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[Senate Hearing 112-372]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 112-372
 
                         FOREIGN OCS READINESS

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   TO

EXAMINE THE STATUS OF RESPONSE CAPABILITY AND READINESS FOR OIL SPILLS 
 IN THE FOREIGN OUTER CONTINENTAL SHELF WATERS ADJACENT TO U.S. WATERS

                               __________

                            OCTOBER 18, 2011

                       Printed for the use of the
               Committee on Energy and Natural Resources

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

RON WYDEN, Oregon                    LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington           MIKE LEE, Utah
BERNARD SANDERS, Vermont             RAND PAUL, Kentucky
DEBBIE STABENOW, Michigan            DANIEL COATS, Indiana
MARK UDALL, Colorado                 ROB PORTMAN, Ohio
JEANNE SHAHEEN, New Hampshire        JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota                DEAN HELLER, Nevada
JOE MANCHIN, III, West Virginia      BOB CORKER, Tennessee
CHRISTOPHER A. COONS, Delaware

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bingaman, Hon. Jeff, U.S. Senator From New Mexico................     1
Bromwich, Michael R., Director, Bureau of Safety and 
  Environmental Enforcement, Department of the Interior..........     3
Hartig, Larry, Commissioner, State of Alaska, Department of 
  Environmental Conservation, Juneau, AK.........................    46
Pinon, Jorge R., Visiting Research Fellow, Florida International 
  University, Latin American and Caribbean Center, Cuban Research 
  Institute, Miami, FL...........................................    25
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     2
Myers, Mark, Vice Chancellor for Research, University of Alaska, 
  Fairbanks, AK..................................................    32
Salerno, Vice Admiral Brian M., Deputy Commandant for Operations, 
  U.S. Coast Guard...............................................     9
Schuler, Paul, President & CEO, Clean Caribbean & Americas, Fort 
  Lauderdale, FL.................................................    28

                                APPENDIX

Responses to additional questions................................    51

                         FOREIGN OCS READINESS

                              ----------                              

                       TUESDAY, OCTOBER 18, 2011

                                       U.S. Senate,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
     The Committee met, pursuant to notice, at 10:06 a.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Jeff 
Bingaman, chairman, presiding.

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW 
                             MEXICO

    The Chairman. Alright. Why don't we get started?
    The hearing will come to order. Today we're going to 
receive testimony from 2 panels of experts about an issue of 
great importance to the committee. That is offshore oil 
development. More precisely, we are focusing today's hearing on 
examining the status of response capability and readiness for 
oil spills in the foreign Outer Continental Shelf waters 
adjacent to the United States to our own waters.
    This activity presents a complex set of issues related to 
its risks and its benefits. Last year we, the world, learned a 
hard lesson through the Deepwater Horizon disaster. We learned 
that there are tragic consequences for human life and 
environmental quality and marine resources and the economy if 
offshore development is conducted with anything but the highest 
degree of skill and care.
    For these reasons the committee spent a significant amount 
of time in this Congress and in the previous Congress 
considering issues related to oil drilling and development in 
the waters of the United States. Obviously we need to continue 
to be dedicated to ensuring that the activities in our own 
waters are done safely and in a manner that protects the 
environment. Additionally it's clear that with respect to 
offshore activities the actions of our marine neighbors are 
important to consider as well.
    As many people have already said, oil spills do not respect 
international boundaries. There are indications that several of 
our neighbors are planning to increase offshore oil 
development. Specifically Cuba and Mexico and the Bahamas and 
Canada in both the Canadian Arctic and the Eastern Canadian 
waters all have activities underway that could lead to 
increased offshore development.
    The complexities of these activities that exist for 
operations in U.S. waters will obviously be faced by our 
neighbors as well. In addition there are particular issues 
related, for example, to the Cuban embargo and to the 
challenges presented by oil spill response in Arctic areas. Our 
goal is to consider these issues. Find the best means, 
including international activities, that will allow us to 
protect our shared marine resources and those whose safety and 
livelihood depend on these resources.
    Today we'll hear from some of our government experts on the 
first panel, who are working to address these issues and then 
also from other experts in oil spill response in the Gulf, in 
the Caribbean and Arctic regions. I look forward to the 
testimony and to continuing this committee's work to address 
the risks and challenges involved in these complex, offshore 
activities.
    Let me turn to Senator Murkowski for her opening remarks 
before we introduce the first panel.

        STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 
                          FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman and thank you to 
our witnesses that are here, not only those distinguished 
witnesses on our first panel, but our second as well.
    I want to extend a special welcome to my friend, Dr. Mark 
Myers, who will be appearing on the second panel. He's from the 
University of Alaska, and he's one of our top scientists on 
these matters. He's previously appeared before this committee 
as the Director of USGS.
    I think this promises to be an interesting hearing. I am 
amazed by how assertive so many of our neighbors have become in 
exploring their offshore oil and natural gas. Cuba, I think, is 
probably receiving the most attention because so many issues of 
controversy arise with their development.
    But I think it's very important to also recognize that our 
Nation also shares maritime orders with Russia, with Canada and 
with Mexico. All of those Nations are moving forward with major 
plans to venture into new areas of their Outer Continental 
Shelf. Some of those areas are not too far from our own 
shorelines.
    Neither geology nor ocean currents recognize our borders, 
as the Chairman has said. So we really have both a shared 
opportunity in terms of the benefits of resource development, 
and also a shared risk in terms of spills or other impacts that 
can occur.
    It probably comes as no surprise that I believe that it 
makes no sense for America to sit stubbornly in between active 
drilling operations in neighboring waters with our arms folded. 
It does us no good to complain that offshore drilling is too 
risky for us to pursue as other Nations are clearly very busy 
reaping its benefits right outside our front door. Yet that 
position is precisely what some Senators and some groups would 
advocate: that the U.S. stay out of this business entirely.
    For the moment, I would ask that we set aside the 
discussion about jobs, about revenue and security that we would 
sacrifice. I would ask my colleagues to consider then, would we 
even be able to lend expertise to our neighbors if the U.S. 
hadn't taken bold steps into the offshore many decades ago? I 
think the answer to that is, no.
    The unfortunate reality is that oil spills, whether they be 
from tankers or rigs, have occurred in our waters. These 
incidents have taught Americans about contending with maritime 
incidents. We know some of what works and much of what does not 
work. Necessity has bred some invention as well, including the 
Sub C containment mechanisms which put an end to the Macondo 
blowout last year.
    So we're here today to talk about what the U.S. can be 
doing to keep its own shorelines and resources safe and well 
managed in what is now, obviously, a global petroleum economy. 
I'd argue that the more build-out that we can advance in terms 
of offshore support facilities, aircraft, response, containment 
assets, ice breakers and vessels of opportunity, the better off 
we are. I'd argue that by training and re-training the best 
personnel and expertise in this field, the better off we will 
be in achieving a degree of comfort that a mistake next door 
will not mean a problem at our own doorstep.
    I'll close by saying that it's not realistic to expect 
international compliance with anything close to U.S. standards 
if the U.S. cannot demonstrate that those standards work in 
both a profitable and a workable way.
    I thank you again, Mr. Chairman, for holding the hearing. 
Look forward to the discussion and the input from our 
witnesses. Thank you.
    The Chairman. Thank you very much. Let me introduce our 
first panel.
    Mr. Michael Bromwich, who is the Director of the Bureau of 
Safety and Environmental Enforcement in the Department of 
Interior. He's a frequent and regular testifier to our 
committee. We appreciate him being back today.
    Also, Vice Admiral Brian M. Salerno, who is the Deputy 
Commandant for Operations in the United States Coast Guard. 
Thank you very much for being here.
    Why don't you proceed? Give us the main points we need to 
understand from your testimony and the written testimony that 
Mr. Bromwich has submitted, we'll just include that in the 
record in its entirety.
    Mr. Bromwich, why don't you start and then Admiral Salerno?

 STATEMENT OF MICHAEL R. BROMWICH, DIRECTOR, BUREAU OF SAFETY 
   AND ENVIRONMENTAL ENFORCEMENT, DEPARTMENT OF THE INTERIOR

    Mr. Bromwich. Thank you very much, Mr. Chairman and Senator 
Murkowski and other members of the committee. I'm happy to be 
here today to discuss the status of response capability and 
readiness for oil spills originating in foreign waters that 
might affect nearby U.S. waters and shorelines.
    As you know the blowout and oil spill from the Macondo well 
last year prompted the most aggressive and comprehensive 
reforms to offshore oil and gas regulation and oversight in 
U.S. history. Our new standards and other reforms are designed 
to ensure that the exploration and development of oil and gas 
resources in U.S. waters proceed safely and with appropriate 
protections for ocean environments and our coastlines. But the 
risks to U.S. waters and shores posed by offshore drilling, as 
both you, Mr. Chairman and Senator Murkowski have noted, are 
not limited to the activities on the U.S. OCS. As a result we 
have taken steps to try to improve drilling standards and 
practices for operations in foreign waters that could have an 
impact on our coastline as well as focus on oil spill response 
preparedness.
    We are working with key agencies across the Federal 
Government including the State Department, the Coast Guard, 
EPA, NOAA and others, as well as with industry, oil spill 
response and blowout containment companies and our 
international counterparts in the Gulf of Mexico, in the Arctic 
and along our maritime boundaries with Canada. In particular we 
are working closely with other Federal agencies to address the 
threat of an oil spill in neighboring parts of the Gulf of 
Mexico that could affect U.S. waters, shores and interests. 
Several other countries on or near the Gulf of Mexico are 
expected to proceed with offshore drilling in their exclusive 
economic zones in the near future.
    As you know the Spanish oil company, Repsol, has announced 
its intention to drill offshore wells in Cuba's waters using a 
newly constructed, semi-submersible rig. In the near future 
there also will likely be offshore drilling activity in the 
EEZs of the Bahamas and Jamaica and continuing offshore 
activity in Mexico's EEZ.
    Now the U.S. Government is taking steps to protect our 
waters and coastal resources by promoting drilling safety 
through prevention and by preparing response contingencies in 
the event of a spill. These activities include communicating 
with Repsol to encourage its compliance with U.S. safety and 
environmental standards, cooperating with our regulatory agency 
counterparts in the region including Mexico through bilateral 
and multilateral mechanisms to develop common safety standards 
and taking steps to ensure that U.S. resources are available to 
respond to an oil spill. As you know we do not have regulatory 
authority over Repsol's activities in Cuba. But beginning in 
February of this year, Repsol has voluntarily provided us 
information regarding its drilling and oil spill response 
plans.
    We have had numerous contacts with the company. We have 
made it clear that we expect it to adhere to the highest 
environmental, health and safety standards and to have adequate 
prevention, mitigation and remediation systems in place in the 
event of an incident. Repsol officials have stated publicly 
that in carrying out its exploratory drilling plans in Cuban 
waters, it will adhere to U.S. regulations and the highest 
industry standards.
    Repsol has also offered U.S. agencies an opportunity to 
board the rig that it intends to use in Cuban waters to inspect 
the vessel and drilling equipment and to review relevant 
documentation. To protect U.S. interests we have welcomed the 
opportunity to gather information on the unit's operation, 
technology and safety equipment. BSEE and the Coast Guard are 
planning to coordinate a joint visit to the unit that would 
occur shortly before the rig is scheduled to enter Cuban 
waters.
    Now in addition to keeping BSEE regularly informed of its 
plans, Repsol has expressed a desire to keep U.S. regulators 
and spill response planners apprised of its oil spill 
preparedness activities offshore Cuba. Along with other U.S. 
representatives, BSEE has already witnessed a table top spill 
response exercise held at the Repsol office in Trinidad. During 
the exercise Repsol spill management team mobilized to response 
to a hypothetical spill and demonstrated response equipment 
deployment capabilities.
    Beyond our specific engagement with Repsol, BSEE has been 
engaged with our regulatory counterparts in the Gulf of Mexico 
in an effort to harmonize drilling safety standards in the 
region. BSEE and its predecessor agencies have been 
collaborating with officials from all levels of the Mexican 
government since the late 1990s. This cooperation has increased 
substantially in the aftermath of Deepwater Horizon and since 
the creation of the National Hydrocarbons Commission, the 
Mexican agency responsible for regulating offshore drilling 
safety on Mexico's Continental Shelf.
    BSEE and CNH, it's the name of the regulatory agency in 
Mexico, are working toward a set of common safety and 
environmental standards through a series of technical 
workshops. If an oil spill from activities in the region were 
to threaten U.S. waters or its coastline, the U.S. Government 
would immediately use all appropriate resources and authorities 
to conduct response operations. The Administration has engaged 
State and local governments and private parties that might be 
affected by such a spill to ensure awareness and mutual 
cooperation. We will continue to actively support these efforts 
to ensure that appropriate plans and resources are in place to 
respond promptly and effectively to an oil spill that reaches 
U.S. waters. In addition the U.S. is also taking measures to 
ensure that the appropriate private industry parties are able 
to respond quickly in the event of an oil spill in Cuban 
waters.
    Finally the Gulf of Mexico is not the only area in which we 
are proactively working on issues relating to a potential oil 
spill. My prepared testimony discusses the ways in which DOI 
and BSEE, in particular, are engaged in a number of 
multilateral and bilateral initiatives for oil spill 
preparedness and response in the Arctic and with Canada. We 
view engagement with our foreign counterparts in areas of 
shared interests and concern whether it is the Gulf of Mexico, 
the Arctic or along our maritime border with Canada as a 
central part of our efforts to protect U.S. environmental and 
economic interests. We are committed to continuing that 
engagement.
    Thank you very much. I look forward to your questions.
    [The prepared statement of Mr. Bromwich follows:]

 Prepared Statement of Michael R. Bromwich, Director, Bureau of Safety 
       and Environmental Enforcement, Department of the Interior

    Mr. Chairman and Members of the Committee,
    I am pleased to be here today to discuss the status of response 
capability and readiness for oil spills originating in foreign waters 
with potential effects on adjacent U.S. waters and shorelines.
    As you know, the blowout and oil spill from the Macondo well last 
year prompted the most aggressive and comprehensive reforms to offshore 
oil and gas regulation and oversight in U.S. history. Our new standards 
and other reforms are designed to ensure that the exploration and 
development of oil and gas resources in U.S. waters proceeds safely and 
with appropriate protections for ocean environments and our coastlines.
    Because the risks to U.S. waters and shores posed by offshore 
drilling are not limited to the activities on the U.S. OCS, the 
Department of the Interior (DOI) and my agency have taken steps to 
improve drilling standards and practices, as well as oil spill response 
preparedness, for operations in foreign waters that could have an 
impact our coastline. DOI and the Bureau of Safety and Environmental 
Enforcement (BSEE) are engaged with the key agencies across the federal 
government--including the State Department, United States Coast Guard 
(USCG), Environmental Protection Agency (EPA), National Oceanic and 
Atmospheric Administration (NOAA) and others--as well as with industry, 
oil spill response and blowout containment companies, and our 
international counterparts in the Gulf of Mexico, in the Arctic and 
along our maritime boundaries with Canada.

   STATUS OF RESPONSE CAPABILITY AND READINESS IN THE GULF OF MEXICO

    DOI and BSEE are working closely with other federal agencies to 
address the threat of an oil spill in neighboring parts of the Gulf of 
Mexico that could affect U.S. waters, shores and interests. Several 
other countries on or near the Gulf of Mexico are expected to proceed 
with offshore drilling in their exclusive economic zones (EEZ) in the 
near future. As you know, the Spanish oil company Repsol has announced 
its intent to drill offshore wells in Cuba's waters using a newly 
constructed mobile offshore drilling unit (MODU), the Scarabeo 9. In 
the near future, there also likely will be offshore drilling activity 
in the EEZs of the Bahamas, and Jamaica, and continuing offshore 
activity in Mexico's EEZ.
    The U.S. government is taking steps to protect U.S. waters and 
environmental and economic resources by promoting drilling safety to 
prevent spills in the first place and by preparing response 
contingencies in the event of a spill. These activities include: (1) 
communicating with Repsol to encourage its compliance with U.S. safety 
and environmental standards; (2) cooperating with our regulatory agency 
counterparts in the region, including Mexico, through bilateral and 
multilateral mechanisms to develop common safety standards; and (3) 
taking steps to ensure that U.S. resources are available to respond to 
a spill.

1. Engagement with Repsol
    While BSEE does not have regulatory authority over Repsol's 
activities in Cuba, beginning in February of this year Repsol has 
voluntarily provided us information regarding its plans related to 
drilling and oil spill response. In our numerous communications with 
Repsol, we have made clear that we expect it to adhere to industry and 
international environmental, health, and safety standards and to have 
adequate prevention, mitigation, and remediation systems in place in 
the event of an incident. Repsol officials have stated publicly that in 
carrying out its exploratory drilling plans in Cuban waters, it will 
adhere to U.S. regulations and the highest industry standards.
    Repsol has offered U.S. agencies an opportunity to board the 
Scarabeo 9 rig that Repsol intends to use in Cuban waters to inspect 
the vessel and drilling equipment and to review relevant documentation. 
Given the proximity of drilling to U.S. waters, and considering the 
serious consequences a major oil spill would have on our economic and 
environmental interests, we have welcomed the opportunity to gather 
information on the rig's operation, technology, and safety equipment. 
BSEE and the Coast Guard are planning to coordinate a joint visit to 
the Scarabeo 9 that would occur shortly before the rig is scheduled to 
enter Cuban waters.
    In addition to keeping BSEE regularly informed of its plans, Repsol 
has expressed a desire to keep U.S. regulators and spill response 
planners appraised of its oil spill preparedness activities offshore 
Cuba. Along with other U.S. representatives, BSEE has already witnessed 
a table-top spill response exercise held at the Repsol office in 
Trinidad. During the exercise, Repsol's spill management team mobilized 
to respond to a hypothetical spill and demonstrated response equipment 
deployment capabilities. Repsol has subsequently invited BSEE and Coast 
Guard officials to observe another emergency drill to be conducted in 
Trinidad related to contingency planning for the drilling.

2. Regional Drilling Safety Initiatives in the Gulf of Mexico
    In addition to our communications with Repsol, BSEE has been 
engaged with our regulatory counterparts in the Gulf of Mexico in an 
effort to harmonize drilling safety standards in the region. BSEE and 
its predecessor agencies have been collaborating with officials from 
all levels of the Mexican government since the late 1990s on issues 
related to the safe and responsible development of oil and gas 
resources in the Gulf of Mexico. This cooperation has increased 
substantially in the aftermath of Deepwater Horizon and after the 
creation of the National Hydrocarbons Commission (CNH), the Mexican 
agency responsible for regulating offshore drilling safety on Mexico's 
continental shelf.
    BSEE and CNH are working towards a set of common safety and 
environmental standards through a series of technical workshops. 
Following a workshop held this summer in BSEE's Gulf of Mexico regional 
office, the U.S. and Mexico developed an action plan to define subject 
areas where the creation of common standards would be appropriate. CNH 
officials will be returning to BSEE's offices in the near future for a 
technical exchange about BSEE's Worst Case Discharge analysis.
    In addition to this ongoing cooperation, Secretary of the Interior 
Ken Salazar and I traveled to Mexico for a series of meetings with 
Mexican officials to discuss the development of common safety and 
environmental standards for offshore oil and gas exploration and 
development in the Gulf of Mexico.

3. Spill Response and Preparedness
    The U.S. government will immediately use all appropriate resources 
and authorities to conduct response operations in the event an oil 
spill from activities in Cuban waters or from activities in other 
states in the region that threaten U.S. waters or its coastline. The 
Administration has engaged state and local governments and private 
parties that might be affected by such a spill to ensure awareness and 
mutual cooperation and the adequacy of five different existing Area 
Contingency Plans covering Florida where models predict varying 
probabilities of U.S. shoreline impacts should a spill occur at the 
planned exploratory drilling locations in Cuban waters. BSEE staff is 
also engaged with District Seven USCG staff out of Miami in the 
development of an International Offshore Drilling Response Plan and 
will be participating in an upcoming workshop to validate the plan. We 
will continue with active support of these efforts to ensure that 
appropriate plans and resources are in place to respond in a rapid and 
effective manner to an oil spill that reaches U.S. waters.
    As part of this planning for possible oil spills from deepwater 
drilling off of Cuba, NOAA, in cooperation with the Bureau of Ocean 
Energy Management (BOEM), has run sophisticated trajectory models to 
identify potential landfall areas along the U.S. coasts. Using worst 
case discharge data provided by Repsol, coupled with computer model 
results, the USCG is working with Area Committees in the areas that 
potentially could be affected by such a spill to enhance Area 
Contingency Plans--an effort that requires local and state 
participation in the development of protection strategies and 
establishing priorities for threatened resources.
    The U.S. is also taking measures to ensure that the appropriate 
private industry parties are able to respond quickly in the event of an 
oil spill in Cuban waters. The Department of Commerce and the Treasury 
Department have a long-standing practice of providing licenses to 
address environmental contingencies in Cuban waters. The Department of 
Commerce's Bureau of Industry and Security (BIS) has issued a number of 
licenses for post-incident oil spill containment and cleanup items for 
use by U.S. companies in Cuban waters. These items include booms, 
skimmers, dispersants, pumps and other equipment and supplies necessary 
to minimize environmental damage in the event of a spill. Several such 
applications are currently under review by BIS, including applications 
for a subsea well containment system and related equipment, such as 
remotely operated submersible vehicles and subsea construction, dive 
support, and well intervention vessels. In consultation with the 
Department of State, the Treasury Department can issue licenses to U.S. 
entities to prepare for and to operate in the event of an oil spill. 
The Treasury Department has been issuing such licenses for over a 
decade, including licenses for environmental response, maritime 
salvage, and spill prevention activities.
    Finally, BSEE is working closely with other federal agencies on a 
number of regional initiatives with countries in the region, including 
Mexico, Cuba, the Bahamas and Jamaica. For example, planning is 
underway for a Regional Oil Pollution Preparedness, Response and 
Cooperation Seminar to Focus on Developing National Plans for Marine 
Pollution Preparedness and Response Related to Offshore Units and 
Regional Cooperation. This seminar, which is sponsored and conducted by 
the International Maritime Organization, will take place in the Bahamas 
later this year and officials from the Bahamas, Cuba, Mexico, Jamaica 
and the United States have been invited to participate. The seminar 
will provide a valuable opportunity for participating countries to 
learn about other nations' plans for emergency well control and oil 
spill response, which will help us improve our own response planning 
for upcoming offshore drilling expected in the EEZs of participating 
states. We believe a multilateral approach that involves all parties in 
the region contemplating drilling activities that could affect the 
United States is the most effective means of safeguarding our 
interests. We therefore intend to continue to vigorously pursue 
continued multilateral engagements in the Gulf of Mexico.

  STATUS OF RESPONSE CAPABILITY AND READINESS IN THE ARCTIC AND WITH 
                                 CANADA

    In addition to our activities in the Gulf of Mexico, DOI and BSEE 
are also engaged in a number of multilateral and bilateral initiatives 
for oil spill preparedness and response in the Arctic and with Canada.

1. Arctic Council
    The U.S. is a member of the Arctic Council Ministerial Meeting, 
which is a high-level forum of eight nations--Canada, Russia, Norway, 
Denmark, Iceland, the United States, Sweden and Finland--and their 
indigenous peoples.
    The Arctic Council's meeting in Nuuk, Greenland this past May led 
to the creation of two important initiatives to address oil spill 
prevention, preparedness and response in the Arctic. The first of these 
is the Oil Spill Preparedness and Response Task Force, of which BSEE is 
a member and which intends to develop an international instrument on 
oil pollution preparedness and response in the Arctic. The Task Force 
is meeting in Oslo, Norway this week. In addition, BSEE is 
participating in the Arctic Council Emergency Prevention, Preparedness 
and Response working group, which is developing recommendations on best 
practices in oil spill prevention. The results of both initiatives will 
be presented at the next Ministerial Meeting of the Arctic Council in 
the spring of 2013.

2. Bilateral Cooperation with Canada
    BSEE also participates in a number of bilateral initiatives with 
Canada related to oil spill preparedness and response. BSEE's 
Technology Assessment and Research Program has collaborated with Canada 
in over 35 joint research and development projects, many of which 
relate to improving oil spill response and preparedness. For example, 
the bureau is collaborating with Canada's Department of the Environment 
on a number of joint oil spill response research projects focusing on 
remote sensing and measurement of spilled oil; chemical treating 
agents; the properties and behavior of spilled oil; testing and 
evaluating oil spill absorbents; cleaning up of oil from shorelines; 
mechanical containment and cleanup of spilled oil; and validating the 
window of opportunity for dispersant use. Another project has involved 
collaboration with Canada's Department of Fisheries and Oceans on a 
study of dispersants.
    BSEE's predecessor agencies also initiated and conducted two 
meetings of the US-Canada Northern Oil and Gas Research Forum (Forum). 
The first Forum took place in October 2008 in Anchorage, followed by a 
second Forum in December 2010 in Calgary. The forums focused on 
technical, engineering, and scientific research concerning offshore 
drilling safety, oil spill prevention and management, ice engineering 
and transportation issues, as well as the environmental effects of oil 
and gas exploration and development in the Arctic. These 
multidisciplinary conferences brought together participants from 
government, industry, academia, indigenous groups, and non-governmental 
organizations to discuss research issues of relevance to the management 
of oil and gas activities.
    BSEE has also cooperated in joint projects with the Canadian Coast 
Guard at the Oil and Hazardous Materials Simulated Environmental Test 
Tank (OHMSETT), which is the U.S. oil spill response and renewable 
energy test facility located in New Jersey. One project evaluated 
remote sensing equipment to detect spilled oil; another evaluated the 
oil containment performance of five different types of fire-resistant 
booms. We will continue this engagement under the leadership of BSEE's 
Oil Spill Response Division.
    Finally, BSEE will participate in the yearly Arctic and Marine Oil 
Spill Program (AMOP) Technical Seminar with Canada.The Seminar was 
created in 1978 by Canada's environmental ministry to improve the 
knowledge base and technology for combating Arctic and marine oil 
spills. Since then, it has been a useful forum for cooperation and 
information exchange providing BSEE with the opportunity to engage 
researchers with similar Arctic response interests, learn about 
emerging technologies and scientific discoveries, inform attendees of 
findings from BSEE-funded research, and identify research gaps and 
needs. In the last AMOP seminar conducted in October 2011, the program 
included discussions on the use of Ohmsett for research related to 
biofuel spill response and dispersant operational research conducted at 
Ohmsett over the last ten years, evidencing the contributions that BSEE 
has and will continue to make to improving oil spill response.
    BSEE is also on the Executive and Planning Committees of the 
International Oil Spill Conference which is held every three years--the 
most recent being in mid-2011. The conference focuses on new 
technologies and hosts exhibitors and participants from around the 
globe.
    As you can tell from this description of the activities of DOI and 
BSEE, we view engagement with our foreign counterparts in areas of 
shared interest and concern as a central part of protecting U.S. 
environmental and economic interests.
    Thank you and I look forward to your questions.

    The Chairman. Thank you very much.
    Admiral, go right ahead, please.

 STATEMENT OF VICE ADMIRAL BRIAN M. SALERNO, DEPUTY COMMANDANT 
                FOR OPERATIONS, U.S. COAST GUARD

    Admiral Salerno. Good morning, Mr. Chairman, Ranking Member 
Murkowski, distinguished members of the Committee. I'm pleased 
to have this opportunity to answer any questions you may have 
on response capability and readiness for oil spills originating 
in foreign waters adjacent to the United States that may affect 
or threaten our Nation or our natural resources.
    Protecting the marine environment from oil spills is an 
important Coast Guard mission. Contingency planning, training 
and exercises are fundamental to our readiness to respond to 
oil spills. These in turn have their foundation in the National 
Oil and Hazardous Substances Pollution Contingency Plan, known 
simply as the NCP. That's a long title.
    Contingency planning under the NCP occurs at several 
levels.
    Local level planning is conducted by an Area Committee 
under the guidance of a Coast Guard Captain of the port, who is 
also pre-designated as the Federal, on scene coordinator for 
the coastal zone. The Area Committee brings together Federal, 
State, local and tribal officials and responders to identify 
risks, sensitive areas to be protected and protection 
strategies.
    At the regional level Coast Guard Districts participate 
with other Federal agencies and State officials through the 
Regional Response Team. They consider such issues as disperse 
and use and insitu burning pre-authorizations.
    Finally at the national level, the Coast Guard serves as 
the Vice Chair of the National Response Team which is comprised 
of 16 Federal agencies with environmental response functions. 
Ensures national level capabilities are available, as needed, 
to support response efforts.
    Each of these organizational levels also has a role to play 
in developing strategies and cooperative relationships with 
foreign neighbors to enhance preparedness and response to 
trans-boundary environmental threats. In particular, we have 
well established relationships with Canada, Russia and Mexico 
to achieve cooperation on potential pollution threats, the 
identification of equipment and personnel needed to respond to 
actual incidents and procedures and protocols for notification, 
incident management and coordinated spill response. Each of 
these cases involves cooperation in controlling the source of 
the pollution as paramount in addressing the transnational 
nature of the threat.
    Without controlling the source you cannot get ahead of the 
problem. So the facilitated movement of people and equipment to 
the source is an essential component of these agreements. 
Additionally these agreements include regular joint planning 
sessions and exercises. They also help spawn bilateral 
cooperation in oil spill research and development.
    Under these agreements we've recently completed a major 
bilateral exercise with Mexico held in San Diego this past 
August. We also held a joint U.S. Coast Guard/Canadian Coast 
Guard Environmental Summit this past month. Next month I plan 
to meet with the Russian delegation here in Washington to sign 
a bilateral Memorandum of Understanding that will expand our 
current cooperative agreements to cover the entire U.S./Russian 
boundary waters.
    We're also working with Russia, Canada and the 6 other 
Arctic Nations through the Arctic Council to produce an Arctic 
wide, pollution preparedness and response instrument that will 
build on our existing bilateral agreements to enhance 
preparedness throughout the Arctic region.
    In light of the growing interest in oil exploration in the 
Northern Caribbean, we're also working hard to improve regional 
cooperation there. The anticipated drilling off Cuban waters is 
a salient example, but others like the Bahamas are also 
considering deep water drilling operations. By working through 
the International Maritime Organization, we've garnered support 
for a regional, multilateral seminar to be held in December in 
the Bahamas to which other Caribbean Nations will be invited, 
including the Bahamas, Jamaica, Cuba and Mexico for the purpose 
of discussing oil spill prevention and response issues.
    Meanwhile we're working extensively with all of our 
domestic response partners to update our contingency plans. 
We're also engaged directly with Repsol, the Spanish company 
which plans to drill the first well off Cuba starting in 
January 2012, to better understand their response strategies, 
their resources and their capabilities. In the event an oil 
spill does occur within Cuban waters, the Coast Guard would 
mount an immediate response under the NCP in partnership with 
other Federal, State and local agencies. We would focus on 
combating the spill offshore using all available response 
tactics.
    As was highlighted by the Deepwater Horizon spill, any 
spill of national significance, regardless of its source will 
require unity of effort across all levels of government, 
industry and the private sector.
    Thank you. I look forward to answering your questions.
    [The prepared statement of Admiral Salerno follows:]

Prepared Statement of Vice Admiral Brian Salerno, Deputy Commandant for 
                      Operations, U.S. Coast Guard

    Good Morning Chairman Bingaman, Ranking Member Murkowski, and 
distinguished Members of the Committee. I am pleased to have this 
opportunity to answer any questions you may have on response capability 
and readiness for oil spills originating in foreign waters adjacent to 
the United State that may affect or threaten our Nation and our natural 
resources.

                                SUMMARY

    Protecting the marine environment from oil spills is an important 
Coast Guard mission. Contingency planning, training, and exercises are 
fundamental to our readiness to respond to oil spills. These in turn 
have their foundation in the National Oil and Hazardous Substances 
Pollution Contingency Plan (NCP).
    Contingency planning under the NCP occurs at several levels:

   Local level planning is conducted by an Area Committee, 
        under the guidance of the Coast Guard captain of the port, who 
        is also pre-designated as the Federal On Scene Coordinator for 
        the coastal zone. The area committee brings together federal, 
        state, local, and Tribal officials and responders to identify 
        risks, sensitive areas to be protected, and protection 
        strategies.
   At the regional level, Coast Guard Districts participate 
        with other federal agencies and state officials, through 
        Regional Response Team, on such issues as dispersant use and 
        in-situ burning pre-authorizations;
   And finally at the national level, the Coast Guard serves as 
        the vice chair of the National Response Team, which is 
        comprised of 16 federal agencies with environmental response 
        functions, and ensures national level capabilities are 
        available as needed to support response efforts.

International Partnerships
    Each of these organizational levels also has a role to play in 
developing strategies and cooperative relationships with foreign 
neighbors to enhance preparedness and response to transboundary 
environmental threats. In particular, we have well established 
relationships with Canada, Russia and Mexico to achieve cooperation on:

   potential pollution threats,
   identification of equipment and personnel resources 
        available to respond to actual spill incidents, and
   procedures and protocols for notification, incident 
        management, and coordinated spill response.

    In each of these cases, cooperation in controlling the source of 
the pollution is paramount in addressing the transnational nature of 
the threat. Without controlling the source, you cannot get ahead of the 
problem, so the facilitated movement of essential people and equipment 
to the source is an essential component of these agreements.
    Additionally, these agreements include regular joint planning 
sessions and exercises; they also help sponsor and support bi-lateral 
cooperation in oil spill research and development.
    For example, we completed

   a major bi-lateral exercise with Mexico in San Diego this 
        past August;
   and a joint U.S. Coast Guard/Canadian Coast Guard 
        Environmental Response Summit last month.

    Next month, I plan to host a Russian delegation here in Washington, 
to sign a Bi-lateral Memorandum of Understanding that will expand our 
current cooperative agreements to cover the entire U.S./Russian 
boundary waters.
    And we are also working with Russia, Canada and the six other 
Arctic Nations, through the Arctic Council, to produce an Arctic Wide 
Oil Pollution Preparedness and Response instrument that will build on 
our existing bi-lateral agreements to enhance preparedness throughout 
the Arctic region.

Preparedness in the Northern Caribbean
    In light of the growing interest in oil exploration in the Northern 
Caribbean, we are also working hard to improve regional cooperation. 
The anticipated deepwater drilling in the Cuban EEZ is a salient 
example, although others like the Bahamas are also looking at deepwater 
drilling. By working through the IMO we have garnered support to 
convene a multilateral seminar this December in the Bahamas that will 
invite Caribbean nations, including the Bahamas, Cuba, Mexico, and 
Jamaica, to discuss oil spill prevention and response issues.
    Consequently, we are working extensively with all our domestic 
response partners to update our contingency plans. We are also engaged 
directly with REPSOL, the Spanish-owned company which plans to drill 
the first well in the Cuban offshore starting in January 2012, related 
to their response strategies, resources, and capabilities in support of 
their drilling operations.
    In the event that an oil spill does occur within Cuban waters, the 
Coast Guard would mount an immediate response under the NCP, in 
partnership with other Federal, State and local agencies. And we would 
focus on combating the spill offshore using all viable response 
tactics.

Conclusion
    As was highlighted by the Deepwater Horizon Oil Spill, any spill of 
national significance, regardless of its source, will require unity of 
effort across all levels of government, industry, and the private 
sector.
    Thank you and I look forward to answering any questions you may 
have.

    The Chairman. Thank you both very much.
    Let me start with a few questions.
    I guess an obvious issue that is framed by this plan that 
Repsol has to go ahead and drill in Cuban waters is what is the 
capability of the U.S. or U.S. companies to respond if there 
were a spill in Cuban waters? We were asked to respond, or to 
assist in a response by the Cubans--I don't know if those 
circumstances would ever occur, but if they did are there legal 
impediments to U.S. companies responding, if requested, by the 
Cubans, Mr. Bromwich?
    Mr. Bromwich. Mr. Chairman, my understanding is that there 
are long term licensing agreements that have existed to provide 
such services. That the combination of the Treasury Department 
and the Commerce Department has approved such licenses in the 
past. Would in an expedited way approve applications for 
similar licenses should the need arise.
    So I don't anticipate that that would be a problem. I think 
Commerce and Treasury have been looped into conversations in 
the Administration. They understand very well of this 
anticipated activity. I have a lot of confidence that if the 
existing licenses were not sufficient to enable an adequate 
response and the deployment of all substantial U.S. resources, 
that those licenses would be granted very, very quickly.
    The Chairman. OK. So that covers any problems with private 
companies taking action in Cuban waters, if requested to do so. 
What about with regard to your own department or any other 
executive branch department? If you were called upon or if the 
Coast Guard, Admiral Salerno, were called upon to assist in a 
response to a spill in Cuban waters, are we able to respond or 
not?
    Admiral Salerno. We do not have immediate authority to 
respond to a foreign source, in a foreign EEZ. We would have 
to, at the request of that foreign government through the 
approval of the State Department. If those permissions were 
granted then we could do so.
    We have sent people to respond to spills in other countries 
in the past with the concurrence of the State Department.
    The Chairman. But there, as far as you know, there's no law 
that we've enacted here in the Congress that would in any way 
prevent the State Department from going ahead and authorizing 
you to take that action?
    Admiral Salerno. Sir, I think, Cuba of course is a special 
case. We would have to defer to the inner agency in the State 
Department as to whether we would be authorized actually to go 
to the source off Cuba.
    The Chairman. OK.
    Do you happen to know, Mr. Bromwich, if there is some kind 
of legal impediment that would prevent the State Department 
from authorizing the Coast Guard or your own Department from 
taking whatever action was requested?
    Mr. Bromwich. I'm not aware of any specific legal 
impediments, Senator. But I can't say that I've looked at this 
issue closely. I think other people in the Administration, in 
other departments have including at the State Department and at 
the Justice Department. I have confidence that they're working 
to work through any such obstacles if they see any in current 
law.
    The Chairman. Mr. Bromwich, I understand from your 
testimony that you feel reasonably confident that the drill rig 
that is going to be used by Repsol will be inspected to the 
standards that we would insist upon for any drill rig operating 
on our own Outer Continental Shelf. That the necessary blowout 
prevention equipment and all that sort of thing will also be 
meeting those same standards. Is that a correct interpretation 
of what you said in your testimony?
    Mr. Bromwich. Yes. I want to be clear. We, together with 
the Coast Guard at Repsol's invitation plan to conduct an 
inspection of this rig. It's a brand new semi-submersible rig, 
very advanced, very modern. We're aware of all of the 
characteristics that the rig has and all the characteristics of 
the blowout preventer.
    So because of our relationship with Cuba we're going to be 
doing the inspection outside of Cuban waters. We're going to be 
doing it in a different location. Some of what we would 
normally inspect, we would do on location including certain 
types of tests relating to the BOP.
    So we will do all available and possible inspections 
including of the BOP that one can do when it's not on the site 
where the drilling is going to actually take place. We have 
been very satisfied in our conversations with Repsol that we 
will be given access to all components of the rig. We will be 
able to do whatever we feel is necessary with respect to the 
blowout preventer. They have been extremely cooperative since 
they first came to us last February. We have had many, many 
conversations with them about how we would need to go about the 
business of inspecting the rig.
    The Chairman. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Admiral, I am pleased to hear you discuss the task force 
that came about at the Arctic Council meeting in Greenland with 
the Arctic Nations focused on oil spill response and 
preparedness. I think that that's a good initiative going 
forward in the Arctic. I'm pleased to see that a similar focus 
is being made down in the Caribbean and in other areas.
    As I mentioned in my opening statement we've got some 
neighbors here not only in the North, but to the South. How we 
work cooperatively, I think, is going to be critical as we see 
greater developments within these areas.
    The Chairman was asking about this authorization to respond 
or the permission to respond from State Department. There's an 
article in the Wall Street Journal just this morning indicating 
that the U.S. is going to inspect the Cuban rig. But the 
President of the International Association of Drilling 
Contractors says that they would like to see some form of 
blanket authority from the White House to allow any available 
U.S. ship or equipment to help if there was a spill.
    As I think back to the incident with the Deepwater Horizon 
there was, I think, a fair amount of confusion because there 
was response capability from other Nations but until that 
approval was given and in some cases, was not given, we sat 
without those assets. So is this a situation where the decision 
is made on a case by case, day by day basis? In which case you 
may see delay in your opportunity to respond quickly and 
address the clean up?
    Admiral Salerno. Just to maybe refer back to the Deepwater 
Horizon, I think there are some misconceptions, Senator, about 
the international offers of assistance. Some of the--what was 
offered, quite honestly, was not useful. So there was some 
technical determinations that had to be made as, you know, can 
we actually use what's being offered. So that accounted for 
some of the delays.
    We had equipment from over 60 countries responding to 
Deepwater Horizon. Most of it, quite honestly, was contracted 
directly by the responsible party. Some of it was government to 
government. But there was quite a bit that was there. Although 
people were not fully apprised, I think, of some of the details 
that went into some of those decisions.
    As far as doing the same thing in a foreign EEZ, yes, we do 
not have pre-authorization to do that. We would be very 
dependent on the decisions made by the State Department and the 
Treasury Department regarding the ability of U.S. companies to 
offer their capabilities in Cuba's EEZ.
    Senator Murkowski. But----
    Admiral Salerno. In our discussions with them working with 
the interagency, I'm very confident that people appreciate the 
gravity of the situation. The fact that the clock is ticking 
when an event occurs that close to our shores and that we would 
need very expedient decisionmaking in those cases.
    Senator Murkowski. That's where I would hope that if you've 
got some protocols that have been put in place similar to what 
we're looking at with the Arctic Council, and that task force 
that is keying in on these issues as they relate to the Arctic, 
that you could do something similar down in the South.
    Let me ask you something, Mr. Bromwich, because you've 
mentioned that good relationship with Repsol. They're going to 
allow you to come in and inspect and that all is working well.
    What about with the contractors? Have you had any 
conversations? Have you met with the contractors? Because as we 
learned, it's not just the company whose name happens to be at 
the top of the letterhead. The contractors that are working 
also have a great role to play. What discussions have you had 
with them?
    Mr. Bromwich. This is a somewhat different situation, 
Senator. Most of the key positions on the rig from project 
manager down to drilling supervisor, it's our understanding 
they are going to be Repsol personnel. Obviously the companies, 
the U.S. companies, that normally provide those kinds of 
contracting services like the Halliburtons and the MW Swacos 
and the Schlumberger, because of the embargo are not--do not 
have employees that are going to work on this rig.
    We are in continuing contact with Repsol. We have literally 
asked them and in the last 48 hours to provide us a greater 
level of detail about the contractors that they are going to 
use. Certainly when we get that information we will make 
further inquiries. But our understanding from the beginning is 
that the key people on the rig are going to be Repsol 
personnel. We have not been told that that's changed. So that's 
been our guiding assumption as we move forward.
    Senator Murkowski. Mr. Chairman, I've got some additional 
questions. But if we have a chance for a second round we'll do 
it then.
    The Chairman. OK.
    Senator Manchin.
    Senator Manchin. Thank you, Mr. Chairman.
    You know, Cuba's deep water development of its offshore oil 
resources raises a number of troubling issues, as you can tell 
by the questions you're getting asked. The Cuban government has 
a history of actively working against the interest of the 
United States. This is really why I've heard--have a hard time 
believing that even if there was a desire to work cooperatively 
to create offshore drilling standards and regulations between 
Nations, could we truly trust Cuba to follow them?
    So my question to both of you would be this. How do we 
balance a desire not to provide an economic lifeline to a 
Communist regime but still ensure that we're prepared for any 
oil spills that may happen? If you were a Communist country and 
you're looking and trying to take direction and we're trying to 
intervene. They're going to say, you know, you all didn't do 
too well with your own oil spill. So how are you going to 
oversee and concerned about mine?
    How would you all answer that?
    Mr. Bromwich. Senator, it's a good question. I just want to 
be clear that what we are focused on as a government is 
protecting U.S. interests and not providing a lifeline to 
anyone. This is all about protecting U.S. environmental 
interests and economic interests.
    Senator Manchin. Let me just ask this follow-up question 
then. If something would happen, who would be paying for the 
U.S. Government to go and intervene and clean this up? Are we 
going to get reimbursed?
    Mr. Bromwich. Those are a set of issues that the Justice 
Department has already begun to look at. I'm sure----
    Senator Manchin. It's a Communist regime. We haven't had a 
good relationship with them. How would we expect them to----
    Mr. Bromwich. I think the focus would be on getting 
compensation from the operator, the way the U.S. regulatory 
system works.
    Senator Manchin. Why would the operator pay attention to us 
as the United States trying to control that when they're 
basically working in territorial waters that Cuba controls?
    Mr. Bromwich. Repsol and many of the other countries that 
explore in other countries exclusive economic zones have 
interests in U.S. waters. Repsol has significant interest in 
U.S. waters. I think that's played a significant role by----
    Senator Manchin. So reciprocity----
    Mr. Bromwich. As cooperative----
    Senator Manchin. I got you.
    Mr. Bromwich. As they have been up until now.
    Senator Manchin. Do you think there's enough of a 
retribution or reciprocity that if they would do something that 
would adhere to what we would think they should, we could 
basically sanction something they're doing here.
    Mr. Bromwich. The evidence of our dealings with Repsol 
strongly supports that. Absolutely.
    Senator Manchin. You're saying even though they were 
operating correctly in the waters of the U.S. and they did 
something that you didn't believe was correct in the waters of 
Cuba, you could retaliate with what they're doing even though 
they haven't broken any laws in U.S. waters?
    Mr. Bromwich. I don't want to use the word, retaliate. If 
it turned out that we determined that they weren't operating 
consistently with U.S. standards, that would be something very 
troubling to us.
    Senator Manchin. Does the Justice Department? Would they 
support that? That we couldn't have restitution made because of 
what they were doing in U.S. waters?
    Mr. Bromwich. We review permits and operations of all 
operators that operate in U.S. waters. If we saw, for example, 
that there was a total failure that would adhere to those 
standards and operations in other waters that would cause us to 
re-examine our ability to sanction their continuing activity in 
U.S. waters.
    Senator Manchin. You can understand our concern. It sounds 
like the American taxpayer could get left on the hook again. 
Without using any other term, getting screwed again for holding 
the bill for this if something should happen.
    So I don't know how you work with a Communist regime. 
That's the thing I don't know. Do you try to build other 
relationships or basically go down the path that we've taken?
    Mr. Bromwich. Our focus would be less on dealing with the 
Cuban government on this and more on dealing with the operators 
that we do have some leverage on.
    Senator Manchin. So you think the operators--you think 
basically the whole standard is going to be built around the 
operators agreeing to perform and to this function, basically, 
under the parameters that we've set not mattering--it doesn't 
matter what waters we're dealing in in the world? Whether it be 
the Bahaman waters or Cuban waters or Mexican waters, makes no 
difference?
    Mr. Bromwich. It does make a difference in that we're not 
guaranteed that every operator who operates in foreign waters--
--
    Senator Manchin. Sure.
    Mr. Bromwich. Will adhere to our standards. In fact it's 
our understanding that some of the companies that may be 
drilling in Cuba are not ones that have----
    Senator Manchin. That's my understanding too, is that the 
Cuban government is sponsoring some of this State owned 
drilling. What do you do in that case?
    Mr. Bromwich. We do everything we possibly can to protect 
ourselves.
    Senator Manchin. But they're not drilling in our waters.
    Mr. Bromwich. Right.
    Senator Manchin. So you don't have that same----
    Mr. Bromwich. We don't have the same kind of direct 
regulatory authority.
    Senator Manchin. You had before?
    Mr. Bromwich. That's true.
    Senator Manchin. Admiral, do you have any?
    Admiral Salerno. I would echo what Mr. Bromwich said. We do 
not have direct jurisdiction over a foreign rig operating in a 
foreign EEZ. The questions you raised, Sir, about you know, 
liabilities are very good questions. Our legal staff is working 
with Department of Justice to see what legal avenues might 
exist and for what we would call the responsible party.
    For the response itself, outside of the Cuban EEZ in waters 
that would directly affect the United States, we would access 
our own pollution fund to fund the response as an immediate 
response measure.
    Senator Manchin. I also would have for a second round, Mr. 
Chairman, on some economic conditions.
    The Chairman. OK.
    Senator Manchin. Thank you.
    The Chairman. Senator Corker.
    Senator Corker. Thank you, Mr. Chairman. Thank you for your 
testimony and for what each of you are trying to do with 
limited abilities.
    Let me make sure I understand. I know there were a number 
of questions that were just asked but right now the Justice 
Department, Mr. Bromwich, is developing knowledge as to what 
recourse we would have against the Spanish entity should there 
be a blowout of some type.
    Mr. Bromwich. That's correct.
    Senator Corker. So we really don't know what recourse we 
would have.
    Mr. Bromwich. That's right. The Justice Department, it's my 
understanding is exploring various theories for potential 
recovery against the operator really for an impact of an oil 
spill that had an impact on U.S. waters or shorelines.
    Senator Corker. It seems to me that it would be odd that we 
would not know that at present. I mean it just doesn't seem 
like a new issue. I mean, what did other companies--what did 
other countries have as recourse against us when the Black 
water issue occurred?
    Mr. Bromwich. I don't know. I don't know what research was 
done. We have focused on the research that is done on this 
specific set of issues, that is a spill in foreign waters in 
the Caribbean that might have an impact on U.S. waters and the 
U.S. coastline.
    I'm not in the Justice Department, so----
    Senator Corker. Yes. No, I understand that.
    Mr. Bromwich. I'm aware that they're working on it and 
developing potential theories of recovery. I'm not 100 percent 
sure how far along they are or whether they've reached a final 
conclusion.
    Senator Corker. OK.
    The inspection issue. I know that again you're limited 
because of our relationship with Cuba and the fact that it's in 
their international waters, but--or in their own waters. But it 
does seem odd that we seem awfully confident about the 
inspections when I would assume a big part of the inspections 
that we have on our own rigs are after it's installed and just 
ensuring that they're checking pressures and doing all the 
things that need to occur. Yet we feel so confident that 
Repsol, without any inspections, is going to be operating in a 
perfectly pure way.
    It's just odd that we would be so confident of that.
    Mr. Bromwich. I don't want to overstate our level of 
confidence.
    We're given confidence by the openness that Repsol has 
shown with us, their willingness to allow us to inspect their 
rig. It's not optimal, Senator. There's no question that we 
could do it better and a more full bodied inspection once the 
rig is onsite. But this is a lot better than nothing in our 
judgment and we think is the best way to protect U.S. interests 
as best we can given the limitations.
    Senator Corker. Let me ask you a question. Since well this 
is obviously creating quite a paradox in U.S. policy. I mean we 
have areas where we can inspect where we're not exploring. That 
there are areas, you know, right off our shore that we cannot 
inspect. Yet we feel semi-confident within our own abilities.
    Is this, do you think, shaping policy at all within the 
Administration to say, hey, look, this is kind of a ridiculous 
scenario? I mean, we have things happening right off our shore 
where we cannot inspect. Wouldn't it make sense to go ahead and 
open up areas that we can inspect and go ahead and make use of, 
you know, American energy that exists there since we have all 
those type of inspection mechanisms in place.
    Do you think this is helping the Administration maybe 
evolve on their--on energy policy notions?
    Mr. Bromwich. We're doing that, Senator. As you probably 
know we're going forward with a lease sale in the Western Gulf 
of Mexico in December, in the middle of December. We're going 
forward with a major consolidated lease sale in the Central 
Gulf of Mexico in May or June of next year. There's going to be 
a new 5 year plan that will cover the years 2012 to 2017.
    So this Administration is in fact, moving forward with a 
safe and balanced energy production offshore, particularly in 
the Gulf of Mexico, but also looking at the possibility of the 
Arctic as well. So I think the Administration is moving 
forward.
    Senator Corker. Good.
    Let me ask you, you know, the Ranking Member mentioned 
something about the fact that the more we have in the way of 
resources ourselves involved in exploration, the better we 
could respond to something that might happen in waters that are 
nearby. Is that a sensible notion that she laid out? That in 
fact, the more we're producing and exploring off our own 
intercontinental shelf, the better we could actually respond to 
something that's happening in other country's waters.
    Mr. Bromwich. I think Senator Murkowski is absolutely right 
in stating that. I think we do have huge advantages based on 
the number of decades that we've been involved in this business 
of exploring and producing offshore. That doesn't mean that we 
won't have blind spots as we clearly did prior to Deepwater 
Horizon.
    We didn't have Sub C containment capabilities which Senator 
Murkowski mentioned in her opening statement. That was a huge 
gap in our response arsenal. Which unfortunately it took 
Deepwater Horizon to make everyone in industry and government 
sit up and say, yeah, we need this. Safe and responsible 
drilling in deep water can't go forward until we have it.
    Senator Corker. Thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Let me just remind folks we have a second panel of 3 
witnesses. But we'll go ahead with a second round of questions 
on this panel if members have questions.
    Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman. I will try not 
to use my full 5 minutes.
    Just following up on Senator Corker's comments and the 
statement that I made about developing our own resources to not 
only assist others but really to build out that source of 
expertise.
    Admiral, are you aware of how many ice breakers the 
Russians and the Canadians operate within their fleets right 
now?
    Admiral Salerno. Yes, Senator. I actually have some 
statistics on that right here.
    The Russians have 8 heavy ice breakers, 12 medium ice 
breakers and 13 light ice breakers.
    The Canadians have 2 medium ice breakers and 4 light ice 
breakers.
    Senator Murkowski. Of course the trick question then is how 
many does the United States have? What is our ice breaking 
capacity as a Nation?
    Admiral Salerno. We have one operating ice breaker which is 
a medium ice breaker, the Coast Guard Cutter Healy. We have 2 
heavy ice breakers, the Polar Sea and Polar Star.
    The Polar Sea is about to be placed in inactive status.
    Polar Star is being refurbished. We expect to have her 
operational in 2013.
    Both of those Polars are at the end of their expected 
service life. They're over 30 years old. So the Polar Star, 
once refurbished, will probably produce about another 7 to 10 
years of service.
    That begs the question, you know, what will follow on? That 
is the subject of ongoing analysis regarding the Coast Guard's 
needs in the Arctic, the Nation's needs in the Arctic for a 
permanent presence, particularly given the increase in human 
activity in that region.
    Senator Murkowski. I have suggested many, many times that 
the current status of our ice breaking capacity as an Arctic 
Nation just simply is unacceptable. I think that those in the 
Coast Guard whose responsibility it is to have the oversight of 
those waters would agree.
    Within the studies that are coming up, is the Coast Guard 
looking at the option then of perhaps leasing ice breakers 
rather than dealing with the very major budget challenges that 
we face with funding a new Polar Class ice breaker?
    Admiral Salerno. Yes, Senator, that is a consideration. 
There is an ongoing independent business case analysis looking 
at the Coast Guard's needs in the Arctic and how best to 
perform our missions. So leasing----
    Senator Murkowski. I understood--I don't mean to interrupt. 
But I understood that that business case study was due out on 
the 15th of October. Do you have any idea when we might expect 
to see that?
    Admiral Salerno. It's still undergoing review, Senator. I 
can get back to you on----
    Senator Murkowski. OK. I'd appreciate it because we're 
anxious to see it, as you can imagine. Thank you.
    Admiral Salerno. Yes, Senator.
    Senator Murkowski. Mr. Bromwich, on the Arctic side, as you 
have mentioned, we are underway. Your Department is clearly 
underway in the process of the review of the Chukchi 
exploration plan. You committed to starting work on this when 
the record of decision was filed on October 3rd. Previous 
versions of the plan have won your agency's approval.
    Where are we in terms of moving this along? What can we 
anticipate? Will Shell be able to proceed in time for the 2012 
exploration season? Where are we with that?
    Mr. Bromwich. We're working hard on it, Senator. As I think 
you know, we've had many, many contacts with Shell. The 
President by Executive Order put together an interagency 
working group to try to make more efficient the permitting 
process and the review process. It's under the supervision of 
Deputy----
    Senator Murkowski. Can I ask you about that?
    Mr. Bromwich. Sure.
    Senator Murkowski. Because I understand that the spill 
response plan is going to be reviewed separately from the 
exploration plan. That the feedback is being solicited from 
this interagency group. So is this actually helping it? The 
fact that you've got 2 separate tracks could lead one to assume 
that it might take longer.
    Are we on track for both of those plans?
    Mr. Bromwich. I think we're certainly on track to do an 
effective, focused, efficient review where all of the agencies 
get to look at the contingency plan, the spill response plan in 
a timely way. That's really been one of the main focuses of the 
interagency group. I'm not part of that, but my understanding 
is that it's proceeding quite well.
    Senator Murkowski. Again, I would ask the question whether 
you believe that it will be completed in time to allow Shell to 
proceed with the 2012 season.
    Mr. Bromwich. Certainly do everything we can to do the full 
review so that, if it's approved, they would be able to do 
that.
    Senator Murkowski. Admiral, did you want to chime in there?
    Admiral Salerno. Yes, Senator. We have been in discussions 
with Shell and with BSEE on the plans. It appears that Shell 
has been doing its homework as to what is needed there.
    As you know the logistical challenges are enormous. Most of 
what needs to be provided will be sea based. We have provided 
some feedback to BSEE which has the approval for the offshore 
spill response plan on some areas we think need to be 
bolstered. But at this point I do not think they'll be 
unachievable by Shell.
    Senator Murkowski. You believe that they will not be?
    Admiral Salerno. No, I don't think they're unachievable. 
Two negatives.
    Senator Murkowski. OK.
    Admiral Salerno. I think they are achievable.
    Senator Murkowski. I thank you.
    Admiral Salerno. Are achievable.
    Senator Murkowski. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    I know Senator Manchin has additional questions and maybe 
Senator Corker does. But Senator Franken has come in. Did you 
have questions for this first panel?
    Senator Franken. I do.
    The Chairman. Please go ahead.
    Senator Franken. Thank you, Mr. Chairman.
    This is for Vice Admiral. Thank you for your testimony.
    The President's Spill Commission report noted that there 
are a lot of challenges in responding to oil spills in Arctic 
waters. The waters are so icy so the oil wouldn't break down as 
quickly. We have fewer bases from which to stage cleanup 
effort. As the Ranking Member was mentioning, we really lack 
sufficient ice class vessels capable of responding to a spill.
    What changes have the Coast Guard made since the release of 
the Spill Commission report? Do you think that the Coast Guard 
is ready to deal? I think you said that it was not 
unachievable. But what changes have been made?
    Admiral Salerno. Senator, a lot of the response capability 
will be placed on Shell. They will have the equipment, the 
vessels, the recovery vessels, on scene to respond to a spill. 
The Coast Guard will have its obligation to oversee and direct. 
We've been in discussions with our regional commander in the 
17th Coast Guard District as to what capabilities we can 
provide during the drilling season.
    It will be very seasonal. They won't be able to drill year 
round. So we are looking at buoy tenders which have minimal ice 
capability to operate in the region during the drilling.
    We will rely heavily on Shell for other capabilities such 
as hangers, refueling for helicopters, aircraft, command and 
control personnel. The region is very sparse in those 
capabilities. Even hotel capabilities are very, very limited.
    There were, if you compare Deepwater Horizon with the 
46,000 responders we would exhaust the hotel capacity on the 
North Slope with probably just a few hundred. So having people 
housed at sea would be a major consideration. So we're placing 
a lot of responsibility on the driller to--the operating 
company, to provide that capability so that we can exercise our 
oversight and management responsibilities should something 
occur.
    Senator Franken. In your opinion how did that work in 
Deepwater Horizon?
    Admiral Salerno. The overall response effort, in my 
opinion, worked very well. Now that's separate and distinct 
from how it played out in the media. But the response construct 
where under our laws the spiller is responsible for mounting an 
effective response. They did that with the direction of the 
Federal Government to make sure that they brought all the 
equipment to bear.
    We do not have the equipment in our Federal inventory to 
mount a response of that magnitude. It is predicated on the 
industry having that capability and performing to our 
satisfaction. So overall, sir, I would say it actually worked 
quite well.
    Senator Franken. You thought the response at Deepwater 
Horizon worked quite well?
    Admiral Salerno. Yes, I did. Now given the fact that there 
were some obvious gaps at the beginning, we did not have, 
nobody had, Sub C well containment capability to operate at 
that depth. This was almost like a moon shot in terms of the 
technology that had to be developed in the midst of crisis. But 
that was done. Now we are better prepared for anything of that 
nature.
    Organizationally, yes, the proper elements did come 
together. Now, was it perfect? No.
    One of the key lessons we learned is, you know, although 
we'd always planned, in conjunction with State officials, we'd 
learned that we really need to drive that down to the county 
level and the municipality level. So where there were some 
chaffing in the response I think that was really the crux of 
it.
    We have now gone back and re-looked at all of our 
contingency plans around the country to make sure that we are 
including the local levels, the county levels, in that 
planning, up front, identifying the sensitive areas, getting 
their input and making them part of the overall decision 
process in a natural response.
    Senator Franken. But have far fewer resources up in the 
North Slope than you would in the Gulf.
    Admiral Salerno. That is correct. That is correct.
    Senator Franken. So as well as it worked in the Gulf how 
many barrels of oil were spilled or gallons of oil were spilled 
in the Gulf from the Deepwater Horizon?
    Admiral Salerno. I don't have that figure at my fingertips, 
sir. But I can get that for you.
    Mr. Bromwich. It's 4.9 million gallons.
    Senator Franken. 4.9 million gallons. But you say that 
you're capability in Alaska is not anywhere near what you had.
    Admiral Salerno. It is not. It's the tyranny of time and 
distance. Our closest air station is probably 1,200 miles from 
the location in the Chukchi Sea where the drilling will take 
place and maybe about 1,500 miles from the location in the 
Beaufort Sea.
    So that's a considerable distance to operate from. We 
really would need some type of a forward operating location to 
be effective. Same thing with ships, a ship, and the closest 
port for a ship to operate from would be Dutch Harbor and 
that's still a considerable distance from the location.
    So time and distance is a significant problem operating in 
that area.
    Senator Franken. OK. Thank you. Thank you, Mr. Chairman.
    Mr. Bromwich. Senator, if I could correct it. I said 4.9 
million gallons. It's 4.9 million barrels. My mistake, I 
apologize.
    Senator Franken. Thank you.
    The Chairman. Thank you. In order to stick with our rule of 
trying to go back and forth, let me see if Senator Corker had 
any additional questions.
    Senator Corker. Yes, sir. I'll try to be brief.
    Mr.--Admiral, if you would? There was a lot of confusion 
the last time something occurred over the Jones Act and whether 
it inhibited our ability to respond. Just since we're talking 
about this issue now, I wondered if you might make any comments 
regarding that.
    Admiral Salerno. Sir, there was a lot of discussion about 
that. The reality is it did not affect the ability of any 
vessel to participate in the response. There were foreign 
vessels involved.
    The Jones Act, as you know, limits movement of cargo, even 
valueless cargo between U.S. ports by a foreign vessel. That 
was really not an issue in this response. If there were a need 
for that there are provisions for waivers.
    But there was actually sufficient number of U.S. flag 
vessels to provide the needed services and there were also, as 
mentioned, quite a few foreign flag vessels operating offshore. 
There was no violation of the Jones Act.
    Senator Corker. OK. Then second and briefly, I have, 
personally, I have a lot of concerns about the Law of the Sea 
Treaty which, you know, hasn't become part of the U.S. The U.S. 
is not a part of that.
    But is there anything regarding anything we're discussing 
today where you would feel most people who do what you do 
support the treaty. I wonder if there's anything regarding any 
of the subject matter today where you feel like the Law of the 
Sea Treaty would be of benefit to you.
    Admiral Salerno. There are provisions in the Law of the Sea 
Treaty which talk about cooperation between nations in 
environmental issues. So there is application there, sir.
    Senator Corker. Like what?
    Admiral Salerno. Regarding cooperation on response for oil 
spills.
    Senator Corker. So like what? I'm not understanding what 
you're saying. So are you saying between us and Cuba or us and 
the Bahamas?
    Admiral Salerno. Between any 2 countries if there's 
provisions. I would have to get the text for you, Senator. It's 
been quite a while since I've looked at that particular aspect 
of it.
    But response and cooperation between nations for an oil 
spill that affects both or originates in one that affects 
another.
    Senator Corker. Again we have a lot of concerns. It's just 
such a confusing document. But I would appreciate it if you 
would respond as to how in this particular area there's 
something that might be of benefit to our country. I thank you 
both for you testimony.
    Admiral Salerno. Thank you, sir.
    The Chairman. Senator Manchin.
    Senator Manchin. Thank you, Mr. Chairman.
    Knowing firsthand the disasters of an oils spill like we 
have with the BP in the Gulf and now that you've made very 
clear, unless it's something--some company such as reputable 
Repsol, who does work in America. I go back to Cuba. If Cuba's 
interest is developing their own drilling, which we have no 
input whatsoever.
    With that being said, can either one of you tell me if this 
Administration is looking at any, lifting any sanctions that 
might give us a better opportunity to negotiate the oversight 
and having standards that Cuba would adhere to other than just 
the reprisal of force? I don't know how you intend to. I'm 
having a hard time understanding how you intend to have Cuba 
accept our standards without any retribution on them. They have 
no stake in this except to explore their own.
    Can either one of you tell me if we have anything in place?
    Mr. Bromwich. We can't obviously direct Cuba to impose our 
standards. So our, really exclusive vehicle, is through the 
operator.
    Senator Manchin. No, the question is, is the United States 
looking at modifying any sanctions that we might have against 
Cuba in order for a return for them to have to set these 
standards or adhere to these standards?
    Mr. Bromwich. I'm not aware of any such discussions. The 
interagency group that Admiral Salerno's agency and mine have 
been involved with----
    Senator Manchin. So you're totally----
    Mr. Bromwich. Have focused on the specific issues----
    Senator Manchin. So we are totally depending upon a company 
that does work in America for you to have a hammer on them to 
do it right in Cuban waters?
    Mr. Bromwich. That's our leverage, yes.
    Senator Manchin. Knowing that some exploration will be done 
by Cuban companies that have no interest in American waters, 
correct?
    Mr. Bromwich. No. Not Cuban companies. There are other----
    Senator Manchin. Other countries that do not have any 
interest in American waters. Is that----
    Mr. Bromwich. It's our understanding that----
    Senator Manchin. That's fair. That's a fair question.
    Mr. Bromwich. Yes, it is.
    Senator Manchin. OK. You have no oversight whatsoever. You 
have no hammer. You have no leverage. Correct?
    Mr. Bromwich. Correct.
    Senator Manchin. We're at the mercy of the Cuban government 
to make sure they do it right?
    Mr. Bromwich. They have oversight power. We don't.
    Senator Manchin. OK. We have no hammer.
    Mr. Bromwich. Correct.
    Senator Manchin. Any you're telling me you don't know if 
anyone's talking about using a bargaining of some sanctions or 
lifting sanctions that might make it better for us 
environmentally to have input?
    Mr. Bromwich. I don't know whether those conversations are 
taking place.
    Senator Manchin. Do you believe that they should? As an 
official of the government and as the Admiral of the most 
powerful Department of Defense in the world, what do you 
believe?
    Admiral Salerno. Sir, we're actually Homeland Security. But 
sir, I have no----
    Senator Manchin. You're very powerful.
    [Laughter.]
    Admiral Salerno. I have no knowledge of discussions of that 
nature.
    Senator Manchin. It's never got to your level. Did you even 
talked about how you would have more input to protect, 
environmentally, the American shoreline, the American waters?
    Admiral Salerno. Actually, sir, I think that would--that 
discussion would take place way above my level.
    Mr. Bromwich. I think there is--we talked, I talked in my 
prepared testimony in my oral statement about work that we're 
doing with other countries in the Caribbean including Mexico. 
So we certainly think and hope that the continuing multi-
lateral engagement would have the kind of impact and effect 
that you're----
    Senator Manchin. I think the most important thing I've got 
out of this whole discussion is that basically the only 
leverage we have is companies that are doing business in 
American waters. That's the only leverage we have.
    Mr. Bromwich. That's the direct leverage that we have.
    Senator Manchin. That's it. But other than that there is--
--
    Mr. Bromwich. There may also be leverage that we can 
exercise through our multi-lateral partners like----
    Senator Manchin. You're going to use economic sanctions, I 
would assume against other companies that might go on behest of 
the Cuban government. You're thinking well maybe I can leverage 
that and go back and make them do it right. But you really have 
no ties.
    If they're not in our waters, we have no oversight or 
leverage whatsoever. I think that's fair.
    Mr. Bromwich. I think that's fair.
    Senator Manchin. We've got that. OK.
    So we know that we are at a tremendous danger for the 
environment of the United States coastline and waters unless 
there's other reasons for someone. If a Communist country, such 
as Cuba, to have a more vested interest other than just trying 
to please the American government which they haven't done in 
the last 50 years.
    Mr. Bromwich. I don't think either of us is denying that 
there's a risk.
    Senator Manchin. OK. Thank you, sir.
    The Chairman. Senator Murkowski, do you have anything more?
    Senator Murkowski. I do not, Mr. Chairman.
    The Chairman. OK. Why don't we dismiss this panel? Thank 
you both very much for your excellent testimony. We will go to 
the second panel.
    The second panel is Mr. Jorge Pinon, R. Pinon, who is the 
Visiting Research Fellow with the Latin American and Caribbean 
Center at the Cuban Research Institute at Florida International 
University in Miami.
    Mr. Paul A. Schuler, who is President and CEO of the Clean 
Caribbean and Americas in Fort Lauderdale.
    Dr. Mark D. Myers, who is Vice Chancellor for Research at 
the University of Alaska in Fairbanks.
    We thank you all very much for being here. Why don't we use 
the same general rules with you. We will include any written 
statement that you have prepared as in full and in the record. 
But if you could take 5 or 6 minutes each and give us the main 
points you think we ought to try to understand, that would be 
very much appreciated.
    Mr. Pinon, why don't you start, please?

STATEMENT OF JORGE R. PINON, VISITING RESEARCH FELLOW, FLORIDA 
INTERNATIONAL UNIVERSITY, LATIN AMERICAN AND CARIBBEAN CENTER, 
              CUBAN RESEARCH INSTITUTE, MIAMI, FL

    Mr. Pinon. Thank you, Mr. Chairman and members of the 
Committee for the privilege and honor to be here today 
testifying and sharing with you what I consider to be an issue 
of national security. I'm not only with the University, Florida 
International University, but I'm also the former President of 
Amoco Oil Mexico and the President of Amoco Oil Latin America.
    It's important that for the United States, Mexico and Cuba, 
the Gulf of Mexico represents the greatest potential source of 
significant, new discoveries of oil and natural gas in the 
years ahead. Underscoring how critical and strategic the region 
is for the respective energy security interest. These resources 
will come from increasingly challenging geologic and 
environmental settings in deep and ultra deep waters, at depths 
below the sea floor not thought possible a few decades ago.
    Development of technology to find and to produce oil and 
natural gas in these challenging settings has made these 
resources available. However, as the risks associated with 
pursuing the development have raised concerns for the 
environment that challenge industry and regulatory agencies to 
ensure that they're prepared to manage their development 
effectively and safely.
    There are 4 key elements of success for the development of 
hydrocarbon resources.
    Capital.
    Technology.
    Operational Knowhow
    Last and most important and what I believe is the subject 
matter of this hearing, Stewardship. Stewardship is the 
principle by which we operate not only for the economic benefit 
of the enterprise, but also the commitment to meet human needs 
while preserving the environment. These are the regulations, 
standards and behaviors, whose objective is the safe and 
environmentally responsible development of the resources.
    Mexico, Cuba and the Bahamas are in the process of 
implementing the most advanced and probably up to date drilling 
regulations and standards. But do they have the resources, 
capabilities, assets, personnel and experience to enforce them? 
Can these countries regulatory agencies appropriate police the 
operators? These are issues for debate.
    What are the roles and responsibilities of the oil 
companies operating in the region relative to safety and oil 
spill prevention and clean up? Do the operating oil companies 
who are going to undertake the drilling and physical 
development of the resources have the values, culture, and 
economic interests to follow the set rules, standards, 
regulations of the host country?
    Said here is only one, publicly traded, non-state oil 
company operating in the Gulf of Mexico region outside of the 
United States. That is Spain's Repsol. All others are State 
owned National oil companies over whom our sphere of influence 
is limited or non-existent. I have not heard one single comment 
about Petronas and Russia's Gazprom, who are going to drill the 
second well after Repsol. What about them?
    Then there is the issue of trans-boundary compensation for 
oil pollution damages, the role of international oil company 
liability conventions, the cost of recovery issues when one 
country is providing most of the incident's spill response and 
clean-up assets and resources in another country. Just the 
issue of identifying ``responsible party and/or parties'' could 
result in complex legal disputes in international law.
    Are the channels of communication in place to share lessons 
learned and best practices for the benefit and protection of 
our common economic and environmental interests? Let's think 
about prevention. Not only with other regulatory agencies, but 
most importantly with the private and State oil companies which 
are going to execute the projects. These are questions that 
need to be answered.
    While respecting each country's sovereignty we must put 
aside cultural, political and nationalistic differences, not an 
easy task, and work together toward a set of common standards 
and regulations, as well as, regional emergency planning and 
response cooperation agreements.
    As a result of the 1979 Pemex Ixtoc well blow-out, which 
impacted the South Texas coastline, the United States and 
Mexico signed in 1980 MEXUS Plan, as it was discussed here 
previously.
    A similar environmental agreement exists between the United 
States and Canada. The 1986 Canada-United States Joint Marine 
Pollution Contingency Plan covering the shared maritime borders 
of the Great Lakes, Atlantic/Pacific coast and the Beaufort 
Sea.
    Today the Deepwater Horizon incident and the resulting 
catastrophic oil spill demonstrates the urgency in developing a 
similar policy of environmental cooperation between the United 
States, Mexico, Cuba and the Bahamas, as these countries embark 
in developing their respective deep water, hydrocarbon 
resources.
    The consequences from an accidental oil spill demands 
proactive joint planning by all 3 countries and the United 
States in order to minimize or avoid such a disaster. This 
planning should be done in the spirit of cooperation and not 
confrontation.
    These risks and challenges are what give purpose to what 
Dr. Lee Hunt, President of the International Association of 
Drilling Contractors, calls a ``One Gulf'' policy of working 
together for the development of collective standards, 
regulations and solutions to the risks associated with deep 
water drilling.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Pinon follows:]

Prepared Statement of Jorge R. Pinon, Visiting Research Fellow, Florida 
 International University, Latin American and Caribbean Center, Cuban 
                     Research Institute, Miami, FL

    Thank you Mr. Chairman and members of the committee, for the 
privilege and honor to be here today testifying and sharing with you 
what I consider to be an issue of national security.
    My name is Jorge Pinon, I am a Visiting Research Fellow with 
Florida International University, Latin American and Caribbean Center's 
Cuban Research Institute. I am also the former president of Amoco Oil 
de Mexico and president of Amoco Oil Latin America.
    For the United States, Mexico, and Cuba, the Gulf of Mexico 
represents the greatest potential source of significant new discoveries 
of oil and natural gas in the years ahead; underscoring how critical 
and strategic the region is for their respective energy security 
interests.
    These resources will come from increasingly challenging geologic 
and environmental settings in deep and ultra-deep water and at depths 
below the sea floor not thought possible a few decades ago.
    The development of technology to find and to produce oil and 
natural gas in these challenging settings has made these resources 
available, however as the risks associated with pursuing their 
development have raised concerns for the environment that challenge 
industry and regulatory agencies to ensure they are prepared to manage 
their development effectively and safely. (Groat 2011)
    There are four key elements of success for the development of 
hydrocarbon resources; capital, technology, operational know-how, and 
last and most important, and what I believe is the subject matter of 
this hearing, stewardship.
    Stewardship is the principle by which we operate not only for the 
economic benefit of the enterprise, but also the commitment to meet 
human needs while preserving the environment. These are the 
regulations, standards, and behaviors whose objective is the safe and 
environmentally responsible development of the resources.
    Mexico, Cuba and The Bahamas are in the process of implementing the 
most advanced and up to date drilling regulations and standards; but do 
they have the resources, capabilities, assets, personnel, and 
experience to enforce them? Can these countries' regulatory agencies 
appropriately police the operators? These are issues for debate.
    What are the roles and responsibilities of the oil companies 
operating in the region relatively to safety and oil spill prevention 
and clean up? Do the operating oil companies who are going to undertake 
the drilling and physical development of the resources have the values, 
culture, and economic interests to follow the set rules, standards and 
regulations of the host country?
    There is only one, publicly traded, non-state oil company operating 
in the Gulf of Mexico region outside of the United States and that is 
Spain's Repsol; all others are state owned national oil companies over 
whom our sphere of influence is limited or non-existent, and over which 
the question of sovereign immunity is to be considered.
    And then there is the issue of transboundary compensation for oil 
pollution damages, the role of international oil pollution liability 
conventions, cost recovery issues when one country is providing most of 
the incident's spill response and clean-up assets and resources. Just 
the issue of identifying ``responsible party or parties'' could result 
in complex legal disputes in international law.
    Are the channels of communication in place to share lessons learned 
and best practices for the benefit and protection of our common 
economic and environmental interests? Not only with other regulatory 
agencies, but most importantly with the private and state oil companies 
which are going to execute the projects. These are questions that need 
to be answered.
    While respecting each country's sovereignty we must put aside 
cultural, political, and nationalistic differences--not an easy task--
and work together toward a set of common standards and regulations, as 
well as regional emergency planning and response cooperation 
agreements.
    As a result of the 1979 Pemex Ixtoc well blow-out, which impacted 
the South Texas coast line, the United States and Mexico signed in 1980 
the MEXUS Plan. This agreement of cooperation set protocols to follow 
in case of an oil spill which would pose a threat to the waters of both 
countries.
    A similar environmental agreement exists between the United States 
and Canada; the 1986 Canada-United States Joint Marine Pollution 
Contingency Plan, covering the shared maritime borders along the Great 
Lakes, Atlantic and Pacific coasts, and the Beaufort Sea.
    Today, the Deepwater Horizon incident and the resulting 
catastrophic oil spill, demonstrates the urgency in developing a 
similar policy of environmental cooperation between the United States, 
Mexico, Cuba and The Bahamas; as these countries embark in developing 
their respective deepwater hydrocarbon resources.
    The consequences from an accidental oil spill demands proactive 
joint planning by all three countries and the United States in order to 
minimize or avoid such a disaster. This planning should be done in a 
spirit of cooperation, and not confrontation.
    These risks and challenges are what give purpose to what Dr. Lee 
Hunt, president of the International Association of Drilling 
Contractors calls a ``One Gulf'' policy of working together for the 
development of collective standards, regulations, and solutions to the 
risks associated with deepwater drilling.
    Thank you Mr. Chairman.

[This testimony reflects strictly the personal views of the author and 
in no way an expression of his views in his official capacity with 
Florida International University Latin American and Caribbean Center's 
Cuban Research Institute.]

    The Chairman. Thank you very much.
    Mr. Schuler.

 STATEMENT OF PAUL SCHULER, PRESIDENT & CEO, CLEAN CARIBBEAN & 
                 AMERICAS, FORT LAUDERDALE, FL

    Mr. Schuler. Yes. Good morning, Mr. Chairman and Committee 
members. My name is Paul Schuler. I am President and CEO of 
Clean Caribbean and Americas.
    CCA is an international oil spill response cooperative with 
geographic responsibility for the Caribbean basin and the 
Americas. I've been President of CCA for 20 years following a 
14 year U.S. Navy career. I'm here today to discuss how we are 
planning for oil spill response drilling in Cuba.
    CCA covers 37 countries and territories in the hemisphere. 
We're a non-profit organization that is funded by our 40 oil 
company members. Our mission is oil spill preparedness and 
response and over the years membership dues have capitalized a 
multi-million dollar stockpile of air mobile response 
equipment. Repsol has been a member of CCA for many years. 
Petronas, who will be the next company to drill in Cuba, is in 
the process of completing membership.
    CCA operates under an internationally accepted system of 
response developed decades ago by the U.N. Environment Program 
and International Maritime Organization. The system is called 
Tiered Response. Is recognized in the U.S. and is the 
foundation for preparedness and response around the world.
    Accordingly companies involved the petroleum industry are 
required to have a capability to respond to oil spills that 
might occur from the entire range of their operations with 
escalating capability and resources depending on the severity 
of the incident.
    At Tier 1 capability with immediately available response 
resources for small operational spills should be available 
onsite.
    Tier 2 capability escalates with additional equipment 
nearby or in cooperation with other companies or government 
resources.
    CCA is a Tier 3 response organization. We have air mobile 
equipment that can be rapidly mobilized to provide assistance 
in incidents that exceed local or National capability. We work 
very closely with other Tier 3 response organizations including 
Oil Spill Response Limited in the UK and with the Marine Spill 
Response Corporation in the U.S. MSRC is the world's largest 
and most capable response cooperative and led the response in 
the Gulf of Mexico last year for BP.
    In the past 20 years CCA has responded to a number of 
spills in the Caribbean, Latin America and North America. We 
have been involved in Cuba since 2001 when we first applied and 
received licenses from the Department of Treasury and 
Department of Commerce to travel and to export our equipment to 
Cuba. This was in response to drilling that took place by 
Repsol and Petronas.
    CCA staff, including myself, have traveled to Cuba for 
contingency planning, training, drills and exercises with these 
companies. With the new round of drilling coming up we have 
recently been back to Cuba to work with Repsol and Petronas. 
CCA is jointly developing Repsol's oil spill contingency plan 
with our sister cooperative Oil Spill Response Limited in the 
UK. OSRL also has a large stockpile of air mobile equipment and 
they have no limitations on sending equipment and personnel to 
Cuba.
    Repsol's contingency plan is being developed and resources 
are being committed consistent with the international model of 
tiered response. The drilling rig has Tier 1 equipment onboard 
to provide initial, rapid response onsite. Seven containers of 
equipment are en route to Cuba from OSRL to be placed in the 
shore base at the Port of Mariel for Tier 2 reinforcement. The 
contingency plan calls for rapid mobilization of CCA and OSRL 
for Tier 3 support, if needed.
    I'll just divert from the text and say we do not have plans 
right now for bringing in the U.S. capability. We can discuss 
that in Q and A.
    I do not believe the concern about Cuba is really about 
small Tier 1 and Tier 2 incidents. It's about the blowout 
scenario that we experienced last year in the Gulf of Mexico. 
CCA was intensely involved in that response. Although we 
provided conventional equipment such as skimmers and 
containment boom, our primary focus was on aerial application 
of dispersants flying our spray system in a chartered C-130 
Hercules aircraft.
    Under the authority of the U.S. Coast Guard as Federal on 
scene commander, CCA equipment and contractors sprayed almost 
400,000 gallons or more than one-third of the dispersant 
applied by aircraft. We are intensely proud of the role we 
played. We believe that science supports the judicious use of 
dispersants to minimize the impact of oil spills.
    I have personally been involved in research and published 
papers on the topic of net environmental benefit analysis of 
dispersed verses non-dispersed oil in tropical ecosystems. I 
bring this up because one of the many advantages of the 
dispersant option is the speed of mobilization and the quantity 
of spilled oil that can be treated with dispersants. Due to the 
currents in the Florida straits and the difficulty of 
conventional recovery operations dispersants will likely play a 
major role at least in the initial phases of a spill response 
until other resources can be mobilized.
    Spilled oil knows no political boundaries. So what we do in 
Cuba can very well determine the impact of spilled oil in 
Florida and the Bahamas. In a deep water blowout scenario in 
Cuba, CCA will provide the initial Tier 3 response resources 
from our organic assets.
    We can very rapidly mobilize our equipment to integrate 
with the ongoing Tier 1 and Tier 2 response effort in Cuba. 
OSRL will simultaneously activate bringing in additional 
resources. We will provide and sustain the initial response and 
take measures to combat the spill near its source. However, for 
an incident on the scale of the Gulf of Mexico spill we would 
expect the mobilization or cascading of significant other 
resources as the response further escalates and transitions to 
the project phase.
    I regularly meet with government officials in the Caribbean 
and Latin America to advise on national contingency planning 
and especially on establishing mechanisms for rapid and smooth 
movement of response resources through customs and immigration. 
Cuba presents a unique challenge. On this coming Thursday, CCA 
will participate in a table top exercise of the U.S. Coast 
Guard's International Oil Drilling Response Plan. We will 
simulate the initial responses I described.
    What remains to be seen is how the response escalates 
beyond our involvement. Nearby in the Gulf of Mexico is perhaps 
the largest concentration of oil spill capability in the world. 
Hopefully we'll never need to execute our plan. But if we do we 
need this capability. I therefore encourage some form of 
loosening up of the process so more U.S. companies, contractors 
and resources can be made available, if needed.
    Thank you for your attention and the honor and privilege of 
addressing you.
    [The prepared statement of Mr. Schuler follows:]

Prepared Statement of Paul Schuler, President & CEO, Clean Caribbean & 
                     Americas, Fort Lauderdale, FL

    Good morning, Mr. Chairman and Committee members. My name is Paul 
Schuler and I am President and CEO of Clean Caribbean & Americas (CCA). 
CCA is an international oil spill response cooperative with a 
geographic responsibility for the Caribbean basin and the Americas. I 
have been President of CCA for 20 years, following a 14 year career in 
the US Navy. I am here today to discuss how we are planning for oil 
spill response for drilling in Cuba. CCA covers 37 countries and 
territories in this hemisphere. We are a non-profit organization that 
that is funded by our 40 oil company members. Our mission is Oil Spill 
Preparedness and Response, and over the years, membership dues have 
capitalized a multi-million dollar stockpile of air mobile response 
equipment. Repsol has been a member of CCA for many years, and 
Petronas, who will be the next company to drill in Cuba, is in the 
process of completing its membership in CCA.
    CCA operates under an internationally accepted system of response 
developed decades ago by the UN Environment Program and the 
International Maritime Organization. The system, called ``Tiered 
Response'' is recognized in the US and is the foundation of 
preparedness and response around the world. Accordingly, companies 
involved in the petroleum industry are required to have the capability 
to respond to oil spills that might occur from the entire range of 
their operations, with escalating capability and resources depending on 
severity of the incident. A Tier 1 capability with immediately 
available response resources for small, operational spills should be 
available on site. Tier 2 capability escalates with additional 
equipment nearby or in cooperation with other companies or government 
resources. CCA is a Tier 3 response organization, and we have air 
mobile equipment that can be rapidly mobilized to provide assistance in 
incidents that exceed local or national capability. We work very 
closely with other Tier 3 response organizations, including Oil Spill 
Response Ltd (OSRL), in the UK, and with the Marine Spill Response 
Corporation (MSRC) in the US. MSRC is the world's largest amd most 
capable response cooperative and lead the response in the Gulf of 
Mexico last year for BP.
    In the past 20 years CCA has responded to a number of spills in the 
Caribbean, Latin America and North America. We have been involved with 
Cuba since 2001, when we first applied for and received licenses from 
the Department of Treasury and Department of Commerce to travel to and 
export our equipment to Cuba. This was in response to drilling that 
took place by Repsol and Petrobras. CCA staff, including myself, have 
traveled to Cuba for Contingency Planning, training, and drills and 
exercises with these companies. With the new round of drilling coming 
up, we have recently been back to Cuba to work with Repsol and 
Petronas. CCA is jointly developing Repsol's Oil Spill Contingency Plan 
with our sister cooperative, Oil Spill Response Ltd, in the UK. OSRL 
also has a large stockpile of air mobile equipment, and they have no 
limitations on sending equipment and personnel to Cuba.
    Repsol's contingency plan is being developed and resources are 
being committed consistent with the international model of Tiered 
Response. The drilling rig has Tier 1 equipment on board to provide 
initial rapid response on site. Seven containers of equipment are en 
route to Cuba from OSRL to be placed in the shore base at the Port of 
Mariel for Tier 2 reinforcement. The Contingency Response Plan calls 
for rapid mobilization of both CCA and OSRL for Tier 3 support if 
needed.
    I do not believe the concern about Cuba is really about small Tier 
1 or Tier 2 incidents. It is about the blowout scenario that we 
experienced last year in the Gulf of Mexico. CCA was intensely involved 
in that response. Although we provided conventional equipment, such as 
skimmers and containment boom, our primary focus was on aerial 
application of dispersants flying our spray system in a chartered C-130 
Hercules aircraft. Under the authority of the US Coast Guard as Federal 
On-Scene Commander, CCA equipment and contractors sprayed almost 
400,000 gallons, or more than one third of the dispersant applied by 
aircraft. We are intensely proud of the role we played and believe that 
science supports the judicious use of dispersants to minimize the 
impact of oil spills. I have personally been involved in research and 
published papers on the topic of the Net Environmental Benefit Analysis 
of Dispersed versus Non-dispersed oil in Tropical Ecosystems. I bring 
this up because one of many advantages of the dispersant option is the 
speed of mobilization and quantity of spilled oil that can be treated. 
Due to the currents in the Florida Straits and difficulty of 
conventional recovery operations, dispersants will likely play a major 
role, at least in the intial phases of a spill response until other 
resources can be mobilized to the Straits. Spilled oil knows no 
political boundary, so what we do in Cuba can very well determine the 
impact of spilled oil in Florida and the Bahamas.
    In a deep water blowout scenario in Cuba, CCA will provide the 
initial Tier 3 response resources from our organic assets. We can very 
rapidly mobilize our equipment to integrate into the ongoing Tier 1 and 
Tier 2 response effort in Cuba. OSRL will simultaneously activate 
bringing in additional resources. We will provide and sustain this 
initial response and take measures to combat the spill near its source. 
However, for an incident on the scale of the Gulf of Mexico spill, we 
would expect the mobilization or ``cascading'' of significant other 
response resouces as the response further escalates and transitions to 
the ``project phase.''
    I regularly meet with government officials in the Caribbean and 
Latin America to advise on National Contingency Planning and especially 
establishing mechanisms for the rapid and smooth movement of response 
resources through customs and immigration. Cuba presents a unique 
challenge. On Thursday, CCA will participate in a tabletop exercise of 
the US Coast Guard's International Oil Drilling Response Plan. We will 
simulate our initial response as I described. What remains to be seen 
is how the response escalates beyond our involvement. Nearby in the 
Gulf of Mexico is perhaps the largest concentration of oil spill 
response capability in the world. Hopefully we will never need to 
execute our plan, but if we do, that capability will be needed.
    I therefore encourage some form of loosening up ``the process'' so 
more US companies and resources can be made available if needed. Thank 
you for your attention and the honor and privelage of addressing you.

    The Chairman. Thank you very much.
    Dr. Myers, go right ahead.

    STATEMENT OF MARK MYERS, VICE CHANCELLOR FOR RESEARCH, 
              UNIVERSITY OF ALASKA, FAIRBANKS, AK

    Mr. Myers. Thank you.
    Good morning, Chairman Bingaman, Ranking Member Murkowski 
and Senator Corker. Today I will limit my comments to the 
Arctic areas.
    Alaska's Outer Continental Shelf adjoins the Canadian 
Beaufort Sea on the East and on the West the Russian Bering and 
Chukchi Seas. Response capacity and readiness for oil spills on 
waters adjoining Alaska's Outer Continental Shelf should be 
seen in light of the type, probability and potential 
consequences of spill.
    Oil spills in the Arctic could occur from marine shipping 
accidents such as vessels including fishing boats, cruise 
ships, bulk carriers, cargo ships or oil tankers.
    Oil spills can occur from oil exploration wells, production 
platforms, loading platforms and oil pipelines.
    These different sources all carry different risk profiles 
and response requirements. Spill risk and ability to respond is 
also controlled by the geology, geography and ecology of the 
region.
    So talk about marine shipping. It is expected that Arctic 
shipping will dramatically increase as sea ice decreases. Based 
on recent historical change and coupled oceanographic and 
atmospheric models it is predicted the Arctic Ocean will be 
seasonally ice free by mid century.
    This will open up seasonally opportunities for shorter 
international shipping routes and also create the opportunity 
to develop increased Arctic tourism, fishing, mining and oil 
and gas development. With these shipping opportunities will 
come increased risk of vessel accidents and associated spills. 
The largest risk to vessels is likely to come from ships that 
encounter ice conditions beyond the ship's capacity to handle.
    In order to escort or respond to vessels in distress both 
Canada and Russia have significant Arctic capable, ice breaking 
fleets. The Canadian Coast Guard has a fleet of 7 ice breakers 
that were built between 1969 and 1987.
    Russia has a fleet of 28 ice breakers that were built 
between 1957 and 2007 including ten that are nuclear powered. 
In addition Russia intends on constructing 3 new nuclear 
carriers or nuclear ice breakers by 2020.
    In contrast the United States currently has a fleet of one 
operational ice breaker with a second under repair and a third 
planned for decommissioning.
    In order to prevent shipping accidents, Canada continues to 
work on its improved Arctic Regulatory Shipping Systems 
including efforts to better monitor and forecast ice conditions 
including multi-year ice and pressured ice zones.
    Russia has been investing in container ships, oil tankers 
and commercial ships with ice strengthened hulls that are 
designed to be used without ice breaker escort.
    So I'm looking at oil and gas exploration development in 
offshore areas adjoining Alaska. I will first look at the 
Mackenzie Delta region of Canada. To date, 89 exploration wells 
have drilled in the Canadian Beaufort Sea. No production has 
occurred.
    Although oil was found these wells found significant 
quantities of natural gas which most likely will not be 
commercialized without a construction of a natural gas pipeline 
south of the Mackenzie Valley. These earlier wells were drilled 
in the shallow waters of the Beaufort Sea inner shelf. 
Currently there's renewed interest in drilling for oil on the 
Outer Continental Shelf and the Continental Slope where 
multiple companies have acquired parcels. Exploration wells 
drilled in the outer shelf and slope will face some additional 
challenges to those drilled in shallower water. They are likely 
to encounter a shorter drilling season due to more severe ice 
conditions and the use of drill ships rather than bottom 
founded structures for drilling.
    Currently no exploration drilling has occurred on the 
Russian offshore areas adjoining the U.S. portion of the 
Chukchi Sea, however offshore production does occur in areas 
further south near Sakhalin Island and through a large offshore 
terminal off western Siberia. This terminal is an area where 
ice cover may exceed or may be at a maximum at about 247 days a 
year. The terminal is supported by both ice breaker and 
auxiliary ice breaking tugs.
    So if you look at prevention response to exploration 
spills. The risk from a spill offshore can be dramatically 
reduced through active preparation. Prevention starts with an 
in-depth understanding of the geologic conditions to be 
encountered while drilling. Data collection on shallow hazards 
such as subsea permafrost, gas hydrates, shallow gas pockets, 
shallow faults and slope instability, ice scour, and sediment 
type will help assure the well is properly designed. Proper 
design should include the use of redundant levels of protection 
including the best practices in well operations and procedures, 
logging, casing, cementing and the use of enhanced blow out 
preventers.
    Rapid response should greatly reduce the effects of an oil 
spill and includes potential to including direct injection of 
subsea dispersants and well capping. It also includes the rapid 
deployment of containment and mechanical cleaning systems, and 
the ability to use in-situ burning chemical dispersants when 
appropriate. Finally, equipment should be available to drill a 
relief well if necessary. In order to improve response, the 
Canadian Coast Guard has prepositioned supplies in Arctic 
communities and does some local training. For the Eastern 
Beaufort Sea, the Canadian producers have formed a nonprofit 
industry consortium, the Mackenzie Delta Response Corporation.
    Some of the challenges associated with responding to Arctic 
oil spills include the very cold temperatures, sea ice, limited 
daylight hours, lack of infrastructure, remoteness of the 
resources and a unique ecosystem. In order to monitor and track 
the oil spill a suite of sensors from satellites, aircraft, 
vessels and buoys are necessary. Emerging use of unmanned 
aerial vehicles and autonomous underwater vehicles will 
dramatically improve monitoring and tracking of arctic spills 
because they can stay deployed for longer periods of time and 
operate under conditions when it is unsafe to use manned 
systems.
    Space and airborne radar systems can locate spills in low 
light conditions, provided ice cover is not too great. Lidar 
and electro-optical sensors provide additional capacity. High 
frequency, portable, coastal radar can be used to measure ocean 
currents and ice movement.
    One of the greatest challenges is locating oil under ice. 
Both airborne and ground--excuse me, both airborne ground 
penetrating radar and the use of oil smelling dogs show 
promise. Poorly understood and in greater need for research is 
the behavior of oil that is actually under ice. Techniques for 
removing oil include containment, mechanical cleaning, in-situ 
burning, bioremediation, chemical dispersants and natural 
recovery. The effectiveness of these techniques is 
significantly affected by the percentage of ice cover.
    Throughout the Arctic more research is needed in order to 
develop better predictive models for the movement of sea ice 
and ocean currents, improve spill trajectory models, increased 
understanding of behavior and tracking of oil under ice and a 
better understanding of impacts to the ecosystem. Stronger 
integration of data streams and system--excuse me, data streams 
and data sharing will be necessary in order to develop a best 
operational picture. Finally more large scale field training 
exercise will be necessary in order to achieve the most 
efficient operational capacity.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Myers follows:]

    Prepared Statement of Mark Myers, Vice Chancellor for Research, 
                  University of Alaska, Fairbanks, AK

    Alaska's outer continental shelf adjoins the Canadian Beaufort Sea 
on the east, and on the west the Russian Bering and Chukchi Seas. 
Response capacity and readiness for oil spills in the waters adjoining 
Alaska's outer continental shelf should be seen in light of the type, 
probability and potential consequences of a spill. Oil spills in the 
Arctic could occur from marine shipping accidents from vessels 
including fishing boats, cruise ships, bulk carriers, cargo ships, or 
oil tankers. Oil spills could occur from oil exploration wells, 
production platforms, loading platforms, and oil pipelines. These 
different sources all carry different risk profiles and response 
requirements. Spill risk and ability to respond is also controlled by 
the geology, geography and the ecology of the location.

                            MARINE SHIPPING

    It is expected that Arctic shipping will dramatically increase as 
sea ice decreases. Based upon recent historical change and coupled 
oceanographic and atmospheric models it is predicted that the Arctic 
Ocean will be seasonally ice free by mid-century. This will open up 
seasonal opportunities for shorter international shipping routes and 
also create the opportunity to develop increased Arctic tourism, 
fishing, mining and oil and gas development. With these shipping 
opportunities will come increased risk of vessel accidents and 
associated spills. The largest risk to vessels is likely to come from 
ships that encounter ice conditions that are beyond the ship's capacity 
to handle. In order to escort or respond to vessels in distress both 
Canada and Russia have significant Arctic capable ice breaker fleets. 
The Canadian Coast Guard has a fleet of 7 icebreakers that were built 
between 1969 and 1987. Russia has a fleet of 28 icebreakers that were 
built between 1957 and 2007, including 10 that are nuclear powered. In 
addition Russia intends on constructing 3 new nuclear icebreakers by 
2020. In contrast, the United States currently has a fleet of one 
operational ice breaker with a second under repair and a third planned 
for decommissioning. In order to prevent shipping accidents Canada 
continues to work on improving its Arctic Regulatory Shipping Systems 
including efforts to better monitor and forecast ice conditions 
including multi-year ice and pressured ice zones. Russia has been 
investing in container carriers, oil tankers and commercial ships with 
ice strengthen hulls that are designed to be used without ice breaker 
escort.

  OIL AND GAS EXPLORATION AND DEVELOPMENT IN OFFSHORE AREAS ADJOINING 
                                 ALASKA

    To date 89 exploration wells have been drilled in the Canadian 
Beaufort Sea. No production has occurred. Although oil was found, these 
wells primarily found significant quantities of natural gas which most 
likely will not be commercialized without the construction of a natural 
gas pipeline south through the Mackenzie Valley. These earlier wells 
were drilled in shallow water on the Beaufort inner shelf. Currently 
there is renewed interest in drilling for oil on the outer shelf and 
continental slope where multiple companies have acquired parcels. 
Exploration wells drilled on the outer shelf and slope will face some 
additional challenges from those drilled in shallower water. They are 
likely to encounter a shorter drilling season due to more severe ice 
conditions and the use of drill ships rather than bottom founded 
structures.
    Currently no exploration drilling has occurred in the Russian 
offshore area adjoining the US portion of the Chukchi Sea, however 
offshore production does occur further south near Sakhalin Island and 
through a large offshore terminal off Western Siberia. This terminal is 
in an area that may be ice covered up to 247 days a year. The terminal 
is supported by auxiliary an ice breaker and an icebreaker tug.

          PREVENTION AND RAPID RESPONSE TO EXPLORATION SPILLS

    Risk of a spill from an offshore exploration well can be 
dramatically reduced through active prevention. Prevention starts with 
an in-depth understanding of the geologic conditions to be encountered 
while drilling. Detailed data collection on shallow hazards such as 
subsea permafrost, gas hydrates, shallow gas pockets, shallow faults, 
slope instability, ice scour, and sediment type will help assure that 
the well is properly designed. Proper design should include the use of 
redundant levels of protection including best practices in well 
operations and procedures, logging, casing, cementing and use of 
enhanced blow out preventers.
    Rapid response should greatly reduce the effects of a spill and 
includes potential for direct injection of subsea dispersants and well 
capping. It also includes the rapid deployment of containment and 
mechanical cleaning, and the ability to use in-situ burning, and 
chemical dispersants when appropriate. Finally, equipment should be 
available to drill a relief well if necessary.
    In order to improve response the Canadian Coast Guard has 
prepositioned supplies in the Arctic at local communities and does some 
local training. For the Eastern Beaufort Sea the Canadian producers 
have formed a nonprofit industry consortium, the Mackenzie Delta 
Response Corporation.

            ARCTIC SPECIFIC OIL SPILL ADVANCES IN TECHNOLOGY

    Some of the challenges associated with responding to Arctic oil 
spills include very cold temperatures, sea ice, limited daylight hours, 
lack of infrastructure, remoteness from resources and the unique 
ecosystem. In order to monitor and track an oil spill a suite of 
sensors from satellite, aircraft, vessel and buoys are necessary. 
Emerging use of unmanned aerial vehicles and autonomous underwater 
vehicles will dramatically improve monitoring and tracking of arctic 
spills because they can stay deployed for long periods of time and 
operate under conditions when it is unsafe to used manned systems. 
Space and airborne radar systems can locate spills in low light 
conditions provided the ice cover is not too great. Lidar and electro-
optical sensors provide additional capacity. Portable high frequency 
coastal radar can be used to measure ocean currents and ice movement.
    One of the greatest challenges is locating oil under ice. Both 
airborne ground penetrating radar and the use of oil smelling dogs show 
promise. Poorly understood and in need of greater research is in the 
behavior of oil under and within ice.
    Techniques for removing oil include containment and mechanical 
cleaning, in-situ burning, bioremediation, chemical dispersants, and 
natural recovery. The effectiveness of these various techniques is 
significantly affected by the percentage of ice cover.

                             RESEARCH NEEDS

    Throughout the Arctic more research is needed in order to develop 
better predictive models for the movement of sea ice and ocean 
currents, improved oil spill trajectory models, increased understanding 
of the behavior and tracking of oil under ice, and better understanding 
of the impacts to the ecosystem. Stronger integration of data streams 
and data sharing will be necessary in order to develop the best 
operational picture. Finally, more large scale field training exercises 
will be necessary in order to achieve the most efficient operational 
capacity.

    The Chairman. Alright. Thank you very much. Let me just 
start with a few questions and then defer to Senator Murkowski.
    It seems to me just listening to Mr. Pinon and Mr. Schuler 
that we sort of have 2 different expectations of possible 
actions on our part. Mr. Pinon, you talk about, in your view, 
the urgency, let me quote you exactly. Here you say, ``Urgency 
in developing a similar policy that is similar to the policy we 
have with Mexico, the MEXUS plan and similar to the policy we 
have with Canada in 1986.'' So you're talking about the urgency 
of developing a similar policy of environmental cooperation 
between the United States, Mexico, Cuba and the Bahamas as 
these countries embark on developing their respective deep 
water, hydrocarbon resources.
    So you feel that some kind of formalized effort to come to 
an agreement among those countries around the Caribbean is 
important to pursue at this time. Is that accurate?
    Mr. Pinon. No question, Mr. Chairman. I mean, sometimes I'm 
surprised how naive we are in transnational issues, particular 
when it comes to oil and gas issues. We need to be sure that we 
focus on prevention.
    So far this conversation has been about assuming that there 
is going to be a spill. But I haven't seen any focus on 
prevention. I mean, the technology in which a lot of these 
companies operate is what's important. Most of that technology 
is in the U.S.
    Mr. Chairman, we continue to focus on Repsol. I am amazed 
and pardon the expression, how we're bullying that company. I 
haven't heard any comments, whatsoever, Mr. Chairman, about 
Bicentenario Uno. Bicentenario Uno, if you can put the Mexican 
map up please, is a rig that was built in Korea, in South 
Korea, that is now, has been delivered to Mexico. It's going to 
be operated by Pemex just 22 miles south of our EEZ on the 
Mexican side.
    Is the U.S. Coast Guard going to respect Bicentenario? We 
have to cooperate. We have to work together. We cannot continue 
in this element of confrontation with countries that I just 
mentioned and that is my sense of urgency.
    My sense of urgency is we're all in business together. The 
environment is all of our concern. So we need to sit down and 
work, not in a spirit of confrontation, but cooperation.
    The Chairman. Alright.
    Mr. Schuler, you talk in your comments at the end of your 
written testimony about encouraging a loosening up of the 
process so more companies and more resources can be brought 
into the response from the U.S. in the event they are needed. 
Now then, I understand Mr. Pinon is talking about prevention. 
You're here, your organization is focused more on response and 
that's a very important distinction. But could you describe a 
little more, elaborate, on what you mean by how you would like 
to see a loosening up of the process so that more companies and 
more resources could be brought into a response from the U.S. 
if they are needed?
    Mr. Schuler. First of all I'd say there's a lot of 
emotional issues in South Florida about Cuba as there are here, 
I'm sure. But at present we write the contingency plan with 
only the resources we know we can get, not with resources that 
we would like to have. It's pretty black and white. If you 
can't assuredly have it, don't put it in the plan.
    There are only 3 U.S. companies that have licenses to go to 
Cuba right now. We are the only company that has a license to 
export to Cuba. The other 2 can provide management and training 
services.
    So if we're talking about being able to cascade equipment 
into Cuba, I'm a little bit less sanguine about the process 
with licensing than we heard before from the Director. We have 
to renew our licenses either every year or every 2 years. It's 
a long process and my view is that if we're looking to have 
U.S. resources go in there, it needs to be handled in advance 
and put into the plan, not as an ad hoc type of arrangement 
that we're going to try to do once there is oil spilt----
    The Chairman. Let me just ask you one other question, Mr. 
Schuler. Would you agree with Mr. Pinon, that we should be 
initiating an effort to work with Mexico and Cuba and the 
Bahamas to get a plan for establishing standards and ensuring 
safe operations in the Gulf?
    Mr. Schuler. Again there is the distinction that I work on 
the side when prevention fails. Preparedness and response is 
our area. But yes, I agree 100 percent.
    Years ago when we first applied for the license back in 
2001, the first time we did it, it was denied. We went back and 
wrote a little paper and said this is a little bit like cutting 
off your nose to spite your face. If there's a significant 
problem in Cuba and we're unable to deal with it in Cuban 
waters. The obvious follow on is that we'll deal with it in 
U.S. waters and perhaps in the coast of Florida.
    So I think it's in our interest and the interest of 
preserving our natural resources in Florida, the beaches, the 
mangroves to coral reefs and further up the coast that we do 
something to engage with the Cubans so that we can operate 
there.
    The Chairman. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    Mr. Pinon, I hear the frustration in your voice when you 
ask why is everybody just focusing on Repsol? The purpose of 
the hearing was to kind of look at what is happening off Cuba. 
But it is a reminder to us that we are a global petroleum 
economy. We need to wake up to the fact that it's happening 
around us and it's happening in waters that we share that 
maritime border. If we don't receive that--if we just kind of 
close our eyes to it here and say it's not going to happen 
anywhere else, we're fooling ourselves.
    So I think that conversation that we're having here today 
is important. About what is going on in Mexico, what is 
happening up North, and as Dr. Myers has pointed out, while the 
Russians in the high Arctic are not exploring right now they 
have been down in the South. The Canadians are looking. There 
is a level of activity that I think is unprecedented.
    Again, how we have a level of preparedness that makes 
sense, I like the idea whether it's the Arctic Council 
spearheading the oil spill prevention and response or whether 
it's one Gulf policy as you have mentioned. We've got to 
recognize that the water touches all of us here. If there is a 
spill the impact doesn't necessarily stop there at our borders.
    You brought up the issue of enforcement of regulations. 
This is something that I think we saw play out here. You've got 
folks that are earning a pretty good income out working on the 
rigs. They're making a heck of a lot more than they were as 
potentially workers within MMS or within the agencies.
    So we didn't have the trained, skilled work force that we 
needed to enforce on the rigs because people are getting paid 
well. I understand that the tool pushers on the rig offshore, 
off Cuba, are going to be paid. They're going to be paid very 
well.
    So the question is whether the Cuban government has the 
ability to pay competitive wages to those who are issuing the 
permits, doing the inspection. Is this going to be an issue for 
us? We're relying on a level of oversight. We heard Director 
Bromwich speak to that, but how much can we count on from the 
Cuban government when it comes to enforcement?
    Mr. Pinon. That is a very good point. It's not the issue of 
whether the Cuban government can pay the wages that other 
countries are paying. The issue, Senator, I have worked in 
countries around the world in which both you and I would be 
impressed by their environmental regulations that are on the 
shelf.
    But that form of enforcement is a huge gap. A lot of 
countries and nothing against Cuba or Mexico even for example. 
They just don't have the experience. They just don't have the 
years of experience that we have in the United States to 
enforce those regulations.
    So even in Mexico, Comision Nacional de Hidrocarburos was 
just formed in 2009. They're doing a fantastic job. Most of 
their personnel are former Pemex employees. So the experience 
is only for one oil company.
    So the issue is, I am sure, that the Bahamas, Cuba, Mexico 
will eventually have on their regulations the best policies and 
standards available. But that is not the point. Do they have 
the resources of the manpower and the experience, like you 
said, to enforce those regulations? I doubt it.
    That's why it's so important then to have operators that 
are of the caliber of Repsol. Instead of trying to run them off 
the scene, we need those types of strong companies which are 
the ones that somehow we're they're going to get the guarantee 
that those regulations are going to be enforced. Having said 
that again, not that Cuba, Mexico and the Bahamas are not going 
to enforce it, but regrettably they just don't have the 
experience at it.
    Senator Murkowski. How do you see things playing out in 
Mexico now that their supreme court has opened up the doors, if 
you will, for foreign companies coming in to produce off their 
waters? In terms of stepped up activity you had a map there 
that you reminded us. I think you said 22 miles.
    Mr. Pinon. Right.
    Senator Murkowski. From where that rig is and U.S. shores, 
what do you see happening? Are we seeing a stepped up level of 
interest?
    Mr. Pinon. Yes. Yes.
    Senator Murkowski. From whom?
    Mr. Pinon. Mexico, Pemex. There's only one oil company in 
Mexico and that is Pemex. They are scheduled to drill 3 
prospects next year at about a billion dollar total cost, south 
of the Perdido Fault or on the Mexican Perdido Fault just south 
of where Chevron, for example, has tried and where Exxon and 
Shell are also active.
    So they're going to aggressively announce their production 
is really declining. They're now below 3 million barrels a day. 
They expect that there's as much as 20 billion barrels of 
reserves on the Mexican side of the Perdido Fault. So they are 
aggressively going to move forward in that direction.
    I expect that changes will come into the Mexican 
constitution in the next election period which will be sometime 
in 2013. But right now hands are tied in Mexico for 
international oil companies such as Repsol, for example, to 
take an active participation in their deep water exploration. 
That's why I think now is the time to engage Pemex, now, which 
we're doing, by the way. We're doing a very good job at it 
working with the Mexican authorities.
    So Mexico certainly is an area of concern from that point 
of view because again they're going to be just 22 miles south 
of our EEZ. We do have the experience of the Ixtoc well 
explosion and blow out back in 1979.
    Senator Murkowski. Thank you, Mr. Chairman.
    The Chairman. Senator Corker.
    Senator Corker. Thank you, Mr. Chairman. Thank you all for 
your testimony.
    Mr. Pinon, I got in listening to the, our first witness and 
then talking about Repsol the way that you have. I had no idea 
that there was a mentality of potentially bullying them. I 
didn't know that's what we were talking about.
    But apparently the State on enterprises then, we have there 
is no transparency whatsoever. We have no idea what they're 
doing. It seems to me that that's your concern that the Bureau 
that we have that is able to deal with Repsol because they are 
public and they want to do business with us and other entities, 
we have the ability to talk with them, if you will.
    But with the State on enterprise we have none of that. Do 
they have the same types of industry practices that Repsol has 
or are they far less sophisticated?
    Mr. Pinon. The international oil companies that are 
operating in Cuba, Senator, are experienced oil companies that 
have experience in deep water. Petronas from Malaysia, ONGC 
from India, even Sonangol from Mongolia, they have deep water 
experience. But the issue is that we have not established any--
we haven't made any effort even to approach them. We have 
solely focused on Repsol because it just happens to be the only 
company that is willing to share as much information as they 
have shared with us.
    By the way, they also have a contractual issue. We're 
asking of Repsol things like the pressure of the reservoir. 
That's proprietary information, confidential information that 
they have with the Cuban government. We have put them in a bind 
because they have a contractual relationship.
    It is just like Pemex will come to us and ask Shell what is 
the reservoir pressure in your Perdido Fault. That's just like 
if the Bahamas will come and ask us in the United States from 
Exxon and Shell and Chevron and others information on their 
offshore activities. So we have to be very careful with that.
    But Petronas from Malaysia is a partner with Russia's 
Gazprom. ONGC from India, they're an experienced company. But 
the Scarabeo 9, as soon as Scarabeo 9 finishes with Repsol, 
she's moving over to another prospect right there by April 
she'll be drilling a Petronas prospect. We're totally blind 
when that Scarabeo 9 gets to the Petronas prospect.
    Senator Corker. Is there a reasonable chance if we tried to 
engage with them and understand what their practices were and 
what they were doing that they would share those or?
    Mr. Pinon. I will be sure that those companies will be more 
than happy, even though they don't have assets in the West. May 
I remind the Senator that the U.S. does have assets in those 
countries? Chevron, Exxon and Hess have huge assets in 
Malaysia. Chevron controls one-third of the production of 
Angola. Their company is going to drill in Cuba.
    So there's no question to me, Senator and members of the 
Committee, that if we establish that relationship with all 
companies working in these areas, even if they're national oil 
companies, we can certainly get a positive response from them. 
But we haven't done it.
    Senator Corker. Why do you think we haven't?
    Mr. Pinon. Because of Cuba. I mean, it's--you said the 
Miami crowd. I happen to be Cuban American. It's regrettable 
how the issue of politics gets in the way of safeguarding the 
economy and the livelihood of the whole State of Florida.
    I think that's not acceptable. I am a Cuban American. I am 
very proud to be a Cuban American. But I'm also an American. I 
pledge allegiance to the flag of this country. So I have the 
same feelings that everybody else has, probably, toward Cuba. 
But I recognize that my primary concern is the livelihood, the 
economic livelihood, of the State of Florida and its 11 million 
citizens.
    Senator Corker. Mostly Presidential politics, I might add, 
not here.
    But Mr. Schuler, the--you seem like you were speaking in 
code about the loosening up. Maybe you're alluding to the same 
thing that Mr. Pinon is leading--alluding to here. But when you 
say loosening up is that loosening up by us?
    I mean, is it our own limitations that we place on our own 
entities that put us in a position of not being able to respond 
appropriately if there is a blow out of some kind or is it, or 
are they policies that Cuba is putting in place?
    Mr. Schuler. No, sir. These are U.S. policies. Again, in 
order to send equipment and personnel to Cuba you have to have 
either a Department of Commerce or a Department of Treasury 
license. There are very few companies who have them.
    So right now as we speak today, the U.S., the overwhelming 
part of the U.S. response industry is not going there. It's not 
because the Cubans won't accept them it's because it takes 
licenses to go there. Then you have to go through the entire 
licensing process which my experience has not been quick.
    Senator Corker. Mr. Chairman, it's interesting. I don't 
want to wade into the bigger issues that--in this hearing 
regarding Cuba. But it seems like there are some policies that 
we have that are sort of cutting your nose off to spite your 
face that maybe it would be worth looking at.
    I thank you for having this hearing. Certainly appreciate 
the testimony of our witnesses.
    The Chairman. Senator Murkowski, I believe had a few other 
questions.
    Senator Murkowski. Just very quickly. I'll follow up with 
you, Mr. Schuler, because you kind of dangled this out there.
    We have incredible resources and assets standing by just 
100 miles away. To recognize that in the event of an incident, 
a tragedy, a disaster, that could impact our shores that we're 
kind of in standby mode. You say, you know, from your 
experience, it takes a while--the licensing and just that whole 
process.
    That doesn't give folks the assurance that I think we would 
all like. There's nothing more frustrating than knowing that 
you have the ability to address something, but you've got your 
policies that are hanging you up from accomplishing that.
    Dr. Myers, I wanted to first of all acknowledge the fact 
that you came a long way on some pretty short notice and 
appreciate that. You mentioned in your testimony that while 
Canada and Russia are neighbors in the Arctic, they have not 
yet really begun to move out in terms of exploration and 
production activity. But clearly the resource is there.
    In your former capacity as head of USGS, you had certainly 
a hand in assessing what it is that is available in the Arctic 
offshore. From a geological perspective, from an academic 
perspective, do you have any doubt that these other Arctic 
Nations will begin to aggressively bring these offshore 
resources to market?
    Mr. Myers. Thank you for the question, Senator Murkowski.
    Let me start by saying in my testimony I talked about the 
waters immediately adjoining Alaska in our Arctic waters. There 
is development and exploration occurring on the Canadian Arctic 
side in the East side of Hibernia. There is also drilling off 
Greenland and a significant amount of activity off in the 
Bering Sea and off the West Siberian shelf. So there are 
drilling activities currently ongoing in the Arctic, 
substantial activities and substantial development that has 
occurred in the Arctic region.
    So I was just referring again to that----
    Senator Murkowski. Right.
    Mr. Myers [continuing]. Blanket in Canada and then the area 
adjoining the Alaska Chukchi and Bering Seas.
    Again the production operations in the Sakhalin Islands to 
the South are significant. So those countries are developing 
the resources.
    Again, I want to thank you for the compliments, but on the 
2008 CARA study the survey did, that was the work of really 
good quality science.
    Senator Murkowski. Yes.
    Mr. Myers. Really good scientists and I want to commend 
them for the work they did. That was a ground breaking study. 
It clearly was the first time we integrated the data and did a 
strong peer reviewed approach on what the resource potential 
was in the Circum-Arctic, the entire Circum-Arctic. It did show 
areas of tremendous high potential, as you know about 22 
percent of the world's remaining undiscovered resource base up 
there.
    It highlighted several basins. Those are the basins we're 
seeing drilling. Greenland, again, West Siberian, Bering Sea 
area, off shore of Alaska was quickly highlighted because of 
its high oil potential. The other areas have significant oil 
resources but a lot of natural gas as well.
    So in those areas that were highlighted we've seen the 
activity increasing. We see strong intent. You see high levels 
of investment in Arctic technology and capacity that's 
occurring in major companies like Shell, ConocoPhillips, Stat 
Oil. We're just starting to see. We're seeing huge investments 
in Russia for Arctic oil and gas exploration by some of the 
biggest international partnerships.
    It's coming. Clearly the companies have a long term view of 
the Arctic. The leases in the Mackenzie were very aggressive.
    We have seen that area was quiet. It was developed in the 
1970s and the late 1970s primarily when they did a bunch of 
drilling. We're seeing a huge renewal of leasing activity and 
plans to drill, again in areas where traditionally they found 
more gas, but they believe there's more oil out there in the 
Mackenzie as well. I mean, in the further offshore 
environments, as well as areas almost immediately adjoining the 
Coast of Alaska.
    So we're clearly seeing that interest follow the assessment 
of the CARA study or the CARA study is mimicking the company's 
own interpretation of the high perspective areas.
    Senator Murkowski. Let me ask you about the technologies. 
You mentioned the various things that we're utilizing up North, 
everything from the satellite and radar to the unmanned aerial 
vehicles and, really, just the changing landscape. With the 
technologies that are available for us to track, to just be on 
top of whatever the issue may be whether it is a spill or how 
we deal with the prevention side which as Mr. Pinon has 
mentioned, this is where we want to be.
    Do we have the expertise to build-out a sufficient amount 
of response, assets and capacity, the infrastructure that we 
have there? We're Alaskans. We know. Big State.
    There's a lot of space in between our communities and what 
we heard from the Admiral there is absolutely true. We need a 
forward operating base. We need a deep water port. We 
appreciate that as Alaskans in terms of the infrastructure. But 
do we have the expertise that we will need to build out some of 
these technologies that will really help us?
    Mr. Schuler. Lots of questions there. But let me start with 
the concept of the emerging technology. There are huge 
advancements in technologies in terms of seismic technology, 
remote sensing technology, satellite technology, the use of 
unmanned systems that offer huge potential. That potential is 
not fully realized yet.
    So we're going through the research and development stage. 
We learned a lot in the Gulf. Of course in the Arctic you have 
the ice and very different environmental conditions. You have 
very different geological conditions. So they'd need to be 
appropriately used where they're available.
    In order to combat issues of lack of infrastructure the use 
of these remote aerial vehicles and remote submarines, very 
sophisticated radars, fusion of sensors together give you a 
much better operational picture. Again we're dealing with 
darkness in the winter so the primary use of optical systems 
isn't going to work. So we're going to rely more on radar, more 
on a broad range of other sensors. That is all doable. But we 
have to operationalize it.
    The other thing I would say is incremental steps of 
development are going to require different solutions. So again 
the solutions you have to deal with shipping issues, better 
navigation, better charts, ice breakers, is different than you 
would to do a Sub C developed pipeline.
    So we're in that phase now, the exploration phase in the 
further offshore and we need to bring these technologies 
together. But as the Admiral said, the Coast Guard has some 
capacity, but the primary capacity is with the companies. I'll 
go with that again, prevention is the No. 1 cure of risks of 
oil spills. The ability to make sure that you understand the 
underlying risks whether they be ecological or geological. To 
make sure that you have a strong culture of safety and you have 
redundant safety on the rig.
    Good regulation to prevent the spill is the first thing.
    The second thing is to get to it quickly so the well 
capping and the containment, the ability for them to move 
equipment up there quickly helps us immensely in this 
exploration phase. So that's an assessment of risk.
    In the development stage I would expect a different 
infrastructure to develop. Just like Alaska Clean Seas is over 
$50 million of equipment, 160 skimmers sitting there around 
Prudhoe Bay. There is significant capacity to deal with the 
existing infrastructure. If you go off far in the offshore, 100 
miles offshore, you would expect in a production scenario for 
additional capacity be added to deal with that. So capacity 
kind of follows the expected path of development.
    We also have to understand that this is where international 
relationships work well. We have good relations with the 
Canadians. We can share capacity and remote sensing and 
satellite and integration of information with them and to a 
certain extent with the Russians, so international cooperation 
is an important piece of this in the Arctic.
    As you had pointed out before there is significant 
development in the Arctic. If we don't do it on the U.S. side, 
it certainly is happening elsewhere. An oil spill in one part 
of the Arctic affects the rest of the Arctic.
    So again, integration, international efforts, adaptation of 
this new, developing technology investment in not only in the 
new sensors, making them small enough to fit on UAVs. The use 
of remote submarines again, throughout the water column give 
you a huge advantage that we hadn't previously had. So I'm 
excited about the technology.
    I'm concerned that we're not fast, integrating it fast 
enough into our operational potential.
    Senator Murkowski. I appreciate that answer. Thank you, all 
of you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Senator Shaheen.
    I'm going to have to go back to my office for an 
appointment. But why don't you go ahead with your questions and 
then dismiss the hearing at the end of those questions unless 
Senator Murkowski has additional questions.
    Senator Murkowski. I don't think so, but I will listen to 
Senator Shaheen's.
    The Chairman. OK. Either one of you that still has 
questions can dismiss the hearing when we're through.
    Thank you all very much. I think it's been useful.
    Senator Shaheen [presiding]. Thank you very much, Mr. 
Chairman. I appreciate your keeping this panel until I could 
get here and apologize for being late.
    I think I probably want to follow up on what I understand 
has been a line of questioning from a number of members of the 
Committee. Because I'm very interested in what you had to say, 
Dr. Myers about the developing technology and agree with you 
that that provides the opportunity that we have for, not only 
further exploration, but for trying to make sure that that 
exploration is as safe both for humans and for the environment 
as possible. But recognizing that despite everything we do to 
try and make sure that exploration is as safe and without 
problems as possible, I still am concerned about human failure 
and about how we address oil spills once they happen.
    I know that Director Bromwich probably addressed earlier 
what the Department of the Interior and Secretary Salazar would 
like to see with respect to the Ocean Energy Safety Institute 
and how that could help with researching responses to oil 
spills. But how can we incentivize the private sector to also 
look at that issue? I know they have an incentive in developing 
new technologies to help them advance exploration. But how do 
we also think about encouraging them to look at what happens in 
case of a disaster?
    I would throw it out to any of you to respond.
    Mr. Myers. I'll take the first shot at that, Senator.
    You know, I think in some ways we need to really understand 
that companies have a shorter term profit cycle. They work 
through an issue. They invest appropriately at a certain level 
of technology appropriate to their activities.
    Again, the company exploring doesn't know if it's going to 
find a susceptible development. So they're not going to invest 
fully in the infrastructure necessary to deal with development 
until they're in the appropriate development stage.
    The government, on the other hand, has a long term 
interest. If you look at the fiscal interest in oil and gas 
development and the money that goes to the Federal Treasury, I 
think there's an opportunity for the government to invest in 
the research R and D. Some of the mapping and remote sensing 
pieces provide fundamental underpinning of information, 
investing in translational technology, for example.
    There's a risk with that technology. So again coming from a 
university environment, I see huge opportunities to exploit the 
technology and to get it to the point where it can become 
operational.
    The other piece, I think, is you see in the Gulf spill, as 
a classic example. You've seen it after every large natural 
disaster in the United States, local community involvement. 
Getting the folks engaged in the process and making those 
connections is partly governmental. It's partly industry. It's 
a connection back to local and State government as well.
    So I think one aspect is the linkages of the decisionmaking 
process together can be much stronger if there is a more 
integrated process of providing base information publicly.
    Companies, as was pointed out, work on a confidential 
basis. That information or that underlying geology is extremely 
sensitive and valuable to them.
    On the other hand, the regulators need to have that 
information and be able to share a level of information. We 
need to know what those Sub C pressures are. So there has to be 
a vehicle for private/public partnerships of that kind of base 
information that involves safety, even if it compromises a bit 
of the confidentiality.
    It's a crucial element. It builds public trust. It gets 
everyone aware. It allows the best technology and approaches to 
be brought forward. So that information flow, in my opinion, is 
a big thing that needs to be worked on.
    Can we release data, seismic data, after 10 or 15 years of 
confidentiality for, particularly a shallow section of seismic 
data, can tell you a lot about the geo-hazards? There's just 
one example.
    Can well data--in the State of Alaska, we released well 
data after a certain period of time after really it's primarily 
commercial sensitivity is gone. Providing that data out there 
to other agencies to the public provides a huge sense of 
confidence and actually can help develop the kinds of things 
you're talking about. So I think data freedom, policy 
integrated information, some baseline government investment 
help the companies and help their ultimate engagement.
    Senator Shaheen. Do you think the industry appreciates that 
that's helpful to them and important to their future?
    Mr. Myers. I think they do on the broad sense. But when 
it's your project and your specific area, that particular 
company may resist it. They might love it when it's someone 
else's project.
    So I'll defer that question to you, if I could.
    Mr. Pinon. Yes. I think the Deepwater Horizon certainly 
taught a lesson that up front efforts both in the form of 
technology investment is worth long term. It's very difficult 
for the private sector sometimes, Senator, to balance 
profitability and growth.
    Senator Shaheen. Right.
    Mr. Pinon. But I think that, again, the Deepwater Horizon 
incident has taught the industry as a whole. Not that the 
industry wasn't doing it before, but certainly to go back and 
focus on the upfront side of prevention and technology because 
if it doesn't work the costs, not only the monetary costs, but 
the social costs are huge.
    The issue of confidentiality, I think that is an issue that 
can be resolved as long as it's done in the spirit of 
cooperation and not confrontation. I think the oil companies 
would be more than happy to sit down and have this 
conversation, again, but it has to be done--it has to take 
place in the spirit of cooperation and not confrontation.
    Senator Shaheen. Thank you.
    Mr. Schuler, would you like to add anything?
    Mr. Schuler. Not very much actually, but just last week in 
New York the X Prize Foundation announced the winners of a 
million dollar prize for the company that could develop the 
best skimmer for offshore operations. There was several months 
of testing that took place at the research tank up in New 
Jersey. One company won the million dollars. The second won 
$300,000.
    But that's kind of a one shot deal. There's always efforts 
to improve containment boom, improve skimmers and prove 
dispersants because it's in the marketplace that the best ones 
are going to be sold. But it's purely a commercial incentive. 
There isn't, outside of the manufacturers and a few oil 
companies, there's not a tremendous amount of R and D in this 
field.
    Senator Shaheen. Thank you all very much. At this time I 
will close the hearing.
    [Whereupon, at 12:04 p.m. the hearing was adjourned.]

    [The following statement was received for the record.]

                                   State of Alaska,
                  Department of Environmental Conservation,
                                      Juneau, AK, October 18, 2011.
Hon. Jeff Bingaman,
Chairman, Energy & Natural Resources Committee, U.S. Senate, 304 
        Dirksen Senate Building, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Energy & Natural Resources Committee, U.S. Senate, 304 
        Dirksen Senate Building, Washington, DC.
Re: Full Committee Hearing to Examine the Status of Response Capability 
and Readiness for Oil Spills in Foreign Outer Continental Shelf Waters 
Adjacent to U.S. Waters

    Dear Chairman Bingaman and Ranking Member Murkowski: I am writing 
to you on behalf of the State of Alaska to provide our comments to the 
Senate Committee on Energy and Natural Resources for its hearing on 
response capability and readiness for oil spills in foreign Outer 
Continental Shelf (OCS) waters adjacent to United States waters. I 
serve as the state's commissioner of the Alaska Department of 
Environmental Conservation, the state agency with primary 
responsibility for spill prevention, preparedness and response. This 
testimony was prepared by me in consultation with Mead Treadwell, 
lieutenant governor of Alaska, liaison to the Arctic Council, and 
former chair of the U.S. Arctic Research Commission.
    My comments are in four parts: a short overview of the State of 
Alaska's experience in oil spill prevention, preparedness and response; 
the risks we see from spills related to foreign OCS activities; what 
actions the state is currently taking to help mitigate those risks, and 
lastly, specific actions Alaska believes should be taken at a federal 
level to make OCS oil and gas development and transportation safer for 
everyone.

                          ALASKA'S EXPERIENCE

    Oil spill prevention, preparedness, and response are not new to the 
State of Alaska. The state has been among the three leading states in 
oil production in the U.S. for decades. Although most of this 
production has occurred from wells on Alaska's North Slope (over 15 
billion barrels), there have also been 78 wells drilled in the Arctic 
Ocean, 33 wells in the Bering Sea and 695 wells in Cook Inlet. If it is 
successful in getting its remaining federal permits and authorizations, 
Shell has plans next summer to drill two exploratory wells on the OCS 
in the Beaufort Sea. It also holds leases on the OCS in the Chukchi Sea 
and plans for exploratory drilling there too. Other companies with 
plans to explore the OCS off Alaska's northern shore include Conoco 
Phillips, ENI and Statoil. These companies are moving back into areas 
in the U.S. Arctic OCS where drilling has already occurred. The State 
of Alaska, federal agencies, local governments and industry continue to 
work hard to make sure oil and gas exploration and development in 
Alaska are safe.
    Oil spill prevention, preparedness and response related to foreign 
OCS exploration and development is also very important to Alaska. We 
are bordered on the east by Canada and immediately across the Bering 
Strait is Russia. Both of these nations currently have OCS exploration 
and development plans or activities that could lead to an oil spill 
impacting the waters and shoreline of Alaska. According to a U.S. 
Geological Survey report, ``The extensive Arctic continental shelves 
may constitute the geographically largest unexplored prospective area 
for petroleum remaining on Earth'' (USGS Fact Sheet 20083049: Circum-
Arctic Resource Appraisal: Estimates of Undiscovered Oil and Gas north 
of the Arctic Circle). According to the report, an estimated 90 billion 
barrels of oil, nearly 1,669 trillion cubic feet of natural gas and 44 
billion barrels of natural gas liquids may remain to be found in the 
Arctic, 84 percent of it in offshore areas. The report puts one-third 
of the oil resource in the Circum-Arctic region in Alaska and the 
Alaska OCS. Given the world demand for energy, and increased 
accessibility due to less seasonal sea ice, it appears likely 
exploration and development of these important resources will continue. 
Thus, it is imperative that federal, state and local governments in 
Alaska, as well as the international indigenous groups that are 
permanent participants in the Arctic Council, engage, not only at a 
state and national, but also at an international level, to minimize the 
risks of spills and to prepare for responses that may cross national 
borders.

                           RISKS FROM SPILLS

    There are two primary sources of spills that need to be considered: 
spills from drilling platforms and other fixed infrastructure, and 
spills from vessels carrying crude oil, fuel and other hazardous 
materials.
    The worst spills in Alaska over the last 25 years have been from 
marine accidents. These include accidents in the Aleutian Islands 
involving non-tank ships on the Great Circle Route between Asia and 
North America and Alaska's very worst spill, the 1989 Exxon Valdez 
tanker spill in Prince William Sound. Drilling platforms and other 
infrastructure, although fixed in location, have the potential in some 
locations and circumstances for even larger spills, as demonstrated by 
the Macondo well blowout in the Gulf of Mexico.
    Various reports indicate this year's traffic may total 18 Northern 
Sea Route voyages (which go across the top of Russia and through the 
Bering Strait). We understand from shippers that traffic carries 
hazardous cargoes in both directions, i.e., oil or oil products 
originating in the Russian Arctic find markets in Asia, and aviation 
fuel in Asia may be returned on the back haul. Ships plying this route 
are subject to Russian regulation, but there is no contingency planning 
requirement today that involves U.S. regulatory bodies. (Such a 
requirement might kick in if a cargo were headed to or from a U.S. 
port.) At its most narrow point, the Bering Strait is only about 53 
miles wide between Russia and Alaska. The wells in Russia that are 
providing some of these cargoes are much further away and aren't 
believed to pose a risk to the state.
    In. Canada, there is potential for oil development in the Eastern 
Beaufort. A large spill in that area could travel west and impact the 
northeasterly shores of Alaska. Such a spill could also impact fishes, 
whales and other marine mammals that are important to Alaska Natives in 
the region.
    Regardless of the source of the spill, oil spill response 
challenges in the Arctic include:

   Extreme weather--wind, temperature, and fog
   Seasonal darkness
   Seasonal and broken sea ice
   Distances from ports, harbors, air fields, lodging and other 
        infrastructure and services
   Distances to response assets, including vessels and aircraft
   Communications network less developed in far north latitudes

    The tactics, equipment, vessels and other resources the United 
States and Alaska rely on to address the risk of spills must take into 
account these challenges.

                  ACTIONS TO MITIGATE OIL SPILL RISKS

    Again, the actions the State of Alaska is taking build on many 
years of experience with spill prevention, preparedness and response. 
The state is very willing to be a partner at the table with federal 
agencies and other jurisdictions, learning from their experiences and 
sharing ours. I will describe how the state is participating with the 
federal government at an international, regional and national level, 
then describe some of our efforts at the state and local level, to 
better address the risk of oil spills.
    The State of Alaska was pleased to be invited by the federal 
agencies to participate in new Arctic Council initiatives related to 
oil spills. The Arctic Council, a unique organization that includes 
indigenous groups whose membership straddles our borders with Canada 
and Russia and includes all of the eight Arctic nations, approved an 
agreement last May on how the nations will cooperate on search and 
rescue in the Arctic. At that meeting, the Council also agreed to a 2-
year effort to develop an instrument on how the nations can jointly 
address oil spill preparedness and response. In addition, the Council 
approved a review of spill prevention measures by its Emergency 
Prevention, Preparedness, and Response working group. Larry Dietrick, 
the State of Alaska's Director of Spill Prevention and Response, is 
currently representing the state in the first set of meetings on these 
matters in Oslo, Norway.
    It is Alaska's hope that through the Arctic Council work, nations 
will find ways to better share information and resources to address the 
risk of spills. Ideally, vessels plying this route would have a 
contingency plan and provide financial support for an oil spill 
response organization in our region. This could be a method of sharing 
the cost of ocean-going tugs and other spill response assets in key 
locations such as the Bering Strait and the Aleutian Islands. It may be 
appropriate to seek International Maritime Organization (IMO) approval 
for local precautionary measures. Those precautionary measures may also 
be authorized under Article 234 of the United Nations Convention on the 
Law of the Sea. (The U.S. has not yet ratified the Law of the Sea, nor 
has it determined how it might use the authorities to extend 
environmental law in traditionally ice-covered areas authorized by 
Article 234.)
    The importance of having an ocean-going tug in the Aleutians was 
dramatically demonstrated in December 2010 when the M/V Golden Seas, a 
738-foot long foreign freighter lost a turbocharger on its only 
propulsion engine and began drifting north of Adak in heavy seas. The 
ship was carrying a cargo of rapeseed from Canada to the United Arab 
Emirates. There was a combined volume of more than 473,000 gallons of 
fuel oil, diesel fuel and lube oil on board. A break in the weather 
allowed it to turn away from shore. An ocean-going tug stationed in 
Dutch Harbor for work with Shell Exploration was able to reach the 
vessel with an emergency tow line provided by the state, and which had 
been stored in Dutch Harbor for such an emergency. The vessel was towed 
nearly 500 miles to Dutch Harbor for repairs. This incident had a good 
outcome, unlike the grounding of the Selendang Ayu which lost power and 
eventually broke up on a reef in the Aleutians in December 2004, 
spilling an estimated 350,000 gallons of bunker oil and diesel fuel.
    The state has also been following and commenting on the U.S. Coast 
Guard led Bering Strait Port Access Route Study. This study looks at 
navigational hazards, vessel traffic patterns, environmental concerns, 
aids to navigation and other factors affecting the safety of ship 
traffic in the area. The state supports this effort and plans to stay 
engaged as it progresses through discussions among the U.S. federal 
agencies, joint U.S.-Russia negotiations and then the IMO process.
    At a more regional level, the state has participated in tabletop 
and field spill drills with the U.S. and Canadian Coast Guard and 
neighboring provinces and states. These drills have looked at spill 
scenarios in both the Eastern Beaufort and Dixon Entrance area at the 
Southeast border of Alaska.
    The state also actively participates in the Pacific States / 
British Columbia Oil Spill Task Force. The members of this task force 
include California, Oregon, Washington, British Columbia, Hawaii and 
Alaska. The members share information and collaborate on oil spill 
research. The task force recently completed a review of existing U.S./
Canada transboundary oil spill response plans and capabilities for the 
British Columbia/Alaska and British Columbia/ Washington borders, 
including recommendations for improvements. (The report can be found at 
the task force's website at http: / /www.oilspilltaskforce.org/docs/
notes_reports/Final_US_Canada_Transb oundary_Project_Report.pdf.) 
Although this report focuses on Alaska's southern boundary with Canada, 
many of the findings and recommendations are also pertinent to looking 
at spill response along the shared boundary at the northeast corner of 
Alaska.
    The Pacific States / British Columbia task force members have also 
all signed mutual aid agreements that describe how they will assist 
each other in responding to a major spill in the region, or back up a 
state/province that sends resources to another region, such as happened 
last year in response to the Macondo well incident.
    More recently, the State of Alaska has begun working with the Yukon 
and Northwest Territories in a sub-group of the Arctic Caucus of the 
Pacific Northwest Economic Region (``PNWER'') focusing on identifying 
and sharing information and resources at the provincial/ state level in 
the event of a spill. PNWER is a bi-national, public partnership of 
states, provinces and territories in the Pacific. Northwest.
    Although Alaska has several venues for collaborating with our 
Canadian counterparts on spill preparedness and response, there hasn't 
been the same opportunity to engage with our Russian counterparts. 
There, we are much more dependent on the U.S. federal government to 
provide forums for the exchange of information, joint planning and 
sharing of resources. The state will continue to track with great 
interest, and participate where we can with the federal agencies, in 
the work of the Arctic Council and on the Bering Strait Port Access 
Study. We hope the level of cooperation will grow where we can do more 
joint planning and even drills with the Russians.
    The state has commented on U.S. Coast Guard regulations for non-
tank vessels and tracked its use of ``Alternative Planning Criteria'' 
where the Coast Guard finds vessels may have initial difficulty in 
meeting the response planning requirements. Alaska remains concerned 
that the Alternative Planning Criteria framework applied in remote 
areas off Alaska does not include sufficient detail and structure to 
ensure practical, achievable improvement in spill response resources in 
those remote areas.
    Alaska has also partnered with the U.S. Coast Guard on a marine 
traffic risk assessment for the Aleutians. This study was designed with 
the help of the Transportation Research Board in the National Academy 
of Sciences. The study involved a variety of experts and stakeholders. 
Their Phase I report (http://www.aleutiansriskassessment.cona/) 
containing initial recommendations for the Coast Guard and the state 
was issued this year.
    With the increase in OCS activity and marine transportation, the 
State of Alaska has also expanded its own planning and spill response 
preparedness. The federal Oil Pollution Act of 1990 (OPA) requires the 
U.S. Coast Guard and Environmental Protection Agency (EPA) to create a 
National Contingency Plan for spill response. There are also 
requirements for Regional and Area Plans. Working cooperatively, the 
U.S. Coast Guard, EPA and the state have created a ``Unified Plan'' for 
the state that satisfies both OPA and state spill planning requirements 
for government involvement in spill response. We have also developed 
ten sub-area regional plans, including for Arctic areas.
    The state has been engaged over the last year updating and 
enhancing the subarea regional plans for Northern and Northwest Alaska, 
including a more focused look at: identification of environmentally 
sensitive areas, geographic response strategies, near shore response 
plans and tactics, potential places of refuge for stricken vessels, 
local response agreements and training, spill drills, prepositioning 
initial response equipment and emergency tow packages.
    The state has also put an emphasis on making sure there is 
alignment and a common understanding of the provisions of these 
government spill response plans and the spill contingency plans private 
entities are required to have in place under federal and state law.
    A critical need for both search and rescue and spill response is 
being able to identify and track marine vessels. The 2009 Arctic Marine 
Shipping Assessment Workshop report noted a Highest Priority Arctic 
Policy Issue was ``Full tracking and monitoring of Arctic commercial 
ships and mandatory AIS (Automatic Identification System).'' Since 2004 
most major commercial vessels. have been required by international 
treaty to be equipped with AIS that broadcasts several times a minute 
the vessel name, type of vessel, flag, dimensions, cargo, course, 
speed, location and destination. Having this information allows 
agencies with responsibilities to spot when a vessel may be getting 
into trouble and what other vessels of opportunity might be in the area 
and able to respond. The state has been investing in AIS receiving 
stations along its coastline. It is a challenge to cover all of 
Alaska's approximately 33,904 miles of coastline (longer than the rest 
of the entire ``lower 48'' coastline combined), particularly when some 
of the stations are in very remote locations without any local source 
of power.
    As Alaska expands its network of AIS receivers, we have also been 
talking with our neighbors in Canada about the eventual build-out of 
their systems in the Canadian Arctic and how we might share information 
to better track commercial marine traffic in the Arctic.
    The state of Alaska has also been tracking and partnering on 
scientific research by industry and other jurisdictions designed to 
reduce the risk of spills from OCS drilling. Among many other 
activities, the state is watching with interest the Joint Industry 
Program on Arctic Oil Spill Response Technology. The state is looking 
to partner with industry and others through establishment of an Oil 
Spill Research Center at the University of Alaska in Fairbanks.

                            WHAT'S MISSING?

    The United States needs polar class ice breakers to help maintain 
our safety, security and competiveness in the Arctic. As stated by 
Governor Sean Parnell in his testimony to the U.S. Senate Subcommittee 
on Homeland Security Appropriations, August 20, 2009:

          Melting sea ice and increased military and commercial 
        activity require a greater Coast Guard presence. The Coast 
        Guard needs to move north and improve its capability--our heavy 
        ice-class icebreakers are on their last legs. To provide 
        homeland security the Coast Guard must have new Arctic-class 
        icebreakers equipped for search and rescue missions, border 
        protection, law enforcement, fisheries enforcement, 
        infrastructure and environmental protection.

    Prime Minister Vladimir Putin announced on September 23, 2011 that 
Russia will be building nine new icebreakers to work toward their goal 
of making the Northern Sea Route as important to commerce as the Suez 
Canal. No action has been taken by the U.S. Executive Branch for new 
icebreaker capacity. Alaska's Congressman Don Young introduced 
legislation that would authorize the Coast Guard to lease and operate 
two new icebreakers. Senator Mark Begich is a sponsor of the Coast 
Guard reauthorization legislation that requires the continued operation 
of at least two polar class icebreakers. It is vital that the U.S. 
Congress support these efforts.
    The federal government needs to support the U.S. Coast Guard in 
establishing forward bases to respond more quickly to maritime 
accidents and spills in the Arctic, including the Aleutians.
    The U.S. government, if it is going to be a viable player in the 
Arctic, also needs to ratify the United Nations Convention on the Law 
of the Sea.
    The U.S. government needs to continue to work through the IMO, 
Arctic Council and other international venues to make sure that the 
U.S. is a player--not a bystander--in the future of the Arctic.
    Alaska looks forward to both the challenges and opportunities in 
the Arctic, which are not only vitally important to our state, but to 
our entire nation.
            Sincerely,
                                              Larry Hartig,
                                                      Commissioner.

                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

  Responses of Michael R. Bromwich to Questions From Senator Bingaman
    Question 1. I would like to open this round of questions by asking 
the both of you--How confident are you that the U.S. is ready to 
respond to a spill following the tragic events of the Deepwater 
Horizon?
    Answer. BSEE is very confident that our overall preparedness and 
capability to respond to an undersea drilling well blowout has 
significantly improved when compared to the capability before the 
Deepwater Horizon incident. The Deepwater Horizon was a human and 
environmental tragedy that highlighted a number of weaknesses in our 
offshore drilling and oil spill response regulatory regimes in place at 
that time. We have learned from those weaknesses, however, and taken 
strong steps to reform our regulations and processes. Shortly after the 
spill, the Bureau of Ocean Energy Management, Regulation, and 
Enforcement (now split into the Bureau of Ocean Energy Management 
(BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE)) 
began requiring implementation of new safety measures for offshore 
drilling activities, including the availability of undersea containment 
equipment for any well being drilled with a subsea blowout preventer or 
floating drilling rig. This requirement alone, which clarifies existing 
regulation-based requirements on operators, will help ensure that we 
will be far more ready to respond in the event that another subsea 
blowout occurs. We have also instituted a requirement that all offshore 
lessees and operators have safety and environmental management systems, 
and have recently proposed expanding that requirement to provide for an 
even greater level of safety. In addition, we have improved planning 
and communication regarding oil spill response with other agencies, 
including U.S. Coast Guard the Environmental Protection Agency (EPA), 
and the National Oceanic and Atmospheric Administration (NOAA). We 
continue to work to improve safety oversight in other areas, such as 
strengthening our inspections and enforcement program to ensure that we 
are assessing and focusing adequate resources on the highest-risk 
operations.
    Question 2. In particular, how confident are you that we're ready 
in the advent that an oil spill occurs in the near future in Cuban 
waters--that would impact US waters, such as the Florida straights?
    Answer. In conjunction with other federal agencies such as the U.S. 
Coast Guard (USCG) EPA, and NOAA, and to the extent authorized by law, 
BSEE is seeking to ensure that U.S. national interests, particularly 
environmental interests in Florida and along the U.S. coastline, are 
protected from the potential impacts of oil and gas drilling operations 
in Cuban waters. Repsol YPF Cuba, S.A., (Repsol), a Spanish energy 
company, is preparing to undertake petroleum exploration activities in 
Cuban waters. Repsol offered the United States government (USG) access 
to review certain operations and equipment on the Scarabeo 9, the 
drilling rig that will be used to conduct these activities. The USG 
accepted Repsol's offer to allow U.S. government officials, including 
BSEE and USCG inspectors, to review certain equipment and documentation 
onboard the rig while it was offshore Trinidad and Tobago. These 
observations and reviews have provided information for USG officials 
concerning Repsol's adherence to its voluntary commitment to conform to 
all U.S. offshore drilling safety standards, including those 
implemented after the Deepwater Horizon incident. However, we do not 
have enforcement authority over the rig or Repsol's activities in Cuban 
waters, nor were we able to do a number of inspection activities that 
BSEE or the USCG would typically perform in U.S waters once a rig is at 
the drilling site. BSEE is aware that the USCG is updating its 
contingency plans to ensure its readiness to respond to oil spills in 
Cuban waters that may affect U.S waters and coastline. Questions about 
USCG activities in that regard should be directed to the USCG.

                             CUBA LICENSING

    Question 3. You mention that Treasury has been issuing licenses in 
the last decade for spill response and is considering new licenses for 
spill response. Should equipment, such as capping stacks and other well 
containment that is manufactured in the US, be needed--in the advent of 
an oil spill--do you think Treasury will grant licenses for this 
equipment and its supporting personnel knowing that U.S. natural 
resources, environmental and human health and safety could be adversely 
affected?
    Answer. All U.S. efforts are designed to protect U.S. interests. 
BSEE works closely with other government agencies including the 
Department of Commerce and the Department of the Treasury in the 
context of fulfilling the Bureau's missions.
    The Department of Commerce advises BSEE that, consistent with U.S. 
foreign policy and national security concerns, the Department of 
Commerce's Bureau of Industry and Security (BIS) has licensed temporary 
exports of post-incident oil spill containment and cleanup items for 
use by U.S. companies while in Cuban waters since 2001.
    The Department of the Treasury advises BSEE that Treasury's Office 
of Foreign Assets Control ((VAC) has licensed U.S. entities to prepare 
for and to operate in the event of an oil spill.
    We defer to the Department of Commerce and the Department of the 
Treasury to provide any additional details.

                                BAHAMAS

    Question 4. You seem to have had some great success in working with 
Mexico and Repsol, in terms of getting them to comply with accepted 
U.S. regulatory standards. Have you begun to work with the Bahamian 
government at all to assist them in developing regulations for any 
offshore exploration that may occur going forward?
    Answer. We participated in a multilateral regional technical 
meeting titled ``Regional OPRC [Oil Pollution Preparedness, Response, 
and Cooperation] Seminar to Focus on Developing National Plans for 
Marine Pollution Preparedness and Response Related to Offshore Units 
and Regional Cooperation,'' on December 7-9, 2011, in the Bahamas. 
Participating countries were the Bahamas, Cuba, Jamaica, Mexico, and 
the United States. The meeting was a planning seminar focused on 
improving spill prevention and well control, preparedness and response 
to a major oil spill from an offshore drilling operation that may 
impact the waters and coastlines of multiple nations in the northern 
Caribbean. It was a useful starting point for coordination among 
Caribbean nations, and we plan to have follow-up meetings to further 
examine issues and carry out strategies.

                                 ARCTIC

    Question 5. It seems that BSEE is quite active in the area of spill 
prevention and intervention for arctic areas and that a great deal of 
efforts are being expended to gain a better understanding of how best 
to approach this issue. Do you feel that we are currently ready to 
response to an oil spill of any magnitude that could happen in arctic 
waters, on ice or under ice--in or around Alaska? How do you think we 
compare, in terms of our experience and readiness, with our arctic 
neighbors--Canada and Russia?
    Answer. BSEE's regulatory responsibility for spill prevention 
includes oil spill response plan review and approval, drilling permit 
review and approval, and a safety and environmental inspection program. 
Facilities engaged in the development, exploration and production of 
offshore energy resources are required to submit detailed spill-
response and prevention plans for BSEE approval prior to commencing 
operations. Spill response plans must specifically designate a spill 
management team available on a 24-hour basis as well as an oil spill 
response organization (OSROs) capable of responding to prospective 
spills from that specific facility in accordance with the Oil Pollution 
and Clean Water Acts. BSEE engages in a rigorous review and approval 
process to ensure that adequate spill response and prevention measures 
are in place and that the operator has the capability to respond to a 
worst-case scenario oil spill. Facilities operating in the Arctic must 
demonstrate the capability to respond to spills in these scenarios 
without the assistance of the USCG or the State of Alaska.
    The Administration is proposing a priority action through the 
National Ocean Policy Implementation Plan to address development and 
implementation of response coordination, procedures, and decision 
support systems. BSEE, in collaboration with federal partners in NOAA 
and USCG are also studying the effects of oil in, on and under the ice 
with international partners. BSEE is committed to developing and 
assessing new technology and techniques for oil spill prevention and 
response in ice-covered waters through our Technology Assessment & 
Research (TAR) Program, which has provided funds and resources for 
research concerning Arctic spill prevention, preparedness and response 
for decades.
    Many nations, including Norway and Canada, have collaborated with 
the TAR Program and use our OHMSETT spill tank facilities in New Jersey 
for testing response measures in ice conditions with real oil. Canada 
and Norway are members of the International Regulators Forum in which 
safety, operational practices, and investigations of offshore incidents 
are shared among national regulators to foster a coordinated approach 
to prevention and preparedness.
    BSEE is also a leader in the work of the Arctic Council on spill 
prevention, preparedness and response, including development of the 
Arctic Offshore Oil and Gas Guidelines and Guidelines for In-Situ 
Burning, an Arctic-wide instrument for emergency preparedness and 
response, and other projects. The U.S. and Canada have been sharing 
research in spill response in the U.S.-Canada Northern Oil and Gas 
Research Forum. Results of these studies, assessments, programs, as 
well as our experience in offshore Arctic operations, are valuable to 
Arctic nations. Based on our participation in the Arctic Council and 
communications with other northern nations, we believe that our 
readiness for oil spills is equal to or greater than Canada's and 
Russia's.

  Responses of Michael R. Bromwich to Questions From Senator Murkowski
    Question 1. Prior versions of the Chukchi exploration plan had won 
your agency's approval and the only changes to it have been, 
indisputably, improvements such as including additional spill 
prevention, containment, and response measures. Specifically, what 
legal and administrative obstacles may remain before the approval of 
this EP?
    Answer. The approval of exploration plans (EPs), in the Chukchi or 
anywhere else on the U.S. Outer Continental Shelf (OCS), is not under 
BSEE's purview. All EP reviews and decisions are performed by the 
Bureau of Ocean Energy Management (BOEM). We coordinate closely with 
BOEM during its EP review to ensure that required information is 
submitted and understood by both bureaus. Subsequent to BOEM approval 
of an EP,BSEE would consider any applications for permits to drill in 
accordance with any BOEM-approved EP.
    BOEM granted conditional approval of Shell Gulf of Mexico, Inc.'s 
Exploration Plan under leases in the Chukchi Sea Planning Area on 
December 16, 2011. BOEM is best able to provide additional information 
concerning review and approval of exploration plans in the Chukchi Sea.
    Question 2. You have stated before that the failure to provide 
final answers on administrative decisions is the worst possible result 
from an agency. Is your current process consistent with delivering an 
answer in time for the decisions which the Chukchi applicant must make 
with regard to contracting for the 2012 exploratory season?
    Answer. The mission of the Bureau of Safety and Environmental 
Enforcement (BSEE) is to ensure that exploration, development and 
production of offshore energy resources take place in a manner that is 
protective of human health and the environment. Although BSEE is 
committed to conducting the most efficient reviews possible, reviews of 
oil spill response plans or applications for permit to drill must take 
place in a manner such that agency decision-making is fully informed by 
all relevant materials regardless of any particular applicant's 
internal timelines. We are on schedule to complete a thorough review of 
Shell's Oil Discharge Prevention and Contingency Plan (ODPCP) for the 
Chukchi Sea, with comments informed by the participation of other 
federal agencies through the Interagency Working Group on Coordination 
of Domestic Energy Development and Permitting in Alaska, well before 
the start of the 2012 exploratory season in Alaska. The timelines for 
agency review are dependent on Shell providing information and 
correcting any potential shortcomings in its plans or applications. 
BOEM conditionally approved Shell's Chukchi Sea Exploration Plan on 
December 16, 2011, and we are confident that BSEE's internal processes 
will not be the source of any undue delays in the review of the ODPCP 
or future Applications for Permits to Drill.
    Question 3. It is my understanding that the Administration will be 
reviewing the Alaska spill response plan separately from the 
exploration plan; specifically that Deputy Secretary Hayes is 
evaluating this element of the plan with the Interagency Working Group 
on Coordination of Domestic Energy Development and Permitting in 
Alaska. Although your testimony indicated your absence from the 
Interagency Working Group, both BOEM and BSEE have or will have 
responsibilities associated with the plan. What is the timeline on 
evaluating the spill response plan?
    Answer. The review of the ODPCP is proceeding separately from the 
review of the exploration plan (EP) because the two reviews are 
conducted, under our regulations, by two separate bureaus. The 
separation of these functions is part of our reorganization intended to 
put safety regulation in different hands from planning and leasing for 
oil and gas development offshore. BOEM is responsible for review of the 
EP, and BSEE is responsible for the review of the ODPCP. As part of our 
review of Shell's Arctic ODPCPs, BSEE has been closely engaged with the 
Interagency Working Group on Coordination of Domestic Energy 
Development and Permitting in Alaska, established by the President in 
E.O. 13580, and BSEE staff has participated in comprehensive dialogue 
with technical experts from Shell, the USCG, the Environmental 
Protection Agency, and the National Oceanic and Atmospheric 
Administration. The interagency process has been extremely helpful for 
highlighting concerns from other agencies long before they would 
normally be addressed. Working through those concerns is helping to 
inform our review and should allow Shell to more fully address our 
comments on their ODPCPs in a more timely manner. Shell was provided a 
detailed notification of certain modifications that we believe are 
necessary to incorporate into their Chukchi ODPCP. Shell's response to 
that notification was received and will be incorporated into our review 
of their Chukchi ODPCP.
    Question 4. In light of the Interagency Working Group's apparent 
control over part of the decision on the Arctic, as well as action and 
inaction of other agencies with the power to slow or halt OCS 
exploration, are you comfortable that DOT's ultimate statutory 
authority over the OCS is preserved?
    Answer. The Interagency Working Group on Coordination of Domestic 
Energy Development and Permitting in Alaska has no control over any 
decisions to be made in the Arctic by BSEE. The purpose of the 
Interagency Working Group is to ensure effective coordination among all 
relevant agencies with respect to decisions about Arctic resource 
development. With respect to the ODPCP, this involves soliciting 
information and feedback from other agencies to help inform BSEE's 
review. It has performed this role admirably. With respect to other 
agencies that also have legal authority over activities on the OCS, we 
continue to work with those agencies exercising their respective 
statutory authorities, which do not negatively affect the Department of 
the Interior's ability to successfully fulfill its missions in any way.
    Question 5. Your agency has asserted that contractors in the OCS 
will be subject to the same direct regulation by DOI as the operators--
notwithstanding the previous practice of regulating the operator as the 
lead entity in charge of an operation. Because this authority is newly 
found or, at a minimum, newly exercised, the Committee has an immediate 
interest in understanding specifically how the OCSLA, a statute under 
our jurisdiction, is being interpreted and implemented at the agency 
level. In the interests of oversight, better understanding, and 
transparency, will you include those specific memoranda on legal 
rationale for this authority with your responses to these questions?
    Answer. BSEE's legal authority over contractors who violate the 
provisions of the Outer Continental Shelf Lands Act (OCSLA), is based 
in part on subsection 24(b)(1), which states in part: ``[I]f any person 
fails to comply with any provision of the Act, or any term of a lease, 
or permit issued pursuant this Act, or any regulation or order under 
this Act, after notice of such failure and expiration of any 
reasonable? period allowed for corrective action, such person shall be 
liable for a civil penalty .. ..'' Consistent with the Act, BSEE's 
implementing regulations also extend responsibility for OCSLA 
compliance to co-lessees, operators, and those persons actually 
performing OCS covered activities. (See, 30 C.F.R. Sec. 250.146.) 
BSEE's civil penalty regulation also defines a ``violator'' as a person 
responsible for a violation of the Act. (See; 30 C.F.R. Sec. 250.1402.) 
In addition, in subsection 24(c) Congress authorized assessment of 
criminal penalties against ``any person'' who ``knowingly and 
willfully'' violates OCSLA, regulations issued under the authority of 
the OCSLA, and leases, licenses, or permits issued pursuant to the 
OCSLA. Congress's utilization of the tenn ``any person'' in OCSLA 
provides BSEE with clear statutory authority over non-leaseholders and 
non-operators.
                                 ______
                                 
     Responses of Jorge R. Pinon to Questions From Senator Bingaman

    Question 1. Do you feel that the channels of communication that you 
referenced in your testimony are in place to share best oilfield 
exploration practices, as well as spill prevention, preparedness and 
response practices, between ourselves and our neighbors in the Gulf--
Mexico, Cuba, and the Bahamas?
    Answer. Not with Cuba and The Bahamas. The only ``communication'' 
with Cuba is through Repsol, one of the six international oil companies 
holding oil and gas exploratory concessions in that country and with 
the Houston based International Association of Drilling Contractors. To 
my knowledge no formal conversations have been held by either the USCG, 
Department of State and or Department of Interior's BSEE with 
Malaysia's PETRONAS, Russia's Gazprom, India's ONGC, Angola's Sonangol, 
Vietnam's Petrovietnam and or Venezuela's PDVSA. I am also not aware of 
formal conversations with The Bahamas Petroleum Company Plc., the only 
licensed operator in The Bahamas.
    Most importantly no conversations have been held with Cuba's oil 
and gas regulatory agency Oficina de Regulacion Ambiental y Seguridad 
Nuclear and The Bahamas Ministry of the Environment. The United States 
does have channels of communication with Mexico's national oil company 
Pemex and Mexico's regulatory agency Comision Nacional de 
Hidrocarburos.
    Question 2. How do you think that we, the U.S. government, can work 
to best help our Gulf neighbors in spill prevention and response 
planning?
    Answer. Create a public or private (non-political academic center 
of excellence or professional trade organization such as the 
International Association of Drilling Contractors) umbrella 
organization under which deepwater hydrocarbon development lessons and 
best practices can be shared.
    For Cuba's national oil company CUPET to become a member of the 
Houston based International Association of Drilling Contractors. . . 
they would have to apply for an OFAC license! And face a number of; 
1917 Trading with the Enemy Act, State Sponsors of Terrorism, The Cuban 
Democracy Act, and The Cuban Liberty and Democratic Solidarity Act 
filters. In my opinion this is not the way to share best practices.
    Question 3. Perhaps more importantly, is there anything that we can 
or should do to help less experienced offshore oil regulators in other 
countries to develop the experience that is needed to be an effective 
regulator?
    Answer. See below.
    Question 4. Do the Mexican, Cuban and Bahamian governments have the 
resources, capabilities and experienced personnel required to create 
and enforce the most advanced and timely frilling regulations and 
standards?
    Answer. Certainly not Cuba and or The Bahamas. I am sure they have 
qualified professionals in their field of academic study but 
understandably lack experience in enforcing regulations in the 
technically complex environment of deepwater drilling for oil and gas. 
That is why it is so important to have experienced operators and sub-
contractors, along with equipment and service providers that have 
hands-on international experience of operating under a multitude of 
geological and environmental complex scenarios.
    But it is not only an issue of physical resources but most 
important. . . behaviors.
    The challenge for Mexico's regulatory agency CNH is independence. 
Mexico's oil and gas sector has been a monopoly for over seventy (70) 
years! Most of the experience of CNH's staff comes from working with 
Pemex. Would the Senator support a situation under which most of BSEE's 
staff were former Exxon employees?
    Emerging countries regulatory agencies also face the challenge of 
ethical conduct and or dishonest and illegal practices which undermines 
the independency of the agency in enforcing regulations and standards.
    Question 5. Can each of these countries' regulatory agencies 
effectively regulate the operators working in our shared waters?
    Answer. Regrettably, not today. Maybe in the future as they gain 
industry and sector experience.

    Responses of Jorge R. Pinon to Questions From Senator Murkowski

    Question 1. Your testimony indicates that the Gulf of Mexico 
represents a great opportunity for Cuba to develop resources and 
bolster its economy. Let's presume for the sake of discussion that 
Cuba's drilling program this year results in a safe, commercial 
discovery. What kind of pace or timeline would you envision for 
additional leasing, exploration, and development? When might we see 
first oil?
    Answer. Limited production within three (3) years and a maximum net 
working interest of approximately 131,000 barrels per day within seven 
to ten (7-10) years assuming that 5 billion barrels of crude oil 
reserves are determined to be proven in the ``North Cuba Basin''. Note; 
Cuba's current oil demand, under its centralized economic model, is 
147,000 barrels per day.
    In Cuba's Production Sharing Agreement, Cupet awards the rights to 
a third party contractor to explore and produce hydrocarbons within a 
specific geographical area at its own risk. The contractor is 
responsible for supplying all capital, equipment, installations, 
technology and personnel needed to carry out the operations as outlined 
in the contract.
    PSAs are generally divided into exploration and production periods, 
each with its own set of performance requirements. If no exploratory 
work is conducted within the specified exploration period, typically 3-
7 years, or insufficient quantities of crude oil and/or natural gas are 
found and the reservoir is declared un-commercial the concession can be 
surrendered with the contractor unable to recover any of its capital 
investments.
    If the reservoir is considered commercially viable, then the first 
oil extracted from the concession is allocated to the contractor to 
recover its capital investment and other exploration costs--cost oil--, 
with a limit on what percentage of production can be allocated as cost 
oil.
    Once costs have been recovered the remaining oil--profit oil--is 
divided between Cupet and the contractor in agreed proportions (60% / 
40%) as outlined in the PSA. Exploration and production terms are 
typically 25-30 years in duration.
    Taxes generally paid by the contractor are 25% on personnel 
salaries and 30% on net profits. The contractor is also allowed to 
dispose of its share of production by exporting it--in kind--or selling 
it to Cupet at an agreed to price formula.
    Question 2. Can you provide any estimate as to the level of oil 
production Mexico might achieve in out years, now that some foreign 
participation will be allowed in its development?
    Answer. Mexico's oil and gas future has not received the attention 
and concern that it deserves as to the socio-economic impact that it 
could have in the United States-Mexico relations.
    Mexico's crude oil production has fallen below the 3 million 
barrels per day threshold for the first time since 1990 from a high 
production level of 3.8 million barrels per day in 2004. Oil production 
and Pemex represent 14% of total export revenues and 32% of total 
government revenues.
    Pemex does not have any deepwater experience. Its current 
production area of Campeche is not considered deepwater. . .Pemex is 
about to drill next year Maximo its first Gulf of Mexico ultra 
deepwater prospect at over 9,500 feet of water depth. . .yes, 9,500 
feet of water depth, just 22 miles south of the US-Mexico EEZ. . . .And 
we are worry about Cuba and Repsol??
    That is why we recently witnessed an unfriendly attempt by Pemex to 
take shareholder's control of a well experienced Gulf of Mexico 
deepwater operator. . .hold and behold. . .REPSOL!!
    DOE's EIA assessment.

                  Mexico, liquids production sinks to approximately 1.4 
                million barrels per day in 2025 before rebounding 
                slowly to 1.7 million barrels per day in 2035, still 
                1.5 million barrels per day below the 2008 production 
                volume of 3.2 million barrels per day. The rebound 
                after 2025 depends entirely on the development of 
                potential resources in the deepwater Gulf of Mexico, 
                which must begin some years in advance of any increase 
                in production levels. The outlook for Mexico's liquids 
                production is markedly different from the IEO 
                projection just 5 years ago, in which production did 
                not fall below 2.9 million barrels per day, and a long-
                term recovery began in 2013. The difference between the 
                projections is the result of production declines at 
                Cantarell, which have been more severe than expected, 
                as well as diminished expectations for Chicontepec 
                production and more pessimistic assumptions about the 
                level of future investment, both foreign and domestic, 
                in Mexico's deepwater production.
                  Although the shortage of investment in Mexico is 
                expected to lead to a mid-term decline, Mexico has 
                potential resources to support a long-term recovery in 
                total production, primarily in the Gulf of Mexico. The 
                extent and timing of a recovery will depend in part on 
                the level of economic access granted to foreign 
                investors and operators. Mexico's national oil company, 
                Petroleos Mexicanos (PEMEX), currently does not have 
                the technical capability or financial means to develop 
                potential deepwater projects in the Gulf of Mexico.
                                 ______
                                 
       Responses of Mark Myers to Questions From Senator Bingaman

                      ICEBREAKERS AND COOPERATION

    Question 1. You mentioned the issue of icebreakers in your 
testimony. Icebreakers seem to be very important in spill response and 
prevention--while the US has only two icebreakers (with a third to be 
decommissioned); the fleet of the Canadian icebreakers seems more than 
adequate to assist us should we need assistance. Do you know if there 
are any agreements in place whereby the Canadians will assist us should 
we need to borrow an icebreaker under emergency conditions?
    Answer. I know of no pre-arranged agreements between the United 
States Coast Guard (USCG) and the Canadian Coast Guard (CCG) for 
icebreaker support for the purpose of emergency oil spill response. 
Even if there were such a formal agreement for ice-breaker assistance, 
the Canadian fleet of icebreakers, consisting of two medium and five 
lighter class icebreakers, is spread over a wide area of Canadian 
Arctic waters so their ability to effectively respond to a spill in US 
arctic waters would be rather limited and probably not very timely. 
First response would likely come from an industry-owned or chartered 
commercial icebreaker or the USCG Healy.
    There has been good cooperation between the CCG and the USCG for 
the joint use of icebreakers for scientific research in the Arctic 
Ocean. For example 2008-2011 there has been coordinated use of the USCG 
Icebreaker Healy and the CCG Icebreaker Louis S. St-Laurent for mapping 
of the extended continental shelf off the US and Canadian portions of 
the Arctic Ocean.

                           ARCTIC EXPERIENCE

    Question 2. In areas where ice cover remains throughout the 
majority of the year, how is it possible to complete a well in a 
drilling season? Are our Canadian and Russian neighbors better prepared 
to prevent and respond to oil spills? Or do we all have the same level 
of experience and knowledge of the Arctic and the complexities that are 
involved with arctic offshore oil drilling and development?
    Answer. The ability to drill in areas where ice cover remains 
throughout the majority of the year is dependent upon the water depth 
and drilling technology employed. Where water depth is shallow 
(generally less than 100 feet), bottom-founded structures or man-made 
islands can potentially be used for year-round drilling. In very near 
shore areas, wells can be directionally drilled continuously off shore 
from causeways or onshore drill pads. However, in offshore areas where 
ice cover remains throughout most of the year and where water depths 
are deeper than 100 feet, completion of wells normally requires 
multiple drilling seasons. Drill ships or offshore drill rigs are 
brought in during the ice free season and the well is partially 
drilled, cased, temporarily plugged and abandoned. The rig is then 
transported off site. The following summer the rig returns, reenters 
and completes the well.
    In the United States significant investment has been made through 
industry partnerships for oil spill response for currently producing 
facilities in the near shore waters of the Beaufort Sea. Because no 
production is occurring in the Canadian Beaufort Sea, the Canadian 
companies have more limited spill response capacity which is directed 
toward exploration drilling and shipping rather than near-shore 
production as in offshore Alaska. Because the Canadian and Russian 
governments have larger icebreaker fleets these governments are 
potentially better capable at responding to a ship-based spill along 
the northern sea routes when ice cover is an issue. It should be noted 
that independent of the US government capacity, Shell Oil has developed 
its own icebreaker to be used in support of its proposed exploration 
drilling operations in the Beaufort and Chukchi Seas.
    Similar drilling technology is generally available in all arctic 
nations where oil and gas exploration development is occurring which 
could indicate similar oil spill prevention capacity. However, safety 
practices and the capacity and practices of individual companies along 
with regulatory requirements and enforcement practices vary from 
country to country. With respect to overall scientific knowledge of the 
complex nature of the arctic ecosystem, I believe that the United 
States has marginally greater knowledge.

                         ARCTIC ENERGY COUNCIL

    Question 3. Can you elaborate a little bit on the role of the 
Arctic Energy Council in offshore oil development in arctic areas?
    Answer. Established in 1996, the Arctic Council is an 
intergovernmental forum to promote cooperation, coordination and 
interaction among arctic states. Member states include Canada, Denmark 
(including Greenland and the Faroe Islands), Finland, Iceland, Norway, 
Russian Federation, Sweden, and the United States. The Arctic Council 
focuses on issues of sustainable development (including oil and gas) 
and the environmental protection of the Arctic.
    Since 2008, the Arctic Council through its Emergency Prevention, 
Preparedness and Response Working Group has been synthesising knowledge 
and developing expertise on the behavior of oil in arctic waters and 
promoting the development and use of technologies and methods that 
improve oil spill response. On May 12, 2011, the Arctic Council began 
negotiations toward an international instrument on arctic marine oil 
spill preparedness and response.

                              DISPERSANTS

    Question 4. How do dispersants behave in arctic areas? Do we know 
if it is the same as warmer areas, like the Gulf of Mexico? What is the 
state of the science for dispersants in cold water areas?
    Answer. In two series of tests funded by the Minerals Management 
Service, commercially available chemical dispersants were tested in 
cold water conditions on North Slope crude oil samples. These tests 
were conducted in the wave tank at the National Oil Spill Response Test 
Facility and found that the dispersants were effective in dispersing 
both fresh and weathered samples in energetic wave conditions. The 
results of these tests were published in the Marine Pollution Bulletin 
58 (2009) p. 118-128. Less is understood about the effectiveness of 
chemical dispersants in less energetic arctic environments such as oil 
that is trapped under ice.
    Funded by the Joint Industry Research Program, toxicology tests 
have been performed on sample arctic marine species. Petroleum and 
chemical dispersant exposures on copepods, fish and krill indicate that 
they react with similar or higher resilience than temperate species. 
Additionally, chemical dispersants in oiled arctic seawater appear to 
enhance the completeness of degradation of measured components in oil 
over petroleum not exposed to dispersants.
    Recent testing and research has significantly enhanced the state of 
knowledge of the effectiveness of commercially available dispersants in 
arctic environments and species, particularly with respect to open 
water and higher energy environments. However, much less is understood 
about how dispersants will function in environments where significant 
sea ice is present. Additionally, more research is needed in order to 
understand issues such as how dispersed oil and associated microbial 
activity will affect oxygen levels in under ice environments. 
Information gathered from the recent large scale use of dispersants in 
the Gulf of Mexico should be used to better focus comparative research 
in arctic waters.

                               CHALLENGES

    Question 5. What do you think the real challenges are for oil 
drilling and development in the Arctic? Do you feel that our neighbors 
are adequately prepared to prevent and respond to an oil spill on or 
under arctic ice or in open waters in arctic areas?
    Answer. I believe that the greatest challenge for oil drilling and 
development anywhere is the prevention of a spill by fully assessing 
risk, employing the best and most appropriate technology, practicing a 
culture of safety first in all operations, and preventing situations 
where a single point of failure will cause a spill. If prevention 
fails, the more rapid the spill is contained, the more effective the 
response. Prepositioning effective well capping equipment is an example 
of a newly tested technology that could dramatically improve the oil 
industry's ability to respond to a spill in offshore wells.
    Some of the additional challenges associated with responding to an 
arctic oil spill include very cold temperatures, sea ice, limited 
daylight hours, lack of infrastructure, remoteness from resources and 
the unique ecosystem. There is a strong need for the development and 
deployment of an all season and all weather operational sensor network 
in the Arctic that integrates subsurface, sea floor, water column, 
surface, and atmospheric monitoring. Such an operational network will 
require significant investment in emerging technological advancements. 
Some examples are next generation autonomous underwater vehicles and 
sensors, small to medium unmanned aerial vehicles, portable high 
frequency coastal radar, and enhanced integration of data from manned 
aircraft and space systems, all coupled with more effective integration 
of community-based monitoring systems.
    One of the greatest challenges is locating oil under ice. 
Furthermore, the behavior of oil under and within ice is poorly 
understood and in need of greater research.
    Techniques for removing oil include containment and mechanical 
cleaning, in-situ burning, bioremediation, chemical dispersants, and 
natural recovery. The effectiveness of these various techniques is 
significantly affected by the percentage of ice cover and the ability 
to timely mobilize adequate equipment and personnel to the spill site. 
Throughout the Arctic more research is needed in order to develop 
better predictive models for the movement of sea ice and ocean 
currents, improved oil spill trajectory models, increased understanding 
of the behavior and tracking of oil under ice, and better understanding 
of the impacts to the ecosystem. Stronger agreements between 
governments, agencies, communities and companies and protocols for the 
integration of data streams and data sharing will be necessary in order 
to develop the best operational picture. More realistic and larger-
scale field training exercises will be necessary in order to achieve 
the most efficient operational capacity.
    Under minimal ice and ice free conditions our neighbors in Russia 
and Canada have some capacity to prevent and respond to spills in and 
around existing infrastructure. However, neither neighbor (nor the 
United States) has the capacity to effectively clean up oil under ice.

      Responses of Mark Myers to Questions From Senator Murkowski

    Question 1. Would you say that strong understanding of the offshore 
oil and gas resources, including characterizing the reservoirs, is 
important to determine what kind of build out will be necessary, should 
production advance?
    Answer. Yes, understanding the fundamental geology of the resource 
is critically important for all aspects of the exploration and 
development of oil and gas fields and their associated production and 
transportation infrastructure. For example, the reservoir properties 
including the seals, depth, pressure, fluid types and contacts, 
reservoir thickness and volume will significantly affect the well and 
completion design, the number and spacing of drilling and production 
platforms, methods of enhanced oil production, and many aspects of the 
design for the production facilities, pipelines and associated 
compressors. Other key factors that affect facility and well design 
include the water depth and ice conditions that the facilities must be 
built to withstand.
    Question 2. Critics of arctic development talk much about how 
dealing with issues in that environment is so much more difficult 
because of the harsh weather and the darkness--but they tend to forget 
that those are essentially normal conditions in our region. Is there a 
population, both domestically and globally, of both skilled and 
unskilled personnel who are accustomed to working in arctic 
environments?
    Answer. In Alaska, Norway, Russia and Canada there is a highly 
successful, professional, skilled, and unskilled labor force that has 
worked year-round for decades in oil and gas development and other 
professions in the extreme weather conditions of the Arctic.
                                 ______
                                 
      Responses of Paul Schuler to Questions From Senator Bingaman

    Question 1. Do you feel that the channels of communication that Mr. 
Pinon referenced in his testimony are in place to share best oilfield 
exploration practices, as well as spill prevention, preparedness and 
response practices, between ourselves and our neighbors in the Gulf--
Mexico, Cuba and the Bahamas?
    Answer. I feel channels of communication are expanding; reference 
the upcoming IMO Workshop in the Bahamas scheduled for December 7-9, 
2011, which will have representatives from the Bahamas, Cuba, Jamaica, 
Mexico, and the United States, as well as several subject matter 
experts.
    Question 2. How do you think that we, the U.S. government, can work 
to best help our Gulf neighbors in spill prevention and response 
planning?
    Answer. Prevention is beyond the scope of my company's activities, 
but I believe response planning could be enhanced by the U.S. 
Government hosting both workshops and training courses on the subject, 
with subject matter experts assisting.
    Question 3. Perhaps more importantly, is there anything that we can 
or should do to help less experienced offshore oil regulators in other 
countries to develop the experience that is needed to be an effective 
regulator?
    Answer. Like #2, dedicated education and training opportunities 
through IMO and other international organizations may be helpful.
    Question 4. In your testimony, you have indicated that you have a 
license to go and work directly with representatives of Repsol and 
Petrobras who have been operating previously in Cuba. In your recent 
work, have you felt that the competencies of the companies have 
increased with experience?
    Answer. I am not qualified to comment on the competencies of these 
companies with regard to drilling operations. However, with regard to 
oil spill preparedness and response since the Macondo incident, Repsol 
and Petrobras, like all the other companies we work with, have 
continued to improve on their preparedness and planning, as well as 
enhancing response capacities.
    Question 5. You also mentioned your sister cooperative, Oil Spill 
Response Ltd. Do they have the same capabilities as your company Clean 
Caribbean & Americas? Or do they have expanded capabilities such as 
wellhead containment equipment?
    Answer. Oil Spill Response Ltd. has broadly similar preparedness & 
response capabilities as Clean Caribbean & Americas. They have recently 
acquired a single wellhead containment system that is dedicated to the 
North Sea operations only.
    Question 6. You finished your testimony by stating that the process 
could be loosened up so that more companies and resources can be 
brought into the response from the US. Are you referring to the 
licensing process itself or to the embargo?
    Answer. I thought it presumptuous to comment on specifics regarding 
how to ``loosen up'' the process, which I felt was the purview of 
Congress. My point was strictly to bring to light the need to have more 
resources available to protect U.S./Florida natural resources. This 
could be accomplished by making the licensing process quicker and 
broader.

     Responses of Paul Schuler to Questions From Senator Murkowski

    Question 1. Your member companies represent both major integrated 
and independent oil companies. To what extent do you draw on their 
expertise--or recruit from such companies--in maintaining Clean 
Caribbean's readiness to respond to incidents?
    Answer. Preparedness and response is a collaborative process 
involving both the operating companies, and the response cooperatives. 
Typically the preparedness functions such as planning reside in the 
companies, while Tier 3 response resources (supplemental to OSR 
resources that the oil companies possess) the physical response 
resources reside in the response cooperatives. They are integrated 
through training, drills and exercises.
    Question 2. Your testimony discusses the appropriateness of 
dispersants when used responsibly. One of the issues we've struggled 
with is a responsible means of getting pre-authorization for certain 
tested dispersants in certain situations. Are there parameters, in your 
view, that would make such a regime workable and responsible?
    Answer. The primary goal of any oil spill response operation should 
be to minimize environmental harm. Although one expectation may be the 
complete physical containment and removal of oil from the environment, 
this is often not possible (especially with large offshore spills) due 
to physical limitations of mechanical recovery systems. In fact, 
recovery operations during previous offshore spills only collected a 
small fraction of the spilled oil even under ideal conditions [ITOPF 
Handbook, 2010]. The Deepwater Horizon incident is no exception, with 
preliminary estimates indicating that only 3% of the oil was 
mechanically recovered [NOAA Oil Budget, 2010]. Relying solely on 
mechanical response measures to large offshore spills may therefore 
result in less effective protection of the environment. Responders, 
response advisors, and regulators must consider the advantages and 
limitations of each response option and the conditions of the spill to 
develop a response strategy that minimizes environmental harm.
    The oil and gas industry recognizes the significant limitations of 
mechanical recovery for large offshore oil spills and has developed 
alternative response tools--one of which is oil spill dispersants. Oil 
spill dispersants facilitate removal of oil from the environment by 
enhancing the natural biodegradation process. Dispersants do this by 
rapidly breaking a surface slick into micron-sized droplets that move 
into the water column. This provides naturally occurring oil degrading 
bacteria greater access to the oil by creating a dilute mixture of oil 
in water rather than a thick surface accumulation. Fortunately, oil 
degrading bacteria are present in all marine environments, having 
evolved to degrade oil released by natural seeps [Margesin and 
Schinner, 2001; Prince and Clark, 2004].
    Dispersed oil rapidly dilutes [French McCay and Payne, 2001; French 
McCay et al., 2006, McAuliffe et al., 1980, Cormack and Nichols, 1977, 
Daling and Indrebo, 1996], and concentrations above known toxicity 
thresholds do not persist for more than a few hours after effective 
dispersant application. Thus the potential for cute impacts to the 
environment from dispersed oil is limited in duration and space. In 
contrast, a surface slick has the potential to impact marine mammals 
and birds for many days and strand on sensitive shorelines. The most 
sensitive areas in many marine environments are marine marshes and 
swamps. These areas can take years to decades to recover [Sell et al., 
1993] once impacted by surface slicks.
    Fortunately, during the Deepwater Horizon incident, the amount of 
damage to these resources was far less than scientists initially 
expected. In many locations where oil did enter, marsh grass recovery 
was apparent soon after the spill [Kaufman and Dewan, 2010]. Although 
additional investigations are still needed, this and other preliminary 
evidence suggests that a key reason for the limited shoreline impacts 
during the Deepwater Horizon incident was the use of dispersants and, 
in particular, the subsea injection of dispersants at the wellhead.
    Considering the limitations of mechanical recovery in removing oil 
from the environment, the decision to use dispersants often assists in 
reducing the potential for environmental impacts. The preliminary 
evidence from the Deepwater Horizon incident shows that the decision to 
use dispersants minimized potential impacts to marine mammals and birds 
and oiling of sensitive shoreline environments.
    Question 3. Another priority I think we recognized last year was 
the need to conduct controlled test spills in the ocean--something we 
can't currently practice in the U.S. but which has been conducted in 
other nations. Would your organization find use in such an exercise to 
both obtain real world experience with the behavior of oil in water and 
to test equipment and assets?
    Answer. I think that controlled test spills would be useful for 
expanding the science and knowledge base on dispersants, in-situ 
burning, and other methods, but I don't believe oil in water is 
necessary to test the capabilities of responders to mobilize and deploy 
equipment in the open water as we perform such exercises on a regular 
basis.
    Question 4. If the federal government authorized small, controlled 
spills in the ocean for purposes of training, would this enhance the 
readiness of organizations such as Clean Caribbean to respond to oil 
spills in areas adjacent to U.S. waters?
    Answer. I believe, as above, that controlled spills would be 
valuable for the purposes of enhancing science and knowledge on various 
response methods and strategies, but are not critical or additive for 
the purposes of training.
                                 ______
                                 
     Responses of Vice Admiral Brian M. Salerno to Questions From 
                            Senator Bingaman

    Question 1. I would like to open this round of questions by asking 
the both of you--How confident are you that the U.S. is ready to 
respond to a spill following the tragic events of the Deepwater 
Horizon?
    Question 2. In particular, how confident are you that we're ready 
in the advent that an oil spill occurs in the near future in Cuban 
waters--that would impact US waters, such as the Florida straits?
    Answer. The U.S. Coast Guard investigates and responds to oil 
spills every day. As the designated Federal On-Scene Coordinator under 
the National Oil and Hazardous Substance Contingency Plan (NCP), each 
local Coast Guard Captain of the Port (COTP) is responsible for 
coordinating local preparedness and response activities for their 
respective coastal zone. These responsibilities include overseeing the 
development of Area Contingency Plans (ACP) and organizing the Area 
Committee whose membership is comprised of stakeholders from other 
federal agencies as well as state, local, tribal and industry 
representatives.
    While the National Contingency Plan (NCP) is sound and performed 
well during the DWH spill response, the Coast Guard is working with 
DHS, the National Response Team, and other agency partners to update 
guidance documents and protocols to reflect DWH Lessons Learned. The 
Coast Guard, in partnership with EPA and FEMA, has jointly chartered 
work groups to develop recommendations that support improvements for 
government responses. The Coast Guard is also working closely with the 
National Response Team, including EPA and NOAA, to review and update 
response equipment options available to operational commanders in 
combating catastrophic spill events.
    In addition, the Coast Guard is aggressively and methodically 
pursuing a number of enhancements across three major lanes, including 
(1) improving internal competency and capacity; (2) improving response 
system policy; and (3) improving quantity, quality and efficiency of 
the national inventory of response equipment.
    In improving internal competency and capacity the Coast Guard is 
addressing the ability to manage and sustain an incident response by 
developing training courses and implementing personnel enhancements in 
the pollution response field. The Coast Guard requested billets in the 
FY12 President's Budget for a National Incident Management Assistance 
Team (IMAT) Additionally, the Coast Guard has encouraged more 
participation from state and local officials in oil spill planning and 
preparedness efforts.
    The Coast Guard is partnering with other agencies to improve the 
quantity, quality and efficiency of the national inventory of response 
equipment. The Coast Guard and Bureau of Safety, Energy and Environment 
(BSEE) and other agencies are reviewing OPA 90's technical planning 
standards for assessing oil spill response equipment efficiency and 
effectiveness. In addition the Coast Guard is currently working with 
industry on updates to its 1997 Oil Pollution Research and Development 
Technology Plan.
    Protecting the marine environment from accidental oil and chemical 
spills is a key mission of the U.S. Coast Guard. Although a response to 
an oil spill in Cuban waters that affects the U.S. would certainly be 
more challenging than a similar domestic event, the Coast Guard is 
working with other stakeholders to maximize preparedness should a spill 
occur. To ensure readiness and awareness, specific to Cuban proposed 
offshore oil exploration, the U.S. Coast Guard Seventh District 
Commander began outreach and planning efforts over a year ago. These 
efforts are ongoing and the U.S. Coast Guard will continue to maximize 
information sharing, preparation, and training with all partners, to 
make sure sound strategies and liaisons are built to prepare for and 
respond to any potential environmental threat to U.S. waters. The Coast 
Guard has engaged the State of Florida, our fifteen National and 
Regional Response Team partners to include: the Environmental 
Protection Agency, Departments of State, Commerce, Treasury, and 
Interior, the Government of the Commonwealth of the Bahamas, Oil Spill 
Removal Organizations with licenses to work in Cuban waters, as well as 
elected officials at all levels of government.
    The Coast Guard maintains contingency plans that are ready to be 
activated in the event incidents occur. The Coast Guard is updating 
plans to address a potential discharge from a drilling rig off the 
coast of Cuba or other Caribbean Nations that could potentially impact 
U.S. waters. This preparedness effort is far-reaching and includes a 
host of federal, state, and private entities to ensure awareness and 
mutual cooperation. Additionally, plans are already underway to begin 
regional coordination as the Coast Guard focuses on the near-term 
drilling that is to occur off Cuba, the Coast Guard is also mindful of 
the potential for future offshore oil exploration in Bahamian waters.
    In the event of an emergency, the U.S. Coast Guard would mount an 
immediate response using existing authorities in partnership with other 
Federal, State and local agencies under the National Oil and Hazardous 
Substances Pollution Contingency Plan and the Oil Pollution Act of 
1990. The National Contingency Plan (NCP) is the Federal government's 
blueprint for responding to both oil spills and hazardous substance 
releases. In accordance with the NCP, U.S. response agencies are 
authorized to undertake immediate actions for the removal of a 
discharge that may affect its natural resources. A ``Unified Command'' 
approach would be employed, focusing on combating the spill offshore 
using all viable response tactics.

                                  CUBA

    Question 3a. Has the Coast Guard been in the same discussions with 
Repsol as the BSEE officials have? If so, do you feel confident that 
Repsol is adequately prepared on both the prevention (in terms of the 
vessel itself) and spill response should another oil spill occur?
    Answer. In March 2011, Repsol independently reached out to the 
Coast Guard regarding their future operations for the Straits of 
Florida. On April 6, 2011, Repsol officials attended a meeting at Coast 
Guard Headquarters and provided general information on their efforts 
and plans. This meeting, hosted by the Coast Guard, was attended by 
interagency partners including Department of State (DOS), the National 
Oceanographic and Atmospheric Administration, the Department of the 
Interior (DOI), and the Environmental Protective Agency. Additionally 
in July 2011, the U.S. Coast Guard representatives, along with DOS and 
DOI (BOEMRE) representatives, received an updated briefing by Repsol in 
Trinidad.
    Based on information available to the Coast Guard at this time, the 
Coast Guard believes the vessel will be fit for intended service. A 
joint inspection with BSEE onboard the vessel will help validate the 
Coast Guard's expectations that it meets international standards.
    The Administration is committed to protecting U.S. national 
interests, particularly environmental interests in the Florida Keys and 
along the U.S. coastline, as they relate to deepwater drilling in Cuban 
waters. Should U.S. waters or land be threatened by an oil spill from 
any drilling site, the United States government can use existing 
authorities to conduct response operations. Additionally the U.S. 
government has engaged relevant state, local, and private stakeholders 
to ensure awareness and mutual cooperation and to examine existing oil 
spill response plans and will continue to do so.
    We have made clear to Repsol that we expect it to adhere to the 
highest environmental, health, and safety standards and have adequate 
prevention, mitigation, and remediation systems in place in the event 
of an incident. Repsol has informed the U.S. government of its plans 
and invited U.S. government officials to observe an emergency drill 
conducted in Trinidad related to contingency planning for the drilling. 
The Administration is committed to supporting best practices to prevent 
and contain oil spills, and is pursuing immediate and long term 
initiatives that seek to minimize risks to U.S. waters and shores.
    The United States government views a multilateral approach as 
essential to contingency planning for oil spill prevention and 
response, especially in light of planned deepwater activity by a number 
of countries in the region. Multilateral engagement with the Bahamas, 
Cuba, Jamaica, and Mexico could occur in multiple forums. It is our 
intent to vigorously pursue such engagement. Our multilateral 
engagement is intended to ensure common understanding and effective 
implementation of international obligations and standards for oil spill 
prevention and response. Outside U.S. jurisdiction, it would generally 
fall to the flag state of the mobile offshore drilling rig and coastal 
state where it is operating to ensure compliance with safety and 
maintenance rules. Such rules would need to conform to applicable 
international requirements, which are often established under the 
auspices of the International Maritime Organization.
    Question 3b. Will you be conducting an inspection of the Repsol rig 
in conjunction with the BSEE inspectors?
    Answer. A joint inspection is tentatively scheduled to occur in 
December 2011 when the SCARABEO 9 makes a port call in Trinidad. The 
Coast Guard intends to send two Coast Guard marine inspectors to 
accompany the BSEE surveyors.

                         GENERAL SPILL RESPONSE

    Question 4. Can you describe how you've worked previously with 
other governments when spills have occurred?
    Answer. In accordance with the Clean Water Act and the National 
Contingency Plan (40CFR300), the Coast Guard serves as US lead for bi-
lateral oil and hazardous substance preparedness, planning and response 
across our international boundaries with Canada, Mexico, Russia, 
Panama, and nations in the Northern Caribbean. Semi-annual plenary 
meetings are held at the national level and daily contact occurs in 
each of the regions for planning, exercise and actual response 
operations.
    In general, when a pollution incident occurs, the responsible On-
Scene Coordinator provides notification of the type of incident to 
include: situation; action taken; future plans; recommendations; and 
the status of the case. Response objectives are coordinated between the 
US and the other governments involved.

                                 ARCTIC

    Question 5. Can you discuss a little more about how you are working 
with local stakeholders in arctic areas to coordinate a spill 
prevention and response plan? How does a spill response differ in the 
arctic areas, compared to non-arctic areas?
    Answer. As the designated Federal On-Scene Coordinator for the 
Coastal Zone under the National Oil and Hazardous Substance Contingency 
Plan (NCP), the local Coast Guard Captain of the Port (COTP) is 
responsible for coordinating local preparedness and response activities 
for their respective coastal zone. These responsibilities include 
overseeing the development of the Area Contingency Plan (ACP) and 
organizing the Area Committee whose membership is comprised of 
stakeholders from other federal agencies as well as state, local, 
tribal and industry representatives.
    As a result of the proposed offshore drilling activities in the 
Arctic, the Coast Guard is collaboratively working with the state, 
local, and tribal representatives at the local level to update the 
worst-case discharge (WCD) scenarios in the industry plans and other 
information in the appropriate Regional and Area Contingency Plans. 
These plans include the Northwest Arctic and North Slope Geographic 
Response Plans (local) and the Alaska Unified Plan (regional). The 
revised plans include updated information about offshore facility WCD 
scenarios, response equipment surge strategy, environmental protection 
strategies, source control, and waste disposal operations. These 
revised plans are scheduled for completion and final approval by the 
Coast Guard and the Alaska interagency regional and local planning 
bodies in advance of the 2012 drilling season. The Coast Guard in 
Alaska will continue to encourage more participation from state, local 
and tribal officials in oil spill planning and preparedness efforts in 
the form of participation in drills and exercises as well as Area 
Committee discussions to improve oil spill contingency plans.
    A spill response in the Arctic would primarily differ compared to a 
spill in non-Arctic regions because of the distance to remote spill 
locations, lack of pre-staged equipment, and lack of supporting shore-
based infrastructure. Adverse weather conditions such as ice, low 
visibility, and prolonged darkness also reduce the effectiveness of a 
response effort.
     Responses of Vice Admiral Brian M. Salerno to Questions From 
                           Senator Murkowski

    Question 1. Your testimony indicated that the Coast Guard was 
examining the option of leasing icebreakers. What stage of this 
examination have you reached
    Question 2. Given the total absence of Congressional support for 
leasing icebreakers from foreign entities, what steps are you taking to 
secure availability of U.S. built icebreakers to meet pressing needs in 
the Arctic?
    Answer. Leasing options continue to be one possible alternative as 
the Coast Guard continues to work with the Administration to assess 
future icebreaker requirements. The most recent analysis, which 
included leasing of currently available platforms and build-to-lease 
alternatives, was thoroughly examined in the Polar Icebreaker 
Replacement Business Case Analysis. This analysis was delivered to 
Congress on 02 November 2011.
    The Coast Guard anticipates Coast Guard Cutter HEALY and Coast 
Guard Cutter POLAR STAR (when returned to service in 2013) are 
sufficient to address the Coast Guard's most pressing, current 
icebreaking requirements in the Arctic for the near-term. The Coast 
Guard continues to work with the Administration on long-term icebreaker 
recapitalization needs. There are currently no U.S.-built icebreakers 
available for leases that are capable of operating in the Arctic.
    Question 3. Along these same lines, you have been called upon to 
address the issue of authorizing larger oil spill response vessels 
(OSRVs) over the past year and a half. The vessels that we're seeing 
constructed for Alaska's offshore development obviously have to be very 
large, with the ability to store huge volumes of recovered oil, and 
they have to be able to operate in heavy seas and in the dark. My 
understanding, however, is that current policy is based on the post-
Valdez idea that OSRVs would be smaller and tasked with responding to 
contained spills in near shore areas. Is this accurate?
    Why is there not yet the authorization for these vessels to be 
classified as what they are?
    Answer.

   Yes, this is accurate; however, that policy is grounded in 
        the governing statute 46 U.S.C.Sec.  3702(f)(2)(A), which 
        requires that an oil spill response vessel (OSRV) must be 
        either under 500 gross tons (GT) or an alternate tonnage 
        created by regulation, or be certified to comply with the tank 
        vessels standards of Chapter 37 of Title 46, U.S. Code.
   OSRVs less than 500 GT are exempt from tank vessel 
        regulations by statute. However, most Offshore Supply Vessels 
        (OSV) built after 1996 exceed 500 GT. In recognition of this 
        trend, the Coast Guard is working on a solution to allow OSVs 
        greater than 500 GT to also serve as OSRVs without restriction 
        on the amount of recovered oil they can be certified to carry. 
        That solution involves a rulemaking project.

    As an interim solution, the Coast Guard has approved requests 
permitting these larger OSVs to be placed into service as non-dedicated 
OSRVs, provided certain conditions are met. As they relate to this 
question, these conditions include that the OSVs have been adapted to 
serve as OSRVs, and they carry no more than 20% of their deadweight in 
recovered oil. In order to carry more than 20% recovered oil, there 
must be a demonstrated need articulated by the response authority 
during an oil spill emergency, and the Coast Guard Officer in Charge of 
Marine Inspection must certify that the vessel can safely operate under 
the circumstances. The Coast Guard is confident this approval can be 
obtained in a timely manner, and that the interim solution meets the 
needs of industry while the Coast Guard pursues a longer-term solution.
    Question 4. Why does a vessel like the Nanuq have to obtain 
authorization as a vessel of opportunity before it can conduct spill 
response operations?
    Question 5. Why can't the Coast Guard simply develop an advance 
classification for vessels like the Nanuq?
    Answer. The Coast Guard's policy and regulations regarding Offshore 
Supply Vessels (OSVs), like the NANUQ, and their designation as Oil 
Spill Recovery Vessels (OSRVs) are under revision.
    Until the Coast Guard's policy and regulations are finalized, as an 
interim solution, vessels like the NANUQ can be designated as a non-
dedicated OSRV while retaining their primary designation as an OSV. 
With this designation, the vessel does not have to obtain authorization 
as a vessel of opportunity to recover oil during response operations, 
as long as the vessel does not exceed 20 percent of its deadweight 
tonnage in recovered oil.
    If there is a need for the vessel to recover quantities exceeding 
20 percent, authorization may be granted when response authorities 
determine such carriage is necessary during an oil spill emergency, and 
it is approved by the Coast Guard.
    The Coast Guard has existing standards under which vessels such as 
the NANUQ can receive advance authorization to serve as an OSRV. In 
addition, in recognition of the multi-service nature of these vessels, 
the Coast Guard is developing design and operating standards for 
vessels (like the NANUQ) which normally support offshore oil and gas 
exploration and production, and may only operate occasionally as an 
OSRV.
    Question 6. Is it true that these large, ultra-capable vessels 
can't work in the Gulf of Mexico, meaning they wouldn't be on hand for 
an issue in Cuba or Mexico, without getting specific, case by case 
authority from the Coast Guard?
    Answer. These vessels can work in the Gulf of Mexico. As the Coast 
Guard's Oil Spill Response Vessel (OSRV) policy is under revision, as 
an interim solution, the Coast Guard has approved requests permitting 
Offshore Supply Vessels (OSVs) to be placed into service as non-
dedicated OSRVs, provided certain conditions are met. Specifically, 
Coast Guard approval would be needed if the vessel exceeds 20 percent 
of its deadweight tonnage in recovered oil. However, the Coast Guard is 
confident such approval would be forthcoming if the response authority 
required it and the cognizant OCMI determined it was safe under the 
circumstances.

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