico every day. For years the oil indusVerDate Mar 15 2010 08:39 Mar 04, 2013 Jkt 077911 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 E:\HR\OC\A911.XXX A911

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try swore this could never happen. We were told the technology 

had advanced, that offshore drilling was safe. BP said they didn’t 

think the rig would sink; it did. They said they could handle a 

Exxon Valdez-size spill every day; they couldn’t. BP says the spill 

was 1,000 barrels per day; it wasn’t and they knew it. 

Now the other companies here today will contend that this was 

an isolated incident. They will say a similar disaster could never 

happen to them, and yet it is this kind of blind faith which is, ironically, the name of an actual rig in the gulf that has led to this 

kind of disaster. 

In preparation for this hearing the committee reviewed the oil 

spill safety response plans for all of the companies here today. 

What we found was that these five companies have response plans 

that are virtually identical. The plans cite identical response capabilities and tout identical ineffective equipment. In some cases they 

use the exact same words. 

We found all of these companies, not just BP, made the exact 

same assurances. The covers of the five response plans are different colors, but the content is 90 percent identical. Like BP, three 

other companies include references to protecting walruses, which 

have not called the Gulf of Mexico home for 3 million years. Two 

other plans are such dead ringers for BP’s that they list a phone 

number for the same long-dead expert. The American people deserve oil safety plans that are ironclad and not boilerplate. 

We now know the oil industry and the government agency tasked 

with regulating them determined that there was a zero chance that 

this kind of undersea disaster could ever happen. When you believe 

that there is zero chance of a disaster happening, you do zero disaster planning. And the oil industry has invested zero time and 

money into developing safety and response efforts. The oil companies before us today amassed nearly $289 billion in profits over the last 3 years. They spent $39 billion to explore for 

new oil and gas. Yet the average investment in research and development for safety, accident prevention, and spill response was a 

paltry $20 million per year, less than one-tenth of 1 percent of 

their profits. 

The oil companies may think it is fine to produce carbon copies 

of their safety plans, but the American people expect and deserve 

more. It is time to expect more from the oil industry and that 

needs to start today. 

First, Congress must ensure that there is unlimited liability for 

oil spills by oil companies. While we try to cap this well, we must 

lift the cap on oil industry liability. 

Second, Congress must also enact wide-ranging safety reforms 

for offshore drilling. If oil companies are going to pursue ultra-deep 

drilling, we must ensure that it is ultra-safe and that companies 

can respond ultra-fast. 

Third, the free ride is over. Oil companies need to pay their fair 

share to drill on public land. Right now, every single one of the 

companies here today, and dozens of others, are drilling for free in 

the Gulf of Mexico on leases that will cost American taxpayers 

more than $50 billion in lost royalties. 

And fourth, we must ensure that new technologies are developed 

for capping wells, boosting safety, and cleaning up spills. 


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I will soon introduce the Oil SOS Act to ensure we have 21st century technologies in place for 21st century drilling risks. 

And finally, America must move to a safer, clean energy future 

so that we don’t have to rely as much on oil to power our cars and 

our economy. 

The American people deserve answers from the oil industry and 

I look forward to the testimony of our witnesses. 

I would like now to recognize my distinguished colleague from 

Michigan, the ranking member of the subcommittee, the gentleman 

again from Michigan Mr. Upton. 

OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. UPTON. Thank you, Mr. Chairman. I thank you for calling 

this very important hearing. What happened on the Deepwater Horizon rig was truly a national tragedy. The loss of life was heartbreaking and the environmental and economic damage that worsens by the day is gut-wrenching. As I said many times before, it 

needs to be made crystal clear to all involved, the polluter will pay. 

The American taxpayer should not and will not be on the hook for 

the cost of this accident, both economic and environmental. Nor 

should consumers be punished with tax increases passed in the 

name of the BP spill. They will only serve to add cost to hardworking Americans and further weaken our economy. 

We now have the opportunity to look BP America in the eye and 

demand that they fulfill their responsibility for the disaster in the 

gulf, and an important step is the creation of an escrow account 

that ensures American taxpayers are not left holding the tab. 

In the wake of this tragedy we must work together to find solutions that will protect consumers, taxpayers, and our national security. The cleanup has been too slow, way too slow and too indecisive. We want answers and we want them all. We have to work to 

ensure a disaster like this never happens again. 

When that rig exploded and there are millions of gallons of oil 

leaking into the Gulf of Mexico, our economy and our national posture is indeed weakened. I am aware that each witness today was 

given a lengthy list of questions to answer in advance of the hearing. Many of these questions are constructive and relate to the 

problem at hand—questions about rig safety, about worst-case scenarios if there is another rig explosion and questions about chemical dispersants—legitimate and constructive questions that will 

help us forge a solution-oriented policy. 

I am, however, disheartened to learn that a few of the questions 

have nothing to do with the disaster that we are trying to solve 

and serve the sole purpose of scoring political points and trying to 

advance an unrelated policy agenda that will raise taxes, eliminate 

American jobs, and leave consumers already struggling in this 

down economy with higher energy costs. 

Some of those questions are: How much is your company invested in the deployment of renewable alternative energy? What 

steps do you believe that the U.S. Government and private industry should take to reduce the threat posed by climate change? Does 

your company support an economy-wide cap on greenhouse gas 

emissions that includes transportation fuels? Would your company 


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be able to pass any of the cost of purchasing emission allowances 

to its customers? 

Frankly, I would prefer to bring up the cap-and-trade bill again 

on the House floor because I am convinced that this year it would 

fail rather than pass by the seven-vote margin that it did last summer, but that is not the issue at hand. Instead of taking time to 

talk about cap-and-tax or cap-and-trade, let’s figure out how to cap 

the well. We are not here to discuss climate change but, rather, 

what each of our witnesses think went wrong on the Horizon rig 

and what policy change can be made to ensure that it never happens again. Let us not forget what is on the line here: jobs, the environment, our economy, and national security. 

Three years ago when BP was caught increasing the discharge 

into Lake Michigan, I joined with the Great Lakes Caucus and our 

colleagues on both sides of the aisle across the Great Lakes to beat 

back the attempt to increase pollution in our lake. We didn’t take 

a partisan posture, we worked together to solve the problem. We 

need similar bipartisanship here today. 

The Gulf of Mexico accounts for almost a third of U.S. oil production. If we eliminate that supply, the dependency on foreign oil will 

indeed go up. Saudi Arabia will be happy, Hugo Chavez, 

Ahmadinejad. They will be popping champagne perhaps, but the 

American consumer will be remembering the good old days when 

gas was only $4 a gallon. 

The team of engineers tapped by Secretary Salazar to examine 

what went wrong on the Horizon rig recently, quote, ‘‘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 with any human endeavor there will always be 

risks.’’ 

Let’s learn from this awful mistake, fix the problem, clean up the 

gulf, and move forward to fixing our ailing economy and create private sector jobs. I yield back my time. 

Mr. MARKEY. I thank the gentleman. 

The chair recognizes the chairman of the full committee, the gentleman from California Mr. Waxman. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Chairman Markey, thank you for holding this 

hearing and for your tenacious work on this issue. You have been 

a true champion for transparency and accountability, and your efforts have kept Congress and the administration and the American 

people informed about the environmental disaster unfolding in the 

gulf. 

Yesterday Chairman Stupak and I released a letter describing a 

series of questionable decisions made by BP in the days before the 

blowout. Time after time, BP appears to have taken shortcuts that 

increased the risks of catastrophic blowout. One of the central 


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questions for today’s hearing is whether the other oil companies 

are any better prepared than BP. 

Last week, after receiving a request from Representative Weiner, 

the committee asked each of the five major oil companies for their 

oil spill response plans. On paper they are very impressive, each 

document is more than 500 pages long. And if I might, I will hold 

up the document that is the contingency plan. But what they show 

is that ExxonMobil, Chevron, ConocoPhillips and Shell are no better prepared to deal with a major oil spill than BP. 

The same company, The Response Group, wrote the five plans 

and describes them as cookie-cutter plans. Much of the text is identical. Four of the plans discuss how to protect walruses, but there 

are no walruses in the Gulf of Mexico. 

We analyzed two key parts of the plans: the provisions for stopping a subsea blowout, like the one that is spewing oil across the 

gulf, and their worst-case scenarios. We found that none of the five 

oil companies has an adequate response plan. 

It is instructive to compare ExxonMobil’s plan for controlling a 

subsea blowout with BP’s plan. Here is what BP says in its plan: 

In the event the spill source cannot be controlled by the facility operator or remotely with a safety system, BP will activate the oil 

spill response plan and assemble a team of technical experts to respond to the situation.’’ 

And here is what ExxonMobil says, and you can see the text on 

the screen. ‘‘In the event the spill source cannot be controlled by 

the facility operator or remotely with a safety system, ExxonMobil 

will activate the oil spill response and assemble a team of technical 

experts to respond to the situation.’’ The plans are identical. 

And so are the plans for Chevron and ConocoPhillips. Shell did 

not give us a well-controlled contingency plan, but it says Shell 

would use the same strategies of top kills and junk shots that have 

already failed. 

Each of the five oil spill response plans also includes a section 

on responding to worst-case scenario involving an offshore exploratory well. On paper these plans look reassuring. BP’s plan says 

it can handle a spill of 250,000 barrels per day. Both Chevron and 

Shell state they can handle over 200,000 barrels per day, and 

Exxon says it can handle over 150,000 barrels per day. That is far 

more oil than is currently leaking into the gulf of BP’s well. 

But when you look at the details, it becomes evident these plans 

are just paper exercisers. BP failed miserably when confronted 

with a real leak, and one can only wonder whether ExxonMobil and 

the other companies would do any better. 

BP’s plan says it contracted with the Marine spill Response Corporation to provide equipment for a spill response. All the other 

companies rely on the same contractor. BP’s plan says another contractor will organize its oil spill removal. Chevron, Shell, and 

ExxonMobil use the same contractor. BP’s plan relies on 22,000 

gallons of dispersant stored in Kiln, Mississippi. Well, so do 

ExxonMobil and the other companies. 

I could go on, but I think you get my point. These are cookie-cutter plans. ExxonMobil, Chevron, ConocoPhillips and Shell are as 

unprepared as BP was and that is a serious problem. In their testimony and responses to questions the companies say they are difVerDate Mar 15 2010 08:39 Mar 04, 2013 Jkt 077911 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 E:\HR\OC\A911.XXX A911

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ferent than BP, but when you examine their actual oil spill response plans and compare them to BP, it is hard to share their confidence. 

At this hearing Congress needs Congress needs to review the evidence and pass new laws and put teeth into our regulatory system, 

but we cannot stop there. Our national energy policy is broken. We 

are addicted to oil and this addiction is fouling our beaches, polluting our atmosphere, and undermining our national security. 

Thank you, Mr. Chairman. 

Mr. MARKEY. We thank the chairman. 

The chair recognizes the ranking member of the full committee, 

the gentleman from Texas Mr. Barton. 

OPENING STATEMENT OF HON. JOE BARTON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. Thank you, Chairman Markey, and I appreciate you 

and Chairman Waxman holding this hearing to bring our major oil 

company executives before us, and, in doing so, fore the American 

people. 

I have a prepared statement I will submit for the record, I am 

going to speak extemporaneously. I have listened with interest to 

the opening statement of Chairman Markey and Chairman Waxman, I want to say that in terms of doing the investigation I commend the majority staff, especially on the Oversight and Investigation Subcommittee that Mr. Stupak holds. We are getting the facts 

assembled and putting them out in an open and transparent fashion so that the American people can understand, to the extent it 

is possible to understand, exactly what happened. 

It is no question that the British Petroleum Oil Company who is 

the owner and chief operator of the rig that had the accident is responsible for the accident. It is also, as Mr. Waxman has pointed 

out, the responsibility of our major oil companies to have adequate 

contingency plans when things go wrong. So I am not trying to 

whitewash the private sector in terms of their responsibility for 

causing this problem, but I want to point out something that has 

not yet been pointed out. The five people most concerned about 

solving the problem are probably sitting before us today. 

ExxonMobil, Chevron, ConocoPhillips, Shell Oil and BP America 

have huge interests in getting it right and preventing it from ever 

being wrong again. 

If you add the market caps of those five companies, they could 

not equal the market cap of some of the oil companies that are 

owned by sovereign nations such as Saudi Arabia, Venezuela, and 

Republic of Mexico. 

So I would stipulate, Mr. Chairman, that while our major oil 

companies have caused this—at least British Petroleum is the 

cause of this particular problem—I will also stipulate that the gentlemen before us are a big part of the solution. If the President of 

the United States has got a better idea of how to solve this problem 

right now, he can pick up the phone and tell BP exactly what to 

do. 

It is a Federal issue in terms of the mitigation plan, in terms of 

the cleanup plan. And if there is anybody from President Obama 

on down who really knows the solution, they can stop that oil from 


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spilling right now, by golly. All they have to do is pick up the 

phone and tell them what to do. And the fact that they are not is 

not simply because the laws of nature and the laws of physics don’t 

respond to 30-second sound bytes. You have to know exactly what 

to do and you have got to have the engineering and technology to 

be able to do it. 

America needs the energy that is beneath the Gulf of Mexico and 

in the Outer Continental Shelf. Thirty percent of our oil and gas 

is coming from the OCS right now, and 80 percent of that is coming 

from what are called deep rigs. We have a depletion rate of existing 

production in this country, Mr. Chairman, of 30 to 40 percent. That 

means that of the 8 million barrels of oil and gas that we are producing per day, of oil we are producing per day, next year we will 

only be able to produce 51⁄2 to 6 million. You have to replace that 

energy. 

Since we have drilled millions of wells on shore since 1896 or 

since the 1870s in Pennsylvania, the fact of the matter is that you 

are going to find significant oil reserves in the Continental United 

States that are going to be in the Outer Continental Shelf, so we 

need that energy. 

Now, I agree with Chairman Waxman that having a 500-page 

document that is a cookie-cutter approach to what to do when you 

have a problem is not an answer. It is not an answer. You can’t 

have a contingency plan that says cross your fingers and hope a 

blowout preventer works. And that was the contingency plan. 

We haven’t had a major accident in the OCS in 50 years. Everybody had decided that these blowout preventers were so good and 

so effective that all you had to do was push that magic button, if 

all else failed, and it would work. Well, they pushed the magic button on the BP rig and it didn’t work. 

So Chairman Waxman is right. We need more than a cookie-cutter contingency plan. But where I disagree, or I think I disagree, 

with Chairman Waxman and Chairman Markey is the gentlemen 

before us have the wherewithal and the expertise, and they certainly have the incentive to put that plan together. 

Now, I don’t know what the answers are. Maybe we need a fulltime safety inspector on these rigs. Maybe we need a real-time data 

center somewhere that all the drilling information goes to a central 

data point where there is somebody in charge of safety that looks 

at it. It does appear that if people had been looking for the problem 

that we now know happened, the data was there to tell them what 

to do. But they weren’t looking for that. This rig was 40 days behind schedule and millions of dollars over schedule, and there was 

a lot of pressure to finish the job. And there was nobody on that 

rig whose job was to make sure that they made the safe decision. 

And so when you start making decision after decision after decision that is not in and of itself a bad decision, but, cumulatively, 

minimized safety, eventually you reach a critical mass and you 

have an accident that happened. So our job, Mr. Chairman, as the 

watch dogs for the American people is to, one, get the facts on the 

table; two listen to people who have possible solutions; three, if 

there is a Federal issue and a Federal role, let’s do it. But when 

you take a patient to the emergency room, the solution is not normally to kill the patient. The solution is to stabilize the patient, deVerDate Mar 15 2010 05:37 Mar 05, 2013 Jkt 077911 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 E:\HR\OC\A911.XXX A911

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termine what needs to be done to save the patient, and then implement that strategy. 

And I will stipulate, Mr. Chairman, America needs the energy 

beneath the Outer Continental Shelf off the coast of the United 

States of America. And the five men before us who represent five 

of largest privately owned oil companies in the world, while they 

are part of the problem, they are a big part of the solution. 

Thank you, Mr. Chairman. 

Mr. MARKEY. We thank the gentleman from Texas. 

[The prepared statement of Mr. Barton follows:] 


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Mr. MARKEY. The chair now recognizes the chairman of the Oversight and Investigations Committee, the gentleman from Michigan 

Mr. Stupak. 

OPENING STATEMENT OF HON. BART STUPAK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN 

Mr. STUPAK. Thank you, Mr. Chairman, and thank you to Mr. 

Waxman for holding this important hearing and for your leadership on the gulf oil spill. 

On the Oversight and Investigation Subcommittee we have been 

investigating the actions of BP. This hearing is important because 

it provides the committee a chance to examine the practices of the 

other major oil companies. It could be said that BP is the one bad 

apple in the bunch. But, unfortunately, they appear to have plenty 

of company, Exxon and other oil companies are just as unprepared 

to respond to a major oil spill in the gulf as BP. 

I have been examining the oil spill response plan of ExxonMobil, 

the largest oil company in the United States. This document, as 

Mr. Waxman showed us, is over 500 pages long. In many respects 

it is virtually indistinguishable from BP’s response plan and response plans of the other major oil companies. 

At this time, Mr. Chairman, I would ask unanimous consent that 

the response plans of major oil companies be made part of the 

record. 

Mr. MARKEY. Without objection, so ordered. 

[The information is available at http://democrats.energycommerce.house.gov/index.php?q=hearing/hearing-ondrilling-down-on-america-s-energy-future-safety-security-and-cleanenergy.] 

Mr. STUPAK. Thank you. 

There is one major difference between ExxonMobil’s plan and the 

other response plans, the section dealing with the media. BP, Shell, 

ConocoPhillips and Chevron have plans with short media relations 

sections. ExxonMobil has an entire 40-page appendix devoted to 

how to respond to the press. 

The media section in the ExxonMobil plan directs public affairs 

personnel to, as you can see on display, maintain on-camera skill 

proficiency. It also explains that communications which convey care 

and concern for the situation and provide relevant, factual information are an integral part of the ExxonMobil’s emergency response. 

It sets up a four-tiered system who can respond to media inquiries. 

The highest level, category D, dictates special treatment for questions about global warming and the Exxon Valdez. 

The ExxonMobil plan contains 13 predrafted press releases for 

almost any occasion—give it a minute here—there is a fully drafted 

press release for an accident involving an ExxonMobil facility. If 

the injury occurs off site, there is a separate press release for that. 

Six of the stockpiled press releases are ready to express they deeply regret an outcome, while two or more press releases stand ready 

that ExxonMobil is deeply saddened. 

The media section also contains a topic guide with talking points 

on over 65 issues. In five different places the plan directs the public affairs agents to say, ‘‘We comply with all applicable laws and 

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tions do not exist.’’ But if the public affairs officer is asked about 

criminal charges, the plan instructs them to say, ‘‘We believe that 

there are no grounds for such charges. This was clearly an accident 

and we are working to respond to the immediate needs of the incident.’’ 

That talking point is ready to go before a hypothetical incident 

even occurs, before ExxonMobil could have any idea whether it was 

actually an accident or if there are any grounds for criminal 

charges. In short, ExxonMobil had meticulously anticipated virtually every conversation that the company might need to have 

with the media in the days following an oil spill in the Gulf of Mexico. 

My problem is that ExxonMobil has given far less attention to 

actually controlling the spill. While ExxonMobil has 40 pages on its 

media response strategy, its plans for resources protection is only 

5 pages long and its plan for oil removal is just 9 pages long. 

We have all seen the horrible images of pelicans and other wildlife coated in oil from the recent spill. ExxonMobil’s plan appears 

to be more concerned about public perception than wildlife protection, given the fact that their media plan is five times longer than 

the plan for protecting wildlife. And the canned, predrafted, deeply 

saddened press release rings hollow with the loss of the 11 people 

who died on the Deepwater Horizon rig. 

ExxonMobil’s plan is a perfect metaphor for what is going wrong 

in the gulf today. The oil company response plans are great for 

public relations. They allow the oil company to do the same. We 

have this 500-page plan that shows they are prepared for any contingency, but these plans are virtually worthless when a spill actually occurs. And that is exactly the kind of misplaced priorities that 

have led to this disaster. 

I yield back the balance of my time. 

Mr. MARKEY. I thank the gentleman. 

The chair now recognizes the ranking member of the Oversight 

and Investigation Subcommittee, the gentleman from Texas, Mr. 

Burgess. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. I thank the chairman, and I do have to wonder 

what any of us expect to achieve with this hearing today. I know 

what the folks at home are saying and thinking. They want the 

flow of that well stopped, they want it stopped today. But it continues to leak and I don’t think anyone sitting here behind the dais 

or the witness table today is going to tell us how to turn that flow 

off today. 

The majority did not call this hearing to talk about meaningful 

solutions, shutting off the flow in the gulf today, because this situation really presents itself too great an opportunity to give some 

Members the impetus for passing even more regulations. And likely 

there will also be the opportunity to increase energy taxes that 

Americans will pay into the foreseeable future under the guise of 

clean energy or climate change legislation. 

The President’s chief of staff, Rahm Emanuel, spelled out the 

Democratic strategy for national energy policy best when he anVerDate Mar 15 2010 08:39 Mar 04, 2013 Jkt 077911 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 E:\HR\OC\A911.XXX A911

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nounced, ‘‘You never want to let a serious crisis go to waste,’’ and 

this is a serious crisis. 

But in some ways, Mr. Chairman, this committee undermines its 

own credibility when it capitalizes on a tragedy—eleven lives were 

lost—when we capitalize on a tragedy to push forward the political 

agenda. I hope the majority members prove me wrong, and I hope 

that during this period the members of this committee will have a 

laser-like focus on trying to discern how we stop this leak, because 

that is really all that matters right now. That is all that matters 

to the fishermen, to the shrimpers and individuals whose families 

and livelihoods have been put on hold while this well continues to 

spill into the Gulf of Mexico. Not how much we spend in the future 

on solar and wind technology, both of which I support. Not how 

much we invest in nuclear technology, as clean as that may be. 

And certainly not how much this Congress intends to cripple the 

American economy even further than it already has with job-killing 

legislation. 

We have had those debates, we are going to have those debates 

in the future. But today, today let’s keep the focus where it belongs. And it is pretty simple: Plug the well, stop the spill, clean 

the gulf. 

So Mr. Chairman, I will respectfully request, I know you submitted a list of questions that you want the witnesses to answer, 

I will ask them to include in their opening remarks what ideas 

they have that will stop the leak, because that is really the question that we want answered today. If this hearing is not about 

stopping the leak, then why are we here? In the alternative, if the 

witnesses today really don’t have an answer to that question, then 

respectfully one might suggest this committee postpone the hearing 

until we have the witnesses in front of us who can answer that 

question. 

Finally, I believe the majority is looking at drafting legislation in 

response to the spill, and I am concerned that this tragedy will 

leave Congress to do what it so often does and rush into writing 

legislation and with really no thought to what the consequences 

down the road will be. 

A week ago the Committee on Oversight and Investigations had 

a subcommittee field hearing in Louisiana and we heard testimony—and it was pretty tough testimony—from two of the widows, 

two women who lost husbands on the Deepwater Horizon. Both 

widows stated unequivocally that they believed the current regulatory requirements for offshore drilling are more than sufficient to 

keep the men and women working on the offshore rigs safe. 

The question then becomes whether the regulations are being 

properly enforced. Mrs. Natalie Rushto told our committee, ‘‘After 

all of the safety schools, meetings, fire drills and safety regulations, 

I just knew he was safe. We need to focus on making safety the 

most important priority; not to focus on making more safety regulations, but on ways to effectively implement and use the ones already in place.’’ 

Mrs. Courtney Kemp, followed with her statement, ‘‘I am not 

here today to suggest that Congress implement more safety regulations, but rather to encourage you to hold companies accountable 

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glected.’’ And Ms. Kemp went on to say, Offshore drilling accounts 

for 75 to 80 percent of all of the jobs in her little town in Louisiana. 

She said that less offshore drilling would devastate the local economies of not only coastal Louisiana, but also the economies of our 

Gulf Coast communities who rely on offshore drilling and oil rig 

jobs. 

Every job on the rig is responsible for four to five jobs on shore. 

When all of this is said and done, we need to find out why the 

agencies, why our Federal agencies, charged with enforcing safety 

regulations, appeared to feel as if that job was unimportant. We 

need to find out why they were asleep at the switch, and certainly 

we need to hold any party accountable at the Federal level that 

skirted safety measures. But first we must stop the leak. 

Mr. Chairman, I yield back the balance of my time. 

Mr. MARKEY. We thank the chairman. 

Mr. MARKEY. The chair recognizes the chairman emeritus of the 

committee, the gentleman from Michigan, Mr. Dingell. 

Mr. DINGELL. Mr. Chairman, I thank you, I commend you for 

holding this hearing. I have a splendid statement which I am sure 

everyone will enjoy reading, and in order to save time of the committee I ask unanimous consent to insert it into the record. 

Mr. MARKEY. Without objection, so ordered. 

The gentleman’s time has expired. 

[The prepared statement of Mr. Dingell follows:] 


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Mr. MARKEY. The Chair recognizes the gentleman from Pennsylvania, Mr. Doyle. 

OPENING STATEMENT OF HON. MICHAEL F. DOYLE, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF PENNSYLVANIA 

Mr. DOYLE. Mr. Chairman, thank you for convening this hearing 

today to examine the impacts of our Nation’s dependence on oil and 

the safety of drilling operations. 

We are 57 days into this environmental and economic tragedy 

and the response effort is ongoing. We have learned that this gulf 

oil spill is the largest in U.S. history. New estimates show that, unlike BP’s previous claim of 5,000 barrels leaking into the gulf each 

day, it is more likely like 40,000 barrels are leaking into the gulf 

each day. But no one really knows. 

As such, President Obama has issued a moratorium on all 33 of 

the Deepwater drilling rigs in the Gulf of Mexico for 6 months, or 

until the completion of the Presidential Commission investigating 

the spill. 

The National Oceanic and Atmospheric Administration has told 

us about the inability of the administration to handle an additional 

concurrent oil spill at this time. And as hurricane season begins 

with conditions ripe with potential for disastrous storms, I believe 

the administration is taking the proper steps to avoid an even more 

catastrophic event. In fact, recent events all over the country merit 

the need for a serious review of safety practices in the entire oil 

and gas industry. 

Just this weekend, Chevron spilled 500 barrels of oil into a 

stream in Utah and in the last few weeks the Marcellus Shale has 

seen two different blowouts of natural gas wells, one in West Virginia and one in my home State of Pennsylvania. In the blowout 

in Pennsylvania the blowout preventer failed, allowing natural gas 

and fracking fluid to spew from the gushing well for over 16 hours, 

while the crew with the skills to cap it had to be flown in from 

Texas. Once they arrived, it only took them an hour to cap the 

well. 

In West Virginia the gas explosion caused seven workers to be 

injured, and flames burned for days before it was brought under 

control. 

Our growing energy demands require that we will continue to 

use natural resources under our land and sea. But there is simply 

no reason we should continue to extract our natural resources in 

a hegemonic and voracious style. The oil reservoirs in the Gulf of 

Mexico aren’t going anywhere. The natural gas in the Marcellus 

Shale isn’t going anywhere. I think it is time we take a step back 

and explore how to do this better and safer and more efficiently. 

With that, Mr. Chairman, I yield back my time. 

Mr. MARKEY. We thank the gentleman. 

The chair recognizes the gentleman from Illinois, Mr. Shimkus. 

Mr. SHIMKUS. Mr. Chairman, just a question. If we waive opening statements, will we get additional minutes for questions? 

Mr. MARKEY. That is correct. 

Mr. SHIMKUS. I waive my opening statement, Mr. Chairman. 


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Mr. MARKEY. The gentleman waives his opening statement. The 

chair recognizes the gentleman from Arizona, Mr. Shadegg. 

Mr. SHADEGG. Mr. Chairman, I similarly will waive my opening 

statement. 

Mr. MARKEY. The gentleman waives his opening statement. The 

chair recognizes the gentleman from Missouri, Mr. Blunt. 

Mr. Sullivan. 

Mr. SULLIVAN. I waive my opening statement too. 

Mr. MARKEY. The chair recognizes the gentleman from Alabama, 

Mr. Griffith. 

OPENING STATEMENT OF HON. PARKER GRIFFITH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ALABAMA 

Mr. GRIFFITH. I would like to thank the chairman and ranking 

member for calling this important hearing today and the witnesses 

for taking time to come before our subcommittee to discuss drilling 

in our current and future energy portfolio. 

Our number one priority must be stopping the flow of oil, that 

is certainly obvious. It is the job of this Congress to do whatever 

we can to aid the unified command in reaching this goal. This is 

a time of engineering in action, it is not a time to hastily put together knee-jerk energy policy that will jeopardize our energy and 

economic security in the future. 

It is imperative that this committee remember the United States 

is part of the global energy economy, and therefore all policies discussed must take into consideration that we are only 4 percent of 

the world’s population. If we enact policies of drive drilling out of 

U.S. waters, these companies will not cease to drill but we will 

cease to be able to ensure that oil and gas production is done in 

a safe and an environmentally friendly manner. 

As we await the outcome of many investigations taking place, it 

is vital that we learn lessons from this incident to keep our workers and environment safe while continuing to produce our valuable 

oil and gas resources. 

The moratorium put in place by this administration does not reflect the President’s previous view, and this knee-jerk reaction to 

create a moratorium is simply a political expression, embryonic in 

nature, which has no place in a situation this serious. 

There are still many questions to be answered about what happened on Deepwater Horizon; however, I think we must also question the Federal response. Government cannot facilitate a quick, effective response, and this event has been yet another example of 

that. 

To echo some of my colleagues, I think we must take a long, hard 

look at the Federal response while also looking at the response of 

BP. This disjointed effort has not aided in helping to contain any 

of the spill. 

Thank you. Thank you for coming today, and I look forward to 

your testimony. I yield back, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Washington State, Mr. 

Inslee. 


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OPENING STATEMENT OF HON. JAY INSLEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON 

Mr. INSLEE. Thank you, Mr. Chair. Today’s hearing is entitled 

‘‘Drilling Down on America’s Energy Future: Safety, Security, and 

Clean Energy,’’ and we have the five leaders of this industry, and 

I’m very interested in what they are going to say in three respects. 

One, I think we need to ask, Has the industry really shown accountability to make sure that the leaders are accountable for safety? So I will be interested in finding out how many people at British Petroleum have lost their jobs to date as a result of the most 

horrific environmental catastrophe in American history. I will be 

interested in that number. 

Number two, we will be interested in the numbers from the leaders of the industry, what they are investing in an effort to develop 

technologies that can reduce the risk of offshore drilling. The numbers we have seen in our questions to the witnesses so far are really quite astounding in how small they are. They all are less than 

one-tenth of 1 percent of their profits have been invested in technology to try to reduce the risk of this type of disaster. That is less 

than 1 one-hundredth of a percent of their gross revenues. It is 

stunning to me if that is the fact, but we’d like to ask the leaders, 

if that is the case, why they have exposed the country to this type 

of risk with such reduced investment. 

And third, it is appropriate to ask about the investment of the 

industry in clean energy. And the reason is that—and all of the 

leaders today will admit this—every single oil well we have ever 

drilled is an invisible oil spill, because every single well we drill results in putting carbon dioxide in the air, which goes into the atmosphere, which goes into solution in the oceans, and have made 

the oceans 30 percent more acidic than they are today. They will 

be so acidic by the time my grandchild leaves the planet, we 

wouldn’t have coral reefs anywhere on the planet. Every single oil 

well is an oil spill. 

So we would be interested in knowing what these leaders are 

bringing to the table in an effort to reduce our dependence on fossil 

fuels, in an effort to find clean energy to prevent this kind of environmental disaster. Unfortunately, it won’t be the numbers we are 

looking for. Hopefully, we will inspire some changes. Thank you. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Kentucky, Mr. Whitfield. 

Mr. WHITFIELD. I waive. 

Mr. MARKEY. The chair recognizes the chairman from Texas, Mr. 

Hall. 

Mr. HALL. Mr. Chairman, I can look back a lot better than I can 

look forward. And when I looked back, I looked at two entities that 

ought to be looked to. There have been suggestions that the Federal Government ought to play a more prominent role in this disaster, such as taking over the process of capping the well. 

Well, there are two things you’d look at there. One is the financial statements of the two entities: The United States of America 

or British Petroleum. And I find British Petroleum in a lot better 

shape than the United States of America. 


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It is theirs. I think that initially we should have turned it over 

to the British to cap their well, and after they cap their well, we’ll 

them how much they owe everybody else. I don’t think this President knows any more about capping a well or going out and counting those birds or picking up little parts of the waste than they do 

about the Olympics. And I resent the fact he’s trying to blame some 

of this on Bush. When Bush, on 9/11—I don’t recollect him ever accusing Clinton. 

I yield back my time. 

Mr. MARKEY. The gentleman’s time has expired. 

[The prepared statement of Mr. Hall follows:] 


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Mr. MARKEY. The chair recognizes the gentlelady from California, Ms. Matsui. 

OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. MATSUI. Thank you, Mr. Chairman, for calling today’s hearing. I would also like to thank the witnesses for appearing before 

us today. The families of those who lost their lives or had their 

livelihoods severely impacted by this disaster of unprecedented proportions deserve our unconditional support. 

Now, as we continue to seek answers from BP and others about 

the cause of the accident, we must hold those responsible accountable. The first priority of BP must be to stop the leak from continuing to spread and ensure the cleanup efforts are carried out to 

protect our costal communities and the families whose livelihoods 

depend on it. And it is incumbent on all of us to make certain that 

this never happens again. 

The unfortunate part about this, Mr. Chairman, is that we have 

been here before. I remember more than 40 years ago when Union 

Oil’s platform A exploded off the coast of my home State. My concern is that today could be like 1969 all over again and that we 

are setting ourselves up for another 4 decades of more of the same. 

So the question I have today is: What has changed? What can 

the oil companies tell us today to assure us that this story is not 

simply repeating itself? Because what the gulf region and the 

American people do not want to hear now are the same excuses 

that were employed decades ago about oil being our largest and 

most reliable energy option. 

In fact, the BP oil spill underscores the need to look beyond oil 

production and consumption and invest in cleaner alternatives that 

would create jobs and save our environment from harm. If I 

learned anything from this disaster, it is that we must continue to 

explore clean-tech alternatives to big oil. Today’s hearing is a step 

in that direction. 

Thank you, Mr. Chairman, and I yield back the balance of my 

time. 

Mr. MARKEY. Great. The gentlelady’s time has expired,. 

The chair recognizes the gentlelady from California, Mrs. Bono 

Mack. 

OPENING STATEMENT OF HON. MARY BONO MACK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mrs. BONO MACK. Thank you, Mr. Chairman. I thank you for 

yielding this time and I welcome the opportunity to hear from the 

witnesses today about our energy security and the ongoing oil spill 

operations in the gulf. 

The companies represented by the witnesses at the table are at 

the forefront of energy resources development and growth, and 

your insights will be very important for how to ensure a spill of the 

current magnitude never happens again. 


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As we just heard from my other colleague from California, many 

of us in California and Southern California certainly still recall the 

oil spill in Santa Barbara from 1969. 

To get a sense of the magnitude of what we are facing, administration scientists, as of yesterday, were estimating that BP’s well 

could be spewing as much as four times that oil every day as we 

spilled during the entire Santa Barbara disaster. American lives 

have already been tragically lost and we have yet to fully understand the environmental and economic impact, so there is significant work ahead. 

Our priority today and for the days ahead, as we have all said, 

must be to completely stop the leak. I hope our witnesses are willing to offer whatever assistance they can to ensure that this is our 

focus. I’m fairly certain it is what the American people want. 

As we sit here today, nearly 2 months have passed since the 

original Deepwater Horizon explosion. What have we seen in the 

interim? A number of charges against BP that still deserve answers; a new government committee set up across agencies that are 

slow and crucial in critical response decision making; and, most importantly, the livelihoods of so many gulf residents are being severely threatened. 

I will be interested to learn about the technologies that these 

companies have invested in to help protect against any future spill. 

Mr. Chairman, we as a Nation ought to be devoting all of our resources to this disaster as the echoes of the Santa Barbara spill 

still haunt us decades later and as years of failed energy policy do 

as well. How this crisis is managed or mismanaged matters. We do 

not know the long-term consequences yet from the spill, but the 

devastation to the environment and the economy will be long-lasting and have national implications. 

I appreciate our witnesses being here and yield back the balance 

of my time. Thank you. 

Mr. MARKEY. Thank the gentlelady. 

The chair recognizes the gentleman from California, Mr. McNerney. 

OPENING STATEMENT OF HON. JERRY MCNERNEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. MCNERNEY. Thank you, Mr. Chairman, for today’s hearing. 

I want to welcome the panelists here this morning. The explosion 

of the Deepwater Horizon and resulting oil gush is a tragedy with 

terrible human consequences. Our thoughts and prayers are with 

the families of the victims and hardworking Americans whose livelihoods and ways of life are threatened. 

Americans are shocked and saddened by what occurred, but their 

outrage is because there is no real plan to respond to a crisis of 

this magnitude. The technology that was supposed to fail safe, 

failed badly. How could companies like BP have invested so many 

millions of dollars of technology for deepwater drilling, but failed 

to develop effective technologies to prevent this kind of gush? I 

want to know today what steps the industry is taking to ensure 

that the technologies designed to be fail-safe work as promised and 


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what investments the industry is making in technologies that 

would allow for a far more effective response to the disaster. 

However, the real solution is to deliberately reduce our consumption of petroleum fuels so the demand for oil is technically manageable. I believe that this can be done in a way that improves our 

national economy. And I want to know what the executives sitting 

here in front of me today are going to do to achieve this goal. 

Thank you, Mr. Chairman. I yield back. 

Mr. MARKEY. I thank the gentleman. 

The chair recognizes the gentleman from Florida, Mr. Stearns. 

OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

Mr. STEARNS. Good morning. Thank you, Mr. Chairman, and 

thank you for having this hearing, together with Ranking Member 

Upton. 

The title of the hearing is ‘‘Drilling Down on America’s Energy 

Future: Safety, curity, and Clean Energy.’’ I’m not sure the title 

really is appropriate as well as listening to some of these opening 

statements. The bottom line is all of us are frustrated here in Congress as well as, obviously, the Gulf Coast residents. We don’t understand why BP didn’t act more quickly. 

I asked CEO Lamar McKay the question of how many barrels 

are coming out per day. He said 5,000. Then I read to him from 

his own report that he could handle up to 300,000 barrels a day, 

10 miles off the shore. So the question to him is, Why can’t you 

handle 5,000? 

Well, obviously the 5,000 wasn’t correct, at least many of us don’t 

think it was correct. We now have an oil spill that is seven times 

the Exxon Valdez, and yet there is no end in sight at this point. 

So the purpose of this hearing is to ask these executives—these 

are the people who are making the top salaries in the world. To 

get to their spot they have unusual acumen, foresight, energy business awareness, and obviously have a lot of corporate political 

savvy to get where they are. They wouldn’t be here today, Mr. 

Chairman. 

So the question is? Can each one of you in your heart of hearts 

say to us that America is protected with all the oil rigs you have 

out there? We have almost 3,800 in the gulf. Can you tell us today 

that we will be safe, that America will be safe? And do you have 

backup, worst-case scenarios. 

Mr. McKay said he did, but he didn’t. He didn’t even tell us the 

right 5,000 barrels a day. Obviously, it was not that. So we need 

to hear from you, under oath, that you can in a worst-case scenario 

protect America’s shores. 

Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Texas, Mr. Green. 

OPENING STATEMENT OF HON. GENE GREEN, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. GREEN. Thank you, Mr. Chairman, for holding the hearing, 

and I want to welcome our panelists today. 


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States along the Gulf Coast are in the midst of dealing with this 

tragedy, and my thoughts and prayers go out to the families and 

the communities affected by this accident. For those of us who represent an energy-producing area, it is like a loss in the family, and 

I think we need to remember that. 

While we anxiously await a positive outcome on efforts to contain 

the spill, we also are beginning the process of thoroughly evaluating the answers to many questions we have on what went wrong 

and how to hold responsible parties accountable. 

As we consider how to approach these issues, legislatively, it is 

critical that we allow the facts that come to light and allow for 

thoughtful deliberation, for making permanent, statutory, sweeping 

changes that would end up taking us further from our goals of safe, 

responsible development of our natural resources. Quickly moving 

forward with legislative proposals would have profound effects, and 

possibly negative consequences, for America’s production potential 

is not the path that Congress should take to rush to do anything 

just to be doing something. 

While I understand there is public leeriness at deepwater production, I want to note there is still a majority of American people 

who support Outer Continental Shelf drilling. I encourage the administration to quickly develop and implement any necessary 

changes in the safety and procedural standards for deepwater drilling—and shallow water, by the way—because of the loss of jobs 

and domestic production. We will see if this full 6-month deepwater 

drilling moratorium is the last thing, if it continues; that is the last 

thing our recovering economy needs, or our Nation’s energy needs. 

It is also estimated 120,000 jobs could be lost as a result of this 

moratorium. 

Finally, I look forward to hearing what our panel plans to do to 

restore America’s public trust in the oil and gas industry. There is 

a great record in the Gulf of Mexico, it has been said. The last time 

I can remember was the well in the Gulf of Mexico, actually in the 

Bay of Campeche in 1979. We have a good record. We need to find 

out why it didn’t work and almost everything went wrong with Horizon, and why it is working in lots of other wells that have been 

drilled. 

Our country needs a strong, steady, domestic supply of oil and 

gas, and natural gas. And as we transition alternative energy supplies, let’s not forget that, as we legislate this response in the accident. I look forward to your testimony, again. 

Mr. Chairman, I yield back the balance of my time. 

Mr. MARKEY. I thank the gentleman. 

The chair recognizes the gentleman from Missouri, Mr. Blunt. 

OPENING STATEMENT OF HON. ROY BLUNT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MISSOURI 

Mr. BLUNT. Thank you, Mr. Chairman, and thank you for holding this hearing. I have a prepared statement I will put in the 

record. 

Let me summarize that a little bit, first, by saying that I am glad 

to have these five individuals here who, as Mr. Barton said, have 

so much at stake and so much potential to be part of this solution. 


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I am hopeful that we can use this hearing today to understand 

better why our government and British Petroleum could have possibly been so poorly prepared for this disaster. Certainly people in 

the fishing industry, the tourism industry want answers to this 

problem; and there is plenty of blame to go around. I don’t think 

the administration or the government agency heads have done everything they should have done, from being prepared, to prevention, to the response. 

Incredibly, 7 weeks after the Deepwater Horizon explosion, we 

are still lacking resources and containment. The booms, the skimmers, the things that should have been readily available are still 

not, apparently, there in the ways we need them to go. Weeks 

ago—and weeks now—I introduced legislation that would require 

ready access to the things necessary to contain a problem if a problem developed in the Gulf. 

We are learning more and more every day about the failings of 

both the industry and the government and the regulators leading 

up to the incident. However, our main focus today and in the next 

few weeks needs to be to do what we can to stop this problem and 

then to study the problem and see that it doesn’t occur again. 

I am convinced that we can protect both our environment and 

our economy. As we continue in our pursuit of more independence 

from foreign oil, Congress and the administration should work to 

ensure that we can produce domestic oil and gas in an environmentally sound manner. 

I am afraid that the moratorium that the administration announced against the wishes of Secretary Salazar’s own technical 

advisers will cost thousands of jobs and ultimately harm consumers. 

It is obvious we need to hear from the panelists today. I am 

grateful they are here. It is also obvious that members of the this 

committee want to speak and are speaking and are concerned that 

this not happen again and we be better prepared to take advantage 

of our resources not become the victim of our resources. 

I yield back. 

[The prepared statement of Mr. Blunt follows:] 


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Mr. MARKEY. I thank the gentleman. 

The chair recognizes the gentlewoman from California, Mrs. 

Capps. 

OPENING STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mrs. CAPPS. Thank you, Mr. Chairman. I look forward to the testimony of our witnesses today. 

BP’s Deepwater Horizon oil spill in the Gulf is an environmental 

disaster that has already created and still threatens profound 

human and economic harm. We all must do everything possible to 

clean up the damage from this incident and prevent future ones 

like it. 

This morning, our subcommittee needs to hear from BP, how this 

spill occurred and how it is going to make the people of the Gulf 

whole. And, more broadly, we need to hear from the oil companies 

in general about how they are going to prevent spills in the future. 

Unfortunately, we can’t stop drilling overnight; and these companies have the responsibility to do everything in their power to prevent future tragedies. Having seen the 1969 oil spill firsthand, I 

can tell you that spill response technology has hardly advanced in 

the past 40 years. 

Finally, we need to hear from each witness and their companies 

whether or not they are going to play a constructive role in 

transitioning our economy away from drilling and onto clean energy sources. The record to date is not impressive. They need to 

transition away from fossil fuels for the sake of our national security, our economy, and the environment. This could not be more apparent than it is today. 

Passing comprehensive energy and climate legislation is just 

what America needs to do to help grow our economy and to create 

jobs. Taxpayers don’t need status quo energy policies that send billions overseas to hostile governments. We need a safer, a cleaner, 

and a more economical approach to energy development, one that 

shifts us away from oil eventually and toward renewable sources 

that can’t destroy our coast lines. 

Every day we delay, our economy grows weaker, our enemies 

grows stronger, and the planet becomes more polluted. It is time 

for real solutions that protect rather than endanger our coastal 

communities, our livelihoods, our way of life. 

I hope we can enact bipartisan climate and energy legislation 

this year, Mr. Chairman. I have pledged to work with you to 

achieve this very important goal. 

Mr. MARKEY. The gentlewoman’s time has expired. 

The chair recognizes the gentleman from Pennsylvania, Mr. 

Pitts. 

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF PENNSYLVANIA 

Mr. PITTS. Thank you, Mr. Chairman. Thank you for holding this 

hearing on America’s energy future. 

The BP oil spill is a tragic event in the history of our country, 

not only in lives that have been lost but an unknown amount of 


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oil has been leaked into the ocean, causing horrible effects, some 

of which we know now, some of which will take years to discover. 

First and foremost, the leakage of oil must be stopped. I think 

we all know this, but it bears repeating, and I hope our witnesses 

will tell us what they think must be done to stop the leak. 

Once this is done, it is imperative that we thoroughly understand 

what happened aboard Deepwater Horizon before, during, and 

after the explosion. We must know what caused this horrific event 

so that it never happens again. 

In the wake of this event, questions have not only arisen regarding the cause of the explosion and the leak but also regarding the 

appropriateness of response from BP and the administration. I find 

it unfathomable that the President is just now meeting with top BP 

executives. 

In addition, it seems to me that the entire Federal response has 

been not only disjointed but confusing and frustrating for those on 

the ground trying to bring relief. The moratorium announced last 

week is just another example of poor judgment without regard to 

the economic livelihood of the Gulf Coast region and millions of 

Americans who buy gas every day for their vehicles. 

As I have said, this is a tragic event. We need to make sure due 

diligence is done in investigating the causes and the appropriateness of the response in the aftermath. However, we need to make 

sure the response of this body and the administration is prudent, 

one that still encourages our country’s energy security and independence. 

I look forward to hearing from our witnesses today, and I yield 

back. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentlewoman from California, Ms. Harman. 

OPENING STATEMENT OF HON. JANE HARMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. HARMAN. Thank you, Mr. Chairman, and welcome to our witnesses. 

I have long argued and, so have others, that we must move away 

from dependence on foreign oil. We know the national security pitfalls of that dependence. We see that played out every single day 

in what’s going on in the Middle East. 

But we also now clearly see that there are environmental and 

economic pitfalls with our ongoing dependence on domestic oil. 

Many of the Californians on this panel, including me, staunchly opposed drilling offshore California, and I want to applaud our President for making clear that that will not happen. 

But it is also clear, as our witnesses know, that California has 

an addiction to one driver per car and that there are, therefore, 

many refineries located throughout the State, four or five in my 

district alone. El Segundo, for example, is named for the second 

Chevron refinery in the State. And so all of you sitting here looking 

at us are saying, well, hey, if you are not fixing this problem, why 

are you blaming it all on us? 

I just want to be point out the obvious that some other members 

have also addressed, which is that all the companies before us 


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have, in 2009, yearly profits amounting to more than $64 billion. 

You paid $37 billion in dividends to your shareholders, you invested more than $9.5 billion in exploration, but you invested far 

less in renewable and alternative energy. 

You are energy companies, and so my urging would be why not 

invest in energy products and energy technologies that are far 

safer, that will wean us from our dependence on oil, that will keep 

your profit level up for your shareholders but that obviously will 

make America safer. 

Finally, let me just mention that our constituents are very smart. 

One of them approached me in San Pedro, California, the other day 

and said, why don’t we require energy companies that are drilling, 

especially deep wells, to drill a relief well alongside the original 

well? If it was drilled at the same time, it would be there if a catastrophe happened. 

Thank you, Mr. Chairman. 

Mr. MARKEY. We thank the gentlelady. 

The chair recognizes the gentleman from Louisiana, Mr. Scalise. 

OPENING STATEMENT OF HON. STEVE SCALISE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF LOUISIANA 

Mr. SCALISE. Thank you, Mr. Chairman. 

I spent last Friday on Grand Isle assessing the damage and talking to local leaders who say they are still spending more time fighting the Federal Government and BP than they are fighting the oil. 

That is unacceptable yet indicative of a serious lack of leadership 

and coordination coming from BP and the Obama administration. 

First and foremost, our focus, BP’s focus, and the President’s 

focus needs to be on plugging the well and using every resource 

available to protect our fragile marsh and seafood beds from being 

further inundated by the oil. BP, as the responsible party, needs 

to be held accountable; and I intend to do everything in my power 

to make sure that BP pays for the full cost of this disaster. 

But in order to improve the inadequate Federal response, we 

need a clear chain of command that holds people accountable. The 

Oil Pollution Act of 1990 states the President shall ensure immediate and effective removal of a discharge. On numerous occasions 

the President has said that from day one he has been on the 

ground and in charge, but if that’s the case, where was the President when State and local officials waited nearly a month for approval on a plan to construct sand berms to protect our valuable 

marsh and prevent at least a dozen pelicans from dying? And why 

do boats continue to sit idle at the docks when our fishermen are 

constantly having to seek BP’s approval to get boom or clean up 

our beaches? 

The delay of the sand berm plan is a prime example of the incompetent response to this disaster. While the administration 

drags their feet in Washington, millions of barrels of oil invade our 

wetlands, killing scores of wildlife and devastating Louisiana’s fisheries. 

Quick action and leadership could have effectively limited the 

scope of this disaster. Instead, the President responded by making 

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isiana have had enough and are sick and tired of the excuses that 

we continue to be given by the President and BP. 

Instead of leading like the Commander in Chief, the President 

continues to act like a spectator in the stands. To add insult to injury, the President has now imposed a 6-month ban on deepwater 

drilling. Make no mistake, implementing this ban is like taking a 

jackhammer to the bedrock of the Louisiana economy. This devastating ban will cost my State alone at least 40,000 jobs and will 

leave our Nation more dependent on Middle Eastern oils, countries 

that don’t like us. 

We must figure out what went wrong to prevent this type of disaster from happening again in the future, but the President is now 

exploiting our disaster as a political opportunity to advance his 

radical agenda that will kill more American jobs. We need answers 

and we need leadership by the President. Unfortunately, we have 

neither, and Louisiana’s people and wildlife are paying the price. 

Thank you, Mr. Chairman. I yield back. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentlelady from Wisconsin, Ms. Baldwin. 

OPENING STATEMENT OF HON. TAMMY BALDWIN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN 

Ms. BALDWIN. Thank you, Mr. Chairman, and thank you for 

holding this hearing today and calling this panel of witnesses before us. 

The catastrophe in the Gulf has shed new light on the operations 

of the oil industry, the safety and security measures that they have 

in place, the disaster plans they maintain, and their efforts to move 

us away from our dependence upon oil and towards developing and 

promoting the use of renewable energy sources. 

As has been noted, the companies that are represented before us 

today have produced record profits in recent years. Last year’s aggregate profits for the five companies represented here today 

amount to $64 billion. Unfortunately, what appears to be missing 

amongst the dollar signs is corporate responsibility, an obligation 

to operate in an environmentally and socially responsible manner, 

to provide safe working environments, to be good neighbors, and to 

reduce environment impacts. 

Generally, companies claim that stewardship is part of their philosophy. I think each of the companies represented here today have 

made that representation. Yet what we are beginning to find as 

this committee and its other subcommittees investigate this disaster is that, rather than corporate responsibility, we may have before us a culture of corporate irresponsibility. 

We know the results of letting companies operate under weak 

regulation. They begin to believe that they are above the law, they 

ignore warning signs, they shortcut proper procedures, they fail to 

properly plan for a disaster, and they put profits above all else. 

You know a lot of what I am observing in this sector could just 

as well have been said about what we saw on Wall Street with the 

financial collapse in the last couple of years. 


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Mr. Chairman, government and industry all have a role to play 

in preventing future environmental and economic disasters; and, as 

lawmakers, we have a responsibility to our constituents, our Nation, to those who have lost jobs, pensions and health care, those 

who have lost their lives, to put an end to this recklessness and 

to hold bad actors accountable. 

I look forward to hearing from our witnesses about the role they 

see their companies and the government playing in ensuring future 

disasters are prevented. 

I yield back the balance of my time. 

Mr. MARKEY. I thank the gentlelady. 

The chair recognizes the gentleman from Arkansas, Mr. Ross. 

OPENING STATEMENT OF HON. MIKE ROSS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARKANSAS 

Mr. ROSS. Thank you, Mr. Chairman, for holding today’s hearing 

to discuss the safety and security of current offshore drilling practices and the future of energy production in our Nation. In the 

wake of the worst oil spill in our Nation’s history, we must now 

learn from this disaster and reevaluate our operating methods 

andexamine how oil will be a part of America’s future energy policy. 

As oil prices and oil company profits have increased dramatically 

over the last decade, so has our Nation’s dependence on foreign oil, 

with the U.S. importing approximately 52 percent of the oil it consumed last year. While I believe that our policies must be broad 

enough to create energy from a variety of domestic sources, including domestic oil and natural gas, I also recognize the importance 

of thoughtful investments in biofuels, nuclear, hydropower, wind, 

solar, and clean coal technology. 

On day 57 of this disaster, with no end in sight, I am hopeful 

that the five companies testifying today can inform us of what went 

wrong, how this tragedy could have been prevented, and how the 

American people can have assurance that this will never happen 

again. I believe the administration and our government must do 

more to hold these companies accountable for their drilling practices and ensure the most advanced technologies and safety procedures are in place. 

Once again, Mr. Chairman, thank you for holding this hearing; 

and I look forward to today’s discussion. 

Mr. MARKEY. We thank the gentleman. 

The chair recognizes the gentleman from Vermont, Mr. Welch. 

OPENING STATEMENT OF HON. PETER WELCH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VERMONT 

Mr. WELCH. It is absolutely outrageous that we are here today. 

What happened in the Gulf was something that BP assured us 

would never, ever happen. That it did happen, in fact, was foreseeable and inevitable. And why was that? Because, at every turn, 

reckless disregard of safety procedures, corner cutting, and decisions that were made for money, not safety. 

Mr. Chairman, I want to take this opportunity to address the 

current crisis. As BP debates whether to issue a second quarter 

dividend on their annual $10 billion dividend, we have people in 


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the Gulf Coast who need compensation. Responsible companies pay 

their obligations. Then they pay dividends. 

Many in Congress have joined me in my call on BP to direct dividend funds to an escrow account to be available to deal with the 

heartache and the destruction of livelihoods in the Gulf Coast. BP 

has affirmed its intention to make good on its obligations. Now we 

ask that BP take financial steps consistent with its assurances. 

President Obama and 54 Members of the U.S. Senate have called 

for the establishment of an independently administered $20 billion 

escrow fund that would be available to cover cleanup costs. Mr. 

McKay, I further call on BP to deposit dividend funds into this escrow account so that the citizens of the Gulf and the taxpayers of 

this country can be assured that your company will meet its obligations. 

I yield back the balance of my time. 

Mr. MARKEY. We thank the gentleman. 

The chair recognizes the gentleman from Utah, Mr. Matheson. 

OPENING STATEMENT OF HON. JIM MATHESON, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF UTAH 

Mr. MATHESON. Thank you, Mr. Chairman, for holding this hearing. 

I know that for each witness here your testimony highlights the 

way in which your company does business and how, and also we 

are going to hear from BP how it conducted itself leading up to the 

Deepwater Horizon explosion on April 20. You each will discuss 

your safety record and lessons learned from past disasters. 

I think it is fair to say that none of your companies are immune 

from criticism, and accidents can strike at any place at any time, 

despite the safety measures that you will be touting today. As has 

been mentioned already, on Friday night, a Chevron pipeline began 

leaking in Salt Lake City and before being shut off early Saturday 

morning had already leaked somewhere around 33,000 gallons of 

oil down Red Butte Creek in northern Salt Lake City, which leads 

into the Jordan River which empties into the Great Salt Lake. 

The Great Salt Lake is one of the most important estuaries for 

migrating birds in the Northwest. Fortunately, current information 

indicates that oil has not hit the Great Salt Lake. Further, it is fortunate that the drinking water supply is protected; and, by most 

accounts, the oil has been contained. 

Now while 33,000 gallons is a pittance when compared to the 

magnitude of the spill in the Gulf and the impact on my city’s economy will not be anywhere near what it is for the Gulf Coast residents, it further highlights for me the importance of Federal Government oversight of our energy infrastructure. 

This particular Chevron pipeline was last inspected in 2008. We 

need to find out what the results were of that inspection and if 

anything in that inspection gave any indication of the potential of 

this problem that occurred this past weekend. 

Right now, the purported cause of this spill is that a branch fell 

during a heavy windstorm, created an electric arc, which hit a 

metal fence post that was driven into the ground just inches from 

the pipeline. 


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It raises some questions. Why was the fence post within inches 

of the pipeline? When the electricity arced through that fence post, 

it burned a hole in the pipeline. 

That is the latest explanation of what happened. We need to get 

answers to that. 

The last thing we needed answers to is that, apparently, the 

monitoring equipment on the pipeline failed to indicate there was 

a leak and the first time Chevron was aware of the leak was when 

the Salt Lake City Fire Department called them the next day. 

So we need to find out, number one, what was the result of the 

inspection in 2008; number two, why was a fence post drilled within inches of the pipeline; number three, why did the monitoring 

equipment fail in terms of why the leak happened? I am kind of 

working the Department of Transportation, the EPA in looking at 

these issues to find out why this happened and, lastly, how we define what clean is in terms of the cleanup. 

I would acknowledge Chevron has taken responsibility. Chevron 

has indicated it will pay for the cleanup in Salt Lake. I appreciate 

that aggressive position they have taken to try to reach out to the 

residents of Salt Lake City. 

Mr. Chairman, I am glad you bear with me. I know this hearing 

is more about the BP situation in the Gulf, but I thought the incident of the past weekend was worth mentioning in this hearing to 

show that issues about energy, infrastructure, and safety can touch 

anywhere along the supply chain. It is important we keep that in 

mind. 

I will yield back. 

Mr. MARKEY. We thank the gentleman. 

The chair recognizes the gentleman from North Carolina, Mr. 

Butterfield. 

OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH 

CAROLINA 

Mr. BUTTERFIELD. Thank you very much, Mr. Chairman. 

I think we are all saying the same thing. You should have done 

more to prevent this unthinkable disaster. Even though some may 

suggest that my home State of North Carolina is not in harm’s 

way, the fact is that we may be. We are not only angry about this 

spill but we are scared to death that our coastal area will be affected. 

Over the past 30 years, the oil industry has used some of the 

world’s most advanced technologies to drill in deeper waters. The 

broad ingenuity that allowed them to drill miles under the ocean’s 

floor has outpaced commitment to safety, and that is unacceptable. 

BP ignored a very simple rule. If you can’t plug the hole, don’t 

drill the well. 

What concerns me, Mr. Chairman, is whether BP’s mistakes are 

unique to them or are indicative of industry-wide practices. Regardless, we must now ensure that adequate safety practices and cleanup plans are firmly in place. It was assumed that this type of disaster would never happen, but it did. 

I hope this tragic event illustrates the need for action. Many of 

us on this side of the aisle have advocated a fundamental overhaul 


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to our energy policy, stressing a broad portfolio of energy sources 

and energy efficiency. This overhaul can be market driven if we 

apply a real cost to carbon and its effect on our economy and our 

quality of life and our environment. 

This disaster demonstrates that we cannot delay in enacting 

comprehensive energy and climate change legislation to diminish 

our dependence on oil both foreign and domestic. 

Today’s hearing will provide unambiguous answers, I hope, on 

what to expect in the days, weeks, and years to come. For millions 

of people who face this nightmare, we must demand transparency 

and a clear assessment of the future. 

I thank the witnesses for being with us today and let me join my 

good friend Mr. Welch in requesting BP to consent to an escrow 

fund that will provide a modest revenue for those who have been 

harmed. I say to the witnesses today, put it on the table. We must 

know it all. 

Thank you. I yield back. 

Mr. MARKEY. We thank the gentleman. 

The chair recognizes the gentleman from Texas, Mr. Gonzalez. 

OPENING STATEMENT OF HON. CHARLES A. GONZALEZ, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. GONZALEZ. Thank you very much, Mr. Chairman. I will be 

very brief. 

I usually don’t make opening statements, but I think I can read 

the minds of the witnesses, Mr. Chairman. I think they are all saying all these individuals are stating the obvious and the political, 

and you are absolutely right. But I think when we get into the 

questioning it will be a whole different world. 

As far as the political view, to be real honest with you, all those 

that are blaming the President for not meeting the BP CEO immediately, had the President done that I assure you today’s statements would have been what was the President thinking meeting 

with the BP executives at the outset without first visiting the areas 

or first meeting with the Coast Guard and first responders. That’s 

what would have happened. 

What I am hoping that we are going to achieve today is to hear 

from these witnesses what are the energy needs of America, how 

are transportation fuels, obviously based on oil, and what we are 

going to do moving forward, the difference between deep and shallow water exploration and drilling and how we meet the immediate 

needs of our public, our constituents, our citizens of this country, 

and the fact that meeting those needs in the interim, as we transition to something different, can be done in a responsible fashion. 

We can meet the needs and act responsibly and that they are not 

mutually exclusive. 

Thank you very much. I yield back. 

Mr. MARKEY. We thank the gentleman from Texas. 

That completes the period for opening statements from all of the 

members of the subcommittee. The chair does not see any other 

members. 

Before we go to the witnesses, I will first make a unanimous consent that Chairman Stupak and Representatives Blackburn, CasVerDate Mar 15 2010 08:39 Mar 04, 2013 Jkt 077911 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 E:\HR\OC\A911.XXX A911

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tor, DeGette, Weiner, and Jackson Lee be permitted to question 

witnesses following questions by members of the subcommittee. 

Without objection. The chair hears no objection from any of the 

members of the subcommittee, so it is so ordered. 

It is the policy to swear you in before you testify. So I would ask 

each of you to please rise and raise your right hand. 

[Witnesses sworn.] 

Mr. MARKEY. Let the record reflect that each of the witnesses responded in the affirmative. 

STATEMENTS OF REX W. TILLERSON, CHAIRMAN AND CHIEF 

EXECUTIVE OFFICER, EXXONMOBIL; JOHN S. WATSON, 

CHAIRMAN AND CHIEF EXECUTIVE OFFICER, CHEVRON; 

JAMES J. MULVA, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, CONOCOPHILLIPS; MARVIN ODUM, DIRECTOR OF UPSTREAM AMERICANS AND PRESIDENT, SHELL OIL CO.; AND 

LAMAR MCKAY, CHAIRMAN AND PRESIDENT, BP AMERICA, 

INC. 

Mr. MARKEY. Now we turn to our first witness, Mr. Rex 

Tillerson. 

Mr. Tillerson is the Chairman and the Chief Executive Officer of 

the ExxonMobil Corporation. He is also a member of the Business 

Roundtable and the American Petroleum Institute. 

We welcome you, Mr. Tillerson. Please begin when you are ready. 

STATEMENT OF REX W. TILLERSON 

Mr. TILLERSON. Thank you, Chairman Markey, Ranking Member 

Upton, members of the subcommittee. 

Of the many issues on the energy agenda, none is more pressing 

than the accident and the spill unfolding in the Gulf of Mexico. As 

someone who has spent his entire career in the energy industry, it 

truly is deeply saddening to see the loss of life, the damage to environmentally sensitive areas, the effect on the economic livelihoods, 

and the loss of the public trust in the energy industry that has resulted. Clearly, this incident and the response will have important 

consequences for the environment, for the citizens and businesses 

of the Gulf Coast, and for our Nation’s energy policy. 

It is essential that we understand the events that led to this unprecedented accident and take corresponding steps to reduce the 

likelihood of a similar event ever occurring again. An expert, impartial, and thorough approach to understanding what happened is 

crucial, because this incident represents a dramatic departure from 

the industry norm in deepwater drilling. Understanding the facts 

surrounding this incident is critical to informing the long-term policy and the operational response. 

We are eager to learn what occurred at this well that did not 

occur at the other 14,000 deepwater wells that have been successfully drilled around the world. It is critical we understand exactly 

what happened in this case, both the drill well design and operating procedures and the execution of the drilling plans, which led 

to such severe consequences. We need to know if the level of risk 

taken went beyond the industry norms. 

Based on the industry’s extensive experience, what we do know 

is when you properly design wells for the range of risk anticipated, 


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follow established procedures, build in layers of redundancy, properly inspect and maintain equipment, train operators, conduct tests 

and drills and focus on safe operations and risk management, tragic incidents like the one we are witnessing in the Gulf of Mexico 

today should not occur. 

For many, current events bring back memories of the 1989 Exxon 

Valdez tanker spill. That accident was the low point in Exxon 

Mobil’s history, but it also was a turning point. In the aftermath, 

we launched a full-scale, top-to-bottom review of our operations and 

implemented far-reaching actions that today guide every action we 

make on a daily basis. An overriding commitment to safety excellence is embedded in everything we do, with a daily commitment 

by our employees and our contractors to a culture that ‘‘nobody 

gets hurt’’. 

In the early 1990s, we began development of our Operations Integrity Management System, or OIMS, a rigorous regime of 11 separate elements that measures and mitigates safety, security, 

health, and environmental risk. 

It is significant that the first element of OIMS is management 

leadership and accountability. This management system applies to 

every operation we undertake. It is our common global language for 

safety and accountability, and when we do have incidents we seek 

to learn from them so that we continuously improve our performance in the system. It is a system which requires internal and external assessment of each business unit’s progress towards complying with all of the 11 elements. 

With respect to drilling, ExxonMobil has drilled almost 8,000 

wells worldwide over the last 10 years. Of these, 262 have been in 

deepwater, including 35 in the Gulf of Mexico. 

The standards and requirements that operate within OIMS dictate our approach to drilling, as they do for all of our other operations. We have documented standards for equipment and well design. We utilize proprietary technology to predict pressures and 

model resource flow, and we carefully analyze that information to 

both understand and reduce the risk. We ensure everyone onboard 

the rig, contractors included, know their roles and responsibilities 

and that all operations must be in compliance with ExxonMobil’s 

expectations and standards, and we test this knowledge through 

regular drills and exercises. 

Sticking through this system has required us to make some difficult decisions. We do not proceed with operations if we cannot do 

so safely. 

The American people have shown their support for deepwater 

drilling, but they expect it to be done safely and in an environmentally sensitive way. 

They have supported it because they understand it is important. 

In the Gulf of Mexico, it accounts for about 24 percent of U.S. oil 

production. Oil and gas activity in the Gulf, including deepwater 

drilling, accounts for approximately 170,000 direct and indirect 

jobs. Worldwide, deepwater production is estimated to equal, in a 

few years, the entire production of Saudi Arabia, and it is a vital 

part of an industry that supports more than 9 million full- and 

part-time American jobs and adds $1 trillion to our gross domestic 

product. 


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These facts show how critical it is that all industry participants 

have the trust of the American people. We can secure this trust if 

we take the time to learn what happened and develop our response 

appropriately to ensure that every participant acts responsibly, 

learns the right lessons, and upholds the high standards. 

The American people deserve nothing less. 

Thank you. 

[The prepared statement of Mr. Tillerson follows:] 


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Mr. MARKEY. Thank you, Mr. Tillerson. 

Our next witness is Mr. John Watson. Mr. Watson is the Chairman and Chief Executive Officer of the Chevron Corporation. He 

is a Director and member of the Executive Committee of the American Petroleum Institute as well as a member of the National Petroleum Council. 

We welcome you, Mr. Watson. 

STATEMENT OF JOHN S. WATSON 

Mr. WATSON. Thank you, Mr. Chairman and Ranking Member 

Upton. My name is John Watson, and I do lead Chevron. 

As we meet today, the tragedy in the Gulf of Mexico does continue to unfold. Our thoughts are with the families who lost loved 

ones, workers who were injured, and communities that are dealing 

with the economic and ecological damage. 

For Chevron, this tragedy is very personal. Our employees knew 

people who died on the Deepwater Horizon. More than 13,000 

Chevron employees live and work in the Gulf region. We have a 

very personal stake in operating safely because it is our home, too. 

For our industry, this is a humbling experience. The American people expect that the energy we need will be produced safely and reliably, and that did not happen here. 

This morning, I will focus my comments on what Chevron did 

immediately following the accident and why I believe deepwater development can be done safely. 

After the Deepwater Horizon accident, Chevron provided its full 

support to the response. We deployed experts to assist BP and advise the Coast Guard on marine transportation planning. We have 

also been working with communities and organizations across the 

Gulf region. 

We helped to lead the Joint Industry Task Force, which made 

recommendations to the Department of the Interior to raise industry standards to an even higher level. A majority of these standards are already embedded in Chevron’s operations. 

Within hours, Chevron held safety stand-downs on our rigs 

around the world to review drilling processes and procedures. We 

examined our blowout contingency plans and scrutinized our drilling and completion policies. 

We also stress the responsibility that every single Chevron employee and contractor has, and that’s the authority to stop work immediately if they see anything unsafe. At Chevron, we reward people who exercise this authority. 

At Chevron, one goal overrides all others, making sure everyone 

goes home safe every day. We have multiple systems to prevent a 

tragedy like the Deepwater Horizon. Our drilling policies and procedures are rigorous, we require continuous training, we certify our 

drilling personnel to ensure they are qualified to manage unusual 

circumstances, and we verify that contractors have the skills to 

execute well control. 

Our internal review confirmed what our regular audits have told 

us. Chevron’s deepwater drilling and well control practices are safe 

and environmentally sound. 

Since our first year of deepwater exploration in 1987, Chevron 

has successfully drilled 375 deepwater wells around the world. But 


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we know that we can always learn and improve, so we welcome 

any new standards and safeguards that improve safety and prevent 

future accidents. 

To that end, we must act quickly to implement the recommendations made by the Joint Industry Task Force to ensure that all 

companies are made with the same high standards of safety and 

reliability. Chevron will accept any new standard and adopt new 

standards that it doesn’t already apply. 

We must also expedite the work of two new industry task forces, 

one focused on subsidy well control and the other on spill response 

and cleanup. We also are committed to work with the President’s 

independent commission, and we will contribute to improve safety 

in every way that we can. 

Now we must restore the country’s confidence in deepwater drilling. I believe the independent investigation will show that this 

tragedy was, indeed, preventable. This is not a trade-off of energy 

for safety. I strongly believe that responsible deepwater development must continue. America needs the energy, and we can 

produce that energy safely. 

Our Nation would lose more than it has already lost if this accident becomes the basis for reversing the many benefits of offshore 

development. Today, production in the Gulf of Mexico accounts for 

15 percent of our natural gas, 27 percent of our domestic oil supply. 

The Gulf of Mexico production is also a foundation of local economies, providing significant jobs, economic development, and revenue. 

The Deepwater Horizon tragedy reinforces that all companies 

must operate with the same high standards of safety and reliability. It is clear that failure to do so does have dire consequences. 

Mr. Chairman, we must learn from this accident; and we must 

make sure it never happen again. My commitment to you is that 

Chevron will do everything in its power to see that it doesn’t. 

Thank you. 

[The prepared statement of Mr. Watson follows:] 


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Mr. MARKEY. Thank you, Mr. Watson. 

Our next witness is Mr. James Mulva. Mr. Mulva is the Chairman and Chief Executive Officer of the ConocoPhillips Company. 

He is also a member of the National Petroleum Council and has 

served as the chairman of the American Petroleum Institute. 

We welcome you, Mr. Mulva. Whenever you feel comfortable, 

please begin. 

STATEMENT OF JAMES J. MULVA 

Mr. MULVA. Thank you, Chairman Markey, ranking member 

Upton, and committee members. Thank you for the opportunity to 

appear before you this morning. 

All of us at ConocoPhillips extend our condolences to the loved 

ones and friends of the 11 workers lost on Deepwater Horizon. Our 

thoughts and prayers are also with those injured or who have been 

impacted by this spill. 

The Deepwater Horizon incident is a matter of national urgency. 

As Americans, we have a long history of joining together in times 

of need and then working to find solutions that are in our national 

interest. 

So in that spirit and in support of the people along the Gulf 

Coast whose lives and livelihoods have been affected, 

ConocoPhillips is providing manpower, materials, and resources to 

responders and the emergency personnel there. We will do so until 

the spill is contained and affected areas have been restored. 

We are not in a position to know about what went wrong at the 

Deepwater Horizon. The companies involved and the regulators 

certainly will do that. But, as an industry, we must commit ourselves to learning lessons from this tragedy and ensuring that 

nothing like Deepwater Horizon ever happens again. 

So any necessary changes undertaken by Congress, the executive 

branch, and industry should be one element of a broader national 

energy policy. That’s a policy that recognizes that we have a robust 

oil and gas industry that generates vital U.S. jobs as well as substantial State and Federal revenue from tax and royalty payments, 

one that guarantees the security of the energy that drives our national economic well-being. Also, a policy that assures the safe, environmentally responsible production of all forms of energy along 

with its wise use. These are essential to a healthy and to a growing 

economy. 

Another key element of a comprehensive energy policy should be 

Federal action to address global climate change. As you are aware, 

ConocoPhillips supports passage of a comprehensive Federal law 

establishing a clear and transparent price for carbon. A Federal 

legislative framework, at a minimum, must provide a program to 

manage transportation emissions, one that protects consumers 

while encouraging investment in lower carbon technologies. 

It also must address the energy intensive and trade exposed nature of our domestic refineries. 

It must create new legislative mechanisms specifically for regulating greenhouse gas emissions. This would be in place of the 

Clean Air, Clean Water, and Endangered Species Acts and other 

Federal and State programs. 


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It must recognize the essential role of natural gas in achieving 

a lower carbon energy future. 

Lastly, in order to achieve our national energy goals, U.S. energy 

policy must create, supply diversity, promote technological innovation, encourage energy efficiency, and environmental stewardship. 

Today, our country is working toward an energy future featuring 

a broad portfolio of energy sources; and these will include renewable sources and cleaner fossil fuels, broader conservation, and 

new, more efficient energy technologies. Each of those approaches 

will provide a part of the long-term solution. 

As a Nation, we are on our way, we will get there, but it is going 

to take us some time. Until then, we must fulfill America’s pressing 

energy needs, in short providing fuel that enables people to travel 

to work and back, moves goods around the world, powers the lighting, heat, electricity, and machinery in which our homes, factories, 

and hospitals depend, and provides the fuel and fertilizer that enables us to feed a growing population. 

In doing this, even with strong growth and renewable sources, 

carbon fuels must keep carrying the energy load far into the future. 

Fortunately, we have natural gas. It is one of the most important 

domestic resources available for use by our country in reaching its 

climate and energy security objectives. It is clean, it is affordable, 

it is reliable, abundant, and available here at home. 

We believe that through a national spirit of shared commitment 

to a mutually beneficial outcome, America can achieve its energy 

goals. As a company, ConocoPhillips is committed to doing so. 

So thank you very much for do this opportunity. I look forward 

to responding to questions that you may have. 

[The prepared statement of Mr. Mulva follows:] 


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Mr. MARKEY. Thank you, Mr. Mulva. 

Our next witness is Mr. Marvin Odum. Mr. Odum is the President of the Shell Oil Company. He is also on the board of the 

American Petroleum Institute. 

We welcome you, Mr. Odum. Please begin when you are ready. 

STATEMENT OF MARVIN ODUM 

Mr. ODUM. Thank you, Chairman Markey, Ranking Member 

Upton, and members of the committee. 

I am Marvin Odum, President of Shell Oil Company; and I would 

like to begin by acknowledging the continuing situation in the Gulf 

of Mexico, which is on the minds of every American. All of us at 

Shell are deeply saddened by the Deepwater Horizon explosion and 

the aftermath, the terrible tragedy for the families of those who 

lost their lives or were injured. Many of our employees and customers live along the Gulf Coast and feel that pain firsthand. 

But getting to the root cause of this incident is critical. Like you, 

we want to know what went wrong with this well and the execution of this well design. 

As the investigation findings are available, Shell will incorporate 

any findings into our operations worldwide. Since the beginning, 

Shell has made experts, equipment, and facilities available to BP 

and the responders, including our Robert Training Center outside 

of New Orleans as a site for unified command. 

We took immediate steps to reinforce the safety of our operations 

globally, including a review of operating practices, testing frequencies, and training protocols. We remain confident in our expertise and procedures, and that comes from focus on five critical and 

integrated areas to ensure safe well design and drilling in the 

deepwater. Those are our global standards, our rigorous training 

and certification of the engineers, a safety case approach with our 

contractors to identify the risk and mitigate those risks, ensuring 

robust and multiple barriers in our wells, and 24/7 remote monitoring by skilled professionals who provide immediate support on 

critical issues such as well pressure changes. 

As safety and environmental protection are and always will be 

Shell’s top priorities, we welcome the recommendations outlined in 

Secretary Salazar’s May 27 report to the President and the June 

8th notice to leaseholders. Many of these elements that were included were already aligned with our global practices, and we will 

work to incorporate all of them. 

In the context of this tragedy, we acknowledge the reasons for 

the President’s decision to halt deepwater drilling, but it is not 

without consequences, thousands of jobs lost and billions in lost 

wages and spending, and not only in the Gulf Coast but also in 

places like Alaska. 

This brings me to the topic that you asked us to speak about 

today, America’s energy future. At Shell, we believe that population 

and economic growth will drive global energy demands to potentially double to today’s use by 2050, even with strong efficiency 

gains. Energy supply from all sources—oil and gas, nuclear, renewable, and others—will struggle to keep up with this demand. Environmental stresses will grow, making the transition to lower carbon economies even more urgent. 


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With this as a backdrop, it is clear the world needs a more sustainable energy system. Alternative and renewable energies could 

be 30 percent of the new energy mix by 2050. 

The scale and the massive infrastructure of the global energy 

system does mean that change takes time. At Shell, we believe our 

industry can best contribute by making more energy available, by 

reducing emissions, and by increasing our lower carbon energy 

share while generating jobs and doing so safely and responsibly. 

Natural gas is not a renewable, but it is abundant in the U.S. 

and a lower CO2 energy source. Increased natural gas for electricity 

is by far the quickest route and least expensive route to cleaner air. 

Within a couple of years, Shell will be producing more gas than oil 

and much of that in North America. 

Biofuels are also one of the best opportunities for reducing CO2

from transportation for at least the next 20 years. 

Shell is the world’s largest supplier of renewable blend fuels, and 

we are investing in lowest CO2 biofuels made from sugar cane ethanol through a $12 billion joint venture proposed for Brazil. 

Investments in technologies such as these are creating jobs. One 

out of every $5 spent in the U.S. supporting new energy jobs comes 

from investments made by our industry, which already supports 

more than 9.2 million American jobs. We need to retain these jobs 

and create new ones to fuel the economy of the future. 

Society, government, and business must all do their part. Absence of a robust energy policy has been a disadvantage to this Nation. Shell supports legislating a solution to energy and climate 

issues as a means to create a secure U.S. energy future, to reduce 

dependence on imported oil, and to decrease greenhouse gas emissions. 

Now this requires setting a price for carbon. But shying away 

from oil and gas development during the transition is not the answer. Oil and gas development is too important to the U.S. energy 

supplies and our economy to not safely and responsibly move forward. Shell stands ready and able with skilled people and state-ofthe-art technology to continue meeting America’s needs. 

Thank you for your time, and I look forward to addressing your 

questions. 

[The prepared statement of Mr. Odum follows:] 


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Mr. MARKEY. Thank you, Mr. Odum. 

Our final witness is Mr. Lamar McKay. Mr. McKay is the President and Chairman of BP America. 

Mr. McKay, please begin when you are ready. 

STATEMENT OF LAMAR MCKAY 

Mr. MCKAY. Thank you. 

Chairman Markey, Ranking Member Upton, members of the 

committee, my name is Lamar McKay; and I am Chairman and 

President of BP America. 

Before addressing the main topic of today’s hearing, I would like 

to reiterate the profound sorrow and regret that all of us at BP feel 

for the loss of life and the oil spill resulting from the Deepwater 

Horizon explosion and fire. 

This is very personal both to me and to BP. I am from Mississippi. I grew up in Mississippi. I spent summers on the Gulf 

Coast. Most of my family is in New Orleans, and I have most of 

my relatives and friends along the Gulf Coast. 

The Gulf Coast States have hosted BP and BP’s heritage companies for decades. Thousands of our employees, contractors, and 

their families call the Gulf Coast States home. This horrendous accident, which killed 11 workers and injured 17 others, has profoundly touched all of us. There has been tremendous shock that 

such an accident could have happened and great sorrow for the 

lives lost and the injuries sustained. 

I would like to make one thing very clear: BP will not rest until 

the well is under control and we discover what happened and why 

in order to ensure that it never happens again. As a responsible 

party under the Oil Pollution Act of 1990, we will carry out our responsibilities to mitigate the environmental and economic impact of 

this accident. In fact, BP is going beyond obligations under OPA to 

agree to pay all legitimate claims for economic damages resulting 

from the spill. 

While it is difficult to divert from the here and now, we cannot 

lose sight of the need to help shape the country’s future energy and 

climate policy. 

BP is committed to working with Congress and with a broad 

cross-section of energy producers, energy consumers, and other 

stakeholders to address the challenges of climate change in the 

context of increasing U.S. energy demand. We appreciate the opportunity to share our views on energy and climate policy, as well 

as the chance to discuss the major role of natural gas that it can 

play in speeding emission reductions in the power sector, delivering 

the greatest reductions at the lowest cost for consumers using technology that is available today. 

BP advocates and has advocated for quite a time an all-of-theabove approach to tackling climate change, enhancing U.S. energy 

security and meeting the Nation’s growing need for energy. We do 

support policies that encourage conservation, energy efficiency, and 

greater production of domestic energy, including alternatives, oil 

and gas and nuclear. Our views on climate policy flow from the fact 

that a ton of carbon is a ton of carbon, whether it comes out of a 

tailpipe or a smokestack and the belief that every ton should be 

treated the same. 


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We support a national climate policy that creates a level playing 

field for all forms of energy that produce carbon emissions. 

We favor an economy-wide price for carbon based on fair and equitable action based across all sectors. Market-based solutions like 

a cap-and-trade or a linked fee are the best solutions to manage 

greenhouse gas emissions. Applied nationally, these would achieve 

maximum environmental effectiveness at reducing emissions, treat 

all energy consumers equitably, and facilitate investment in sustaining and creating jobs. We have long supported transitional incentives for alternatives to assist their development and accelerate 

their market entry. 

Additionally, we think natural gas holds great promise in becoming a larger component of the U.S. energy pool and can provide a 

critical down payment at delivering upon our carbon reduction 

goals. 

I would like to conclude by noting that, while BP is in the midst 

of a crisis right now and we are prepared to be judged by our response to that crisis, we cannot lose sight of the future. 

Thank you, and I look forward to your questions. 

[The prepared statement of Mr. McKay follows:] 


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Mr. MARKEY. Thank you, Mr. McKay. 

That completes the opening statements of our witnesses. We will 

now turn to questions by the subcommittee members. The chair 

will recognize himself. 

As I mentioned in my opening statement, the Gulf of Mexico response plans for ExxonMobil, Chevron, ConocoPhillips, and Shell 

are virtually identical to BP’s and just as deficient. As you can see 

by looking at the covers of these five plans on the screen and over 

my head, the pictures are the same for each plan. All that is 

changed is the color of the cover of the plan from each of the companies seated at the table. 

Mr. Tillerson, like BP, on page 11–6 of your plan, Exxon Mobil’s 

Gulf of Mexico oil spill response plan lists walruses under sensitive 

biological and human resources. As I am sure you know, there 

aren’t any walruses in the Gulf of Mexico; and there have not been 

for 3 million years. How can ExxonMobil have walruses in their response plan for the Gulf of Mexico? 

Mr. TILLERSON. Congressman Markey, those response plans incorporate a number of broad-based studies, marine mammal studies, many of which are part of the EIS and EIA statements that 

are put together by the MMS; and much of the response plan and 

what is contained in it is prescribed by regulation, including the 

models that are used to project different scenarios for oil spills; and 

many of the statements and representations that are in the 

plans—— 

Mr. MARKEY. These are regional oil spill response plans. How 

can walruses be in a response plan for the Gulf of Mexico? This is 

a regional response plan—— 

Mr. TILLERSON. I understand your question. 

Mr. MARKEY [continuing]. That the company has put together. 

Mr. TILLERSON. And it’s unfortunate that walruses were included, and it is an embarrassment that they were included, but 

that is part of a larger marine mammal study that is used in preparing regional response plans. 

Mr. MARKEY. Mr. Mulva, your plan as well includes walruses. 

Mr. Watson, your plan has them on page 11–6. How do you respond to having walruses in your plan? 

Mr. WATSON. I would respond in a similar fashion. The plan was 

put together in response to guidelines from the Minerals Management Service. 

Mr. MARKEY. Do you agree that it is an embarrassment to have 

walruses in a response plan for the Gulf of Mexico? 

Mr. WATSON. Certainly for the Gulf of Mexico it is not appropriate. 

Mr. MARKEY. Mr. Mulva, do you agree it is inappropriate to have 

it in a plan for the Gulf of Mexico? 

Mr. MULVA. I agree it is not appropriate to have include it for 

that region. 

Mr. MARKEY. In your response plan, Mr. Tillerson, as well as 

some of the other plans, including ConocoPhillips, there is a Dr. 

Lutz who is referred to as an expert, a technical support person. 

Mr. Lutz died in 2005, 4 years before the plan was actually filed. 

How, Mr. Tillerson, can you justify in a response plan having a person who has been dead for 4 years? Is that also an embarrassment? 


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Mr. TILLERSON. Well, it is. But let me point out that Dr. Lutz 

is part of the University of Miami’s Marine Mammal Research Division which has been an important resource for preparation of 

these plans for years. The fact that Dr. Lutz died in 2005 does not 

mean his work and the importance of his work died with him. 

There are many other individuals identified in the plan for contact 

and we need expertise—— 

Mr. MARKEY. I appreciate that. It is 2010. It is 2010. 

Mr. TILLERSON. Those numbers are all valid that are in the plan. 

Mr. MARKEY. It just seems to me that when you include Dr. 

Lutz’s phone number in your plan for a response that you have not 

taken this responsibility seriously. 

Mr. Mulva, the same is true for you. Is it an embarrassment to 

ConocoPhillips to have that as part of your plan? 

Mr. MULVA. Well, the plans need to be updated more frequently. 

What’s important is the institution. That’s who we refer to for support. Obviously, it is embarrassing, but we really look towards the 

institution and not necessarily the individual. 

Mr. MARKEY. It just seems to me that, for each of your companies, the only technology you seem to be relying upon is a Xerox 

marine to put together your response plans, that there wasn’t 

enough effort put together to ensure that in the Gulf, if a catastrophe occurred, that you would be able to respond. 

And you, Mr. McKay, in the first week, your company developed 

a document that showed that your range of possibilities for an accident was 1,000 to 14,000 barrels per day, and yet your company 

continually, in the first week, low-balled the number and said that 

it was only 1,000 barrels per day. 

You are now estimating that it could be upwards of 40,000 barrels per day and you are today capturing 15,000 barrels per day of 

oil from that gusher. Are you ready to apologize to the American 

people for getting that number so wrong, having been so incompetent or deceptive to the American people that proper preparations were not put in place because of BP’s low-balling of the actual 

amount of oil that was going into the Gulf of Mexico. 

Mr. MCKAY. First, just to be clear, those were united—sorry, 

Unified Area Command estimates. They came from the 5,000 barrels a day, was an estimate done on April 26th by NOAA. Our 

input into that on the 27th, which was after that, was a range of 

1- to 14,000 barrels per day. And our estimate, best estimate was 

above 5,000 barrels per day. But the unified command estimate 

was 5,000 barrels a day. We stuck with that. Information has been 

gathered as things have moved along, as we’ve gathered oil. 

Mr. MARKEY. This document that I have is BP Confidential in 

the first week. It says 1,000 to 14,000, this is BP Confidential. 

Mr. MCKAY. Right. 

Mr. MARKEY. The onus, the burden, the responsibility, is on your 

shoulders. You had the technology. You were able through your expertise to make this determination. And I do believe that it is either deliberate deception or gross incompetence, because ultimately 

the amount of boom, skimmers, cleanup of the beaches and 

marshes, and rescue of birds and turtles, the capacity which you 

needed in order to capture the oil coming out of that spill, testing 


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for the health of the workers, it was all dependent upon how large 

the spill was. 

Are you ready to apologize for getting that number so grossly 

wrong that the capacity of Federal and State governments to put 

in place a response was delayed because you did not do the job? 

Mr. MCKAY. I will just reiterate what Commandant Allen said, 

is that those were not BP estimates, those were Unified Area Command estimates. We did provide—— 

Mr. MARKEY. They were your cameras at the bottom of the 

ocean. 

Mr. MCKAY. That’s true. 

Mr. MARKEY. You got it wrong, Mr. McKay. Your company got 

it wrong. BP got it wrong. 

Mr. MCKAY. We have provided every bit of data we’ve got into 

the Unified Area Command with government scientists and government MMS, NOAA, Coast Guard to help them understand what 

data we have. 

Mr. MARKEY. On the day, Mr. McKay, that you are ready to 

apologize—— 

Mr. MCKAY. What’s that? 

Mr. MARKEY. On the day that you are ready to apologize, that 

is the day that we can begin to move forward and put together the 

kinds of plans that make sure this never happens again. It was 

BP’s spill, but it was America’s ocean. 

Mr. MCKAY. We—— 

Mr. MARKEY. We need you to admit that you knew or should 

have known very early on that this was not a spill of 1,000 or 5,000 

barrels per day. They were your cameras, your technology, your expertise that the American people were relying upon, and you got 

it completely wrong, either in order to limit your liability or out of 

incompetence. But the ultimate impact on this region of the country is profound and will last for a generation. 

Please, one final chance; apologize for getting that number 

wrong. 

Mr. MCKAY. We are sorry for everything the Gulf Coast is going 

through; we are sorry for that and the spill. What I can say is we 

have provided every bit of data and information we have to the 

unified command, to the government, to every scientist that’s working on this full time, and from that day you’re talking about. So 

we do not have the technology to measure that. That is still under 

evaluation. 

Mr. MARKEY. I continue to believe that BP is still more interested in its liability than it is in the livability of the gulf, and this 

hearing is just one further indication of that. 

My time has expired. Let me turn and recognize the gentleman 

from Michigan, Mr. Upton. 

Mr. UPTON. Thank you. Mr. McKay, you indicated BP is looking 

to pay all legitimate damages. Are you willing to put into an escrow account enough money to pay for such damages as might be 

expected? 

Mr. MCKAY. Well, we’ve been very, very clear from day one that 

we, as a responsible party under OPA 90, we are going to be responsible and living up to the responsibilities of OPA 90. I cannot 

comment on whether there will be a fund set aside or not. We’ve 


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made it clear that the company stands behind these commitments. 

We have a strong balance sheet and we have a strong company. We 

intend to stand behind those. 

I cannot commit today, one way or the other, whether a fund 

would serve that in furtherance. 

Mr. UPTON. So that’s a ‘‘no’’ at this point. 

Mr. MCKAY. I can’t comment yes or no. 

Mr. UPTON. I thought the buck stops there. 

Mr. MCKAY. We’ve—what we’ve said, we will honor all legitimate 

claims; and the full company stands behind that. 

Mr. UPTON. Have you asked the Federal Government for any 

help that you’ve not received? 

Mr. MCKAY. Not that I know of. 

Mr. UPTON. What grade would you give the administration in its 

efforts to stop the spill? 

Mr. MCKAY. We’ve been cooperating in every way we know how 

with the administration and—— 

Mr. UPTON. A, B, C, D? 

Mr. MCKAY. I can’t give a grade. This has been a unified command that we’ve been a participant in with many government 

agencies. Industry, we’ve got 150 companies working on this. I 

can’t comment on a grade of individual components of that. 

Mr. UPTON. Of your counterparts that are at the table, have any 

of them—are you working with any of them to try to stop the leak? 

Mr. MCKAY. Yes, all of these companies have been tremendously 

supportive and helping us. 

Mr. UPTON. Question for all of you, as you do drills—drilling 

across the world, which country has the toughest regulations that 

enforce those regulations and what—and if that country gets an A, 

where would you put the U.S. with the enforcement by the MMS? 

Mr. Tillerson. 

Mr. TILLERSON. Well, I think the United States and the North 

Sea countries have the most mature regulatory structure around 

offshore drilling activities, because that’s where it has taken place 

the longest. I can tell you those standards didn’t get taken to countries that have not established a regulatory structure. And the 

same standards are applied everywhere. 

Mr. UPTON. So the same standards are in the gulf as they are 

in the North Sea? 

Mr. TILLERSON. By and large they are the same. For ExxonMobil 

we take what we believe to be the best practice, the best, and then 

apply that globally, because it really doesn’t matter where you are. 

If you have a well-controlled incident, you need to use the best you 

have everywhere in deepwater drilling. It is not an area where you 

make some distinction, I’m going to cut a corner in this country because I can. 

Mr. UPTON. Well, I know in the North Sea when they had the 

accident, I think it was back in 1988, and 100-some folks—180 as 

I recall—— 

Mr. TILLERSON. Piper Alpha. 

Mr. UPTON. Right. The changes were made in essence to split the 

MMS, or split the enforcement agency, similar to what the administration is now proposing in the MMS. So that is a better system 

than what we have in the United States, right? 


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Mr. TILLERSON. I don’t know the structure is as important as the 

competency and the process by which the oversight occurs. 

Mr. UPTON. Mr. Watson. 

Mr. WATSON. I’m not sure I can grade all the differences across 

the jurisdiction. 

Mr. UPTON. I just want to know what model should we be looking at with the enforcement. 

Mr. WATSON. We start with the regulations in each country and 

then we apply our standards on top of those regulations, and they 

are very similar. The application of our processes and procedures 

are very similar in all the countries. Where there are particular requirements in a particular country, we of course comply with those. 

Our view is certainly that the U.K. And the U.S. have very high 

standards. 

Mr. UPTON. Mr. Mulva. 

Mr. MULVA. The greatest part of our experience and operation 

has been in the North Sea, particularly Norway and the United 

Kingdom. And Norway and the United Kingdom, especially developed some of the best practices that are applicable and used 

around the world. So it is based on our experience for many—several decades, those best practices and oversight review have been 

applied and used in the industry and other places in the world. So 

I would say that they rank right up at the top in terms of the capability and development of practices. 

Mr. UPTON. Mr. Odum. 

Mr. ODUM. Similar answer in that I think the U.S. does have one 

of the most comprehensive set of recommendations for the industry 

in the world. There are—you can find other areas where a particular regulation may be more stringent than what you see in the 

U.S. The important part for us as a company is going back to what 

I called in my testimony our global standards; how we do things 

everywhere. Those often exceed the regulations in any country. 

Mr. UPTON. Mr. McKay. 

Mr. MCKAY. Yes, I would agree with that. The standards are 

similar in many places, with some specific differences, but the U.S. 

has a strong set of standards. 

I would add a comment that I think learning what we are learning through this will augment some of those standards and would 

be helpful. 

Mr. MARKEY. The gentleman from Michigan’s time has expired. 

The chair recognizes the chair of the full committee, the gentleman from California, Mr. Waxman. 

Mr. WAXMAN. Yesterday, Chairman Stupak and I sent a letter to 

Tony Hayward, the CEO of BP, and the letter raised questions 

about the design and the safety decisions made by BP at its 

Macondo well. The letter describes a series of decisions that BP 

made that seemed to increase the risk of catastrophic blowout. I’d 

like to ask each of you whether you think mistakes were made by 

BP. Mr. Tillerson. 

Mr. TILLERSON. Well, in reviewing the letter that you both sent, 

it appears clear to me that a number of design standards were— 

that I would consider to be the industry norm were not followed. 


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Mr. WAXMAN. Let me go through this, if I could, quickly. You 

think that they made mistakes. The answer that you would give 

would be ‘‘yes.’’ 

Mr. TILLERSON. We would not have drilled the well the way they 

did. 

Mr. WAXMAN. How about you, Mr. Watson? 

Mr. WATSON. We just had a chance to take a look at your letter. 

It is quite lengthy, of course, with a number of detailed comments. 

Our experts are taking a look at it. I’ve read it myself. And from 

what I have seen it is consistent with what the Joint Industry Task 

Force found that there—we have an opportunity to raise the bar, 

if you will, on standards in the industry. And it certainly appears 

from your letter that not all standards that we would recommend 

or that we would employ were in place. 

Mr. WAXMAN. Do any of you disagree with the statement that BP 

made mistakes? 

Mr. ODUM. It is not a disagreement, it is just confirmation that— 

don’t have all the information, but from the information that was 

in your letter and what we know about the well, a similar statement that it’s not a well that we would have drilled with that mechanical setup, and there are operational concerns. 

Mr. WAXMAN. Mr. Watson, you’re quoted in the Wall Street Journal saying this incident was preventable. What mistakes did BP 

make that you would not have made? 

Mr. WATSON. First, we would say that as we look at this incident, we need to let the investigation run its course. What we have 

done is, since the first days of this investigation and this accident, 

we’ve participated in the Joint Industry Task Force where the industry—— 

Mr. WAXMAN. You made the statement. You were quoted as saying this incident was preventable. 

Mr. WATSON. Yes. 

Mr. WAXMAN. What would you have done differently to prevent 

the disaster that we have now encountered? 

Mr. WATSON. There are several areas that appear, based on the 

information we have seen in the Joint Industry Task Force, based 

on the information we’ve been able to gather, that suggests the 

practices that we would not put in place were employed here. 

Mr. WAXMAN. Specifically? 

Mr. WATSON. For example, the casing design and mechanical 

barriers that were put in place appear to be different than what 

we would use. 

Mr. WAXMAN. Geren McKett, head of Chevron’s exploration and 

production unit, said in the Wall Street Journal that Chevron uses 

a safer well design. Can you tell us why the Chevron well design 

is safer than BP’s? 

Mr. WATSON. It is the two characteristics that I commented 

there, on top of what we think are effective procedures and other 

authorities that we have in place that would have prevented this 

incident. 

Mr. WAXMAN. Well, in the well design, BP had a choice of two 

primary options. It could lower a full stream of casing from the top 

of the wellhead to the bottom of the wellhead, or it could hang— 

could hang a liner from the lower end of the casing already in the 


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well and install a tie-back on top of the liner. BP plan review recommended against the full string of casing because it would create 

an open annulus to the wellhead and make the seal assembly of 

the wellhead the only barrier to gas flow if the cement job failed. 

Would you have chosen the other option and do you choose the 

other option in your wells? 

Mr. WATSON. We would not have run a full string. 

Mr. WAXMAN. You would not have. OK. 

Mr. Tillerson, you made a similar claim today. You testified that, 

‘‘What we do know is that when you properly design wells from the 

range of risk anticipated, follow established procedures, build in 

layers of redundancy, properly inspect and maintain equipment, 

train operators, conduct tests and drills, and focus on safe operations in risk management, tragic incidents like the one in the Gulf 

of Mexico today should not occur. 

Mr. Tillerson, you’ve said that this blowout would not have happened if ExxonMobil had been drilling the well. Tell us what you 

would have done differently, and please be specific. 

Mr. TILLERSON. Well, it would have been a different well design. 

We would have run a liner, a tie-back liner, we would have used 

a different cement formulation, we would have tested for cement 

integrity before we circulated the kill-weight mud out, we would 

have had the locking seal ring at the casing hanger before proceeding. 

And leading up to all of that, though, there was clearly—and this 

is just based on what has publicly been made available—there were 

clearly a lot of indications or problems with this well going on for 

some period of time leading up to the final loss of control. And why 

those—why—how those were dealt with and why they weren’t 

dealt with differently I don’t know. And we don’t have all the information, so I want to echo what Mr. Watson said there. We do—are 

very interested, as I said in my remarks, want to see the full investigation because we want to understand was there something else 

people were looking at that caused them to make the decisions they 

made as opposed to making the decisions that almost any of our 

drilling operations people would have made differently that led to 

the ultimate loss of the well. 

Mr. WAXMAN. Thank you. My time is running out. Let me make 

just make a statement, Mr. Chairman. I would feel more confident 

in these assurances if I didn’t realize that each of the oil spill response plans from the companies are virtually identical to BP’s. 

You say you would have done things differently. I would think, 

certainly in retrospect, that’s a statement you would certainly 

make. I hope that’s true, but the record does not support that the 

other companies here today have been more prepared than BP, and 

their plans were the same. 

So I thank you for your testimony. We’ve got to learn from this 

experience and move on, but we really have to learn that these 

things have to be thought out and the plans should not just be 

cookie-cutter plans. Thank you, Mr. Chairman. 

Mr. MARKEY. The chairman’s time has expired. The chair recognizes the ranking member of the full committee, the gentleman 

from Texas, Mr. Barton. 


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Mr. BARTON. Thank you, Mr. Chairman. The stakes are a lot 

higher and the consequences are much more dire, but this reminds 

me a little bit of a Monday morning call-in radio talk show after 

the Redskins have blown another one. Everybody has an idea of 

what should have been done and now that they know what was 

done, and it wasn’t done properly, they are much smarter than the 

coach on the field and the quarterback on the field at the time. 

So it is very easy to second-guess and to point out the problems. 

There is kind of good news, bad news. The bad news is that I agree 

with Chairman Waxman. Judgment calls were made that now that 

we’re—now that we know what happened, that those were the improper judgments. That’s bad. That’s bad. But the good news is— 

and this is what our industry CEOs are saying, I think, is that it 

is preventable. 

I don’t know what this task force is going to recommend that Mr. 

Tillerson has alluded to, but if the recommendation is that best 

practices on these deep wells ought to have these double sleeves, 

I think we could put that into a regulation if we need to. If the best 

practice is you ought to put the lock-out collar on the well before 

you do the final cementing job, I think that is something that can 

be done. If the best practice is that we ought to really focus on 

degassing the mud before you recirculate it and do that final stage, 

when this accident occurred, I think we’ll go along with that. These 

are not huge, technically complex; we just don’t know how to solve 

that particular problem. So that’s the good news. 

Now my first question is to the CEO of British Petroleum or the 

President of British Petroleum USA. Has the Federal Government 

suggested, told, asked, that you do anything that you just flat said 

no to? In other words, have they proposed some solutions that 

you’ve turned down? In hindsight, if you had just done what you 

were told to do, that the well wouldn’t continue to be leaking? 

Mr. MCKAY. No, I don’t know of any solutions that have been 

proposed that we haven’t—haven’t done. 

Mr. BARTON. And it is BP’s responsibility for the well. I mean 

you are the owner of the well, but in terms of mitigation, in terms 

of cleanup on the beaches, did BP tell the President of the United 

States that we shouldn’t let the Louisiana people go out and do 

those sand berms? 

Mr. MCKAY. What we—no, what we’ve always said is what we’re 

trying to do is work through unified command, and decisions for 

operational matters like that go through unified command. They 

did go through unified command, and we agreed once we were— 

that was a unified command decision to go forward. 

Mr. BARTON. Are any of you gentlemen here because you were 

subpoenaed? 

Mr. MCKAY. No. 

Mr. BARTON. You’re all here voluntarily. You’ve chosen as free 

citizens to come and answer any question that any member of this 

subcommittee has; isn’t that correct? In terms of BP, this television 

camera that’s showing the oil, isn’t that your television camera? 

Mr. MCKAY. That’s—that’s the remote operated vehicle cameras 

that are contracted. 

Mr. BARTON. But you’re providing it—— 

Mr. MCKAY. Right. 


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Mr. BARTON [continuing]. Voluntarily. I think at Chairman Markey’s suggestion or request, but you haven’t been told by Federal 

law you have to do that? 

Mr. MCKAY. No. We agreed with Department of Interior, MMS, 

Coast Guard and others to supply right off the bat, but we have 

responded to requests to open that up to the public and other congressional Members. 

Mr. BARTON. Now I want to ask this question to ExxonMobil and 

to Chevron. If we were to maintain the so-called temporary moratorium in the deep OCS, how does that affect your decision on how 

to get the energy that America needs to America? Do you just sit 

on your hands and hope that the moratorium goes away, or look 

for that energy somewhere else, or perhaps even import it from 

somewhere else? 

Mr. TILLERSON. Well, we will redirect our human resources, the 

technical talent, to other parts of the world where we are allowed 

to work, and we will redirect the rigs and the equipment elsewhere. 

The stuff is too expensive to just let sit around. 

Mr. BARTON. What does it cost per day? 

Mr. TILLERSON. The spread rate on a typical deepwater well is 

about a million dollars a day. 

Mr. BARTON. Mr. Chevron, do you echo what Mr. Exxon just 

said? 

Mr. WATSON. Yes, we have three deepwater rigs right now, two 

of which were operating at the time of the incident, an additional 

one that came in, and the costs are similar to what Mr. Tillerson 

mentioned. And we will redeploy people and redeploy rigs if we are 

unable to put them into service. 

Mr. BARTON. Now, I am told that the Chinese oil companies are 

drilling off the coast of Cuba, which means they are drilling off the 

coast of Florida. Do any of you gentlemen have reason to believe 

the Chinese oil companies are safer and more concerned about safety and the environmental protection than U.S. oil companies? Anybody? 

Mr. WATSON. I can’t speak for those companies. I’m sure they are 

committed to safe operations. 

Mr. BARTON. Have they done anything more innovative than the 

United States oil companies have? Have they led the way in any 

area that you’re aware of? 

Mr. WATSON. I’m not aware of that. 

Mr. BARTON. OK. Last question. We’ve heard a lot in the scientific community about new ideas to—once you have an oil spill, 

to insert natural organisms that biodegrade and turn it into nonharmful substances. Would any of you care to comment on—we 

want to prevent the spill. If we can’t prevent it, we want to stop 

it. But if you have one, is there hope that someday we’ll have organisms that biodegrade the oil very quickly so it doesn’t harm the 

economy—the environment? Anybody? 

Mr. TILLERSON. I would only comment, Congressman Barton, 

that in effect that’s part of what the dispersant action does is to 

reduce the oil to very small droplets within the natural microorganisms that exist in the marine environment are able to break that 

down more quickly. There has been a lot of discussion about the 

dispersants, but the dispersants have been tested and are actually 


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less toxic than detergent soap which you would flush down your 

sink every day. 

Mr. BARTON. I want to thank Chairman Markey for his discretion in letting me go over. And let’s work together to stop the spill, 

figure out a way to prevent it in the future, and keep our industry 

and environment safe and growing. Thank you, Mr. Chairman. 

Mr. MARKEY. Thank the gentleman. The chair recognizes the 

gentleman from Michigan, the chairman emeritus of the committee, 

Mr. Dingell. 

Mr. DINGELL. Thank you, Mr. Chairman. 

Gentlemen, yes or no, each if you please. You have seen—well, 

this document which is the Department of Interior’s increased safety measures for energy development in the Outer Continental 

Shelf. Do any of you have any objections to the recommendations 

contained therein? 

Mr. TILLERSON. Congressman Dingell, I’ve looked at the document and the task force that John Watson has referred to had significant input to the DOI’s consideration. As I’ve looked at specifics 

of what’s in there, there are some areas where I am concerned that 

they may be actually introducing more risk in their effort to improve the safe operation. They may actually be increasing the risk 

in some areas. 

So we want to have a thorough discussion with them and others 

around what risk are we trying to mitigate and is this actually 

going to accomplish that, or in effect are we increasing risk in the 

operation. And again that—I think it is a very good document, it 

is a very good start. Most of it we would strongly support. A lot 

of it we’re already doing. So it is not going to be a difficult compliance issue for us, but there are some areas in there that I do have 

some concerns about. 

Mr. DINGELL. Does that, gentlemen, generally address your feelings? Each? 

Mr. WATSON. Yes. 

Mr. DINGELL. Thank you. I note—and this would be of concern 

here, I think, to Mr. McKay—the Deepwater Horizon blowout preventer contained a single set of blind shear rams. These blind 

shear rams were supposed to cut through the pipe in the case of 

emergency and stop the flow of oil and gas into the water. The 

blind shear rams obviously failed to carry out that function. 

Do you support the idea that we should have double or redundant blind shear rams? 

Mr. MCKAY. We have—we have recommended that the design of 

blowout preventers should be evaluated based on what we learned 

here and potentially additional redundancy, yes. 

Mr. DINGELL. Now, again if you please, Mr. McKay, how many 

vessels do you have down there in the area of the spill to collect 

the oil that is retrieved? Do you have one, do you have several? Do 

you have more on the road? Are you going to run out of capacity 

to receive the oil that you are retrieving? 

Mr. MCKAY. We have two, as of today, receiving oil. But we have 

several that are being outfitted to arrive on location in the next 

couple of weeks, two more. And then we have an additional two on 

the way that should be outfitted and functional potentially by midJuly. Obviously, that’s not counting skimmers and other vessels 


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picking up oil that’s on the surface, but in terms of taking production off the well, we’ll have up to roughly six that would take direct 

production in the very near future. 

Mr. DINGELL. I note you are, however, burning or were burning 

some of the retrieved oil for want of space or capacity to handle it. 

Is that still going on? 

Mr. MCKAY. The offshore burning occurs when there is enough 

oil in an area to boom and burn and when weather conditions permit. That’s under the Unified Area Command. We will have a vessel called the Helix 4000 on location, and working, hopefully today, 

that will be burning oil that is produced up to that vessel. 

Mr. DINGELL. Now, gentlemen, you are supposed, I believe, to 

have a plan to address spills or catastrophic events. I’m assuming 

that each of you do. What is the date—well, first of all, is that plan 

for the whole of your operation or is it for item by item or specific 

site by specific site? Starting with Mr. Tillerson. 

Mr. TILLERSON. There’s a gulf regional plan and then with each 

well, when we permit the well, there would be a plan to support 

that well’s activities and operations. I think the aspect of the plan, 

the cookie-cutter characterization should not come as much as a 

surprise, because the industry has relied upon sharing of resources, 

boats, booms, skimmer equipment. And working with the Coast 

Guard and Federal agencies, what we really should have is a unified plan, because it doesn’t matter whose well has the problem; 

when it has the problem, we need to be able to respond with everything we have available. So those plans look the same because in 

fact they call upon the same resources to respond. 

Mr. DINGELL. Now, gentlemen, would each of you submit the 

date of those plans so that we could know—you don’t have to do 

it now, I’ll ask that be inserted in the record. 

Now, I am troubled here that everybody is blaming the administration for the events that are going on down in the gulf area. I 

am curious. What is the practice, if you please, starting, Mr. 

Tillerson, with you; does the Federal Government take over when 

there’s a spill and cleanup or is that the responsibility of the operator? 

Mr. TILLERSON. Well, the Coast Guard has command of the incident after you have the spill. The responsible party then works in 

the unified command structure with the Coast Guard on the spill 

response. So the Coast Guard does ultimately make final decisions 

on your actions. Your actions have to be approved by the Coast 

Guard, but it is very much done, obviously, in a joint fashion. And 

the Coast Guard makes determination of when certain cleanup activities should be undertaken, how they should be undertaken, and 

when you should stop. 

Mr. DINGELL. Now, Mr. McKay, do you agree with that statement? 

Mr. MCKAY. I do. The incident commander is the Coast Guard, 

and final decisions are by the Coast Guard under that incident 

command structure. But I also agree with the statement that much 

of this is collaborative in terms of decision making, but the final 

decisions for deployment or resources is with the command—— 


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Mr. DINGELL. If you please, Mr. McKay, in the case of the event 

we’re discussing here, has the Coast Guard made any recommendations with which BP did not agree? 

Mr. MCKAY. I think—no, I don’t think there have been any recommendations that BP did not agree. The decisions have been effectively worked together for the uniformed structure and the 

major decisions have occurred under that structure and with our 

support. 

Mr. DINGELL. Was there any—has there been any conflict between the administration and BP with regard to the cleanup that 

has been going forward? 

Mr. MCKAY. On spill response within the unified command structure, there have been debates about deployment, and when, and 

where, and how, and that’s part of the command structure. But I 

think all the major decisions that have been made have been supported by BP. 

Mr. DINGELL. Now, is it your view that the government should 

take over the cleanup, or is it your view that that should remain 

as it is now, or should it be the principal and sole responsibility 

of the operator or the holder of the lease? 

Mr. MCKAY. I think overall, the command structure and the way 

the National Contingency Plan as well as the Gulf of Mexico plans 

work is effective. I think this actually—I understand everyone’s 

frustration with how long this is taking, but the spill response has 

actually been pretty effective in terms of dealing with it on the 

water. It is unfortunate we can’t get it stopped at the source right 

now. We’re doing everything we can to do that. But I think the 

command structure has actually been functional, and the spill response plans have been leaned upon and have been the foundation 

of that. 

Mr. DINGELL. Now, in one recommendation that the Secretary 

has made, he recommends that there be the finalization of a rule 

that would require the operators of drilling wells to develop robust 

safety and environmental management systems for offshore drilling 

operations. In 2009 when this was first proposed, the Offshore Operators Committee and the American Petroleum Institute raised 

concerns about—I believe, gentlemen, you are all members of both 

bodies. Would you support—is there anyone at the table who would 

not support the finalization of that rule? 

I notice, Mr. Tillerson, you have got the same problem I do. I’m 

not coming through very well, I’m afraid. 

Mr. WATSON. Just want to be clear what you’re referring to, Congressman. 

Mr. DINGELL. Would you support the finalization of that rule, 

sir? 

Mr. TILLERSON. I’m not sure I’m clear on exactly what rule you’re 

referring to, Congressman. 

Mr. DINGELL. Well, the Secretary, one of his recommendations is 

that the finalization of the rules required drilling—rather, operators of drilling wells to develop robust safety and environmental 

management systems for offshore drilling operations. 

My question to you gentlemen of the panel is: Would you support 

such recommendation? That’s known as the SEMS rule. 


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Mr. TILLERSON. I’d have to go back and look at the specifics, Congressman, quite frankly. I don’t remember enough of the details. 

I’m sure—we were concerned with it. 

Mr. DINGELL. Would you each, gentlemen, please submit your 

comments on that point to the committee as to whether you would 

support that or not. 

Mr. Chairman, I thank you for your courtesy and, gentlemen, 

thank you for your kindness. 

Mr. MARKEY. I thank the gentlemen. The chair recognizes the 

gentleman from Texas, Mr. Burgess. 

Mr. BURGESS. Thank you, Mr. Chairman. Let me just go back to 

a question I posed—to a rhetorical question I posed in my opening 

statement. Everyone in the panel before us, with the exception of 

Mr. McKay, let me just ask you a question. Is there any idea that 

you have at this point that would stop that leak from occurring in 

the Gulf of Mexico? Is there something you could share with us this 

morning that has not been done or tried that will bring a conclusion, a rapid conclusion to this? We know BP doesn’t have that 

idea; do any of the rest of you? 

Mr. WATSON. We provide our experts to assist, Congressman, and 

I’m not aware of any ideas beyond those have been employed or 

that we’ve—— 

Mr. BURGESS. No ideas have suggested that haven’t been taken 

up. Now, again, with everyone, with the exception of Mr. McKay, 

we know that BP has not been to the White House to talk to the 

President. Have any of the rest of you had conversations with the 

White House about the management of this situation in the gulf? 

Mr. Tillerson? That’s an affirmative answer? 

Mr. TILLERSON. I’ve had very brief conversations. 

Mr. BURGESS. With the President himself or with his advisors? 

Mr. TILLERSON. Both. 

Mr. BURGESS. Any of the rest of the gentlemen? 

Mr. WATSON. I’ve had a very brief conversation, but not with the 

President. 

Mr. BURGESS. Let me ask you a question. A week ago we went 

down to the gulf and had testimony on a field hearing on Oversight 

and Investigations. We heard from two of the ladies who lost husbands on the rig. Mr. McKay, you were present at our first hearing 

on Oversight and Investigations, I didn’t get a bit of information 

that day from yourself, Transocean, Halliburton, and the blowup 

protector manufacturer was here. I learned a lot more from those 

two ladies talking about e-mails they’d had with their husbands, 

phone calls they had with their husbands, discussions they had 

with their husbands back home when they came home for visits. 

And it seemed to be there was a lot of concern about things that 

were happening on the rig. 

Now, I’ve never walked on a deepwater rig. Have any of you 

worked on a rig? 

Mr. TILLERSON. Not a deepwater rig, but I worked on rigs earlier 

in my career. 

Mr. BURGESS. Well, let me just ask you a question. Is that unusual? I mean, I go home and complain about Mr. Markey a lot, 

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men were sharing with their wives about the safety conditions on 

an offshore rig? 

Mr. TILLERSON. Well, Congressman, I have—I haven’t looked at 

their testimony in detail so I can’t comment directly to that. 

What—as I commented, there were certainly some things going on 

with this well in the days and hours prior to the loss of control that 

we’re interested to understand, and it is incomplete at this point. 

So I can’t really say. 

Now, what I would say, that well control is part of drilling; that’s 

what drilling operations are about. You are trying to drill into the 

forces of Mother Nature and hold that back in a controlled fashion 

until you can then secure it. And so it is common to be dealing with 

well control issue on a well—in a routine manner. 

And the reason you have the well design, and the layers of redundancy, and all the safety equipment and the training, is so you 

can deal with those. It is not uncommon to take a gas kick in a 

well and have to circulate that kick out in a controlled fashion and 

restabilize the well to continue your operation. To do that you have 

to have good well bore integrity, and good equipment, and people 

that know what they are doing. 

And that’s why in my testimony I said when you have those 

things, you can deal with well control issues and maintain the integrity of the well and not lose control of the well and have what’s 

happened out there. 

Mr. BURGESS. Have any of you ever ceased operations on a well 

because it was difficult to control? 

Mr. TILLERSON. Yes. 

Mr. BURGESS. Or you didn’t feel like you had control? 

Mr. TILLERSON. Yes. 

Mr. BURGESS. The answer is yes? So that does happen. 

Mr. WATSON. Certainly—— 

Mr. BURGESS. Who would generally make that call? Would it 

be—in the case here, would it be Transocean or would it be BP, the 

owner of the platform or the driller? 

Mr. TILLERSON. Well, we as the owner of the well or the operation would make that decision, and depending on what the severity of the issue was and what was at stake, it would be made by 

a line manager somewhere in the drilling organization. But there 

has been at least one instance that came all the way to my level. 

Mr. BURGESS. Mr. Mulva, let me ask you a question, because in 

your testimony you talked about natural gas and the use of natural 

gas as one of those bridge fields to the future. And yet we can extract a lot of natural gas on land where it is not an issue with drilling a mile down in the gulf, but we also have issues of where that 

drilling is occurring because now it is occurring closer and closer 

to civilization, and sometimes right on top of civilization. 

Mr. Tillerson mentioned the loss of the public trust with the energy industry. What are you doing to create the best practices so 

that people on land who are nearby to the gas drilling operations 

can have the comfort that their safety is protected, that they are 

not being exposed to benzene and hexane, that the fracking fluid 

is not going to contaminate their water wells? How are you taking 

a leadership role in the industry to be certain that those things are 

being handled appropriately? 


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Mr. MULVA. We have a great deal of experience as a company 

and as an industry and we share those practices, but it all goes 

back fundamentally to how you plan and design and execute and 

drill those wells. Also, it is most important how you develop the infrastructure so as you develop the gas and you bring it to the marketplace, that that’s done through the infrastructure and pipelines 

in a way that’s very secure and safe. 

We really feel that by doing this in a proper way, meaning the 

plan and design, and we have many, many decades of experience, 

that this can be done. And there is nothing really that unique from 

a technological point of view of our ability as an industry to develop 

the gas resources, whether you call them nonconventional or conventional resources that can be developed in North America. It is 

a tremendous resource. Our country is blessed with natural gas. It 

is not just a transition fuel, it is an integral part of the energy supply that we’re going to need for our society and for our economy. 

Mr. BURGESS. I may have some additional questions for you on 

that issue, and I would appreciate you working with our office so 

that we can be confident of those best practices; because I will just 

tell you, in my neighborhoods you may not—it may not be as secure as you think. 

I yield back, Mr. Chairman. 

Mr. MARKEY. We thank the gentleman. 

The chair recognizes the chairman of the Oversight and Investigations Subcommittee, the gentleman from Michigan, Mr. Stupak. 

Mr. STUPAK. Thank you, Mr. Chairman. 

Mr. Waxman and I sent that letter yesterday and Mr. Tillerson 

responded a little bit to it. And we talked about the five areas 

where we feel BP should have done things differently to get control 

of this well. In fact, they used the word ‘‘nightmare well’’ in one 

of the e-mails that we looked at and put in our report. 

I was struck, Mr. Tillerson, you indicated in your testimony, 

based on the industry’s extent of experience, you state that what 

we do know is that when you properly design wells with the range 

of risk anticipated, follow the established procedures, build in layers of redundancy, properly inspect and maintain equipment, train 

operators, conduct tests and drills, and focus on safe operations 

and risk management, tragic incidents like the one we’re witnessing in the gulf today should not occur. 

And I mention that because in today’s Post, the exact same 

words are there, exactly the same as your testimony, but it is attributed to Kenneth P. Cohen, ExxonMobil’s vice president of public and government affairs. 

And in my opening statement I mentioned how in your 500-page 

response, 40 is on press, and that you all stay on script. I have got 

to compliment you, you’re all on script, you’re using the same 

words. Those are problems with the well, as Mr. Waxman pointed 

out in his testimony. 

So what about—are you all on script that if it wasn’t BP but one 

of you, one of your companies, if that was you and the blowout happened on April 20th, if you had received a call that there was a 

subsea blowout at your well instead of BP’s, would you have been 

prepared to stop the leak and prevent oil from reaching the sensitive coastal areas? 


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So would your company have been ready, Mr. Tillerson? 

Mr. TILLERSON. We would have been ready to implement our oil 

spill response plan. 

Mr. STUPAK. That’s the 9-page plan, right? 

Mr. TILLERSON. That’s the 500-page plan you referred to. 

Mr. STUPAK. OK. There’s only 9 on oil removal, 40 on media, 9 

on oil removal. So that 9 pages would have been able to prevent 

the oil from hitting the gulf shores? 

Mr. TILLERSON. The 9-page plan would have done what the 9- 

page plan says it is intended to do. And it says ‘‘to the maximum 

extent practicable.’’ 

Mr. STUPAK. How about you, Mr. Watson? 

Mr. WATSON. I would say, Congressman, that our emphasis is on 

prevention of that spill. You were talking about—— 

Mr. STUPAK. Sure, but let’s say this. You got the call, your well 

just blew, what would you have done? 

Mr. WATSON. Before the incident? 

Mr. STUPAK. Yes. 

Mr. WATSON. We would have exercised a stop-work authority. We 

have rigorous stop-work authority, not only written down, but we 

use stop-work authority. 

Mr. STUPAK. But your well blew up, so what would you do? 

Mr. WATSON. We would activate our spill response plan. 

Mr. STUPAK. That’s about 5 pages I think in your proposal, right? 

To remove the oil? 

See my concern is, Mr. Tillerson, Mr. Mulva, Chevron and Shell’s 

worst-case scenario is 200,000 barrels per day in their response 

plan. Exxon Mobil’s is 166 barrels per day. That’s a lot more than 

what’s currently leaking out into the gulf. So on paper, these 

plans— and you are all going to rely on these plans—might seem 

reassuring, but reality shows you can’t prevent the oil from reaching the gulf shores. 

So Mr. Tillerson, ExxonMobil states in its response to the prehearing questions that ExxonMobil is prepared to meet all the commitments in its permits, including those involving the worst-case 

scenario. So do you stand by that statement? 

Mr. TILLERSON. I do, because the permit does not guarantee that 

the oil will not get to the shore, nor does it guarantee that it will 

all be contained. 

Mr. STUPAK. We’re at, what? At most, 40,000 barrels today? 

Mr. TILLERSON. I don’t know. 

Mr. STUPAK. Forty thousand, I think is what we’ve been saying 

for the record. So ExxonMobil’s worst-case scenario is over 160,000 

barrels per day. So how can you say that you would be able to control a spill that’s four times bigger than the current spill, using the 

same plan BP has, with the same contractor BP’s using? 

Mr. TILLERSON. As I said, Congressman, we would use the response capability to the maximum extent practicable and in the 

models that we provide as part of the permitting which are in conformance with what the regulatory bodies require—— 

Mr. STUPAK. Your plan is written by the same contractor that 

BP’s is. BP relied on Marine Spill Response Corporation to provide 

response equipment, and so does your plan. So if you can’t handle 

40,000, how will you handle 166,000 per day as you indicate? 


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Mr. TILLERSON. The answer to that is when these things happen, 

we are not well equipped to deal with them. 

Mr. STUPAK. So when these things happen, these worst-case scenarios, we can’t handle them, correct? 

Mr. TILLERSON. We are not well equipped to handle them. There 

will be impacts as we are seeing. And we’ve never represented anything different than that. That’s why the emphasis is always on 

preventing these things from occurring, because when they happen, 

we’re not very well equipped to deal with them. And that’s just a 

fact of the enormity of what we’re dealing with. 

Mr. STUPAK. But they do happen. 

Mr. TILLERSON. It just happened. 

Mr. STUPAK. And in an answer to Mr. Waxman, you said yep, it’s 

cookie-cutter plans, and we call upon the same resources. The resources for BP are not enough, so no matter which one of the oil 

companies here before us had the blowout, the resources are not 

enough to prevent what we’re seeing day after day in the gulf, not 

only the loss of 11 people, but we’re on, what, day 56 or 57 of oil 

washing up on shores. There is no other plan. There is no way to 

stop what’s happening until we finally cap this well, correct? 

Mr. TILLERSON. That is correct. 

Mr. STUPAK. But for the grace of God there goes I, right? It’s BP 

this time; it could be Exxon Mobil tomorrow, it could be Chevron 

tomorrow. 

Mr. TILLERSON. Not if we follow our practices and procedures it 

won’t be. 

Mr. STUPAK. But if it does, we can’t handle it—we can’t handle 

the spill. This worst-case scenario is pie in the sky, and oil in our 

water and on our shores. 

Mr. TILLERSON. It is a scenario that the MMS and Coast Guard 

require us to calculate using their methodologies. That’s why it is 

in there. I see your point, and I think that’s all that matters, is the 

point is we have to take every step to prevent these things from 

happening, because when they happen it is a fact that we’re not 

well equipped to prevent any and all damage. There will be damage occur. 

Mr. STUPAK. We satisfied the application, but in reality we can’t 

respond to a worst-case scenario. 

Mr. TILLERSON. We are responding, a response is underway, it is 

having some effect as if there were no response. But there is no response capability that will guarantee you will never have an impact. It does not exist and it will probably never exist. 

Mr. STUPAK. Nor do you have the ability to respond to the worstcase scenario. If we can’t handle 40,000, how can we handle 

166,000? 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Illinois, Mr. Shimkus. 

Mr. SHIMKUS. Thank you, Mr. Chairman. I’m handling the tack 

a little bit different. I have 3,000 Facebook followers. I posed a 

question, I’m going to get a chance to visit with you all today. 

I have 22 questions and responses. We chose five of them, and 

I will kind of weave them into some of the things we have already 

heard in question and answer and in the testimony. 


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The first one is from Randy from Greenville. He says, What will 

be the impact on the U.S. economy by stopping offshore drilling? 

If I were to answer him saying that the moratorium is idling 33 

rigs which affect 46,500 direct jobs, 330 million in lost wages, and 

if it goes for a 6-month moratorium, that would be about $10 billion to the Federal Treasury. Would that be—would that be numbers that would sound correct? I know some of you have actual 

drilling rigs, but I’m seeing some nodding. 

The second question is, We haven’t heard anything directly from 

the workers on the rig that saw what happened. That’s why I was 

talking to my good friend Mr. Scalise. 

Brian from St. Louis says, I want them answering questions in 

front of congressional panels. I’ve heard nothing but the story that 

some methane gas came up through the line. 

Now, I know at the field hearing last week, they did have the 

widows, and Mr. Scalise mentioned the compelling testimony. I 

think during that testimony also, the widow said we need to be 

drilling. And I think what we’re learning is there is lost livelihood 

on the coast because of the environmental disaster. We need to be 

careful not to compound that loss of jobs and an economy by shutting down operations right now. So that’s my response to Brian. 

Another Brian from Ettersville says, What types of regulations 

would have prevented another tragic incident like this from occurring? Also, what do you suggest we do regarding forming emergency response teams for disastrous magnitude? 

My friend Michael Doyle mentioned how long it took to get a response team to Pennsylvania. I would ask that in this emergency 

best-practices thing that we’re reviewing, that we start the industry talking about a consortium of emergency response team that we 

can mobilize. 

Obviously, this is bigger than anything we would have projected. 

I think Mr. Stupak was also highlighting that even in the emergency response plans, we are projecting billions of barrels. This is 

something that we had been overwhelmed. So part of that planning 

I would suggest that we do in forming an emergency response 

team. Hopefully this will never happen again, but it would be nice 

to have if we’re in that venue. 

Doug Oyster from Collinsville, my home town of Colllinsville, 

says—talks about—we have a ConocoPhillips refinery locally in my 

area, I’m very proud of it. He mentions a refinery fire but it was 

contained. He says, What risk do we face on land-based facilities 

as well? 

And I think what the story that’s not told, and Joe Barton’s mentioned this a couple of times, that you’re in the deepwater because 

that’s where major oil finds are. And I have marginal oil production 

in southern Illinois and it is about a barrel a day. We still produce, 

we’re the tenth leading State, but it is not very much and we’re 

proud of what we get out of the ground. 

But Mr. Mulva, since I’ve been to the refinery there numerous 

times, one thing that is important if we’re talking about all of the 

above energy strategy, I’ll talk climate—I’ll fight this climate debate another day—but we can agree on North America energy independence. And what your refinery is doing in the St. Louis metropolitan area is bringing tar sands oil down through a pipeline that 


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can be refined in the Midwest so that we will be less dependent on 

imported crude oil, and we may not have to be in places that are 

tough. So that’s a shout-out. 

I’ve also talked to this committee numerous times about coal to 

liquid technologies, using the Fisher Tropsche techniques. That 

would be another way to displace our reliance on imported crude 

oil. And so that expansion for this heavy Canadian sand crude oil— 

right now, there are 2,500—at the peak. There were 4,000 construction jobs on an average of $67,000 salary per year, I think 10 

different unions building. That’s the importance of the fossil fuel 

sector in this country. They are good paying, big number jobs. I’ve 

always used your refinery there and the Prairie State Coal Firepower plant we’re building in this economy to have still on site, in 

addition to 2,500 jobs. That’s energy security. That’s not including 

the 750 full-time jobs that are there. 

So energy security is part of this debate and we’re in the deepwater. The vast majority of time we’re doing it successfully. We 

need a low-cost energy to make us competitive in the world today. 

I hear from—Michelle from Staunton says, How much money are 

they spending on technology to put safety measures in place? 

Let me ask this question so I get at least one response instead 

of my filibuster. A second blowout preventer in deepwater application, what would that cost? Go ahead, Mr. Tillerson, on down. 

Mr. TILLERSON. I would have to ask my experts. It would not 

represent a huge additional cost for the daily spread rate. And I 

think the real question that we want to look at is when you do 

that, do you change in some way the safe operation of the mechanisms you have, which have worked very well for 14,000 wells? So 

we just want to be careful that we understand—it is not really a 

cost issue. 

Mr. SHIMKUS. Yes. And I think I have been told $15 million, but 

we’ve been told that this is a requirement in other places around 

the world and in some operations, so that might be something that 

the panel might want to consider. 

Can anyone address this debate about lifting the cap? Helpful, 

harmful, for current operations and future operations? Don’t be 

shy. 

Mr. MULVA. Given the situation that we are facing an unprecedented event that we never expected would take place. So, obviously, given the situation, I think it’s appropriate for us to take a 

look at the cap, what it should be. It most likely needs to be raised. 

In doing so, I think the industry should come forth, the States and 

Federal Government should come forth and make a good judgment, 

informed decision on what that cap should be. But we’ve obviously 

faced an unprecedented situation, and it needs to be evaluated and 

changed. 

Mr. WATSON. I would just comment that it is a combination of 

financial capacity, general funds that would be made available 

from industry contributions, insurance. In total, that can realize an 

effective system for ensuring that there are funds available or responding to an incident like this. 

Mr. SHIMKUS. Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. The chair recognizes the gentleman from Pennsylvania, Mr. Doyle. 


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Mr. DOYLE. Thank you, Mr. Chairman. 

Would you gentlemen all agree that Americans’ confidence in the 

ability of the oil industry to go deepwater safely has been shaken 

by this event? Would you all agree with that statement? And it is 

in all of your best interests to restore the confidence so that—because we want this resource, but this price is way too high of a 

price to pay for it, what we’re seeing right now. 

Let me ask you a question. I get asked this a lot, Mr. Tillerson. 

I think you basically made the statement that, hey, we need to stop 

this before it happens because once it happens, we really don’t 

have a good way to stop what’s going on here, right? 

A lot of people have suggested this idea of why isn’t it required 

that we drill a relief well at the same time we’re drilling the main 

well. So that if this situation that is occurring right now, if that 

relief well was already drilled and sitting there, that we would 

have been able to cap this well certainly a lot quicker than we’re 

doing right now. 

I would like to hear from each one of you whether or not you 

think it’s a good idea to require that a relief well be drilled simultaneously with the main well as a condition for future drilling. 

Mr. TILLERSON. Well, I would say you just doubled your risk. 

This is an exploration well, so it means you are drilling in an area 

that has not previously been drilled before. If you look at the history of well control problems and blowouts, most of them have occurred on the way down to the objective, not once they have 

reached the objective. They are caused by shallow gas hazards. 

They are caused by unknown pour pressures on the way down to 

the objective. So if you have two wells going down at the same 

time, it just means you have now increased your risk of having a 

problem on both of them. I don’t think it’s a viable nor necessarily 

a good risk management option to consider. 

Mr. DOYLE. Next. 

Mr. WATSON. We favor redundancies in the well design and how 

we drill our wells. We don’t think that a relief well will reduce the 

risk, and we don’t advocate it. 

Mr. MULVA. Given we feel that time will show that this incident 

and accident, tragic accident, certainly could have been preventable, what we have found is that the response to such an unprecedented situation is inadequate. The question really is, what could 

we or should we be doing to improve our response? Because the 

only certainty that we see today is a relief well. 

I think that where you need to spend a fair degree of time and 

money and resources is on technology so as to improve our capability on the sea bed to contain and capture out-of-control well. 

Second, I think technology-wise we are going to have to do a 

much better job of when oil gets on the water to contain it in a 

smaller area and have more capability to handle it. 

And third is I think we also need to learn from this incident and 

situation a far more effective, efficient approach with respect to 

oversight and regulation. 

Mr. DOYLE. Thank you. 

Mr. ODUM. I generally agree with the comments that have been 

made. I think, just to go back to one point, though, the real opportunity is the redundancy, meaning the multiple barriers, the way 


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a well is drilled or is it well designed. Those need to be testable, 

verified, in-place barriers. That’s the opportunity. 

Mr. DOYLE. Mr. McKay. 

Mr. MCKAY. Yes. I generally agree and I think learned quite a 

bit about sub-sea intervention capability that can be developed 

going forward. 

Mr. DOYLE. Yes. Mr. McKay, I appreciate your response. It just 

seems to me that the only solution left to us at this point seems 

to be to get that relief well down there, that a lot of people were 

asking the question why isn’t one there in the first place. And it 

just seems to me that I read it would cost $100 million to drill a 

relief well. I am sure BP wishes they spent that $100 million before 

they drilled this one. 

It just seems to me that right now I don’t understand a better 

answer of how we stop this when it happens than to get a relief 

well down there, and the thought that it takes 2 months or 3 

months to do that while all the oil comes out of the ground just 

seems incredible to me. 

Let me ask in the time I have remaining that, in 2000, the Minerals Management Service proposed a rule to implement best cementing practices for offshore drilling operations. We know now 

that cementing was a factor in what went wrong here and that 

MMS was concerned that operators were using unregulated cementing procedures. 

In light of the recent events that we see here, I would like to ask 

each one of our witnesses if they think cementing should finally be 

regulated, if there should be a standard for it. 

Mr. TILLERSON. Well, I think, as is footnoted in Chairman Waxman and Congressman Stupak’s letter, the API already has a number of standards and recommended practices for cement and cementing operations; and I think, had those been followed, at least 

that element in this case might have been eliminated. 

Mr. DOYLE. But it’s a voluntary standard, is it not? I mean, 

there’s no penalty for not following it. 

Mr. TILLERSON. Well, I guess that’s right, other than if you want 

to live with that risk. 

Mr. DOYLE. I see. 

Mr. TILLERSON. It’s a risk—I guess it’s a risk management decision. 

Mr. DOYLE. Yes, I guess it sort of gets down—I see my time has 

expired, Mr. Chairman—as to whether or not we just have voluntary best practices that we count on you guys to implement or 

whether we make sure they are implemented. 

Mr. Chairman—— 

Mr. TILLERSON. Well, and whether you can keep your regulations 

up with the technology. 

Mr. DOYLE. Yes. Thank you. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Arizona, Mr. Shadegg. 

Mr. SHADEGG. Thank you, Mr. Chairman; and I thank you gentlemen for being here. 

I think every single American wants, first and foremost, to see 

the flow stopped and to see the area cleaned up. Unfortunately, I 

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nizing that you should never let a good crisis go to waste, as Mr. 

Rahm Emanuel said, rather than to deal with it and learn from it. 

I want to begin by asking each of you to respond to this question. 

Specifically, the question is, is there more that you could do or your 

company could do or are there assets that you have, whether it’s 

booms or ships or whatever, that you could deploy to assist in either stopping the current flow or cleaning up the current flow? Just 

yes or no or a brief explanation. 

Mr. Tillerson—I would just like to ask the four: Tillerson, Watson, Mulva, and Odum. 

Mr. TILLERSON. No, we have made everything available we have. 

Mr. WATSON. No, I am not aware of any resource we haven’t 

made any available. 

Mr. MULVA. All made available. It doesn’t mean that everything 

we have offered has been used, but it has all been made available, 

yes. 

Mr. SHADEGG. My next question is, were you asked to make that 

available by the President or were you asked to make that available by BP? On what basis did you make that available? 

Mr. TILLERSON. Well, we made certain equipment and facilities 

available immediately after the incident occurred. That’s just part 

of our industry mutualized response. We then were contacted subsequent to that, at least I was, by Admiral Allen, requesting specific needs that they had and just wanted to know if, you know, 

there were—you know, if we had any other way that we could help 

them with those needs. 

Mr. SHADEGG. Mr. Watson. 

Mr. WATSON. A similar response in that we made equipment 

available, and then I did receive a call from Tony Hayward on 

some specific individuals. 

Mr. SHADEGG. Let me cut this short. Was anybody contacted by 

the President or by anybody in the White House? 

There’s been a lot of focus today on what you do today after the 

spill occurs, and yet it seems to me that everything I can read 

about this indicates that what went wrong went wrong before the 

spill occurred. Indeed, there was a lengthy op-ed placed in the Wall 

Street Journal by Mr. Hayward, I believe, on May 25. And last Friday, on June 11, the President of Samson Oil & Gas Company, Mr. 

Terry Barr, wrote a letter to the editor, which the Wall Street 

Journal published. In it, he said this oil disaster was about human, 

not system, failures; and he cites a series of red flags having to do 

with the incorrect cementing job and other things, all based on the 

testimony by BP before this committee earlier this year where BP 

came in and was asked about what it did and what tests it performed, the, I guess, inadequate shoe, the failure to get a top plug. 

I would like to know if each of you have kind of indicated that 

this is not the real well you would have drilled or you would not 

have drilled in this fashion. Have any of you happened to read this 

letter to the editor? 

Mr. WATSON. I have seen it. 

Mr. SHADEGG. Anybody else seen it? 

Mr. MCKAY. Yes. 

Mr. SHADEGG. Mr. Odum, you saw it. 

Mr. ODUM. Yes, I have seen it. 


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Mr. SHADEGG. Mr. Mulva, you have seen it. Mr. Tillerson, you 

have not seen it. 

Of the three of you that did see it and read it, would you agree 

with it that specifically it cites a number of red flags that should 

have been indicators that safety procedures or different procedures 

should have been followed going forward? 

Mr. WATSON. I haven’t said that I have evaluated it and the merits of it, but the basic content is consistent with some of the concerns that have been cited elsewhere. 

Mr. SHADEGG. Mr. Mulva. 

Mr. MULVA. In drilling these types of wells, we look at how the 

well was drilled; and based on publicly available information, we 

wouldn’t have drilled the well that way. 

We feel that it’s most important to have two barriers to contain 

or control the hydrocarbons verified and tested by pressure to 

verify those two barriers exist. And in those two barriers, the blowout preventer is not one of the two barriers. 

Mr. SHADEGG. Fair enough. 

Mr. ODUM. Referring to the letter, the piece that is consistent 

from my point of view is, yes, systems are extremely important. 

They have to be right, well designed and so forth. 

The other critical element is the human side of that. So, you 

know, our philosophy is we focus on that culture, a safety culture, 

a culture that stops work if something doesn’t look or feel right 

that anybody on the site—doesn’t matter if it is a Shell employee 

or not—can stop that work. That culture is critical. 

Mr. SHADEGG. Mr. Chairman, I would like to put this in the 

record, unanimous consent. 

Mr. MARKEY. Without objection, the letter the gentleman from 

Arizona is referring to will be included in the record. 

[The information appears at the conclusion of the hearing.] 

Mr. SHADEGG. I believe you are all aware that the President has 

instituted a 6-month moratorium on deepwater drilling, that apparently that even on shallow water drilling there is at least a stoppage based on new procedures that are supposed to come out very 

quickly. That moratorium was based on a report requested by the 

Interior Secretary called The Increased Safety Measures for Energy 

Development on the Outer Continental Shelf. And I assume you 

have all seen that report. It was held up by Mr. Dingell earlier. Is 

that correct? 

You are all aware that seven of the scientists who worked on 

that report have now written a letter that it was modified after 

they either wrote it or reviewed its content and that they do not— 

let me quote. Those seven scientists have said, we do not—we believe the report—or unmodified report does not justify the moratorium as written and the moratorium as changed will not—or as actually implemented will not contribute measurably to increase safety, will have immediate and long-term economic arguments. And 

they say an argument can be made that changes made in the wording in the report are counterproductive to long-term safety. 

Have you reviewed their concern to the Secretary of the Interior, 

any of you? 

Mr. WATSON. I have not. 

Mr. SHADEGG. Well, let’s talk about some of the things it says. 


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It says, point blank, we do not agree that a 6-month blanket 

moratorium—we do not agree with the 6-month blanket moratorium on deepwater drilling. It says a blanket moratorium is not the 

answer. It will not measurably reduce risk. It will have a lasting 

impact on the Nation’s economy which may be greater than that 

of the oil spill. 

They seem to be pretty upset—— 

Mr. WATSON. I am sorry. Could you just refer—I have seen those 

recommendations. 

Mr. SHADEGG. They seem to be pretty upset that their report was 

altered, apparently, by the Secretary of Interior after they signed 

off on it and then sent to the President. 

I would like to know how many jobs will be lost if the moratorium is overly broad and what the consumer impact will be if the 

moratorium is overly broad. And do you think the moratorium is 

needed or do you think it’s, as apparently these scientists think, it 

is overly broad? Mr. Tillerson. 

Mr. TILLERSON. Well, I understand, you know, the motivation for 

the moratorium and the desire to have in effect a stand-down to 

ensure that the ongoing operations are being carried out safely. 

Now, Department of Interior Secretary Salazar did immediately 

order a reinspection of every deepwater drilling rig and activity out 

there. Those inspections were carried out. In fact, some of them 

were carried out twice, and there were no deficiencies of concern 

that were identified. So, in my view, I think the moratorium was 

unnecessary in terms of the extent and the length of it. And so I 

would—you know, I would hope that that could be revisited very 

quickly. 

Mr. SHADEGG. Mr. Watson. 

Mr. MARKEY. The gentleman’s time—— 

Mr. SHADEGG. If the other three gentlemen could just quickly say 

whether they agree or disagree. 

Mr. WATSON. I would agree. 

Mr. MARKEY. Thank you, sir. 

Mr. Mulva. 

Mr. MULVA. With respect to the moratorium—— 

Mr. MARKEY. The gentleman just needs a yes or no. 

I apologize to the gentleman. The gentleman’s time has expired. 

The chair recognizes the gentleman from Washington State, Mr. 

Inslee. 

Mr. INSLEE. Thank you. 

I think what is so disturbing, at least to me, in this investigation 

is that this was not simple human—one human failure of running 

through a stop sign. It was going through one stop sign after another. No batteries in the blowout preventer, hydraulic leak not 

fixed, failure to do a cement log, not having adequate centralizers 

when their own personnel recognized they didn’t have enough of it. 

We get an e-mail from someone who said, but who cares, it’s 

done. End of story. We will probably finally get a good cement job. 

I mean, if airline industries were operated the way this particular situation was, no one would fly an airplane. And the whole 

industry now, I think, needs to think seriously about what we do 

about this. 


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One of the things is the corporate culture, and I think there’s a 

serious question about the corporate culture here with British Petroleum, whether or not it really rewards and insists on safety performance. 

Mr. McKay, how many people have lost their jobs as a result of 

this disaster of British Petroleum? 

Mr. MCKAY. I don’t know of any yet that have lost their jobs. 

There are, I think, a couple of people who have been placed on administrative leave as the investigations are conducted, but I don’t 

know of any yet. 

Mr. INSLEE. Do you think that that will happen over time? 

Mr. MCKAY. It’s hard to speculate, but I assure you that if the 

investigation showed that people made mistakes they shouldn’t 

have made, that could very well occur, yes. 

Mr. INSLEE. Well, we will be watching; and certainly in the U.S. 

Navy they would have a culture that would respond to this adequately. I would just tell you my constituents are not impressed 

with the response yet from British Petroleum in this regard. 

Second, we want to ask about whether or not the industry has 

made appropriate investments in improving safety of offshore. We 

are going deeper and deeper in the water, extraordinarily deep as 

our oil supplies dwindle and the risks increase. I think everybody 

acknowledges that. So the question is, what is the industry investing to try to determine that? 

British Petroleum—we asked these questions to the five companies here. British Petroleum responded that they had spent $10 

million in 1 year in research for offshore safety and technology investments. How much did British Petroleum pay its CEO last year 

in relationship to that $10 million you spent on trying to come up 

with safety offshore drilling techniques? 

Mr. MCKAY. I don’t know his exact pay. 

Mr. INSLEE. Well, the published report suggests that he was paid 

about $36.5 million, three times more—you paid your CEO three 

times more than you spent in your entire research budget to determine how to reduce the risk of catastrophic failure in the offshore 

oil fields. Do you think that is an appropriate prioritization for a 

company in your business? 

Mr. MCKAY. I can’t comment on his salary. I actually don’t think 

that’s a correct number, so could we get back to you on his salary? 

Mr. INSLEE. Thank you. 

Just so you know you are not alone on this, Conoco spent .008 

percent of its profit on trying to improve offshore technology. Exxon 

spent .08 percent, British Petroleum spent .06 percent. Those are 

not huge numbers. 

And I think it’s pretty apparent, given this risk and given the increasing risk of going deeper in water, we encourage the industry 

to start making more serious investments to try to prevent these 

situations from taking place. 

The third thing I want to ask the industry about is about the investments you all are making in an attempt to prevent invisible oil 

spills; and I will just ask you very quickly, does everyone agree 

that every single oil well you drill and that we use ends up in the 

invisible oil spill because we burn it, it makes carbon dioxide. The 

carbon dioxide goes into the oceans, the oceans are now more being 


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more acidic because of the carbon dioxide, and they are 30 percent 

more acidic than pre-industrial times because of the carbon dioxide 

that comes from burning fossil fuels. 

Obviously, you are not responsible for all of that. But, very quickly, can you all just say yes or no if you agree with that. 

Let’s start with Mr. McKay. Very quickly. 

Mr. MCKAY. I would not agree with that characterization. 

Mr. ODUM. It’s not a yes or no question, I don’t think. I do see 

the link between oil production and CO2. Mr. MULVA. I don’t agree. 

Mr. WATSON. There are emissions associated with our operations 

and our product. 

Mr. TILLERSON. It’s a scientific debate, so I am not sure we can 

answer yes or no. 

Mr. INSLEE. Well, actually, it’s not a scientific debate. We have 

had a lot of hearings on this, and there is no scientific debate about 

this. Carbon dioxide makes the oceans more acidic. And your joint 

investment as percentages of your gross revenues for energy 

sources that won’t put carbon dioxide in the air are ConocoPhillips 

.03 percent of revenues; Exxon .1 percent; Chevron .31 percent; 

Shell.26 percent; British Petroleum, which at one time was meant 

to be called Beyond Petroleum .09 percent. 

Now I have got to ask you, to me, those investments—and we appreciate any investment you make—but isn’t it clear that at that 

level of investment, we will not be able to solve this problem of pollution in the oceans caused by carbon dioxide? Would everybody 

agree with that? 

We will start with Mr. McKay. 

Mr. MCKAY. The changeover and the transition to alternative energy will take quite a while and a tremendous amount of investment. 

Mr. INSLEE. Well, let me ask me ask this question. Does everybody agree we have got to up our investment in clean energy technologies if we are going to solve this problem of carbon dioxide 

acidifying the oceans? 

We will start—let’s start with on the other side of the table. 

Mr. MARKEY. Please make it yes or no. 

Mr. TILLERSON. These are not—these issues are too important 

and too complex to be reduced to yes or no answers. And so I—you 

know, I am just not going to go there with you. This is too important to have a yes or no conversation. 

Mr. INSLEE. We will appreciate your written response. We will 

look forward to that if you can provide it. Is that OK? Thank you 

very much. I appreciate that. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Missouri, Mr. Blunt. 

Mr. BLUNT. I thank the chairman. 

Mr. McKay, on the issue of cleanup, I think your company has 

said that they are going to be fully responsible for whatever the 

cost of the cleanup; is that right? 

Mr. MCKAY. That is correct. 

Mr. BLUNT. What about economic damages? 

Mr. MCKAY. Yes. We have said that we would honor all legitimate claims. That’s right. 


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Mr. BLUNT. So the current cap, which actually I have introduced 

legislation, would retroactively impact that cap, but you are not 

concerned by—you are not going to use the limit of the current civil 

damages cap at all. You have pledged to take—to respond to all legitimate claims for damages? 

Mr. MCKAY. That’s right. We have said that we will ignore that 

cap, and that cap is irrelevant for this particular matter. 

Mr. BLUNT. And the cash reserves of the company suggest that 

you would be able to do that? 

Mr. MCKAY. We believe so. 

Mr. BLUNT. What are the cash reserves of the company right 

now? 

Mr. MCKAY. I don’t know the cash reserves of the company right 

now. 

Mr. BLUNT. Do you have cash on hand? I mean, give me a—is 

there a cash number of available cash that you could turn to? 

Mr. MCKAY. I can get back to you on that. I don’t know that offhand. 

Mr. BLUNT. All right. I would like to see that. 

And what about the payment of dividend with this kind of exposure out there? Has the company revisited the dividend issue at all, 

I think a $2 billion dividend? With this kind of unknown exposure, 

does that seem like something that the company should be doing 

right now? 

Mr. MCKAY. Our chairman has said publicly that we will—our 

priority is the Gulf Coast and making things right on the Gulf 

Coast, and then we will have to balance the other components of 

dividend investment, balance sheet. 

Mr. BLUNT. As the chairman said, are the dividends going to be 

paid or not? 

Mr. MCKAY. That decision has not been made yet. 

Mr. BLUNT. Has not been made yet. So that’s still something the 

company can look at it as it looks at the overall financial cost of 

the cleanup and the civil damages; is that right? 

Mr. MCKAY. Yes. The second quarter dividend decision has not 

been made yet. 

Mr. BLUNT. How many U.S. employees does British Petroleum 

have? 

Mr. MCKAY. About 23,000. 

Mr. BLUNT. What percentage of your overall workforce, employee 

workforce, would that be? Are there more U.S. employees of British 

Petroleum than any other country? 

Mr. MCKAY. Yes, by quite a bit. 

Mr. BLUNT. By quite a bit? 

Mr. MCKAY. Probably by triple. 

Mr. BLUNT. My mike here or not—it was one of my phones, I 

guess, too close to the mike. 

On this issue of the relief well, Mr. Tillerson, I think you said 

that it would double the risk of the problem, and I heard the person that asked the question still say he didn’t understand why we 

wouldn’t be doing this. Why would you want to double the risk— 

and maybe you can’t answer that since you said you would double 

the risk. How would this again—let me ask this one more time. 


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Why would that double the risk potential rather than provide more 

secure, more safety to the situation? 

Mr. TILLERSON. Well, whatever risk exposure you are trying to 

manage with the exploration well would be the same risk exposure 

you would be having to manage with the relief well. 

Mr. BLUNT. And does any country require a relief well right now? 

Mr. TILLERSON. No, not one drilled concurrent with the exploratory well. 

Mr. BLUNT. All right. I am puzzled. I think I understand why 

you double the risk. I also understand when you have got a problem how you try to get to the source and relieve the pressure. I 

guess that’s what the current British Petroleum relief well would 

do. But I don’t understand why anybody thinks that doubling the 

cost of drilling a well would have any positive impact—and you 

don’t believe any other country requires a relief well being drilled 

at the same time? 

Mr. TILLERSON. I know, at least in the countries where we operate, no one does. 

Mr. BLUNT. How long—Mr. Watson, how long do you think these 

platforms can set in the Gulf right now that are not being used? 

At some point, do you have to make a decision that even though 

the well is partially drilled—are they going to allow the partially 

drilled wells to be completed or what’s your sense of this moratorium idea? 

Mr. WATSON. If you are referring to the rigs that we have idle, 

we have not yet moved these rigs out of the country. But the industry—and we will respond if it appears that the moratorium is going 

to extend indefinitely or if it’s not clear when we can put these rigs 

back in service. 

They can set for a long time, but the market for deepwater rigs 

is robust right now. Deepwater wells are being drilled all over the 

world, and developments are taking place around the world, and 

there is demand for these rigs. 

Mr. BLUNT. I assume if you move these out, it takes some time 

to move them; and it takes some time to decide whether you would 

ever move them back or not. Would that be a reasonable assumption? 

Mr. WATSON. Certainly there are mobilization costs. There are 

contracts that have to be arranged. There are partner arrangements in the new country or area where it will be drilled. And once 

it’s drilled those same impediments are in place to moving them 

back. 

So it would be an issue for development in the Gulf of Mexico 

if we were to lose those rigs. Ultimately, they can return, but in 

many cases they will be put in service elsewhere. 

Mr. BLUNT. Thank you, Mr. Chairman. 

Mr. MCNERNEY [presiding]. Thank you. 

The chairman recognizes himself for the next 5 minutes. 

First of all, I would just like to thank you all for coming. I am 

sure there are places you would rather be this morning. 

Mr. Watson, looking ahead, I am familiar with some of the investments that Chevron has made in geothermal and biofuels. Do 

you see that becoming a significant portion of your bottom line and, 

if so, how soon? 


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Mr. WATSON. Right now, 85 percent of the world’s energy comes 

from fossil fuels; and renewables represent a small portion of that. 

Similarly, for our company, although we are the largest renewables 

producer amongst these companies and other oil companies, thanks 

to our geothermal operations, I think it will be a long time before 

all forms of alternate energy represent a significant portion of our 

bottom line. 

Now, we do have an energy conservation company that’s in place. 

We do have our geothermal business. We are doing research in 

biofuels. And I would be delighted to make additional, profitable investments in those businesses if they would become economic. 

Mr. MCNERNEY. Well, I certainly recommend that you follow that 

path. 

Mr. Tillerson, in your testimony you state that an impartial review of events in the Gulf is essential to understand what happened and to prevent its reoccurrence. Given that, do you think 

that the oil industry’s failure to adequately prepare for a disaster 

in the Gulf requires enhanced oversight of the industry? 

Mr. TILLERSON. Well, I think, again, the emphasis is on prevention. If you don’t have the blowout, if you don’t have the loss of well 

control, if you don’t have the spill catastrophe to have to deal with. 

Having said that, I think clearly there are going to be a lot of 

things to learn from now from what has been an actual spill of this 

magnitude, which previously we only had models to try to help us 

understand that. 

Mr. MCNERNEY. Well, the oversight would have to include prevention to make sure that the business that’s done in the Gulf and 

in deepwater has adequate safeguards built into it and that those 

safeguards are followed, that the regulations are followed. It seems 

to me that that’s a good, a fair question. Do we need government 

oversight or are the companies going to be able to police themselves 

at the current level? 

Mr. TILLERSON. Well, and I think you need both. There are industry standards and recommended practices that have been put in 

place; and when those are followed, most of these problems are 

avoided. 

Having said that, there’s also a proper role for regulatory oversight; and the Department of Interior has undertaken an exercise 

to look for areas where they could enhance the oversight of the industry’s practices. And I think the President’s commission, which 

is now being formed to look at this entire incident, both from the 

standpoint—it should look both at prevention and response—and I 

hope ultimately out of that commission we will know. 

Mr. MCNERNEY. So we can work cooperatively with the industry 

to find the right set of rules and regulations and how to make sure 

that they are properly implemented? 

Mr. TILLERSON. Yes, sir. 

Mr. MCNERNEY. Mr. McKay, it seems that all the steps to contain the gush seem to have been ineffective or even made the situation worse. As we watch oil gushing out on those videos, the failsafe device appears to me in the videos to be breaking apart and 

oil coming from different parts of the device itself. Is there corrosion involved in this equipment or what am I seeing that makes 


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me think that that device is coming apart and failing in different 

ways? 

Mr. MCKAY. What you are seeing on the videos is that we had 

to cut the top off of the riser that was damaged and put a cap on 

top of this lower marine riser package that sits on top of the blowout preventer. 

Mr. MCNERNEY. Right. And that seems to have made oil gush 

out from below. 

Mr. MCKAY. That’s because the capacity of our system right now, 

to take it up through the riser, is lower than the total rate of the 

well; and that’s why you see it coming out from around the bottom 

of that cap. Today—and I haven’t gotten an update yet—but today 

we should have a secondary system producing off of that blowout 

preventer which may relieve some of that that is coming out. 

Mr. MCNERNEY. So you are saying oil is not coming out from inside the device itself? 

Mr. MCKAY. No, it’s the lower marine riser package that sits on 

top of the blowout preventer. 

Mr. MCNERNEY. It just seems that there’s—that the device was 

incapable of withstanding the kind of pressure that would be needed from the top to stop it, you know, when it was coming apart. 

Maybe concrete was coming out or something like that. That’s not 

what I had seen on the video. 

Mr. MCKAY. No, no. 

Mr. MCNERNEY. All right. I yield back. 

Mr. Sullivan, the gentleman from Oklahoma. 

Mr. SULLIVAN. Thank you, Mr. Chairman. I appreciate everyone 

coming today. 

My first question will be for Mr. McKay. Who is in the room 

making the decisions on how to stop this well right now? 

Mr. MCKAY. We have a crisis center in Houston, and we have 

about 500 people working there, and that includes BP personnel, 

industry personnel, Coast Guard, Navy, Department of Interior, 

MMS, NOAA, USGS. I mean, it’s a unified command system in 

Houston around source control. 

Mr. SULLIVAN. Is it different than it was a month ago, today? 

Mr. MCKAY. It’s probably got some different participants in the 

crisis response room or area. There are teams working on flow 

measurement that are there that are incremental versus a month 

ago. But, in general, the structure is about the same. 

Mr. SULLIVAN. Do you think it’s working? 

Mr. MCKAY. I think it is. I think what’s maybe not understood 

by the American public is that we have had parallel efforts going 

on all the time to increase capacity redundancy and options around 

killing or containing this well; and those have been worked on from 

day one, many of them, and some of them take longer than others. 

So, yes, I think it is working. I mean, it’s unfortunate that we 

can’t put it out; and the frustration is unbelievably high with everybody. But I think everything that can be done is being done. 

Mr. SULLIVAN. Thank you. 

Mr. Tillerson, in your testimony, you stated that ExxonMobil has 

drilled almost 8,000 wells—which I thought was interesting— 

worldwide over the past 10 years and that, of these, 262 have been 

in deepwater, including 35 in the Gulf of Mexico. Can you discuss 


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what measures your company has taken that have resulted in 

nearly 8,000 wells being drilled over the past decade without a 

blowout? 

Mr. TILLERSON. Well, I mentioned broadly in my opening statement that what we know is if you design the well properly and 

there are good industry standards and recommended practices that 

are published, if you develop good operating procedures, you train 

the people, you conduct drills, and you use multiple layers of redundancy—and it’s not just redundancy in equipment, but it’s redundancy in people, eyes and people that are looking at this well 

as it’s being drilled. 

So that when you are seeing certain things occur in the well that 

either you don’t anticipate or they are telling you that the well is 

not going according to plan, that you then adjust and manage the 

change. And a part of our system is a very specific management of 

change of process that, when something is not going to plan, there 

is a process by which you must go through to deal with that 

change, and that includes involving peer reviews and multiple layers of people looking at that to ensure that we really are about to 

do the correct thing to maintain the well control and the well integrity. 

Mr. SULLIVAN. Did anybody—during Hurricane Katrina or Rita, 

did anybody experience any problems? 

Mr. WATSON. We were extensively impacted during the hurricanes and, in fact, learned a great deal from those hurricanes and 

have incorporated those learnings into our response and other capabilities. 

Mr. SULLIVAN. As regard to leaking, any spills? 

Mr. WATSON. There were impacts from toppled platforms. So, 

yes. 

Mr. SULLIVAN. Well, also—this is to everybody—can each of you 

go into the negative impacts of a deepwater moratorium on U.S. 

energy production and domestic energy security? How would it affect energy exploration in the Outer Continental Shelf? Where will 

your rigs go? Could it be foreign waters? And, also, could you explain how we are going to need oil for decades to come, even 

though we are exploring other technologies of energy? 

Mr. ODUM. I think there’s a lot in that question, of course. But 

the fact that we are going to need oil for decades to come is probably the best place to start, and it’s simply the scale and the size 

and the affordability of the energy system overall and understanding what technology, what investment, what government policy and other elements are required to shift that over time. You 

look at that and you understand the elements of that and you know 

it will be decades that we will be using oil and gas. 

I think we have addressed to some degree the economic impacts 

of what will happen to the rigs. But, clearly, these are big, expensive pieces of equipment. Each one, you know, probably has an employment surrounding each one of these deepwater rigs, it could be 

up to a thousand people. That piece of equipment needs to find a 

home where it’s working and generating revenue, and that’s what 

those pieces of equipment will do as soon as they can work that 

out. 

Mr. SULLIVAN. Anybody else? 


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Mr. Mulva, in your testimony, you state that the business of offshore exploration will and must continue and that we can do it 

safely and responsibly. Can you elaborate on that? 

Mr. MULVA. I believe the industry has proven that it can be done 

safely and reliably. From the responses to the questions here this 

morning, I believe that the tragedy that has taken place, there are 

certain lessons to be learned and that most of us sitting here today 

would have, by our practices and policy, would have drilled the well 

and handled it differently. 

If we look at what this means for natural resources, these are 

indigenous resources for our country, and it’s very important for 

energy security that we develop our own resources. We can do 

these in a way that’s safe and an environmentally responsive way. 

Obviously, through the incident, we have learned that a response 

to an incident like this is not adequate. We will have to make the 

changes to do so appropriately. 

But developing our own indigenous resources is so important because it gives us energy security, provides investment, and it provides jobs and financial resources to the States, communities, and 

the Federal Government. 

Mr. SULLIVAN. Thank you very much. I yield back. 

Mr. MARKEY [presiding]. The gentleman’s time has expired. 

The chair recognizes the gentleman from Texas, Mr. Green. 

Mr. GREEN. Thank you, Mr. Chairman. 

Following up a substantial line of questioning, I heard the analogy that no one would fly an airplane if we flew an airplane like 

we drill wells. I would say it is the reverse. After 9/11, we didn’t 

shut down for 60—you know, 6 months flying on airplanes to find 

out what happened. Even when there’s a terrible airplane crash 

and a tragedy, we investigate, we come up with findings and fix it; 

and that’s what I am hoping we will be able to do. 

I guess my frustration, coming from an oil and gas area, is that 

anytime we have a tragedy like this in the energy industry, it 

hurts the areas where I come from. I have literally thousands of 

constituents who work in the energy industry, oil and gas. I have 

refineries. I have chemical plants. We still produce in our area, 

plus we have a lot of constituents who work offshore. 

So every time a short circuit decision is made, you impact not 

just the employees of your company and their families, you impact 

the whole industry; and that’s what’s frustrating sitting here today. 

One of the questions—and having been to Norway and, actually, 

I know, with the chairman of the committee we were there and the 

standards they have—it’s interesting I think the last leasing opening, bid opening in the Gulf of Mexico, Statoil from Norway, actually was the biggest bidder on the Gulf of Mexico. 

And I have asked for many years the difference in production, 

particularly a Norwegian oil company in the Gulf of Mexico, is compared to Norway off their shore; and that leads up to the question 

of should we encourage the Department of Interior, Minerals Management, to actually regulate in using API’s cementing requirements. Would that be something that we should do? Because I 

know it’s a voluntary—I know all of your members of the American 

Petroleum Institute, but it’s voluntary. Is that something we 

should do? Although the cementing is one problem we have here— 


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and there’s lots of other ones and those of us who have spent a lot 

of time looking at it—just to answer that question, should we actually make that a regulatory requirement with the API? If it is done 

as a voluntary? 

Mr. TILLERSON. Congressman Green, I responded earlier, a short 

answer to that question, I think the challenge is certainly those 

standards, I think, have been well designed and they have all the 

industry input around being a best practice. That could be made 

a regulatory requirement. 

I think the thing that everyone needs to appreciate is, in exploration drilling in particular and in certain situations, you want to 

be able to formulate that cement so that it is fit for the purpose 

that you are using it. And so I think as long as the regulation were 

written to accommodate the fact that you want to have the best cementing integrity you can have in that well so it serves its purpose, 

and if conditions change there’s not an overly onerous procedure by 

which you can have a formulation that might have moved outside 

of that regulation because new capabilities have been developed. 

That would be the only concern I would have around it. 

Mr. GREEN. Well, and my concern is we have a 6-month moratorium on deepwater. The impact on the industries and the people 

who make a living in the Gulf of Mexico is pretty dramatic. 

I would hope that 6 months would be the maximum, and we 

could get some standards in place both for you to follow but also 

for the American people to have some comfort in the Federal Government responding to a disaster that cost 11 lives and we still 

haven’t counted up the cost. 

So would it be better to look at what Norway already does in 

their offshore production? Because I know the testimony earlier 

you said that they have the strictest offshore standards in the 

world. Would that be better to actually look at what Norway does? 

Of course, in the Gulf of Mexico, we are not dealing with cold 

water. And having been to Norway and understand the difference 

in the high north and what we have in the Gulf of Mexico. But, 

you know, maybe we ought to look at the toughest standards in the 

world to produce in the Gulf of Mexico. 

The reason is that Statoil is getting ready to start producing because they leased it, and I don’t want them to lease in the Gulf of 

Mexico for less standards than what they have to lease off their 

own country. 

Should we look at what Norway is doing and the success they 

have had? 

Mr. ODUM. If I could just comment on that. 

I think, first of all, I just want to make the statement that the 

industry benefits as a whole from a good solid set of recommendations; and I think you would find all of us supportive on getting 

that in place. 

So to the earlier comment of making sure the appropriate flexibility to ensure safety is included in those regulations, what you 

have already seen as a result of this incident is a joint industry 

task force that got together, including members of API, to say here 

is a set of recommendations that we would make. There could be 

regulatory changes, but we think it would make this operation betVerDate Mar 15 2010 08:39 Mar 04, 2013 Jkt 077911 PO 00000 Frm 00113 Fmt 6633 Sfmt 6633 E:\HR\OC\A911.XXX A911

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ter, safer, more appropriate. So the answer to your question, I believe, is yes. 

Now, as we go into those joint industry task forces and develop 

those recommendations, we bring elements like what’s done in Norway and what’s done in other parts of the world. We bring that 

knowledge into that conversation. 

Mr. GREEN. Mr. Chairman, I have one more question, if I could. 

BP, I guess I get frustrated because I have constituents who 

work at the Texas City Refinery, and I know you have heard it. It’s 

just frustrating. It seems like oftentimes at BP there’s been expediency—in this case particularly, what we know now and we will 

know more as we go—as compared to safety. 

And we found that out in the Texas City Refinery in the loss of 

15 lives that there were decisions made not to fund the safety 

issue. And actually there was a neighbor of mine who lost his life 

there at Texas City that lived in Baytown. 

So I would hope that the problems, whether it be with the pipeline in Alaska or any refinery, whether it be in the Midwest or 

Texas City, Texas, it’s close to our district, that BP would look at 

the safety more so than trying to move that rig to another production site. 

Mr. Chairman, thank you. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Alabama, Mr. Griffith. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

Some of the child-like, accusatory, mean-spirited, petulant questioning demonstrates a couple of things in this hearing. One is that 

it is very, very difficult to resist demagoging this tragedy, and 

that’s unfortunate. The second thing it demonstrates is that there 

is really not a lack of natural gas here on Capitol Hill. So some of 

you have been subjected to some things that I think are disrespectful. 

I do think it’s interesting that some were stunned to find out 

that your disaster responses were similar, almost word for word. 

You would be surprised to find that an airline disaster plan is similar from company to company. You would be surprised to find that 

chest pain in an ER is similar all over the United States in how 

we handle it, and disaster responses to hurricanes and tornados 

are absolutely word for word from municipality to municipality. So 

that should not have surprised anyone, even though it did. 

With that, I have a question for Mr. Watson. You mentioned 

something earlier about your company had a stop work policy. 

What exactly is that? 

Mr. WATSON. A stop work authority is really the authority that’s 

vested with each individual employee and contractor to stop work 

if they see any unsafe condition that jeopardizes health, environment, or safety. 

I think the important part of the policy that we have in place 

isn’t that it’s written down, because I think many companies have 

it written down. It’s important that it’s exercised and when it’s exercised that the follow-up to that by management is appropriate. 

I was in Australia a couple weeks ago when we recognized the 

contractor who exercised stop work authority in a lifting operation. 


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So we routinely recognize people and reward people for using stop 

work authority. 

If there are adverse consequences for employees that advocate 

stop work authority it ceases to become very effective, so we work 

very hard not to send unintended messages after it is exercised. 

Mr. GRIFFITH. Thank you. 

Mr. McKay, the possibility that there’s a different structure or 

make-up of the surface oil versus the subsurface oil, what procedures are being done by the unified command to determine how 

best to handle one versus the other? 

Mr. MCKAY. It’s two pieces. Well, one, obviously, we are trying 

to contain or stop and then, since that hasn’t been successful, contain as much oil subsurface as possible and get that to the surface 

and can deal with it. The oil that’s coming out, we are using subsea dispersant, which will disburse the oil into tiny droplets and 

speed biodegradation. The oil that gets to the surface is being dealt 

with with skimmers and burning and other techniques to try to 

fight it as far offshore as possible. 

I would say that the monitoring programs and the measurement 

programs around subsurface oil and dispersant is extensive. It has 

shown that the oil concentrations are very low. That’s both the 

data we are conducting on the unified command as well as independent NOAA data. That’s going to be tracked diligently for a 

long, long time to make sure we understand what’s happening and 

the natural resources damage assessment that will go into—that’s 

being studied now, that sets the—effectively, the restoration plans 

to damage will key on some of that as well. So that’s under way. 

Mr. GRIFFITH. Thank you. 

One more question, Mr. McKay. The Deepwater Horizon was 

commissioned in what year? 

Mr. MCKAY. I think 2000. I think 2000. 

Mr. GRIFFITH. And it has had a record of drilling, how many— 

been involved in drilling how many wells? 

Mr. MCKAY. Over 100 deepwater wells. 

I am sorry. Probably not—no, that’s a wrong number. I will have 

to get back to you on that. 

Mr. GRIFFITH. This is probably not a structure that was flawed 

or brand new or we were unfamiliar with? 

Mr. MCKAY. No. The Transocean rig had been working with us 

since it was commissioned and has been a good rig and operated 

difficult wells quite well. 

Mr. GRIFFITH. So it could drill successfully 70 plus wells. 

Mr. MCKAY. It has drilled a lot of wells. 

I just would also like to make one comment. We also have a stop 

work program, as has been mentioned, and I believe our contractors do as well. And that is a fundamental, important piece of safety management on a rig or an operation like this. 

Mr. GRIFFITH. I yield back my time, Mr. Chairman. 

Mr. MARKEY. The chair recognizes the gentlelady from California, Mrs. Capps. 

Mrs. CAPPS. Thank you, Mr. Chairman. 

Mr. McKay, last year, you testified before the Natural Resource 

Committee. It must seem like ages ago. It was before this bill. This 


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is what you had to say about the role of technology and the oil and 

gas industry, and I quote: 

The energy industry isn’t usually classified as a high-tech business, but it truly is. This technology has been instrumental in protecting the environment. Today’s offshore oil drilling technology 

bears about as much resemblance to what was available in the 

1960s as a rotary dial telephone does to an iPhone. 

That was a very interesting comparison. Let’s look at it to get the 

picture of the contrast. 

First, we have a picture of a rotary dial phone and then an 

iPhone. Clearly there’s a difference in technology, and we certainly 

all benefit from those remarkable advances. 

Now another picture, a picture I am very familiar with, a picture 

of the boom used in the Santa Barbara spill in 1969. That was 

about the era of the rotary telephone. Now here is a picture of the 

boom used in the Gulf today, 40 years later. 

Do you see a big difference between the boom technologies used 

in these two pictures? 

Mr. MCKAY. I don’t see a big change in boom technology. There 

have been tremendous changes in technology in how a boom is deployed and how satellite imagery helps to deploy resources into the 

best possible places. 

Mrs. CAPPS. Yes, they do have satellite imagery now, but that 

was the era of the rotary telephone. We now live in the era of the 

iPhone, and it looks a lot on the shoreline of the Gulf as it looked 

to me in Santa Barbara in 1969. The two cleanup booms, however 

they are deployed, they look and act pretty much the same, would 

you agree? 

Mr. MCKAY. That’s true, although there are absorbent—— 

Mrs. CAPPS. Let me show you another set of pictures. 

Here is a picture of workers cleaning up the oil in Santa Barbara 

in 1969. Now let’s look at a picture of a worker mopping up with 

his own two hands—bare hands, I should add—oil that had 

reached the Gulf shore. Again, I don’t see a lot of difference in technology between the cleanup in Santa Barbara and the cleanup now 

under way in the Gulf. In fact, I don’t see much difference at all, 

booms, workers mopping up by hand thousands of barrels of spilled 

oil. 

So, Mr. McKay, I get that the industry spends a lot of time and 

effort on exploration and extraction and lobbying. But my problem 

is that you don’t seem to have spent very much on accident prevention or on—and you seem to have made few, if any, real developments in oil spill cleanup. We are talking about 40 years later. 

So here’s my question: What’s BP’s plan to contain the inevitable 

accidents from your offshore rigs, the rest of them that are operating out there, the rest of them that are drilling in even harsher 

and even more difficult conditions? What is it going to look like 10, 

20, 40 years from now when there’s another huge spill to see booms 

being lined up in defense for our coast? Is that what we are going 

to see then? Will we still be relying on thousands of cleanup workers mopping up beaches by hand? Will that be considered state-ofthe-art cleanup technology and response like it is today and like it 

was 40 years ago? 


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Mr. MCKAY. Well, we have talked a lot about prevention today, 

so I won’t go into that. But in terms of spill response, I think one 

area that we will learn from this incident is the ability to do more 

subsidy intervention—— 

Mrs. CAPPS. Well, OK, but I am talking about the oil that comes 

to the surface. 

Because let me switch to a May 12 Oversight and Investigations 

Subcommittee and a Transocean document, and I quote from that 

document: The recovery rate of oil under the best circumstances 

rarely exceeds 15 percent. 

That’s 15 percent of all the oil that reaches the surface of the 

water. It’s not a very impressive rate of recovery. 

More disturbing is the fact that the rest of the proposed techniques are not particularly effective either. For example, Chevron’s—BP’s response plan that the chairman held up earlier cautioned that some marsh cleanup techniques destroy, quote, destroy 

much wildlife and destroy marsh areas. 

And here is Shell’s oil spill response plan describing an approach 

that stands out from the rest. Section 13 of the Shell plan states 

that oil will accumulate on places like sand bars and barrier islands. The plan states that this can be—and again I quote—very 

helpful and cost-effective as a way of collecting the oil. 

So, Mr. Odum, my final question, does Shell really believe that 

it is ‘‘very helpful’’ when oil washes up on barrier islands? 

Mr. ODUM. Clearly not, and I think the statement is simply 

meant to go to the fact in terms of an ability to stop further encroachment and cleanup, that that’s what’s intended by the statement. 

Mrs. CAPPS. Do you have any other information? If I had time, 

I would ask each of you. Is this the state of affairs for cleanup 

today on oil spills? 

Mr. ODUM. I do think your—the answer is, yes, you are seeing 

the deployment of the technology today to respond to this spill. 

Mrs. CAPPS. That’s the best we can do. 

Thank you. I yield back. 

Mr. MARKEY. The gentlelady’s time has expired. 

The chair recognizes the gentleman from Florida, Mr. Stearns. 

Mr. STEARNS. Mr. Chairman, thank you. 

In 2008, Exxon abandoned, after spending $180 million, a well 

called the Blackbeard West, and this occurred when the well’s pressure increased to a point that Exxon could not justify the risk of 

a blowout and decided to put the safety of those workers on the 

drilling rig and the environment before corporate profits. Perhaps 

this is what BP should have done. 

My question is for each of you, except Mr. McKay, just answer 

yes or no. Knowing what we know today, in hindsight, about the 

inconsistent well pressure test readings, would you have proceeded 

with withdrawing the drilling fluid from the well? 

Mr. Tillerson, just yes or no. 

Mr. TILLERSON. No. 

Mr. STEARNS. Mr. Watson, just yes or no. 

Mr. WATSON. I don’t—I can’t answer yes or no until we see the 

full investigation of this report. 


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Mr. STEARNS. So you would continue drilling? There’s only a yes 

or no here. I am just asking you, knowing what we do, in hindsight, about the inconsistent well pressure test readings, would you 

have proceeded with withdrawing the drilling fluid from the well? 

Just yes or no? 

Mr. WATSON. Based on the information we have seen, no. 

Mr. MARKEY. Mr. Mulva. 

Mr. MULVA. No. 

Mr. STEARNS. Mr. Odum. 

Mr. ODUM. No. 

Mr. STEARNS. OK. Let me ask the four of you again. In retrospect 

now, are there safety measures that your company could have 

taken to prevent this incident. 

Mr. Tillerson, just yes or no? 

Mr. TILLERSON. We haven’t had the incident. 

Mr. STEARNS. No, but I mean, in retrospect, knowing what BP 

did, could you have suggested safety measures that would have 

prevented this incident? 

Mr. TILLERSON. They are in the industry standards. They are already there. 

Mr. STEARNS. OK, so they are already there and you are saying 

BP did not follow? 

Mr. TILLERSON. At least that’s what’s been reported. 

Mr. STEARNS. So, in your opinion, there are, and the standards 

are there, and BP didn’t follow them. 

Mr. Watson. 

Mr. WATSON. Based on the information we have seen, yes. 

Mr. STEARNS. Mr. Mulva. 

Mr. MULVA. Yes. 

Mr. STEARNS. Mr. Odum. 

Mr. ODUM. Based on the information, yes. 

Mr. STEARNS. OK. I think, Mr. Chairman, I think the majority 

of opinion is that BP acted recklessly and should be held accountable for all the economic and environmental damages that have occurred. 

Now, Mr. McKay, on May 12, you testified when I asked you the 

question based upon the worst-case scenario, you could handle up 

to 300,000 barrels a day at 10 miles from the shore. So I asked you 

what was the rate at that moment on May 12, and you said it was 

5,000 barrels a day. Do you still stand by that 5,000 barrels a day 

that you gave me on May 12? 

Mr. MCKAY. Well, obviously, that was not right on that day, but 

that was the unified command estimate. 

Mr. STEARNS. But you also testified this morning that your estimate went up to 14,000 barrels a day. Back on May 12, you said 

internally BP was talking about 14,000 barrels a day; is that correct? 

Mr. MCKAY. Not exactly. I said we had a range of 1 to 14 that 

would transfer to the unified command. 

Mr. STEARNS. Did you tell the unified command that you thought 

it could be as high as 14,000? 

Mr. MCKAY. Yes, absolutely. 

Mr. STEARNS. So they went—all of you went with 5,000. 

Mr. MCKAY. They chose 5,000. 


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Mr. STEARNS. How many barrels of oil per day are currently 

flowing from the ruptured well? 

Mr. MCKAY. We don’t know the latest estimate from the flow 

rate technical group, which is a government group. We are not in 

it. It’s 20 to 40,000. 

Mr. STEARNS. OK. How many barrels per day is the top cap recovering? 

Mr. MCKAY. 15.5, 15,500. 

Mr. STEARNS. OK, in this case, in retrospect, do you think that 

because you gave such a low ball that impacted the response team 

because they thought it was so low? 

Mr. MCKAY. No, I don’t; and Admiral Allen has answered this 

question directly. The response has been geared towards a much 

higher number. We provided every bit of data we can provide as 

fast as we get it to unified command. 

Mr. STEARNS. So how did the estimate go from 5,000 up to, what, 

40,000? Even your 14,000 that you estimated May 12 now is 

40,000. How did it get from your estimate high of 14 to 40,000 

today? 

Mr. MCKAY. Well, the flow rate technical group, which is a government group—— 

Mr. STEARNS. No, I am asking about BP’s estimate. 

Mr. MCKAY. We haven’t done an estimate since the one, the 14. 

Mr. STEARNS. So you are saying that your corporation has not 

even attempted to find out technically how much? 

Mr. MCKAY. No. We have given our data to the flow rate technical group, which is under direction of unified area command. 

Their estimate as of a week or week and a half ago was 12 to 

19,000. In the last few days, it has gone 20 to 40. 

Mr. STEARNS. Mr. Chairman, I just think that BP has low-balled 

this figure, and I think—you know what, Mr. McKay? When the 

buck stops here, means, you know, that you take full responsibility. 

Now Mr. Markey asked you for an apology. I really think in light 

of the performance that you as a CEO and what has occurred, I 

really think that you should be resigning as chairman of BP America. I mean, it’s really outrageous that you sit here and tell us that 

you are going to punt to the unified command when we have had 

11 people killed, we have had a huge environmental damage, and 

you are still sitting here as the CEO of BP. 

Frankly, I would call for your resignation. I am calling for it 

today. I am not asking for an apology. I am asking for you to resign. 

Thank you, Mr. Chairman. 

Mr. WELCH [presiding]. I thank the gentleman from Florida. 

The chair recognizes himself for 5 minutes. 

One of the questions that this whole tragedy raises is BP America’s energy policy; and it’s time, I think, for Congress to call the 

question, does America’s energy policy work? Is America’s current 

energy policy sustainable? 

The United States, as you know, consumes 25 percent of the 

world’s oil. We have 2 percent of the proven reserves. Americans, 

our businesses and our consumers, spent nearly $900 billion last 

year, most of that going to countries that are not our friends. 


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The current policy that we have works well for some, including 

the shareholders of the companies represented here today. What 

you do you do very well, run very efficient operations with some 

tragic exceptions. But profits increased among your five companies 

from $28 billion in 2002 to $64 billion in 2009, and that’s after your 

companies paid dividends that shareholders appreciated of $37 billion. And Exxon, I believe, Mr. Tillerson, has repurchased stock in 

the value of almost $20 billion. 

But the question for Congress—and I am going to ask you to 

comment on this—is whether we are at a point where taxpayers 

are being well served when taxpayers are continuing to provide 

subsidies for a business-as-usual energy policy that’s based on a 

carbon energy 19th century approach versus a clean and renewable 

energy fuel policy of the 21st century that we need. 

And the question really is, should taxpayers in the United States 

continue to provide billions of dollars to subsidies to an industry, 

the oil industry, that’s mature, to an oil industry that’s extremely 

profitable, into an industry that’s based on a carbon-based fuel? Or 

is it time, finally, for the taxpayer incentives that are being steered 

to the oil industry to be redirected to efforts to develop a 21st century clean energy economy? 

Mr. Tillerson, my understanding, just on a specific tax provision, 

is that section 199 of the domestic manufacturing deduction provides a tax rate deduction for oil and gas companies. Repealing 

that would ship $17.3 billion from oil companies; and it could be 

directed to clean energy efforts, which your company engages in, to 

some extent. Would you support the repeal and redirection of that? 

Mr. TILLERSON. No, Congressman, I would not. Section 199 tax 

was put in place to preserve and protect manufacturing jobs in the 

United States. 

Mr. WELCH. All right. 

Mr. TILLERSON. I am not sure how to explain to a refinery worker why his job isn’t any more or less important than an autoworker’s job. 

Mr. WELCH. This is not about whose jobs is important. The jobs 

that are important are the folks that are down there in the Gulf 

Coast and are losing their jobs because of this catastrophe that just 

happened. This is about whether taxpayer subsidies are going to 

help Americans get jobs and an energy policy for the future. 

Mr. Watson of Chevron, I’ll ask you. My understanding is the 

Tax Code right now provides oil and gas companies to expense intangible drilling costs. That cost taxpayers $7.8 billion over 10 

years. Do you support continuing that or would you support repealing it or redirecting it to clean energy efforts. 

Mr. WATSON. I support continuing it, and I don’t consider it a 

subsidy. I consider it similar to many other provisions in the Tax 

Code that dictate the timing of the deduction. 

Mr. WELCH. Well, you know, I have one question. I believe in tax 

incentives, but I question whether they should go to mature industries and industries that are profitable. They’ve managed to get 

their sea legs. And your industry enjoyed profits of $68 billion, 

hard work of a lot of people. But do we need in America to be starting to use taxpayer money, which is what these subsidies are, to 

help us move to a clean energy economy that is sustainable and 


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does not have the risk of these catastrophes that are causing people their lives and their livelihoods. 

Mr. Marvin, do you have a view on this? 

Mr. ODUM. I do, and I think—if I go back to where you started, 

I think it is time for Congress to take a comprehensive review of 

energy supply to this country. I think part of that would be then, 

in addition to all the alternatives and renewables that I talked 

about in my opening statement, I think it would recognize the importance of oil and gas. 

Mr. WELCH. OK, thank you. 

My last question. Mr. McKay, there was a report by the U.S. 

Chamber of Commerce, Mr. Donohue, who said last week that he 

believed that the taxpayer should help BP pay for the cost of this 

spill. BP official testimony is you’re going to bear the burden on 

this. Do you repudiate the suggestion by the United States Chamber of Commerce that the taxpayer participate in the cost of this 

cleanup? 

Mr. MCKAY. We’re going to pay for all costs, all costs of the 

cleanup. 

Mr. WELCH. Thank you. 

The chair recognizes Mr. Whitfield. 

Mr. WHITFIELD. Thank you, Mr. Chairman, and thank you all 

very much for being with us today. 

As I’ve listened to the hearing and your testimony today and articles that I’ve read in the paper, whether or not they are truthful 

or not, I don’t know. But there are reasons to believe that there 

were advance warnings given about problems with this particular 

well; and I say that because of all of these things that I’ve heard, 

the testimony here, articles I’ve read, the letter from the chairman 

of the committee, and when you think that it is alleged that a BP 

employee said that this is a nightmare well, there were concerns 

expressed by well design, the number of centralizers, the cement 

process and so forth. 

So I would ask you, Mr. McKay, as the President of U.S. BP, 

were you aware of any of these concerns or problems that existed 

with this well prior to it blowing? 

Mr. MCKAY. No, I was not. 

Mr. WHITFIELD. And are you aware of anyone on your staff that 

may have been—had knowledge of this? 

Mr. MCKAY. I think what the investigations will determine is the 

interplay between data that was known, decisions that were made, 

the processes that were followed on the rig and in the equipment 

that worked or not. So that’s part of the investigation. These are 

big questions. They are important questions. 

Mr. WHITFIELD. From your own personal knowledge, you’re not 

aware of any of that? 

Mr. MCKAY. No, no. 

Mr. WHITFIELD. Now when you consider all the steps that have 

been taken to try to stop the flow of this oil—the coffer dams, the 

tie kills, the dispersants, the relief wells, all of these things—and 

all of you are experts in this field, and we value your views. And 

if all of these efforts that are being made do not work, is there any 

way that any of you could guess as to how long this oil might flow? 

Do any of you have any ideas on how long this could go on? 


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Mr. MCKAY. Could I just say that the relief wells that are under 

way will be—first of all, we’re going to try to contain as much as 

we possibly can; and that’s going to increase in capacity, redundancy, and resiliency for hurricanes in the next few—3 weeks, 4 

weeks. The first relief well should be down by mid-August, and 

that should permanently secure this well. 

Mr. WHITFIELD. So if the relief well works then mid-August, that 

should be the end—— 

Mr. MCKAY. And we have redundancy with a second relief well. 

Should we need it, we could sidetrack both of those wells for other 

attempts, but we believe that we will get it mid-August. 

Mr. WHITFIELD. Because I was reading an article about a well referred to as IXTOC 1, which I think was back in 1978 or ’79, which 

was in the Gulf; and evidently in that well the oil flowed from June 

of ’78 to March of ’79. Are any of you familiar with the history of 

that particular well blowing in the Gulf? Are you aware of the facts 

of that? 

Mr. MCKAY. I don’t have depth of knowledge, but I understand 

that that was a well in Mexican waters in the Gulf of Mexico. It 

did go for about 9 months. I believe it was a jack up—a jack up, 

and the rig collapsed partially on top of the blowout preventer. 

Mr. WHITFIELD. It was not a deepwater well? 

Mr. MCKAY. No. 

Mr. WHITFIELD. OK, but I understand that that well—there was 

3.3 million barrels of oil. 

Mr. MCKAY. That’s what’s reported. 

Mr. WHITFIELD. I yield back the balance of my—one other question, one other question. 

I think I know the answer to this, because I think you have indicated that you had a policy that any individual or contractor would 

have the authority to stop the action on the well; is that correct? 

Mr. MCKAY. That is correct. 

Mr. UPTON. Would the gentleman yield? 

Mr. WHITFIELD. Yes. 

Mr. UPTON. Mr. McKay, you said that anyone on the rig had that 

authority. Is there anything that you disagree with in the conclusion in the letter that was sent to—that the oversight subcommittee did that they sent to Mr. Hayward just yesterday talking about the lack of a lock-down sleeve, the failure to circulate 

drilling mud, no cement bond log, and two few centralizers? Do you 

quibble with any of the findings in this letter? 

Mr. MCKAY. Yes, I’ve not been able to go through that letter yet, 

but what I would say is we identified for the O&I subcommittee 

some of these issues and in our investigation, and what we said is 

those all have to be evaluated. And I believe the investigations will 

get to put this chronology together such that we can understand. 

Mr. UPTON. Let me say if the findings in this letter are accurate, 

how many folks on the rig had the authority to actually stop the 

work? Everyone? Anyone? 

Mr. MCKAY. I was speculating on Transocean, OK? But we had 

seven people on the rig. Two or three were trainees. So we had four 

or five people on the rig. 

Mr. UPTON. So did all—so you only had four or five folks on the 

rig that had the stop work authority? 


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Mr. MCKAY. Those are the sum total of BP employees on that 

rig. 

Mr. UPTON. But all of them had the authority to say stop. 

Mr. MCKAY. Every BP employee has that authority. That’s right. 

Mr. UPTON. And did any of them say stop? 

Mr. MCKAY. I don’t know. I don’t know. 

Mr. UPTON. I’m led to believe that there was at least one BP supervisor who is taking the fifth. I don’t know if that’s accurate or 

not. Is that accurate? 

Mr. MCKAY. I don’t think it is perfectly accurate. I think when 

they asked him to have a hearing last month—I believe, this is— 

maybe I shouldn’t even say this, but I think his attorney advised 

he wasn’t ready, and they could reschedule. And I don’t know what 

his situation—— 

Mr. UPTON. Do you know whether he actually said stop? 

Mr. MCKAY. I don’t know that. 

Mr. UPTON. I yield back. 

Mr. WHITFIELD. Mr. Chairman, I yield my 27 seconds to the gentlemen from Texas. 

Mr. BURGESS. Mr. McKay, a question I just have to ask you, any 

good interventional radiologist can put a catheter in places that are 

hard to get to and do kill shots and inflate balloons. Has anyone 

in your engineering staff looked at the concept of putting something down this stem riser and inflating a heavy duty balloon just 

to give you a short period of time to put some cement and heavy 

weight mud on top of it to kill this thing off? 

Mr. MCKAY. Yes, but we have drill pipe that’s inside the blowout 

preventer, and it is crimped. And there’s a torturous path in the 

blowout preventer, it would appear, very torturous. That was the 

purpose of junk shot, was to try to clog up the blowout. 

Mr. BURGESS. But you couldn’t stop the flow of stuff coming up. 

But if you inflated something that rapidly put some compression on 

the flow below, then you would have a chance to get something on 

top of it to try to get it stopped. 

At this point, almost anything is worth a shot. You had Mike 

Huckabee on TV the other night. He had a litany of people coming 

in who wanted to do things to help. 

This is one of the things that’s frustrating us. Mr. Markey is 

making us watch this thing 24 hours a day on our computer screen 

savers, and people are coming up with ideas, and there is no place 

for them to go to get the ideas vetted and tried. 

I yield back. Thank you, Mr. Chairman. 

Mr. MARKEY [presiding]. The gentleman from Kentucky’s time 

has expired. 

The chair recognizes the gentleman from Texas, Mr. Gonzalez. 

Mr. GONZALEZ. Thank you very much, Mr. Chairman. 

Mr. McKay, it is obvious that your colleagues in the industry are 

saying that what BP did in the way of drilling would not have been 

the same procedure they would have followed. I believe that’s what 

they—to the person—to the witness have said. Why would—it 

seems like all of you are on the same page when it comes to how 

you contain and clean up, but you’re not on the same page when 

it comes to on how to drill. 


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And then your whole theory today is—not BP’s—is that we would 

have done it differently. It would have never have happened. So I 

would have loved to have seen the same uniformity in adopting the 

more safe manner so this would never happen. There is a whole 

lot more to this story, obviously; and it will develop. 

Mr. McKay, why would all these individuals have a taken different route in the way they would have drilled? 

Mr. MCKAY. Well, I can’t speak for them. 

What I can say is part of what these investigations will determine is what were the procedures that were used, the design of the 

well, the procedures that were used to execute the well and the 

equipment on the rig and how did it perform and how did decisionmaking and data flow. I think then those will be the design and 

things like that will be compared to industry norm, and we’ll see 

if that’s outside of normal or not. 

And then, undoubtedly, in an accident of this type and severity 

there will be a combination, I believe—this is speculative—of decisionmaking processes and equipment that interplay to allow this to 

happen. 

So I think these questions about what’s normal, what’s not normal, what’s unusual, what’s not unusual, that’s going to come out 

in the investigations. And, to my knowledge, the well design is not 

an unusual design for the Gulf of Mexico. 

Mr. GONZALEZ. I realize you have Transocean doing the work, 

and you’ve got Halliburton that’s basically going to cap after the 

hole is drilled and so on, and I’m sure it will be an interesting situation when it is all said and done. Because I know you’re the responsible party under certain statute. But when it is all said and 

done I’m sure that you will be seeking some indemnification from 

others. 

I’m going to ask the other witnesses—just yes or no; this is somewhat rhetorical—can you guarantee to the American public and our 

constituents that any of your drilling operations are free from a 

similar accident as Deepwater Horizon? And just yes or no, 100 

percent assurance, 100 percent. 

Mr. TILLERSON. Congressman, I’m not sure we know all, all of 

the aspects of the Deepwater Horizon incident yet. 

Mr. GONZALEZ. No, I understand that, but—— 

Mr. TILLERSON. What we can assure you is that the designs and 

the procedures and the processes we have in place, when carried 

out, would prevent this from happening. 

Mr. GONZALEZ. Mr. Tillerson—and here is where I’m going to 

lead the witnesses—you cannot give 100 percent assurance of anything in our lives. And I think the American public want to hear 

you guys just come out and say, yup, there’s risk. Gee, surprise. 

Mr. TILLERSON. There is risk. There are no guarantees in life. 

Mr. GONZALEZ. That’s all I want to know. Yes or no, can you give 

me 100 percent so I can go back home—— 

Mr. TILLERSON. No, I cannot. 

Mr. WATSON. I believe Chevron operations are safe. 

Mr. GONZALEZ. One hundred percent certain. This is a simple 

question, and if you guys were in the courtroom, you know there 

would be a judge saying yes or no, and it’s a simple question. 


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Mr. TILLERSON. I believe our operations are safe. We’re drilling 

deepwater—— 

Mr. GONZALEZ. One hundred percent, I can go back and say that 

your operation, no matter where it is, in the Gulf or elsewhere, is 

100 percent safe, that this could never, never replicate itself. 

Mr. WATSON. I believe our operations are safe. 

Mr. GONZALEZ. One hundred percent, that’s what makes it so 

hard to the American public, gentlemen, for us to go out there and 

tell them something that they know can’t possibly be true. Because 

it doesn’t apply in any other aspect of life or business. 

I’m a proponent of offshore drilling. I’ve had this debate with 

Mrs. Capps since the day I got here. You all are not making me 

look good. 

Can I just go—100 percent. Come on, you guys. I mean, seriously, how can you say yes? But if you want to say yes, say yes. 

We can all go back, Mr. Chairman, and tell them we had witnesses 

from leaders in the industry that can actually tell us they are 100 

percent sure this would never happen again. 

Mr. WATSON. Congressman, I indicated that we have effective 

procedures. I didn’t—— 

Mr. GONZALEZ. No, sir, it’s fine. You’re saying—to me, that’s 100 

percent. I’m gratified. 

Mr. MULVA. No, nothing is 100 percent failsafe. 

Mr. ODUM. Not 100 percent safe. It’s what we focus on every day, 

though. 

Mr. GONZALEZ. The reason I’m for exploration domestically is because we depend on more than 60 percent of our oil from foreign 

sources, which is a national security threat. But we can do it safely—I started off in opening statement that we can explore and 

produce and do it in a safe way that they are not mutually exclusive. 

In this country, we have more than a third of all cars and light 

trucks in the world. By 2020, we probably still will be selling 62 

to 70 percent of our cars fueled somehow—operated in part by a 

fossil fueled engine. That’s why it is so important. But we have an 

obligation to this country to say that we’re going to do it in a safe 

manner. That’s all we’re trying to do here. 

You are the guys that are the experts. You have the resources, 

the assets, and the knowledge. You are going to have us decide for 

you, if, in fact, you don’t really get engaged, until we can go back 

to the American public and tell them with a straight face that we 

are doing everything that is humanly possible to make it safe and 

if there is an accident that we can clean it up. 

Thank you very much, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. 

The chair recognizes the gentleman from Louisiana, Mr. Scalise. 

Mr. SCALISE. Thank you, Mr. Chairman. 

Mr. McKay, I first want to take issue with the statement you 

made earlier when you said the spill response has been pretty effective. I just spent Friday on the ground in Grand Isle, which, as 

you know, is one of the epicenters of the disaster that’s coming into 

not only the beaches but the marsh. They are trying right now to 

put a plan together to protect Barataria Bay, which is an area 


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where they are starting to get oil behind the boom into some of 

these fragile marshes and ecosystems. 

We don’t want to sit back and wait until the oil comes in to clean 

it up, and in some cases you may not be able to clean it up for 

years. We want to be proactive, and we have been submitting 

plans. In fact, 75 percent of the plans submitted by our Governor 

to have the sand barriers in place have not been approved. So 

when you hear local officials saying they are spending more time 

fighting BP and the Federal government than fighting the oil, 

that’s not what I would classify as pretty effective. So please go 

back and redouble efforts and do everything you can to work with 

our local leaders who have plans and are being blocked by BP and 

the Federal Government from getting those plans implemented. 

That’s when it will be effective, when everything is moving by 

the speed of light. It takes right now at least 5 days in some cases 

to get answers on questions. That’s unacceptable. So I would appreciate it if you’d look at that. 

I want to ask you about the relief well. Are you using the same 

method to drill the relief well as you used for the original Horizon 

well? 

Mr. MCKAY. Well, the design of the relief well is very, very similar to the original well. 

Mr. SCALISE. Clearly, that well failed. It was a miserable failure. 

You had 11 people die. Are you still using that same method or 

have you changed the method of drilling? 

Mr. MCKAY. That design has been reviewed over and over with 

the MMS. The failure of the original well I think is going to be a 

complicated set of decisions, equipment, and processes. The relief 

well, I believe, is safe. 

Mr. SCALISE. Well, let me ask you, the last time you testified I 

had asked you about disagreements on the rig. In fact, I had given 

you a report that you said you hadn’t read at the time—now you’ve 

had some time to read it—where there was a disagreement reported in the media between the head of operations on the rig for 

BP versus the head of operations for Transocean. Did that disagreement occur? Were there disagreements? 

Mr. MCKAY. I believe in the Marine board hearing a couple 

weeks ago that individual from Transocean said that did not occur, 

that actual individual. 

Mr. SCALISE. OK. So we’ll see more, because more reports continue to come out that contradict that, but we’ll see. 

I want to go down the line with the rest of the panelists, starting 

with Mr. Tillerson. How deep in the OCS do you currently drill? 

What’s your deepest well? 

Mr. TILLERSON. I assume you’re talking about water depth? 

Mr. SCALISE. Yes. 

Mr. TILLERSON. We’ve drilled up to 8,700 feet deep. 

Mr. SCALISE. Eighty-seven. Of course, the Horizon was 5,000. So 

you’re 8,700. Any incidents there? Any blowouts? 

Mr. TILLERSON. No. 

Mr. SCALISE. Mr. Watson. 

Mr. WATSON. I’ll have to check on the exact depth. 

Mr. SCALISE. Deeper than 5,000. 

Mr. WATSON. Yes. 


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Mr. SCALISE. Mr. Mulva. 

Mr. MULVA. Deeper than 5,000. 

Mr. SCALISE. Mr. Odum. 

Mr. ODUM. Deepest approach which is 10,000. 

Mr. SCALISE. Ten thousand. No incidents? No blowouts? 

So as we look at all of these other reports that are coming out, 

you look at the reaction, it still boggles the mind that, with the exception, I think, of one of you, that the President hasn’t talked to 

those of you who are drilling in deeper water and doing it in a safe 

and effective way with safety as a top priority. 

Who actually reviews and approves those regional response plans 

that we heard about earlier, Mr. Tillerson? 

Mr. TILLERSON. Well, those would be developed—you’re talking 

about internally. 

Mr. SCALISE. When you all submit those, who do you submit 

them to for approval? 

Mr. TILLERSON. Well, they go to the MMS. 

Mr. SCALISE. Well, MMS signs off on them. 

Mr. WATSON. MMS. 

Mr. MULVA. Yes. 

Mr. ODUM. Same. 

Mr. MCKAY. Yes, MMS. 

Mr. SCALISE. Now if MMS, who is the Federal regulator, signs 

off on these plans that by the chairman’s own admission are 

flawed, why isn’t MMS at this table? We have yet to have a hearing with the Federal regulator who had an equal role in this disaster. Four of you had absolutely nothing to do with this disaster, 

and you’re here giving your time to testify. Yet the Federal regulator who is directly responsible for approving these plans, who actually sits there and approves the plan, who approved the inspection, the blowout preventer, has still not testified before this committee. 

I think there is no excuse for that. If we’re serious about getting 

to the bottom of this instead of playing politics, we would have the 

Federal regulator here where we can talk to them about real things 

that they did to approve these plans that failed us; and that still 

hasn’t happened. 

Finally, I want to get to the Secretary of Interior’s report that 

came out that actually led to this ban on drilling. And we had a 

copy from the majority of scientists on the President’s own commission that they were using—the Secretary of Interior was using as 

his basis for banning drilling, actually wrote a letter and came out 

and said, ‘‘We believe the report does not justify the moratorium 

as written. 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. 

A majority of the members of that commission that the Secretary 

of Interior and the President are hiding behind for the 6-month 

ban. 

Again, the President’s got to stop playing politics and putting 

politics over science and actually focus on his job under the Oil Pollution Act which should be directing the response. 


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Mr. McKay, your job should be paying the bills; the President’s 

should be the quarterback on the field. Our local leaders shouldn’t 

have to go to you to get approval to protect the marsh. That’s something the President should be directing you to do. That still isn’t 

happening. That’s something that needs to change. 

I would like to ask unanimous consent to submit this for the 

record, this letter from a majority of those members of the Department of Interior’s panel. 

Mr. MARKEY. Without objection, it will be included in the record. 

[The information appears at the conclusion of the hearing.] 

Mr. SCALISE. Thank you, and I yield back. 

Mr. MARKEY. The gentleman’s time has expired. 

For the record, we have had testifying before the committee the 

Department of the Interior, NOAA, EPA, Coast Guard—— 

Mr. SCALISE. Would the gentleman yield? 

Mr. MARKEY [continuing]. As well as David Hayes, who is the 

Deputy Secretary of the Department of Interior. 

Mr. SCALISE. Would the gentleman yield? 

Mr. MARKEY. I’m glad to yield. 

Mr. SCALISE. The only day that we had actual testimony scheduled by the Secretary of MMS was the day that the Secretary was 

conveniently fired. Why haven’t we had an opportunity to reschedule and have MMS come before our committee? They are the ones 

who signed these reports. They signed those plans. They won’t give 

us still the information on the blowout preventer test that was 

done—— 

Mr. MARKEY. You are right that it was the day that that person 

resigned. But, at the same time, the person who did come to substitute was someone who is higher in the rankings inside the Department of Interior, David Hayes. 

Mr. SCALISE. But doesn’t work for that agency. 

Mr. MARKEY. The chair recognizes the member of the subcommittee, the gentleman from New York, Mr. Engel. 

Mr. ENGEL. Thank you very much, Mr. Chairman. 

And let me just say I find it incredible that some people want 

to blame the President. The same people who want smaller government and don’t want the President to intervene against private industry are the same ones who say the President should intervene 

and should somehow do something. I think tonight we’ll hear the 

President saying a lot of important things, and we will see that he 

is trying to do a great deal. 

Gentlemen, I want to read some quotes and ask you to comment 

on it, that some of you made. 

Mr. Tillerson in 2006 you said, and I’m quoting, ‘‘Industry has 

developed the technologies and acquired the experience to produce 

these resources safely and with a minimal environmental footprint.’’ 

Mr. Mulva, in 2009, you said, and I quote, ‘‘Our industry, our 

company we believe that we have the capability and the experience 

that we can develop these resources and not in any way really compromise safety and environmental performance.’’ 

In 2005, David O’Reilly, who was then CEO of Chevron, told 

Congress that all of the offshore areas closed to oil drilling ‘‘can be 

developed with minimal environmental impact.’’ 


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And, Mr. McKay, in 2009, you told Congress, ‘‘For those who continue to question the safety of offshore energy operations, I can 

only point to our record in the Gulf of Mexico.’’ 

Gentlemen, if we can’t believe what you said in those days, how 

can we believe anything you say now and anything you’re going to 

say in the future? I mean, we were given assurances that everything would be fine. I know that accidents happen, but this is one 

hell of an accident. Why should we trust the industry to give us 

assurances when those assurances apparently mean nothing? Anybody have an answer to any of the quotes? 

Mr. TILLERSON. Congressman, I stand by my statement with respect to Exxon Mobil’s performance. 

Mr. ENGEL. Do you believe that the industry’s developed the 

technologies and acquired the experience to produce these resources safely and with a minimal environmental footprint? 

Mr. TILLERSON. When the standards and the processes and the 

procedures that have been developed by the industry are followed, 

that has been the case. 

Mr. ENGEL. Well, how can we feel comfortable that the processes 

and technologies will be followed? Obviously, it wasn’t followed 

here. 

Mr. TILLERSON. You’re asking me or someone else? 

Mr. ENGEL. No, I’m asking you. 

Mr. TILLERSON. We didn’t have the problem. I can’t answer that. 

Mr. ENGEL. Well, let me ask Mr. McKay. Perhaps he can answer 

that. 

Mr. MCKAY. The tragic accident that has happened here I think 

is going to have a combination of factors which are going to be 

decisional process and equipment. The investigations are exceptionally important to understand how that chronology works and what 

caused this accident. 

I do have confidence that we will understand what happened 

here. I do have strong confidence in that. I also believe that there 

will be improvements made because of those learnings such that 

the industry can get back to work. I think that can happen pretty 

quickly. 

Mr. ENGEL. Mr. McKay, let me ask you this. What really infuriates the American people and infuriates me is after the accident 

every single day it seemed that BP was trying another technique, 

another method of trying to plug the hole, and each time it failed. 

It’s mind boggling for me or for anyone else to understand why 

there were not safeguards in place, technologies in place, modes of 

operation in place so that if a disaster happened you would know 

immediately what to do. 

Mr. MCKAY. Unfortunately, this particular incident occurred 

where the lower marine riser package did not disconnect from the 

blowout preventer so we have a package on top of that preventer. 

We had 4,300 feet of riser off the top of that kinked, and the access 

to that to be able to do anything from the top from that blowout 

preventer has been prevented. 

Mr. ENGEL. But that never occurred to anyone beforehand that 

that might happen? 


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Mr. MCKAY. Not in that way. I don’t think anyone could predict 

that. That package is supposed to release from that blowout preventer, and it has not. 

Mr. ENGEL. Well, doesn’t this mean that oil drilling is inherently 

risky? 

Mr. MCKAY. There’s risk—as was mentioned a few moments ago, 

there is risk in everything. But I do think the systems and the 

technology that is available to the industry and will be improved 

through the learning here, the resources—the important resources 

here can be developed. 

Mr. ENGEL. Why do these disasters seem to only happen in the 

U.S.? We had the Exxon Valdez 20 years ago, and now we have 

this. There is drilling all around the world, in the North Sea, all 

over. We don’t hear about tragedies like this. Are the oil companies 

in the United States cutting corners? 

Mr. MCKAY. No, I would say, unfortunately, there are tragedies 

around the world. Probably the worst rig disaster in history was 

in the North Sea. So, unfortunately, these things happen around 

the world; and we have to improve from each and every one of 

them. I think that’s what the industry tries to do. 

Mr. ENGEL. So doesn’t it prove my point that oil drilling is inherently risky? There could always be a disaster? 

Mr. MCKAY. I don’t think always. I think the track record overall 

in the industry is very strong, but we have issues like we’ve had 

this tragic accident we’ve got to learn from. 

Mr. ENGEL. Well, I don’t hear anybody saying ‘‘drill baby drill’’ 

anymore and for good reason. I think it is absolutely ridiculous 

that this could happen and that there’s no response that’s satisfactory. 

Thank you, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. 

We now turn and recognize a member of the full committee, the 

gentleman from New York, Mr. Weiner. 

Mr. WEINER. Thank you, Mr. Chairman. 

Mr. McKay, I wonder if we’re all on this panel not saying essentially the same thing and that is that BP shouldn’t be in charge 

of anything in this operation anymore. That Mr. Scalise and many 

on our side have said in different ways there is very little credibility that BP has in telling us what’s going on. The numbers have 

been wildly underestimated, as Mr. Markey’s questions earlier 

pointed out. 

It is pretty clear that you’re conflicted when it comes to settling 

claims with people who have been victimized by your negligence. 

You don’t want to pay. You want to pay less. They want to get 

more. 

It seems that your control over the access to the media, to the 

location, you’re conflicted. You want to portray this in a certain 

way. Members of the media want to try to find out whether you’re 

telling them the truth or not. And that even people who have expressed frustration with the President basically are saying, why do 

you trust these guys to do anything? You should get in there and 

do it yourself. 

I think that it comes down to this basic notion that was reinforced today when the four gentlemen to your right basically said 


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that a well-managed company that was doing things responsibly 

wouldn’t have had this problem because they would have taken the 

information that Mr. Waxman and Mr. Stupak released yesterday. 

They looked at it and said clearly that corners were cut and that 

there is no credibility in what—in even the basic elements of how 

this thing was done. 

I wonder what you would say to the American people who open 

up the newspaper and say, well, BP says—dot, dot, dot—why any 

of it should be believed. What have you done to establish any level 

of credibility here? 

Even your supporters, even the people who will go to their political ends saying ‘‘drill baby drill’’, even they are saying, hey, the 

President is responsible because he trusted those knuckleheads in 

BP. I mean, I don’t understand why on any level going forward you 

all should be in charge of anything. 

So let’s go one by one. 

Why should the claims process be under any control of British 

Petroleum? Why shouldn’t we just take the money that is going to 

be paid out in claims in the billions of dollars and give it to someone independent of BP to say which claim is legitimate and which 

one is not? Why should BP have it in their control at all over what 

claims they pay? 

Mr. MCKAY. We have been very clear from the start we’re going 

to pay all legitimate claims. So that’s point one. 

Point two is we set up a claims network. 

Mr. WEINER. Who do you think should determine who is legitimate? 

Mr. MCKAY. We are following OPA guideline under OPA 90. 

Mr. WEINER. Do you believe that BP is conflicted at all in deciding whether or not BP should pay money that BP is going to have 

to pay to victims? Do you think you’re conflicted at all? 

Mr. MCKAY. Not—no, not—— 

Mr. WEINER. I think that walks the line actually of being a rhetorical question. You’re clearly conflicted. 

Let me ask you about access to the media or experts on trying 

to learn what’s really going on there. Now there have been some 

reports that in the process of trying to get access you had to 

check—a member of the media would have to check with BP 

whether to get access to the largest environmental disaster ever 

created by BP. Now do you think that you’re conflicted at all in 

having any decisionmaking role at all about whether BP should be 

able to give access to an environmental disaster created by BP? 

Mr. MCKAY. Well, I’m not familiar with the protocol for access. 

That goes through unified command. So—— 

Mr. WEINER. So under no circumstance should any member of 

the media or any expert who wants to try to get the information 

themselves ever have to call BP to get clearance to do it. 

Mr. MCKAY. No, I didn’t say that. Because they may be acting 

under instructions of unified command. So I—what I’m saying is I 

don’t know the protocol for that. 

Mr. WEINER. Well, whether someone somewhere thinks that you 

should have that is not the question I’m trying to get into now. 

What I’m trying to understand is whether under any circumstance 


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anywhere in the decision tree should be anyone who has been so 

horrible at making decisions. 

I mean, the one thing we know from this hearing with metaphysical certitude is that BP created this problem through their 

own negligence and their own cost cutting, their own corner cutting. It is not just someone like me who believes that we should 

be reducing the amount of drilling that we are doing. The gentleman to your right, who believes you should be doing more of it, 

and even they say you have done that. 

So the question is, in this entire context, why should the American people at any time when it says BP says dot, dot, dot, not immediately take up the newspaper and throw it over their shoulder 

because there is no credibility on it? And if we don’t believe that 

there’s credibility why is there any decisionmaking left in your 

hands? 

And I think, Mr. Chairman, you know, what we have is there are 

opportunities now for us to not remake the same mistake over and 

over again. If we know they are conflicted about being truthful 

with information, any access to the media, access of experts to the 

American people to what’s going on there should not go through 

BP. If we know they are conflicted about wanting to understate 

costs—that’s the basic element of a corporation. They want to take 

in as much as we can, give out as little as they can—why is there 

any role to play in claims? And then becomes why should there be 

any decisionmaking ability on your part at all here? 

And that’s one thing my Republican friends who want to criticize 

the administration for not doing enough, maybe we agree. Maybe 

we do need to have BP involved in a heck of a lot less anything 

to do with our environment, anything to do with our citizens going 

forward. Because while you’re sitting here saying over and over 

again that we are going to pay all legitimate claims, my question 

is, who determines legitimate? I think it should be the American 

people and not you. 

I yield back, Mr. Chairman. 

Mr. MARKEY. The gentleman’s time has expired. 

By unanimous consent, we’re going to recognize two members 

who are not on the committee but who represent the Gulf of Mexico. We will begin by recognizing the gentleman from Louisiana, 

Mr. Cao. 

Mr. CAO. Thank you, Mr. Chairman. 

Mr. Chairman, the oil disaster has caused great economic impact 

to my district. Hundreds of businesses have closed, and thousands 

are out of work. 

Mr. Stearns asked Mr. McKay to resign. Well, in the Asian culture, we do things differently. During the Samurai days, we just 

give you a knife and ask you to commit Hari Kari. My constituents 

are still debating on what they want me to ask you to do. 

But, with that being said, the cleanup process has been a disgrace. The claims process has been dismal. And 1 week into the oil 

spill I approached BP about establishing a trust account, and I received no response. Now that the President’s asking you to establish an escrow account, what would be your response? 

Mr. MCKAY. I don’t think any decisions have been made on a 

trust account. We’ve been clear, as I said, that we’re going to pay 


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all legitimate claims; and the whole company is standing behind 

that. So a decision on whether to do a trust fund or account I don’t 

believe has been made yet. 

Mr. CAO. I’ve been approached by hundreds of constituents who 

said, I am legitimate and BP is saying that I’m not legitimate. How 

do you respond to them? 

Mr. MCKAY. I don’t understand the individual claims. If the 

claims had been submitted, had they been rejected? 

Mr. CAO. Well, they have not been rejected, but they have been 

delayed. And people, when their livelihoods are on the line, they 

cannot afford to be delayed. 

Mr. MCKAY. I can’t answer the question. I know if there are 

issues with claims that we should talk about off-line, I would be 

glad to do that and get our claim experts to come see you and try 

to understand those claims. 

Mr. CAO. Now, I want to ask a question to the panel. Because 

the moratorium is affecting Louisiana in a very tremendous way, 

and I would like to ask you, do you have the technology to know 

exactly where the oil reservoir is? Do you have the technology to 

know that? In other words, do you know how deep you have to drill 

before you tap into an oil reservoir? 

Mr. ODUM. Let me say to a reasonable high degree of accuracy, 

yes. 

Mr. CAO. What would be reasonable? Ninety, ninety-five percent? 

Mr. ODUM. I would actually have to get an expert to tell you in 

the Gulf of Mexico how many foot above or below would be the 

range, but it is pretty close. 

Mr. CAO. But, generally, what risk exists if you were to drill a 

well partially? Would there be any risk involving that and not tapping into the reservoir? Would there be tremendous risk, minimal 

risk? Is there a risk of having a blowout, as we did with the Deepwater Horizon? 

Mr. TILLERSON. Congressman, in response to an earlier question, 

I commented that most of the—a lot of the well control issues and 

blowouts have occurred prior to ever reaching the objective. Shallow gas hazards, overpressured saltwater zones can lead to well 

control problems. The difference is you would not be having a lot 

of oil spilling out of the well, but you would still have a blowout 

condition. You might have natural gas coming out instead. So there 

is risk. It is a risk management process to drill the well to the objective. 

Mr. CAO. Now, if I were—in order to I guess address two concerns, one, the administration’s need to have additional time to implement safety procedures and protocol, but, on the other hand, I’m 

facing the prospect of losing thousands of jobs in Louisiana because 

of the moratorium, would allowing companies to drill partially and 

not allowing them to tap into the oil reservoir, would that create 

tremendous risk? 

The reason why I’m looking into this possible solution is to, on 

the one hand, allow the administration the time to do all the safety 

checks but at the same time trying to keep the rigs from not going 

anyplace else. Because there is at this present moment a high demand for these rigs; is that correct. 


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Mr. WATSON. I have seen a proposal by Senator Landrieu to 

allow certain drilling operations take place. And we think it is important to put the industry back to work. As we said earlier, the 

industry, through the Joint Industry Task Force, has made recommendations and the Department of the Interior has made recommendations that can be employed. 

One of the things that I could comment on is, as we raise standards, it is important the MMS be adequately staffed to approve revised permitting procedures that are being put in place. 

Mr. CAO. Thank you. I yield back. 

Mr. MARKEY. The gentleman’s time expired. 

The gentlelady from Texas, Ms. Jackson Lee, is recognized. 

Ms. JACKSON LEE. Thank you very much, Mr. Chairman; and 

thank you for your courtesies. 

Some of us, as the chairman indicated, come from the region 

where so many constituents are impacted every single day by the 

conditions that we now face. Reminded that in the Gulf area we 

consider ourselves family. So many of my constituents are, some 

way or another, related to the energy industry. 

The gentlemen that sit before me really have a major opportunity that I think has been characterized by my colleagues who 

have questioned you today. There is certainly a high degree of mistrust by the American people, although after 9/11 and the horrific 

tragedy and terrorist act Americans did get back on airplanes and 

seem to buy into the fact that this is part of the American life. 

I think you have a major challenge because you are looked upon 

in a distance. Maybe we know you somewhat in our local communities, but most of America has no stake in the energy industry. 

They don’t know you. 

Most of the discussion on national energy policy is a divided discussion. Your lobbyists appeal to those on the other side of the 

aisle when they think it is appropriate and castigate some of us on 

the other side of aisle. 

So I would like to raise the question of really making the decision of national energy policy an American discussion, where we’re 

not characterized from region, what political party we’re from, 

what ethic background we’re from, but we really come together and 

begin to assess how we can restore the faith to the American people that this is an industry that is part of our national security. 

You have failed. You have patently failed. You don’t know us, 

and you don’t want to know us. 

And so I’d ask this question very quickly. The main visual that 

is being shown shows the oil in the water. My question would be 

to each individual here, what would be your willingness of an investment in an R&D fund that would address immediately the 

question, and long term, of this question of oil in the water, the oil 

in the water now beyond the explosion and the tragic loss of life? 

And let me stop for a moment, again having met some of the victims’ families, to offer again my deepest sympathy, as I did during 

the Texas City incident when some of my constituents were working there. 

But what is the investment that you would be willing to make 

on R&D on this question of oil in the water? 


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Can I quickly ask Mr. Tillerson and, because my time is short, 

to go down the line in an answer. 

Mr. TILLERSON. Well, Congresswoman, there is—we already 

spend money. There are academic studies under way. There are 

government-funded studies under way. And I think something the 

Presidential commission should consider is accumulation of what 

all currently is under way in the area of oil spill research and containment and cleanup and see if that’s really being spent on the 

right things. And the commission I think can play a useful role in 

accumulating that, in determining whether that research needs to 

be better focused based on what we learned from this incident. 

Ms. JACKSON LEE. Because my time is short, why don’t I just 

say, would you be willing to have a fund set aside for R&D, just 

yes or no? 

Mr. WATSON. We are willing to participate, yes. 

Mr. MULVA. Absolutely we are willing to participate. 

Mr. ODUM. Yes. 

Mr. MCKAY. We’ve announced that we’re doing a fund, $500 million. 

Ms. JACKSON LEE. Yes or no as to the willingness of the industry 

to come together and to design expanded and more detailed and 

more technically sophisticated recovery plans. Mr. Tillerson, yes or 

no? 

Mr. TILLERSON. I think, based on what we learned from this, we 

will all want to do that. 

Ms. JACKSON LEE. Just go down the line. 

Mr. WATSON. Yes. 

Mr. MULVA. Yes. 

Mr. MCKAY. Yes. 

Ms. JACKSON LEE. There is a cap on liability; and, of course, 

there are a number of legislative initiatives that are moving forward to remove the cap. I want to know whether the industry 

would support the removal of that cap longstanding. Mr. McKay. 

Mr. MCKAY. I haven’t looked at all the policy around the different bills and ideas, but we have set up for this incident for us 

where that cap is irrelevant. 

Ms. JACKSON LEE. May I have all the—— 

Mr. ODUM. I do think it is time to relook at the whole program, 

don’t have a proposal on the cap. 

Mr. MULVA. Yes, I think we should look at considering raising it, 

but we need to do it in a way with informed judgment. 

Mr. WATSON. We need to look at raising it in a way that will 

make it compatible with the appropriate amount of development 

that the Congress and the administration desires. 

Mr. TILLERSON. I think, based on the incident, the whole question of the oil spill liability trust fund needs to be revisited; and 

I think we want to understand so what is the purpose of that trust 

fund and therein would give us some guidance on how to set that 

cap. 

Ms. JACKSON LEE. Thank you. 

Mr. McKay, just very quickly, there are e-mails in our materials 

that call the well a crazy well, someone else making comments 

about they were nervous. There is a problem with the claims process, and I think you have to own up that it does not work. 


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I’m asking you, Mr. McKay—Mr. Haber will be before the committee. Quickly, will you please answer, the establishment of a separate claims process, escrow to be able to make determinations, I 

don’t think you can make determinations on what is legitimate. 

Oystermen and others and restaurants are all in shambles. Would 

you see to that? Would your company consider that, a separate 

claims process from BP? 

Mr. MCKAY. What we’ve said is we’re going to get an independent mediator to help us, and we’re looking at other suggestions 

to improve it. I can’t say yes or no. 

Ms. JACKSON LEE. Thank you, Mr. Chairman. 

I don’t think that will work. I think we’re dying in the Gulf. Beyond getting back to this issue of the moratorium, you have companies and restaurants that are shut down and people losing their 

jobs. You’ve got to improve the claim system, and you need to move 

now. Thank you. 

Mr. MARKEY. The gentlelady’s time has expired. 

The chair makes a unanimous consent request to allow all members of the committee to submit questions for the record. 

Without objection, so ordered. 

This has been a historic hearing, but we are in a historic time. 

This is the single worst environmental disaster in our country’s 

history, and the American people want to know how it happened, 

why the response is so inadequate, and what we are going to have 

to do in order to ensure that it never happens again. That is why 

the attention of the American people is riveted on this issue and 

you gentlemen who are the CEOs of the largest oil companies in 

our country. 

Mr. Tillerson said that you are not well equipped to deal with 

these sorts of spills. With all of the billions of dollars you make, 

you apparently can’t afford the experts who can tell you collectively 

that walruses and seals don’t live in the Gulf of Mexico, let alone 

the experts who can tell you how to prevent, respond to, and stop 

this leak. 

BP holds 37 leases in the Gulf of Mexico on which it drills for 

free, Exxon Mobil has 14, Chevron has 51, Shell has 28, and 

ConocoPhillips has 10. Between you all, that makes 140 leases on 

which you pay zero, not a penny in royalties to the American people or to the people of the Gulf for the right to drill for oil and reap 

billions and billions of dollars in profits. 

Yet when you’re asked can you stop the massive quantities of oil 

that are now ruining the beaches and marshland, killing the wildlife, and devastating the economy, you say no. You say you’re not 

well equipped to deal with it, and these catastrophic impacts are 

simply unavoidable. That is unacceptable to the people in the Gulf 

of Mexico. It is unacceptable to the people of our country. 

For years, you’ve gotten a free ride on some of your offshore drill- ing, which amounts to $50 billion in royalties not paid over the lifetime of these leases. At the same time, when your free ride results 

in a major disaster, what we have seen today is the collective answer that we cannot effectively deal with the consequences of a 

geyser coming from the bottom of the ocean. 

It is an embarrassment that your response plans are about seals 

and walruses and contain long-disconnected phone numbers for 


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long-deceased experts. It is an embarrassment that of your billions 

of dollars you’ve spent less than one-tenth of 1 percent on the development of safer technologies. 

Your industry needs to step up to the plate and recognize the 

need for change. You need to change your emergency responses 

plans. You need to strengthen your safety measures. You need to 

invest more in new safety, response, and alternative energy technologies. 

Mr. McKay, you must ensure that there is an independent capacity to guarantee that every claim is not going to be determined to 

be legitimate or not by the chief counsel of BP. There has to be an 

independent evaluation to ensure that legitimate claims are determined not by your own self-interest but by, in fact, an independent 

arbiter to ensure that these people are not harmed beyond that 

which they already have. 

This disaster is a wake-up call for your industry. You need to 

heed this call. You need to bring to the table the plans that ensure 

that this never happens again, that we never see a response like 

this again; and we are going to be moving legislation that will accomplish that goal. 

It would be better, however, if the industry was saying we understand now it just can’t be voluntary. It has to be mandatory. These 

safety features and these response features, they have to be mandatory. We cannot any longer rely upon the voluntary. We see what 

the consequences for the people in the Gulf of our country. 

This hearing is adjourned. 

[Whereupon, at 2:24 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 


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