it, because people have begun to understand how devastating that proposal could be. i am hopeful that the american people will continue to stay in touch with our legislators to try to put a stop to this. using this tragedy in the gulf coast as an excuse to have a national energy tax and their so-called capt. trade law -- cap and trade law, it is not right. >> what you think about an hour a negotiating with house democrats about campaign finance reform? >> when you lay down with dogs, you are likely to get up with fleas. .

>> i supported the line-item veto. the president does not have to wait to congress to act. erick kanter and i have promised the president that if he sends a package of spending cuts up to the congress, we would work to get republican support for that proposal. and we will. send those spending decisions appear. why he could send those proposals appear -- up here? we also sent a book of ideas that are worthy of his consideration that we would be

happy to support. >> you're not conditioning your support on his using the current -- >> no. >> what is the prospect for the disclose act? [inaudible] [no audio] >> we are back live in the house senate meeting room. they have been working on amendments to the financial regulations bill. a break in the action here. the senate is voting, so senate members of the committee have gone to the floor of the senate to vote. we expect the conference to reconvene. members have been working for four days in the work is expected to continue into next week. they're working section by section to the legislation. you can follow this online at c- span.org.

he confined all four meetings of the committee. while we wait to see when they come back, we will show you house speaker nancy pelosi from today who said that she believes the republican leadership holds the same view of the oil damage fund expressed earlier today by energy committee then be -- a member joe barton that called the $20 billion fund a shakedown. the weekly briefing is 25 minutes, and we will show you as much of this as we can.

>> a good afternoon. thank you all for accommodating the change in schedule from morning until afternoon as i am sure you are aware, we had a briefing at 11:00 from admiral palin on the situation in the gulf of mexico. it was very informative. members from the region had very specific questions about how the people and their district were affected and the impact it has had on our country, our economy, and the ecology of the region. and most of all, the well-being of the individuals. we had an opportunity to speak later about how we can make change for the better to increase the role that the coast guard has been working with mms, the new minerals management

service in order for them to be part of decision making when they are part of the response to it. we look forward to staying in touch with the admiral and i thank him on behalf of all members of the congress of the united states, to extend that thanks to the hard work that is being done by the coast guardsmen in the gulf of mexico. the have met a great challenge. they have, i think, handled the task very well. i think we can do better in the future. whether it is about training, prepared this, and right now, there is an approval process for the recovery plans. it is approved by the american petroleum institute. they have suggested to the minerals management service that they approve it.

what we're suggesting is that perhaps a day and the coast guard approved something not set forth by the petroleum industry, but set forth by the third party. again, these are some of the kinds of things that we discussed in the meeting generally and in my private meeting with him. since then, i have been pleased that the house has passed a very strong bill to help small businesses create jobs. if you heard me say over and over again -- one of the most up to make water -- one of the most optimistic things someone can do other than get married is to start a small business. we're hearing that there is some optimism and hope in terms of business opportunity, but they need credit. they have needed the credit for a long time with the banks that the bank did not provide.

this legislation which is a small investment on the part of the taxpayer, paid for, will create $30 billion in credit that can be leveraged in loan opportunities that can be leveraged in the $300 billion of credit to small businesses. as you know, small businesses are the creators of jobs in our country. there the creators of capital, and for too long now, republicans in congress have favored wall street over main street. they did again today. only three republicans voted for a bill that will provide credit to small businesses that would have tax advantages for small businesses. perhaps the most objected to how we paid for a, by closing a loophole that allowed businesses to send jobs overseas. and get a tax break for doing it. this is a bill we have been

working on for quite awhile. it is long overdue and i am glad that it has passed now. as you know, last week and met with families of those who lost loved ones in the gulf of mexico. they had some specific suggestions for us, especially relating to their well-being. we will have legislation that will come forth on that through the judiciary committee. revising the death on the high seas legislation that passed in 1859 and was revised in 1920. we will revise it now to the benefit and retroactively to cover these families. they were also concerned about their neighbors in the region. that is why i am so pleased with what the president did this week, by holding bp accountable

for the damage and harm done to families, small businesses, watermen, fishermen, and congratulate the president on the outcome of it. i was quite concerned about the response from my republican colleagues and i say colleagues more than one about apologizing to bp because of this settlement which would help people. while people in the gulf are suffering from actions taken by bp, republicans and the congress are apologizing to bp. again, we tried to rein in big oil, the republicans are not. same with health insurance. the republicans said know. as a need here today, our conference committee is meeting on operating and more of those

that are reckless from wall street causing joblessness on main street. when we pass the bill, not one republican voted for it. it is sad to say that today, only three republicans voted for it. five yesterday. in the event, willis' up to have -- we hope to have -- we will measure our progress by the success being made by america's working families. any questions? >> do you intend to bring it back to the floor tomorrow? i know there are still thinks that you're trying to work out. does widening the language a little bit, did that create problems in your caucus?

why are we doing these for other groups, and does that make these groups look like they are -- >> it is about to disclose that if he could not hear the question. it is the daylight that we want to shed on corporate america up making unlimited contributions and spending unlimited contributions to campaigns. the supreme court wrongly decided to undermine our locker see by saying that corporations could spend an lesley on campaigns and closing the window to any legislative change to that. >> we're going to leave the house speaker nancy pelosi from her briefing earlier today to return to the house and senate conference on the financial regulations bill. there was a break, and as you see, senators here are reconvening. the work is to reconcile the difference between the house and

senate versions of the measure. they have been meeting for four days since 11:00 this morning. house members may have left for the day. work is done both by house members and senate members and it looks like we'll be seeing senate members now. we continue our live coverage of the house senate conference on c-span. >> mr. chairman, i have an amendment dealing with the requirements. a big most of you will have, if you don't have the amendment, i would like to speak on it for just a few minutes. this amendment will help insure that our banking system has strong capital requirements. the recent financial crisis as we all know revealed in our financial institutions, they are undercapitalized and existing capital requirements were inadequate. one reason why we have an

adequate capital requirements is that the complexity surrounding capital determinations' makes it very difficult for congress and the public to determine if a particular capital is sound. it is and effective oversight of capital requirements by regulators. to address this problem, mr. chairman, this amendment will require the federal banking agencies to prepare a report describing any proposed rules on capital requirements. it will show how it will impact the amount the capital banks hold. this will make it much easier to determine whether a particular rule will increase or decrease the amount of capital held by financial institutions. mr. chairman, no longer will congress and the public have the blindly trust regulators about how capital requirements will impact the financial system. this will ensure that there is

clear and understaadable data on the impact of new capital requirements. in addition, this amendment will require the financial stability oversight council to approve any changes in capital requirements. and since the council is responsible for monitoring the financial stability, i think is appropriate that it has the final say on capital requirements. senator dodd has long advocated for a council to monitor the financial system. this amendment will ensure that the council actually has teeth. furthermore, requiring the council to approve changes to capital requirements will help address the problem of regulatory caps. far too often, financial regulators become captured by the financial institutions that they regulate. as a result, the rules that they have developed has not been as robust as they need to be. requiring the council to approve capital requirements promulgated

by federal banking regulators will help insure that capital requirements are not watered- down. requiring the council to approve capital requirements will also improve accountability for financial regulation. the amendment will require the treasury secretary to vote to approve any rule on capital requirements before self-rule can become affected. as a result, if the capital requirements undermine the stability of our financial system, it will be clear that this administration is the blames and that it will be easier for the voting public to hold accountable those responsible. future administrations will know that they need to take financial regulation seriously because they will be on the hook. this amendment is a common-sense way to strengthen capital requirements. without micromanaging regulators on this very complex subject. i would urge my colleagues to support the amendment. >> let me ask -- i don't know

anyone in our committee who has been more consistently outspoken about capital requirements that my friend and colleague from alabama. my stewardship as chairman where senator shelby did not raise the importance of capital standards, let me begin by commending him for his consistent support for this issue and is consistent efforts to point out the failure in the past of not requiring adequate capitals. it is one of the contributing factors to the situation we are in. i reluctantly have to disagree with this amendment. i think it is very cumbersome, first of all. and it requires a lot more requirements that it is asking a lot more to be done to various agencies and departments. also what it does a good the third paragraph, in effect, this

gives the treasury secretary legal power because in the absence of the secretary of the treasury voting, a political appointee gets to basically determine capital stance. while that may be great for trying to identify which administration -- i would hate to get one individual the power to determine all of these issues. i think we don't want a political appointee to be able to control that. making agencies would have to go through a very cumbersome process, and also submit incredibly detailed reports. we already have the collins amendment that seeks them and capital standards to ensure financial stability, and i commend my colleague that we accepted the amendment refers during the debate. it is a very important issue.

i don't want anyone saying that this minimizes the importance that senator shelby has made, is one of the important factors to monitor. i'd be hesitant to want to give secretary of treasury veto power over all other regulatory bodies in a sense when it comes to capital standards. i would urge rejection of the amendment. do you want a vote? i would ask the clerk to call the roll. >> [roll call vote] mr. schumer? no by proxy. ms. lincoln, mr. lahey, mr. harkin, mr. shelby, >> aye. >> mr. gregg. >> aye by proxy.

>> the clerk will report. >> 5 ayes, 7 nays. the measure is not passed. >> i have several and i will try to be very brief with them. >> comment on all of them, and most of them we will accept. >> section 165 allows the board of governors to impose mightn't credential standards and reporting disclosure requirements on non-bank financial companies. obviously, in some of these situations, the subsidiaries are the largest piece of it. they are actually regulated by some other regulator. all my amendment does is that it says -- it sets the capital

requirements. they have to consult with people that do regulation, and i think it is a good government amendment. i hope they will just take it and we don't even have to vote on it. >> i think it is a good amendment, i commend my colleague for it. unless otherwise objected, it will be accepted. >> i think you are aware of the effect that accounting has had on our banking system throughout this time. i have not been one to want to water down accounting standards, but i think it is very important for us to make sure that we have somebody monitoring, and a think the oversight council should modern not only what is happening here, but also what is happening internationally. and while your language in the bill is fine, i think they

should monitor and actively talk with us. we may in fact want to weigh in on some of the accounting board. this would give them the opportunity to do that. >> i agree with my colleague's analysis. monitoring that will be very worthwhile. a further debate? all those in favor? -- it has already been accepted. this is the monitoring of accounting. all those in favor? all opposed? the amendment is adopted. >> this one really has to do

with what we have been discussing with collins. there are other types of hybrid instruments other than just preferred trust. this would put in place in 18 months steady. in no way does it change the collins amendment. and i hope we are able to change it over time. it does put in place a study involving others to do a study on how these various hybrid instruments that the system. i hope we can take it and move on. >> all those in favor? those opposed? the men and is adopted. >> i have -- the amendment is adopted. >> i have one more and then i will stop. uni both sat through the multiple discussions regarding

title to and resolution. i know it has been one of the most contentious issues. we spent a lot of time discussing it. we have talked about refunding, opposed funding. one of the issues we have never had the opportunity to really look at was changing the bankruptcy code. we have talked to senator leahy and senator sessions. there are multi jurisdictional issues relating to this. the fact is that we never did the work. i know that is not our jurisdiction to do, but we didn't do the work to look at bankruptcy. we're also balancing of mechanism almost in a vacuum. we're looking at the way things were a couple of years ago when, in fact, this bill is going to change tremendously the way things are. we'll have a clearing mechanism for derivatives, the relationships are going to be very different. with this amendment will o is

direct the federal reserve and the administrative office of the u.s. bankruptcy court to do a study on what we would need to do to bankruptcy law to change it and make it more effective for complex entities like this bankruptcy. go through%- what we have done by not doing the work is that we have almost confirmed that in every case, we're going to use this resolution mechanism. i don't think that was our intent. >> let me inquire. it is a very good point. as i listened to the house colleagues, we were talking about this and we have these rules not to jump into their discussion. but again, the senator is correct about this. the bankruptcy proceedings, we're going to need have, are

going to have to be different. there's just no way for us in the midst of this whole debate and everything else that is going on to get the judiciary committee to rewrite the bankruptcy code. then made some changes for us to accommodate certain parts of our bill. the reason being we know the present banking structure, you end up with highly complex entities where there are residual effects and going to bankruptcy can be complicated. clearly, that needs to be done. and certainly, we have some studies already in the bill. i don't object to having a heightened or whatever you want to focus on it. correct me if i am wrong. i would be reluctant to sunset everything we have done. i can't predict what happens down the road and all of a sudden, without any mechanism in place, people can hold things up and depending on what is going on, all the work we have done, despite this flop that you're correct to identify, i

would hate to want to put aside all that we have accomplished in this area because we have failed to meet sunday. i agree with you it needs to be done. i agree a study that allows us to determine best to do that is necessary. i don't have a problem with that. >> i know the outcome of the sunset, and i am not going to ask for a vote on that. i know what the outcome is going to be. the only way to make us act is to ask for the resolution title that we now have in place be sunset in three years. this study can be completed in a year, and give plenty of time for activities to take place through the judiciiry committee and pass something that may be far more workable. we can go ahead and have a vote now if you wish, but i think a study that we have in the bill is not expansive enough to

really do the work necessary for us to have the answer is necessary to make the changes that i think need to be made in the bankruptcy code. i else to think that regardless of whether we're doing the study are not, this resolution title is going to need to be changed because i think the rest of this bill is not being taken into account when we look at resolution. all the changes occurring are going to greatly changed the connectedness issues. i think that with the tremendous powers that we have given the fdic, and i don't think we have the appropriate judicial check, i think a sunset of this resolution title actually would be wise and calls us to do the work necessary to fine-tune it and get it right. it is going to continue to have the flaws that we all know it has today. we know it is not perfect. i won't force a vote on that,

but i hope at least you will take the steady peace and let's really would do the work necessary to ensure that we have the information to make those changes. >> the steady part is not in lieu of the other studies, it is in addition to? >> it is in addition to, and i hope that where it is duplicative, they can work it out themselves. >> he is right to modify his own amendment, striking the sunset provision of the amendment. hopefully, what we're doing, you're right. there are a lot of changes. but the financial services oversight commission and the capital standards requirements, all of those things are avoiding ever getting to the point. you're into that either bankruptcy or resolution situation, and again, the hope is that by doing a good job

ahead of time and watching these things, we can avoid that. i am more than happy -- we can accept the modification. and i would urge the adoption of the study suggested he has made. all in favor? the amendment is agreed to. senator shelby. >> i have another amendment3 conference text. this would establish a -- this establishes the purpose and the views of the oversight council. these duties include imposing a recommended heightened standards for financial companies that may pose risk to financial stability of the united states. similarly, the council has a duty to make recommendations for heightened standards and safeguards for financial activities or practices that

could create or increase significant liquidity, credit, or other problems spreading among bank holding companies. in considering the relevant universe of activities and practices and what companies to consider, the council is to look at things like leverage, the degree of reliance on short-term funding, and the number of other things that seem to be a systemic risks. the conference based tax would be a new consideration. the new consideration is quoting from the bill the importance of the company as a source of credit for low-income minority and underserved communities and the impact that the failure would have on the availability of credit.

mr. chairman, programs to address credit issues in low- income minority and underserved communities currently exists everywhere. for example, the fdic has established an alliance for economic conclusion that is a broad-based coalition of institutions currently based organizations -- to bring all underserved populations into the financial mainstream. there are similar efforts aimed at low-income, minority, -- the examination council, it includes major regulatory bodies. moreover, an entirely new title was added to the senate bill that sets up a number of new programs for underserved communities. we can debate whether more resources is sufficient in the existing programs or whether the new title in the senate bill is necessary.

those are certainly valid issues and consideration to debate. but those issues i would submit to you are not pertinent to the title that we are presently considering. macro provincial or systemic risk regulation is a subject matter of title 1. systemic risk regulation is intended to focus on matters that influence the financial stability of our entire financial system and all participants in the system throughout the country. systemic risk detection and regulation can be done at all, there is not a consensus among experts that it can, it will involve a broad financial and economic considerations devoid of politics that politically driven community-based considerations for the systemic oversight council that the base text includes run directly counter to the systemic risk a mission that we have set out. as we have tragically seen from our experiences with fannie mae and freddie mac, to the

detriment of millions of now unemployed americann and trillions of dollars of loss of wealth, conflicting objectives and emissions are perilous to the civility of our system. i believe that distractions from the core mission, indeed, the sole mission of stability would be a mistake. i also believe that the base tax would likely allow a community activist groups such as acorn to hijack the financial stability oversight council as they seek to extract preferential treatment for select groups at the expense of financial institutions. addressing the financial needs of low-income minority and underserved communities deserves our attention. however, mixing these needs with issues concerning stability of the entire u.s. financial system i believe only creates

confusion and distract the financial stability oversight council from its core mission. oversight of the financial system as a whole. mixing community activism with financial stability concerns raises serious questions about the objectives of this legislation. are we truly interested in mitigating threats to the stability of our financial system, are we engaging in populace community activism? this is the appropriate title for the former and not for the latter. i urge my colleagues to support this amendment. >> let me respectfully disagree with my colleague from alabama. i have to get the exact numbers, but we have millions of our fellow citizens that have never entered a savings-and-loan, a bank, or any other traditional financial restitution in our country. these are people that get drawn

in to pay lenders and other circumstances where too many cases, they get taken advantage of the minority community. the same arguments are made, and in this very room, will work on the community reinvestment act a few years ago. senator schumer and i were part of different bodies. i believe that mr. gramm was part of the chairman -- part of the chair. and over the years, we have major that all of our fellow citizens would have the access to capital, mortgages, loans, and all the things that make it important for people to achieve the dreams that all americans have to improve the quality of life for their families. in this bill, we're suggesting an effort ought to be made that the members of our society and minorities and others, we reach out to those millions that have never been able to access the

traditional sources of financing in our country is something that all of us ought to be able to embrace. i don't think it detracts at all from financial stability. in fact, i think it enhances that. but every single american, there isn't -- and there is an opportunity to secure a greater opportunity for all of us. i don't think this language in the bill the tracks in any way whatsoever. in fact, quite the opposite. i would respectfully urge defeat of the amendment. >> let me just say one thing. i did find it odd that in the systemic risk area, we had a clause that basically, the way i understand these to be, is both title one entitled to, actually. that if actions are being taken

where an institution may be creating systemic risk, before you take action, you have to consider if it is going to have an impact on a neighborhood that has minority residents in its. i spent a lot of time creating a nonprofit back in the '80s that helped about 10,000 folks have decent housing. i point is, i spent a lot of time in the inner city. because you didn't have those kinds of robust institutions, that could serve the community well in many cases, a lot of people you were trying to help were actually hurt. if i read what he is saying, what i think it means is that we would not -- the way the legislation reads, we would allows on the institutions, is on the institutions to continue to operate in these underserved

neighborhoods and do exactly the opposite of what it is we ought to be doing. we would be much better off to elect a poorly run institution in one of these neighborhoods fail so that the citizens would have access to a robust institution. it does sound like that what this language is trying to do is protect poorly run organizations that do damage to these neighborhoods because they are not run properly. when a systemic risk council or the resolution authority was looking at these, they would say, all know, even this is on the bank and it doesn't have capital and it is poorly run, because it is in a neighborhood of people that are underprivileged and underserved, we will let it operate. to me, that is the opposite of what we ought to be doing.

>> i think that we are over reading the language. in title 1, it says to take into account. in title to, it says of these affected communities. it says that the description of the effect falls to the financial company would have on the economic conditions for low- income and minorities, it is hardly overreaching. consider that somehow, there have been institutions that did a dreadful job. a lot of lending institutions are doing dreadful jobs. the fact of the matter is, you take into account how this would affect the community. that language doesn't appear to be onerous. striking it altogether, i understand the point the senator is making, but i don't think it is worthy of striking this language.

that somehow it is overly burdensome. >> i just want to associate myself with senator corker. using the words you quoted, taking into account, what does that really mean? it means to consider all of these things. to consider -- let's say the bank is broken and it is insolvent. and say, we're going to bail the bank out and keep it going. we're going to consider this. this has no place in what we're talking about. we're talking about a council, and there are other things in the law to protect people. we all want to protect people, but sometimes, you can't protect people from themselves. >> we are designating it as being systemically important. taking into account that designation, what are the facts? >> is it systemically important?

it might be socially important. it might be politically important. the answer is obviously no. >> and taken to consideration whether or not there is an adverse impact -- >> that has nothing to do with systemic. it is social. >> let's vote. >> i understand how this is going to turn out, but you have a line right above that that talks about looking at how it affects u.s. households. that is the title above. and then you step down and look at communities, you know, underserved communities in a different way. we do have a consumer protection title in this bill to deal with the kinds of issues that i think you're concerned about. mr. chairman, i am saying this as a champion of low-income citizens, that this is the type of politically motivated decision making that hurts the

of low income citizens you're trying to help. that is why, by the way, these neighborhoods and of having all kinds of shadow banking mechanisms their that serve them because these are the kinds of decisions that and that being made. i think it is reverse. i understand there are good intentions. but it does end up causing politics. this is about politics. >> no, it is not. why are we picking on just this one? why was this one driving people crazy? i find it hard to accept and understand that at this juncture with fragile communities, of all the 11 considerations, only the one that affects minority communities is the one that jumps off the page of people in looking at whether not something designated it is systemically risky.

anyway, let's just vote on it. >> >> this is obviously politics, is not policy. we don't have the votes, we know that. >> the clerk will call the roll. >> [roll callvote] mr. schumer. ms. lincoln. mr. lahey. mr. harkin. mr. shelby. mr. corker. mr. gregg. mr.>> the clerk will report.

>> the measure were does not pass. >> are there additional amendments to settle? i am not going ask my colleagues to vote on title 1 as amended this evening, because we're going to work on the issue of thecrapo -- a o fthe crapo -- of the crapo amendment, it was a close call. we will work on this to see if we can't reach some additional commendation. i will delay asking my colleagues to vote to send back to the house our counter offer on title 1. are there amendments to title to? and that one, i will ask all those in favor of title 1 as drafted? -- title to, excuse me.

those opposed? the ayes have it. we will submit our counter offer on title to. i am very grateful to my colleagues. we at started on such a good note earlier, we ended on kind of a sour note. >> this is a great process, and we see it for what it is. it has been a great process, and i appreciate that this is going to be a great legacy for you to leave behind. >> it better be important for the american people. i didn't understand -- i listened to try to understand everything. i want to submit the actual titles will be involved on tuesday, and he talked about consumer protection and the interchange fees. you'll get that list for you and send out a notification of what it is. i will urge the staff to be

available this weekend. we have got a lot of work to do. i like to see if we can come to some conclusion. it will try to least come to some conclusion on these matters so that we can pick up on tuesday with the remaining titles and work our way through the next week. i just want to express my gratitude to all of my colleagues. the time he spent over the last week -- i want to thank our hosts that divided us to come to the house financial services committee. we appreciate your consideration and hospitality. and the remarkable entertainment you have provided over the last three days. [laughter] in the absence of something else, we will stand adjourned to the further call of the chair. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> the house and senate conferees have been working on amendments to the financial regulations bill. this is the fourth day of conference meetings meant to merge the house and senate versions of the measure. members are expected to continue into next week working section by section to the legislation. live coverage of the house and senate finance or regulations conference continues on tuesday when members will take up topics including consumer protections, predatory lending, and interchange fees. you could find all four meetings any time on our website at c-span.org.

>> the ceo for bp testified today on capitol hill about the gulf of mexico oil spill. this morning, texas congressman joe barton apologized for what he called the white house shake down for asking bp to set up a $20 billion compensation fund for those affected by the oil spill. this set of reaction around capitol hill and at the white house. later in the day, he backed away from his earlier statement. next, we will hear congressman barton's opening statement in reaction from massachusetts democratic representative markey and vice president biden. after that, his later comments at the hearing. we'll bring you today's hearing

in its entirety. >> thank you, mr. hayward for appearing before us. we have kind of a dual track under way, in my opinion. we are obviously trying to get a the facts, what happened in the oil spill in the gulf of mexico month and a half ago, trying to find out the causes of that spill, what can be done to prevent it in the future, we are obviously very concerned about the mitigation and the cleanup. we have a system in america built up over 200 years of due process and fairness where people that do bad things, or in this case, a corporation that is responsible for an accident, we want to hold them responsible

and do what we can to make the libel parties pay for the damages. mr. stupak and mr. waxman are doing an excellent job of working to conduct a very fair investigation. we're going to get into a number of those issues in this hearing. we're going ascii some pretty tough questions. i am speaking totally for myself, not for the republican party or for anybody in the house of representatives but myself. i am ashamed of what happened in the white house yesterday. i think it is a tragedy of the first proportion that a private corporation can be subjected to what i would characterize as a shakedown period in this case, a $20 billion shakedown the

attorney general of the united states who is legitimately conducting a criminal investigation and has every right to do so to protect the interests of the american people, participating in what amounts to a $20 billion slush fund that is unprecedented in our nation's history, it has no legal standing, and it sets a terrible precedent for the future. if i called you into my office, and i had the subcommittee chairman with me, who was legitimately conducting an oversight investigation on your company and said if you put so many millions of dollars in a project in my congressional district, i could go to jail. and should go to jail. there is no question that british petroleum owns this lease.

there's no question that british petroleum -- bp, it is not british petroleum anymore. that bp may decisions that objective people think compromised safety. there is no question that bp is liable for the damages. but we have a due process system where we go through hearings and in some cases court cases, litigation, and determine what the damages are and when as damages should be paid. i am only speaking for myself, i am not speaking for anybody else, but i apologize. i do not want to live in a country where any time a citizen or a corporation does something that is legitimately wrong is subject to some sort of political pressure that is, again, in my words, a massive shakedown.

i apologize. but on this hearing today, i am with mr. waxman, with mr. tupac, there are answers that need to be -- questions that need to be asked that are legitimate because we don't want another oil spill of this magnitude or any magnitude in the gulf of mexico. if this subcommittee can do things that make it much more difficult for this type of an incident to occur in the future, then we will have done our work for the american people. with that, i yield back. >> i like to turn to the chairman of the subcommittee on climate. >> i want to begin by disagreeing in the strongest possible terms with what mr. barton said in his opening

statement. not only is the compensation fund that was created yesterday at the white house in an agreement reached between the ndp and president obama and not a slush fund and not a shakedown, it was the government of the united states working to protect the most vulnerable citizens that we have in our country right now. the residents of the gulf. it is bp's spill. but it is america's ocean. it is american citizens who are being harmed. we cannot wait as so many citizens who were victims of the

exxon valdez spill had to wait years. we can't lose sight of the fact that the 1984 disaster and the lawsuits that were related to its were only settled last week. we have to ensure that the citizens of the gulf are protected. a hearing which this subcommittee conducted in new orleans last monday, we heard from a fisherman who brought a absolutely impeccable records which proved that he and his family had made $27,000 last

may, and after examining the documents, bp gave them $5,000. the families in the gulf will be crushed financially. unless this compensation fund is put into place. as each day and week at a month goes by, the history of these families are going to be altered, and permanently altered, unless they can take care of their loved ones, their children, their families. that is why this compensation fund is so important. that is why it is not a slush fund. it is, in fact, president obama insuring that the company that

has spoiled the waters of our nation is made accountable for the harm which was done to our people. a company which said for the first week that it was only 1,000 barrels of oil a day when we now know that they know that it was 1000 to 11,000 barrels. they deny it underwater toxic fumes, a company which has not been providing the proper protective gear for the workers in the gulf. a company which contended it could respond to a spill of 250,000 barrels per day. this is not a shakedown of that company. this is the american government, president obama, ensuring that this company is made accountable and sending a signal to all other companies that seek to

treat ordinary americans, families and a way that will destroy their entire family's history. this is, in my opinion, the american government working at its best. this is creating truly a kind of partnership between the public and private sector. they can make sure that innocent victims are not road kill as a result of corporate plans that did not actually factor in the harm that can occur in ordinary families. i just could not disagree more strongly. i think that this is, in my opinion, while the most important hearings that this congress will ever have because it is sending a signal to any corporations out there, including the ones that testified on tuesday that they

had plans to respond to the harm which could be done in the gulf on one of -- if one of their rigs had the same kind of catastrophic event, that we will -- they will be made accountable. i think you, mr. chairman, for holding this hearing. i think you, because yesterday was the day where the page began to be turned and we move to a new era where, in fact, your company is made accountable and the citizens of the gulf are made whole. thank you, mr. chairman. >> vice-president biden was asked what he thought about congressman barton's comments. here is his response. >> look, guys. i find it incredibly insensitive, incredibly out of touch.

the reason why i got involved in politics, the reason why the president and i got involved is the one primary role for government, to protect people who are being taken advantage of. protect people who are in extreme straits and not able to take care of the circumstances themselves. i have been down in the bayou area off and on for the last 36 years. . .

that people disassociate themselves from that. that is not the role. there is in shakedown. it is insisting on responsible conduct and a responsible response to something they caused. and i find it outrageous to suggest that if in fact we insisted that bp demonstrate their preparedness to put aside billions of dollars, in this case $20 billion, to care of

these people who are drowning. these guys don't have deep pockets, the guy who runs the local marina, the guy who has one shrimp boat or one small business. he can't afford to lose $10,000, $12,000, 15,000, or $30,000 a month. i was proud of the president. they were cooperative. he said i want you to take care of those people now who, if they don't get help now, are going to be under, gone. and i might add this fund is not a ceiling. people can go back to it as many times as they can prove they have been damaged, and they need help. and the cleanup costs are all bp's costs separate, apart and above that $20 billion. what is wrong with that?

how is that a shakedown? i just -- i don't know. i find it pretty astounding, the comment. >> back on capitol hill, republican jeff miller, who represents a florida district affected by the spill called on congressman barton to step down as chairman of the committee. later in the day, congressman barton tried to clarify his statement about the bp compensation funneled. >> finally, mr. chairman, if i may take a small point of personal privilege, i want the record to be absolutely clear that i think bp is responsible for this accident, should be held responsible, and should in every way do everything possible to make good on the

consequences that have resulted from this accident. and if anything i've said this morning has been miss construed to an opposite effect, i want to apologize for that misconstruction. with that, mr. chairman, i yield back. >> now, today's bp hearing in its entirely with the company's c.e.o., tony hayward. i testified before the house, energy and commerce subcommittee on oversight and investigations. he apologized for the deepwater horizon spill and offered condolences to the families of the workers who died in the explosion. the hearing is over five hours. >> this meeting will come to order. we are going to ask the press to please clear.

this hearing of the >> this committee will commence our hearing. today we have a hearing entitled the role of bp in the deepwater horizon oil spill. we have a number of members present. deep water horizon energy spill. i welcome the members of the

energynd commerce committee and they will be allowed to submit written statements for the record, but will not deliver verbal opening statements and in addition aftmembers who are not the subcommittee or on the energy and commerce committee e will be to observe, but they will not be allowed to ask questions due to time constraints, the chairman, the ranking member and the charity emeritus will be recognized for three minute opening statements. i will yield to the chairman of the full committee mr. waxman for the first opening statement. >> thank you very much mr. chairman, thank you for holding this very important hearing. and mr. hayward, thank you for being here today. yesterday bp pledged to establish a $20

i'm sure these were not easy decisions for you, but they were the right ones, and i commend you for them. congress has multiple committees examining the gulf oil spill. some are evaluating the impact of the spill. some are working on the reorganization of the regulatory agencies, and some, including the chairman's subcommittee are drafting legislation to reform our exploration laws. you are testifying before the investigation subcommittee, and this subcommittee has a special role, to examine the facts and determine what went wrong, and to make recommendations to prevent future stills.. when it's time for questioning, i and other members of the subcommittee will ask you about a series of internal bp documents. they appear to show that bp repeatedly took short cuts that

endangered lives and increased the risks of a catastrophic blowout. i sent you a letter in advance indicating that we were going to question you about those issues. but what is equally important is what is missing from the documents. when you became c.e.o. of bp, you promised to focus like a laser on safe and reliable operations. we wanted to know what you had done to keep this promise, so we asked what e-mails you had received, what documents you had reviewed about the deepwater horizon rigor the mccondo well before the blowout . deep water drilling is inherently dangerous. as the entire country know, an uncontrolled blowout can kill rig workers and cause an environmental disaster. we want to know whether you

were briefed about the risks and were monitoring the safety of the drilling operation. we could find no evidence that you paid any attention to the tremendous risks bp was taking. we've reviewed 30,000 pages of documents from bp, including your e-mails. there is not a single e-mail or document that shows you paid even the slightest attention to the dangers at this well. you are the c.e.o., so we considered the possibility that you may have delegated the oversight responsibility to someone else. we reviewed the e-mails and briefing documents received by the chief executive for exploration and production, and the chief operating officer for exploration anddproduction and the person now leading bp's according to bp, these are the

senior officials who were responsible for the well, but they, too, were apparently oblivious to what was happening . we could find no evidence that either of them received any e-mails or briefings about the deepwater horizon rigor drilling activities at the well. bp's corporate complacency is astonishing. the drilling engineer for the rig called it a nightmare well. other bipe employees predicted that -- other bp employees predicted the cement job would fail. halliburton warned of a problem. these warnings fell on deaf ears. it may be best summed up in an e-mail from its operations drilling engineer, who oversaw bp's dream of drilling engineers.

after learning of the risks and bp's decision to ignore them, he wrote, "who cares? it's done, end of story. we will probably be fine." there is a complete contradiction between bp's words and deeds. you were brought in to make safety the top priority of bp. but under your leadership, bp has taken the most extreme risks. bp cut corner after corner to save $1 million here, a few hours or days there, and now the whole gulf coast is paying the price. today et cetera hearing will focus on bp's action, but we learned from the hearing earlier this week that the other oil companies are just as unprepared to deal with a massive spill as bp. we are seeing in the oil industry the same corporate indifference to risk that caused the collapse on wall

street. and that is why reform is so urgently needed. part of this reform must be legislation to put teeth into our regulatory system, but part must also be a transition to a clean energy economy. we are addicted to oil. this addiction is fouling our beaches, bluting our atmosphere and undermeanwhiling our national security. we can't snap our fingers or transform our energy economy overnight, but we need to start down the path of a clean energy future. mr. chairman, i look forward to the hearing, and mr. hayward i thank you for cooperating. >> thank you. next going to the ranking member of the full committee, mr. barton of texas. mr. burgess and i will do ours harriet. mr. barton? >> thank you, mr. chairman. thank you, there hayward, for appearing before us. we have kind of a duel -- dual

track. we are trying to track the facts of what happened with the oil spill in the gulf of mexico a month and a half ago, trying to find out the cause of that spill, what can be done to prevent it in the future. we are obviously very concerned about the mitigation and the cleanup. we have a system in america built up based on the british tradition, over 200 years of due process and fairness where people who do bad things, in this case a corporation that is responsible for a bad accident, we want to hold them responsible and do what we can to make the lieable -- liable

parties pay for the damages. we are all working together in conducting i think a very fair oversight investigation. we are going to get into a number of those issues in this hearing, and we are going to ask you some pretty tough questions. i am speaking totally for myself. i am not speaking for the republican party or anybody in the house of representatives but myself. but i'm ashamed of what happened in the white house yesterday. i think it is a tragedy of the first proportion that a private corporation can be subjected to what i would characterize as a shakedown, in this case a $20 billion shakedown with the attorney general of the united states who is legitimately conducting a criminal investigation and has every right to do so to protect the

interests of the american people, participating in what amounts to a $20 billion slush fund that is unprecedented in our nation's history, that has no legal standing, and which sets i think a terrible precedent for the future. if i called you into my office, and i had the subcommittee chairman, mr. stew pack, -- stupak with me who was openly conducting an investigation against your company and said if you put so many millions of dollars in a project in my congressional district, i could go to jail, and should go to jail. now there is no question that british petroleum owns this lease. there is no question that bp -- i'm sorry, it is not parish petroleum any more -- that bp made decisions that objective

people think compromised -psafety. there is no question that been is liable for the damages. but we have a due process system where weigh through hearings, in some cases court cases, litigation, and determine what those damages are and when those damages should be paid. i'm only speaking for myself. i am not speaking for anybody else. but i apologize. i do not want to live in a country where any time a citizen or a corporation does something that is legitimately wrong, is subject to some sort of political pressure that is again in my words, amounts to a shakedown. so i apologize. but on this hearing today i am with mr. max one-and-one, with mr. stupak.

there are questions that need to be asked, that are legget, because we don't want another oil spill of this magnitude or any magee tight in the gulf of mexico, and if this subcommittee can do things to make it much more difficult for an incident like this to occur in the future, then we will have done our work. i yield back. >> thank you. i will do my opening statement now. today is the 59th day of the bp oil spill that has devastated much of the gulf of mexico. 11 men lost their lives the day the deepwater horizon drilling rig exploded. and in the 59 days that have followed, countless people have lost their livelihood as the oil spill plutes the fishing grounds and plutes the states. this is the third hearing the oversight subcommittee has held and the fifth hearing overall

in the energy and congress committee. our first committee discovered problems with the blowout preventor and several other factors. our second hearing was a field hearing that -- in new orleans where we heard from the widows of two men who died in the deepwater horizon explosion as well as shrimpers and other small business owners who have suffered from the environmental catastrophe that followed. our staff has spent weeks combing through hundreds of thousands of pages of documents, sitting through more than 50 hours of briefings by corporate, governmental and academic experts in an attempt to piece together what went wrong with the well. we have reviewed several questionable decisions made by bp in the days and hours leading up to the explosion, and what we have learned so far is alarming. we have learned that time after time that bp had warning signs

that it was a nightmare well. bp made choice that set safety aside in exchange 230 cost-cutting and time-saving decisions. vugs, they head questionable tests after cementing in the well. they selected the riskier of two options for installing the line. they could have provided additional barriers to the release of oil. instead, they lowered a full string of the new casing, which took less time and cost less, but did not provide protection. bp was warned by their cement contractor, halliburton, that the well could have a severe gas flow problem if bp lowered the final spring with only six centralizers instead of the 21 halliburton recommended. bp rejected the advice in an

e-mail on april 16. a bp official involved in the decision explained, it will take 10 hours to install them. i don't like this. bp chose not to fully circulate the mud in the well from the bottom to the top, which was an industry recommended best practice that would have allowed them to test for gas in the mud. bp chose not to use a casing hanger lock-down sleeve, which would have provided extra protection against a blowout from below. these are just a few of the issues that led to the disaster. once deepwater horizon exploded and sank to the bottom of the sea, bp's response to contain the leak and clean up the spilled oil was equally as poor. they issued low ball estimates as to the amount of oil flowing from the well, which may have led to a scaled back response. we discovered that bp's oil spill response plan was

virtually identical to other companies' plans. on tuesday in a hearing, rex tillerson admitted that once spills occur, we are not well equipped to handle them. all the other companies testified at tuesday's hearing this they would not have drilled the well as bp did. with us today is tony hayward as the c.e.o. of bp. he held a town hall meeting with employees in houston. at this meeting he discussed the need for bp to be a leader with fewer people in decision-making processes. i ask you to put up the guardian article. an article from september 27, hayward says oil company has become too cautious. reads assurance is killing us. noting that too many people were engaged in

decision-making, leading to excessive cautiousness, something that critics of its safety performance in the u.s. might question. let me put up notes from the same meeting. we received notes from the employees. the employee notes summarized mr. hayward's statements as follows. i don't think having all these layers would reduce risk. the best way to reduce risk is to have deep technical competence where we need it. individuals need to be accountable for risk and manage it. i find this cavalier attitude unbelievable given the fact that bp has just been responsible for the largest oil look in alaska history as well as the 2005 texas city refinery explosion which killed 15 workers and injured another 170. i must ask mr. hayward whether

it was wise to adopt this leaner decision-making process with input from fewer people. under the leadership of the former chairman and presidents of bp america, been created an independent office of the mom buds man. it was established because line workers reported fearing retaliation if they reported safety concerns to management. when the current chairman and president, lamar mckay took over, i met with him and he said he odom to improve the culture enough to make the office none yes. i urged him not to eliminate the office because it served a significant role in investigating employee complaints. i am more concerned now than ever about bp's safety and the role they take in assuming risk. i am concerned that the culture from tony hayward down to the

chief operating officer, that there is a willingness to cut costs and take greater risks. i look forward to herring mr. hayward answer the many hard-hitting questions our committee members will ask today. i hope well hear honest, contrite and substantive answers. we are not small people, but we wish to get our lives back. for americans who live and work on the gulf of mexico, it may be years before they get their lives back. for the families who lost members on the rig. i am sure you will get your life back, and with a golden parachute back to england. we are left with the consequences of bp's reckless disregard to charne. i yield back my time and turn to mr. burgess for opening

statements. and a very critical hearing in the deep water horizon oil spill. this hearing provides the subcommittee with an important opportunity to directly question the man who ultimately leads bp, mr. tony haywardnd bp's role has been central to the causes of the incident and to the response over the course of our inquiry today, committee investigators working in a by partisan fashion have conducted numerous interviews and briefings and reviewed tens of thousands of pages of documents, our subcommittee has done an excellent job and this sub committee has been focused on gathering the facts rather than rushing to judgment. and from this intensive effort we have begun to have a series

of questions, exploring these and related questions today will help us identify for congress and identify for the country what went wrong on april 20th and the days thereafter, and while we are investigating, a picture of the chain of events leading to this incident is emerging. mr. chairman, you and chairman waxman recently outlined some critical questions that we hope mr. haywardill address, for example you noted the investigation has identified questionable choices by bp engineers to use a particular well design over another one that would appear to have provided more built in barriers to an uncriminaled gaddis charge. there was the cice made by bp to move forward with what appears to be an inadequate cementing plan and the related failure despite clear warnings to test that the cement was properly in place. and it appears there may have been a rush to move off this well, whether there may have been economic or other time and

performance measures or some combination thereof, it is not clear burks that clarity needs to emerge today. thquestion outlined in the central role of bp's decision making appears that bp's decision making appears to have had in this incident. we need to understand that decision making, mr. hayward. what factors influenced it, whether the decisions reflected a management and an operational mind set that failed, failed to maximize safety in a challenging deep sea environment. it is important to note that the picture developing from this investigation is not one of technological limits in deep sea drilling, the construction of an 18,000-foot well was not pushing the envelope of engineering know how so far as we identified, but the picture developing is one of unsafe industry practices, although clearer more focuseded industry standards may be able going forward, the best industry

practice would have resulted in more cautious designs and more testing, more safeguards and ultimately no loss of control of the well. rather and quite clearly the picture is questioning decision king by people charged it is a picture composed of a series of choices which, taken together, created an oil well particularly vulnerable to a blowout. and of all the people who may have distracted, unaware or resistant to recognizing the problems around them. documents show that bp was prepared to run a test on the quality of the cement job, but chose not to. i can't understand why given the history of this particular well with four previous well control incidents in the two months prior to april 20th. the rig personnel appear to have taken their eye off the ball. bp employees were the key decision-makers. certainly others, contractors, subcontractors and federal regulators may have contributed to this incident.

the role of federal government especially including the overall effectiveness of the response remains a critical piece that we must pursue at 3 i am still disappointed that we have not done that. but it is bp's decision-making about the well design, the cementing program, preparation, integrity tests, or lack there of, or the general lack of curiosity as so why these would be necessary. the fail our to follow best practices that our investigation is showing were critical factors in this incident. but this is difficult to square with the avowed priorities of the chief executive. in an interview before you became chief executive, you described how the death of a worker while you were leading an operation in venezuela shaped your opinions. at the end of the service his mother came up and beat me on the chest. why did you let it happen, she

asked? it changed the way i think about safety. leaders must make the safety of all who work for them a priority." mr. hayward, i respectfully request that you answer this question in your opening statement, if not for me, then for the two ladies who testified before our committee in the field hearing who lost their husbands on the deepwater horizon. you have been chief executive since 2007. you said safety was your number one priority and that you would focus like a laser beam on safety. one would expect those priorities to be carried out by your employees. we have found that bp employees made five critical decisions that may have contributed to welfare ure, where well safety was traded off and was not the priority. so today, will you assert before this subcommittee that all decisions by bp employees related to the horizon horizon reflected your pirate -- priority of safety first?

mr. chairman, the disaster in the gulf coast shows the cons against of a series of unchecked back decisions. we in congress and the federal government must be mindful of the cops conferences of bad decision-meaping. at a field hearing last week in louisiana, the committee heard some of the administration's decisions are threatening the livelihoods of the workers and families who depend on the fishing industry. we have killed half of their fishing with the spill, and it looks like we are going to kill the other half of their economy with a moratorium. we look can he consequences of bad decisions and the lessons learned. may we have the human it and wisdom to apply some of those lessons and apply them to ears. >> i would lick to turn to the chairman of the energy and environment subsubcommittee, mr. marcy for an opening statement.

>> thank you. i want to begin by disagreing in the strongest possible terms with what about -- mr. barton said in his opening statement. not only is the compensation fund that was created yesterday at the white house in an agreement reached between bp and president obama not a slush fund and not a shakedown, rather it was the government of the united states working to protect the most vulnerable citizens that we have in our country right now, the residents of the gulf. it is bp's spill, but it is america's ocean, and it is american citizens who are being

harmed. we cannot wait, as unfortunately so many citizens who were victims of the exxon valdez spill, had to wait years in order to see those families exen tated. we can't lose sight of the fact that the 1984 disaster and the lawsuits that were related to it were only settled last week. we have to ensure that the citizens of the gufrl are pro -- gulf are protected. in a hearing which this subcommittee conducted in new orleans last week, we heard from a fisherman who brought

absolutely impeccable records which proved that i and his family had made $27,000 last may. and after examining the documents, bp gave the family $5,000. the families in the gulf will be crushed financially unless this compensation fund is put into place. as each day, week and month goes by, the history of these families are going to be altered, and permanently altered, unless they are given the financial capacity to take care of their loved ones, their children, their families. that's why this compensation fund is so important. that's why it is not a slush fund. that is why it is not a

shakedown. it is in fact president obama ensuring that a company which has despoiled the waters of our nation, is made accountable for the harm which is done to our people, a company which said for the first week that it was only 1,000 barrel per day when we know now they knew it was 1,000 to 14,000 barrels. a company which denied there were underwater toxic plumes, a company which has not been providing the proper protective gear for the workers in the gulf, a company which contended it could respond for a -- to a spill of 250,000 barrels per day. no, this is not a shakedown of

the company. this is the american government, president obama, ensuring that this company is made accountable. and sending a signal to all other companies that seem to treat order american families in a way that can destroy their entire family's history. this is, in my opinion, the american government working at its best. this is creating truly the kind of partnership between the public and private sector that can make sure that innocent victims are not road kill as a result of corporate plans that did not actually factor in the harm that can occur to ordinary families. i just could not disagree more strongly. i think that this is, in my opinion, one of the most important hearings this congress will ever have,

because it is sending a signal to any corporations out there, including the ones that testified on tuesday that all admitted they had no plans to respond either to the harm which could be done in the gulf if one of their rigs had the same kind of cat stroveg vent, that they will be made accountable. so i thank you, mr. chairman, for holding this hearing, and i thank you, mr. hayward. because yesterday was the day where the page began to be turned, and we moved to a new era where in fact your company is made accountable and the citizens of the gulf are made whole. thank you, mr. chairman. >> thank you. i turn to mr. sullivan. >> chairman stupak, thank you for holding this hearing today. on april 20, 2010, a fire and

explosion occurred on the british petroleum deep water horizon rig in the gulf of mexico. this terrible disaster resulted in the loss of 11 lives and injured many more members of the 126-person crew. there is no question that the bp oil spill is a tragedy. in fact, it is the worst environmental disaster in our nation's history. i believe we must do everything in our power to cap the leak, find out what caused the explosion, and ensure nothing like this ever happens again. bp must bear the entire financial burden for this disaster, and the american taxpayer should not be on the hook for a dime. according to the occupational health and safety administration, there is mounting evidence that bp has one of the worst safety records of any major oil company operating in the united states. to this end, i am looking forward to examining with mr. hayward whether there is a

deficient safety culture at bp which led to this disaster, including the bp refinery explosion in 2005 in texas city, texas. and a pipeline spill that released 200,000 gallons of oil into the alaskan wilderness. mr. hayward, why is bp's record on safety so spotty in what is equally as important is the knee jerk legislative reaction from this congress. right now the administration and the alleys in the house are more focus on the application of putting the oil and gas industry out of business than on solutions to the problem. instead of working in a bipartisan way to push for rigorous safety standards on all offshore rigs, the administration is exploiting this disaster to advance it's disastrous cap and trade energy policy, which won't stop the well from leaking, but serve as

a national energy tax on the people. i believe congress should work towards implementing rigorous safety inspection standards for all offshore rigs. with nearly 30% of our nation's record and 11% of gas reserves located off shore, a ban on drilling will only put americans out of work. it will send energy and gas prices through the roof and increase our reliance on foreign imported oil. we still have work to do to uncover exactly what went wrong, and many questions remain. this tragedy should not be used as an excuse to roll back the gains we have made as well need more oil and natural gas to meet the crucial needs of our nation. i yield back. day 59

worst environmental disaster in the history of this country. 11 people are dead, the already fragileconomy of an entire region is in real danger of shattering. we will be feeling the envinmenting consequences for years to come. and god almighty alone knows what the health and environmental effects of the containment and cleanup strategies will be. millions of gallonsf chemical dispersants and controlled burns. sadly we can't even get a decent estimate of the amount of oil and gas thas spewing out into the water. bp has been before this committee many times. and rarely has it been apleasant meeting. because in variably they have

appeared here to defend serious failures on the part of the company. the company has a history of cutting corners, apparently, for the almighty dollar. texas city, they paid there $50 million in criminaa fines, alaska's north side slope which was investigated by this subcommittee, where a pipe corroded, allowing 1 million liters of oil to spill. in each instance, we were hoping that the assurances given by bp that this would not happen again have been regrettably untrue. in rerence to a decision on how to secure the final 1,200 feet of the well, a single casing or tie back of bp engineer said not running the tie back 15i6s a good deal of time and money.

in reference to installing for centralizers, a bp inspector said, it will take ten hours t install them, i am concerned, i don't want to use it. so were we. even if the hole is perfectly straight, as straight piece of pipe, even in tension will not seek the center of the hole unless it has something to centralize it. i want you to listen to this, but who cares? it's done, end of story. it will probably be fine. and note the wor probably. and we'll get a good cement job. i would rather have to squeeze that gets stuck, so guard right on the risk-reward occasion. mr. chairman, the comments of our witness today reveal lite sorrow for the events that have occurred. and here he said, the gulf of

mexico is a very big ocean, the amount of volume of oil and dispersant we are putting in is tiny in relation to the total water volume and then the environmental impact of the disaster is likely to be very, very modest. i wonderf he wishes to stand on that statement today. when mr. hayward responded to the claims that cleanup workers were becoming ill because of oil fumes and such, he said this, food poisoning is clearly a big issue. finally most famously, mr. hayward informs us he wants his life back, last year mr. hayward enjod a splendid 40% pay raise even though bp's profits dropped. i just happen to be a poor polish lawyer from detroit. but it seems to me that this is a curious response to a drop in profits. it makes me wonder what the

compensation package of our witness will be this year. mr. chairman, again, i thank you for your diligence and hard work on this issue. i look forward to >> thank you, mr. chairman. next, ms. back bush for your opening statement? >> thank you, mr. chairman. i thank you and ranging member burgess for holding the hearing. mr. hayward, i thank you for your willingness to testify before this committee. when news of the bp spill began and information about the well started to circulate, it seemed that there were problems not only with bp, but with m.m.s. bureaucracy, and thattmaybe the problem lay there rather than with anything that could have gone with bp, that it was there with m.m.s. what we've learned and confirmed is that that is not correct, that the problem does 0 lie with bp in what went

wrong. while there are many faults with m.m.s. in doing its job with inspection and oversight, most of the data points to wrong decision-making by bp's management. this is not the first time, and we have talked about that in several of our opening statements this morning. it is not the first time you have been before this committee on safety problems, and with the alaska and texas incident, which revealed insufficient protocols in bp's management and hierarchy. there was a statement that you all would focus like a laser on safety. it is concerning to us that the appearance is, mr. hayward, that bp has not learned from previous mistakes. so it leaves us asking the questions of you and of bp, was this accident caused by negligence? was it caused by risk-taking?

was it caused by cost-cutting measures, by bp decision-makers? and unfortunately for citizens, beaches and wildlife all along the coastal region, they are paying a price for those misplaced decisions. bp dan not blame mother nature, or equipment failure or even other subcontractors. their actions have put at risk the livelihoods of communities and businesses that depend on the fwuffle not only for seefed -- seafood and tourism, but other things this area relis own. i mentioned m.m.s. earlier, and the m.m.s. officials approved nad kuwait spill response plans, and -- nad kuwait spill

response plans. but what is the most damaging is that the president and senior officials knew on day one that the blowout preventer was not working and knew of the potential spillage. while bp shoulders of -- much of the responsibility for this spill, the lack of effort by the administration to contain the spill has doomed the wildlife and gulf coast from oil an spill which could have been contained. now drilling moratoriums will furt devastate america's energy production. thank you. i yield the a balance of my time. hairman, i yield the balance of my time. >> thank you. i next turn to vice chairmanf

the subcommittee, opening three minutes sir. >> mr. hayward, you're not going to get a lek schur from me today and you're not going to get an apologies. quite frankly the people who live along the affected area of the gulf coast deserve answers from you. we were in louisiana last week and we had the opportunity to hear from a variety of individuals whose lives have been devastated by this oil disaster and i use the word disaster specifically because i don't think spill qte captures the magnitude of what's going on. the american people are frustrated because we were first told that this was a 1,000 barreler day release and about a week later that was updated to 5,000 barrels per day. and at the end of may it was adjusted upwards of 15,000 to 19,000 barrels a day and this week it shoucould be as high as

60,000 brels a day. that's 17.5 million gallons ber week and over the length of this disaster it could be the largest release of oil in the north american continent in history, unintended. one of t things i think we need to know about today is the decisions that your company made and who ahead them that led to this explosion and subsequent disaster, what your company is doing to fix this problem and what your company is doing for all the families and communities that have been devastated by this disaster and i think it would be help follow for you and everybody in this hearing room to hear from those women who testified last week, because and they were questions that were raced after they gave passionate testimony of wanting the oil and gas business to continue in louisiana and the region.

i would like to have you listen to their comments in the hearing this. is natalie rosh to. >> because of my husband's death, we can begin to focus on making safety a priority. ways to effectively implement the ones that we already have. this tragedy will not be in vain because of right now, it will be in vain. it will not be in vain if it serves to make the lives of every man and woman working in the field safety. >> i do not believe that they are risking lives or destroying families. i am asking you to please consider harsh punishments on

companies who choose to ignore satisfied standards before other families are destroyed. my family can never and will never be adequately compensated for our loss. >> these your now widows with small children to take care of, and they are the symbols and the faces of this disaster, and i look forward to your testimony. i yield back the balance of my time. >> thank you. next the gentleman from georgia. >> thank you, mr. chairman. i want to express my sorrow to the familiar of those who lost their lives on april 20th, 2010. through all the hearings and legislative consideration, we must remember those lives and the lives of their families as we just aw that were forever changed on that fateful april day, and we certainly must continue to keep nem in our thoughts and prayers. furt, we have an obligation not only to those families but to ever affected to get to the

bottom of the causes of this extent and the failure to secure the situation and stop the devastation wreaked upon the gulf coast. mr. chairman, we have an opportunity in this hearing to ask questions and get to the facts of what happened. however, today's hearing is incomplete. we can only ascertain half of the story today because we do not have anyone representing the administration, the mineral management service, to discuss their oversight role and discussing their responsibility in ensuring an accident like this didn't happen. deep ocean drilling is not new. we have been doing it for deck eights on the gulf coast. why did this happen now? i have heard some assert it was the lacrosse oversight of the previous administration that led to this. if that is the case, why did this not have in the last deck cade? why did it occur almost a year and a half into this

administration. we need to hear from the mineral services. certainly mr. hayward should be prepared to answer for bp's responsibility, but well also need answers from the administration so that we can nan accountability and implement prudent reforms. simply saying no to new drilling is not a realistic answer. i realize there are some in this administration who have a penchant for not letting a crisis go to waste. but for a nation didn't on foreign oil and unemployment hovering at 10%, we can't say to this. we can't take our ball and go home. everyone is didn't on foreign fuels and all too inclined to let jobs leave this country. no, mr. chairman. we have to understand what happened on and leading up to april 20th. we need to answer those questions to determine if the rules or the agency oversight

were insufficient, or if this was purely an act of negron or wanton czar to regulations. we can try to enact things to make sure this never happens again. mr. hayward, this falls to you and your company, bp. you have an only fwation to right this wrong and not only the public trust, but the belief in the free market. mr. chairman, i await the opportunity to ask questions with the hope that we will soon discuss these same matters with our own administration. i yield back. >> thank you. >> as this is an investigative hearing, i will submit my excellent opening statement for the record in order to have more time for questions the witness. >> very well. mr. doyle, opening statement? >> mr. chairman, thank you for

convening this hearing today so we can begin to understand what went to tragically wrong on the deepwater horizon. we are now 59 days into this tragedy, and oil continue to gush into the gulf of mexico. the estimates for how much oil spills into the gulf each day continue to rise, and we still have no way to cap the well in the near future. we sit helplessly as we wait for a relief well to be completed as the details and facts come to lying, it is clear to us all that the decisions made by officials at bp that reflected bad judgment at best and criminal negligence at worst. there this committee's investigation we have learned that at nearly every turn, bp cut corners, in well design, the number of centralizers they used, whether to run a cement log, surry county lating drilling muds and securing the drig head with the lock-down

sleeve. bp took the path of least resistance. on tuesday, testimony was given that they beliefed bp had delinquencies in well stein and failed to follow best practices of the industry. now we learn that bp had several warnings, with one of their own engineers calling it a night m.r.i. well. instead of treating it with caution, it seemed bp's only interest was completing the well quickly and cheaply. were bp employees on the deepwater horizon given orders to speed up the well? were they told to slash costs wherever possible? where use a team on board the rig to test the cementing of the well be sent home before performing the test? surely if a cement bond log was ever necessary, it would be in a nightmare well situation. but sending the team home, bp

saved $100,000 and nine or 10 hours of work. mr. hayward, i hope you're here today to answer questions about decisions made on deepwater horizon that led to this tragic and deadly blowout. earlier this week this committee sent you a letter with detailed information about topics-week-old like -- topics, we would like you to address. i am disappointed in your avoidance of topics. i hope you use the opportunity today to answer our questions openly and truthfully. i know bp has committed to clean up the gulf region, and i expect that commitment to be ongoing. i welcome your commitment to pay damages, but that is just the tip of the iceberg. rebuilding the public's trust in your company and industry will take years and many serious changes in the way you do business. when you operate on our land

and in our waters, you're only there because the public's trust has allowed you to be there. you violated that trust in the worst possible way. mr. hayward, i look forward to your testimony. i look forward to your answers to our questions, and your ongoing efforts to regain america's trust. mr. chairman, i yield back. >> thank you, mr. doyle. mr. griffith for opening statement, three minutes please? >> thank, mr. chairman and ranging member for calling this hearing toong, and mr. hayward for taking time to come before our subcommittee to discuss what happened. like us, you're number one priority is stopping the flow of oil. congress and this committee owe it to the american mahinmi to do whatever we can to aid the unified command to attain this goal this. is a time for engineer and action. let us know what we can do in congress to be helpful. there are still many questions

to be answered, and unfortunately we do know that the documents that we are reviewing, it does not look good. my hope for our hearing today is that we will be able to put political public relations chen ganls aside and focus on understanding why decisions were made and how bp and the industry can ensure they learn from this incident so that drilling safely for our valuable resources can continue. i might say this to you. you're never as good as they say you are or as bad as they say you are. so this hearing will go back and forth. the other thing i would like to remind the committee is that the greatest environmental disaster in america has been cigarettes. 60,000 americans this year will die from cigarette-related cancer. if we are going to talk about the environment, let's be sure we don't leave that out. i am a cancer specialist by training, and i never fail to bring that up.

the environment is an important concept. we regret the loss of life, but there is much we can do, and we will put this in perspective. this is not going to be the worst thing that has ever happened to america, thank you. . erica. th anyou. >> three minutes opening statement, please. >> thank you, mr. chairman. at this very moment, oil is gushing from the deep water horizon blowout at a rate between we learned 35,000 and 60,000 barrels a day, wiping out entire popplation of fish and along with it the jobs of hundreds of thousands of people. most upsetting about this travesty is that it could have been avooded. as the ongoing investigation by this committee has already discovered, bp executives create and atmosphere where safety concerns were ignored in order to ensure that the company's already staggering profits this

year, approximately $93 million a day in the first quarter continued unabated. this appalling disregard for the gulf coast and its inhabitants is one of the most shameful acteds by a corporation in american history. it's the mossignificant example of bp's disregard for the environment and well being of its workers. a report published by the center for public integrity found that between june 2007 and february 2010, bp received total of 862 citation from theccupational safety and health administration, of those a staggering 76 were' grecian and will wilful. compared with eight at the two oil companies tied for second place. this pattern of behavior continued in the spill's aftermath. ihold in my hand a document called voluntary waiver of release that bp made unemployed

fisherman sign before they could be hired for spill cleanup t states i hereby agree on behalf of myself and my representations to hold harmless indemny if i and forever discharge the bp exploration production inc. from all claims and damag that i or my representatives may have with regard to the participation in the spill response activities. i know that you said this was an early misstep and that this was just a standard document, but this is was the first response that you had to people that were hired. and outrage does not begin to express my feeling. these are people who are unemployed because of the recklessness of bp, forced to take jobs cleaning up bp. 's mess in order to survive, yet to qualify for those jobs they had to hold bp harmless for everyone further damages they may suffer in bp's employ. this from a company that made $93 million a day.

fortunately a court trumped your fancy lawyers who wrote this document but still it begs the question how could you do that? i'm glad that you're here, mr. hayward. i skbekts you to explain why your company has operated in such a wholly unacceptable manner. in the final analysis the simple fact remains if bp thought more about the residents as these widows assistant workers, as these widows said, rather than the already exorbitant profits of its shareholders, we would not be here today. i yield back. >> mr. lotta s for an opening statement. >> thank you, mr. chairman. ranking member burgess, i want to thank you for holding this subcommittee hearing on the role of bp in the oil rig explosion and the ongoing explosion in the gulf of mexico. i also want to extend my heartfelt condolence to the families of those who love one luved ones an have been injured.

the scale of the spill and impact on the gulf economy environment demand a thorough examination of bp's actions and inactions as well as bp's current and future plans. the flow of oil must be stopped. every day anywhere from 35,000 to 60,000 barrels are spilling into the gulf and only 15,000 barrels aay are being  captured. the envinmental effects on the oil spill are harming shorelines and coastal wetlands, fisheries an fishery habitats as well as sea mmals aed turtles. what's worse, we will not fully know the ecologil ramifications of the oil spill until years down the road. further more, businesses suffering great losses including job and revenues dependent on tourism are being threatened. the noaa announced a revised fishing closure in the oil affected portion of the gulf of mexico accounting for 33% of the gulf of mexico's exclusive

economic zone. as oil continues to flow this yeah is sure tone large further exasperating the economic damage. a recent economic impact study by the american sport fishing association indicated that the enfire gulf were closed to recreational fishing from may through august. leaving $win.win billion of revenue which supports $2.5 billion in total sales, and 18,785 jobs. this is devastating to an area that has already suffered greatly from the aftermath of natural disasters. americans continue be to be frustrated from the lack of solution from all parties involved and i'm interested to hear more about the coordinated efforts between bp and the administration. the economic and environmental magnitude of this disaster necessitates a clear understanding of what went wrong

and bpp needs ton held accountable for the disaster. i also look forward to having mms and the department of interior before this subcommittee to also for them to answer some tough questioning. i look forward to the hearing, mr. hayward's testimony and i yield back the remainder of my time. thank you. >> thanks, mr. latta mr. ross, three minutes opening statement, please, sir. >> thank you. chairman stupak for holding today's hearing to examine bp's actions and decisions that directly led to the tlach magic explosion and oil spill that continues to gush and wreak havoc on the gulf coast. at a rate of up to 1700 gallons we are minute. since this hearing began a little over an hour ag up to

112,847 gallons have been dumped into the gulf on day 59 of this economic and environmental disaster, with up to 60,000 barrels ofay spilling into the gulf, i continue to be frustrated and downright angry by bp's response and lack of a clear and productive plan totop the lk or efficiently clean up the oil that is destroying the ecosystems that surround the gulf. reports have surfaced revealing that in the days and weeks before the explosion bp knowingly made a number of decisions that increased the danger of an explosion and spill occurring. it seems apparent that bp put profit before safety, many people are dead. llions of gallons of oil continue to spew into the gulf. i'm hopeful that mr. hayward can explain today why these decisions were made, how this

company's actions led to this disaster and what they areoing to remedy it. as oil floats into the marshes and onto the beaches, as shrimping vessels sit tied to docks, as restaurants and businesses during their peak season remain without tourists and customers, and as homeowners see their property values plummet, the people and wild life of the gulf cst wait and wonder about how extensive the damage to the ecosystem or the economy will be. this bill is not only affecting the gulf coast, the jobs and economies of this surrounding states are hurting as well. my state of arkansas borders louisiana. and many of my constituents, people i know in my hometown work on offshore rigs. these jobs are also at risk and

i hope bp will take responsibility for all those who are affected by this spill regardless of where they live. and work to help pull them through this disaster as well. this spill is a wake-up call that must result in better government oversight. more advanced technology, strongeresponse plans and improved safety standards. not only by bp and every oil company in america but also by our government. above all, this disaster is a learning experience that will help us prevent a tragedy like this from ever happening again. and i'm hopeful this hearing can provide the answer and solutions necessary to begin that process. mr. hayward, i truly hope that you'll give us open and honest answers today and not those prepared by your legal team. with that mr. chairman, i yield back. >> thank you, mr. ross. next i would like to call on

miss christensen from virgin islands for annopening statement, please. >> thank you, mr. chairman. and thank you for holding this important hearing. the explosion on the deep water platform and the sub subsequent outpouring of hundreds of thousands of galns of oil into one of the most sensitive and important bodies of water in this country is indeed a tragic accident which caused 11 deaths, many injuries left-hand have deep, long lasting debilitating and expensive repercussion, the people of this country need it know what happened and who is responsible. all that has transpired since april 20th says to me that not only bp but no country drilling in our outer continental shelf is prepared to deal with a spill at this depth. they're all, there using the best available technology and still 59 days later an end is not in sights. this is not skaementable. what has also become clear is that while bp reportedly used shortcuts they were warned not

to which may have caused the spill, they're not the only ones at fault. they could not have cut those corners without the complicity of employees at some of the responsible government agencies who did not do their job. we're all appalled that lives are lost by decisions made apparently in the interest of cutting costs, but also by the lack of adequate preparation for this worst case scenario we are facing today. the fact that the industry does not ensure that response technology kept pace with deeper drill wells lays blame at all of their feet, but we can still not ignore the decisions bimade by bp, if they had been different 11 people ght still be alive today. we with our congress along with the fred who has had more of his share of crisis not of his making have make challenges and critical ahead. i hope the many who dd, the affected families and now who now depend on ocs platforms for

their livelihood, this and of the hearings will help us go beyond a knee-jerk reaction to do the right thing for the region and our country. that bp and any other responsible party will be held fully accountable and responsible and that petroleum and natural gas companies will learn important lessons to ensure this does not happen again. i want to thank you, mr. hayward for being here, i look forward to to your testimony and full answers to the questions we will ask on behalf of the people in the region and on behalf of the american people. i yield back. >> thank you. mr. welch, opening statement, please. >> thank you, mr. chairman. mr. hayward, in the 49 days since the deep water horizon explosion 'caused this extraordinary environmental catastrophe, we've heard time and again from bp this was an abration, the facts regrettably tell a different story. in 2005, when bp's texas city operation blew up, 14 workers lost their lives n 2006, a bp

oil peline in texas ruptud and spilled 200,000 gallons of crude oil n in 2007, the year you became ceo, the bp corporation settled a series of criminal charchgs not civil charge, krill unanimous charge and paid $370 million in fines. according to risk met tri, an independent okay, bp has one of the worst health, environment and safety records of any company in the world n only one year, the occupational safety and health administration found more than 700 violations at bp's texas city refinery and bp paid a record $87 million in a fine. bp was charged with putting profits before safety. earlier this ar, a refinery in toledo was fined $3 million for willful safety violations including the use of valves that contributed to the texas city blast. finally, of course, the deep

water horizon catastrophe and more evidence that comes in, the more it's clear that that event was foreseeable and it was avoidable. after the explosion, bp said there was no oil leaking, then it said there was 1,000 barrels a dye. then 5,000, we're now up to 60,000 barrels. for 59 days, bp has told the american peopthis was abration. it's deja vu again and again and again again. the question many of us have is whether a ceo who hapresided over a company that has incurred $370 million in fines, a company with one of the worst records in the world for safety and consistently puts money ahead of safety, who's peers including

mr. tillerson from exxonmobil who testified where you are two days ago, said they never, that they never would have drilled a well the way bp did at deep water horizon and who has ceos to hass presided over the destruction of over $100 billion in sharehold ever value. does that leader continue to enjoy and have a valid claim on the trust and confidence of employees, shareholders, public regulators and most important lit families and small business of the gulf coast? or is it time frankly to that ceo to consider to submit his says rig nation? i thank you and yield back. >> thank you. mr. greene for an opening statement, please. >> thank you, mr. chairman. mr. hayward, i appreciate your testimony or being here this morning. and most people on this committee know i'm a big supporter of outer continental shelf drilling and domestic energy production. and i understand from your

testimony in our other hearings we've held in meetings with the administration that efforts to cap the well are going as expeditiously as possible however like many of my colleagues here, i'm frustrated that did it's been almost two months and we still have thousands of barrels of crude oil gushing in the gulf of mexico. i'm frustrated by the threat of dister impacts our wildlife and coast line. i'm frustrated that one well out of thousands of wells is threatening my constituents' lively hood and most communities on gulf coast. literally from alabama back to brownsville, texas. this disaster has caused the oil and gas industry to shut down even if the moratorium does not last six months it will be too late for many of these folks, but these people are not the ones to blame. ey're the hard working people with a work ethic like none other than take their responsibility on these rigs

seriously. however, koording to the investigation this subcommittee conducted it's obvious many bp officials on and off the rig did not take their responsibility of this rig seriously. halliburton warned the decisions could lead to serious problem and now people are losing their jobs. they could have been prevented if bmplt p had not chosen exped yensy over say. which brings my next point. whether it's the fire where 15 people died, time after time, it's shown that bp choosss exped yensy over samplt yet, mr. hayward, in your tesmony you write, none of us knows why it happened. yet this subcommittee uncovered five air years where bp made mistakes. i add up the hours that these extra precautionary actions would have taken and it comes to be to about three to four day, that's assuming many of these

actions would not have occurred simultaneously, which they could have. for an extra three days of work, men's lives would have been sarchd an industry record of safety and responsle production would still be in place which brings me to my last point. in your testimony, mr. hayward, you say this incident kaul $into question whether the oil and gas industry did explore for oil and gas in safer more reliable ways and what the appropriate regulatory framework for the industry should be. mr. hayward, the decisions made by handful of individuals % called this into question, not this accident, and you should take the responsibility for the workers who did nothing wrong and are now losing their jobs. and mr. chairman, i yield back my time. >> thank you, mr. green. miss sutton for around opening statement. three minute, please. >> thank you, chairman stupak. it's been nearly two months since the explosion of the deep water horizon dlling rig resulting in the death s of 11

workers and injured additional workers. since then, we've witnessed the worst environmental disaster in our nation's history, that continues to pour an estimated 60,000 barrels of oil a day into the gulf of mexico. that has led to over 66,000 victims filing claims to receive compensation. through this subcommittee's work, several alarming decisions by bp have come to light to save money and time. it's unconscionable when companies pay more attention to their comforts and their profits than to their own workers' safety and to our environment. at our last hearing one witness from transocean testified that a duplicate blowout preventer system comforts rough $15 million not used on the deep water horizon rig. bp also ulized a risky option for steel tubing saving $7 million. bp did not circulate drilling mud or secure casing hangers

between biopsies of different dime terse and critical signals were brushed aside. when standard methods were not followed to center the steel pipe in the drill hole, one of bp's operations drilling engineers remarked in an e-mail, quote, who cares? it's done. end of story. but these cut corners have been anything but the end of the story. as the workers and volunteers from around the country help clean up the oil from the disaster, many are becoming ill. between april 22 and june 10, 8 485 of bp's own employees have been ill. and the money has long been lost as they already paid $81 million in claims. mr. hayward, like many americans, i feel physically sick when sii see the clips of h

oil gushing in the gulf. witnessing the devastation of our waters and our coast. and the wildlife. thinking about the lives of the rkers killed. and hearing and seeing the pain in the face and the hearts of the people, the families, the small businesses, the fishermen and others in the gulf. all consequence of this catastrophe. this culture of carelessness and taking shortcuts to maximize profits at the expense of safety, this come what may, we'll crosshat bridge when we come to it attitude is unaccept ability, it's outrageous. bp must be accountable for the consequences of that approach and we must take actions necessary on behalf of the american people to make sure that such a reckless approach will be forever abandoned. the risks and costs to our environment and to the workers in the gulf coast, to the

workers throughout our economy are simply too great to allow otherwise. i yield back. >> thank you, miss sutton that concludes the opening statements of all members of our subcommittee. as i noted in the opening, as i noted in the opening, we have members of the full committee here, i would like t recognize them they will be allowed to ask questions by order o seniority. mr. e mr. ensly is here. miss cast, mr. gonzalez, miss cas, mr. harmon, ms. wiener, and mr. scalise. they also host the field hearing in new orleans, we had nine members go down in one of the largest field hearings we've had so you can see the interest here. i also also note, miss jackson lee is with us, not a member of the committee, she will not be

allowed to ask question, but we welcome her and she's sat in on previous hearings we've had. so our first witness is mr. tony high hayward who is the chief executive officer of bp plc. you have a right to be advised by counsel during your testimony. do you wish to be represented by legal counsel? i'm sorry, you have to just press that button right there, sir. >> positive dye not. >> we also asked if you would have a technical person with you so you could consult if we ask some questions that you want to run it by your technical person. do you have a technical person with you? >> i do. >> could you state his name and position for the record, please. >> mike zangey, drilling engineer. >> during your testimy, if you want to consult with that individual, please let us know, we'll give you a moment to do so

before you answer but you'll be only one who could answer the question. is that clear? thank you. mr. hayward, i'm going ask you to please rise raise your right hand and take the oath. do you swear or affirm the testimony you're about to give to be the truth, the whole truth and nothing but the truth, the matter pending before this committee. >> i do. >> let the record reflect the witness answered in the affirmative. mr. hayward, you are now under oencht we would like it he an opening statement from you. you may submit a longer statement if you will for the record but if you would, please begin your opening statement and let me again on behalf of all members of the committee we appreciate your biwillingness tr here today. >> chairman stupak -- ranking members. >> suspend, please, sir.

>> you need to go to jail! [ inaudible ]. >> ma'am -- >> she's a shrimper. her whole life is -- >> be careful. let them get through.

>> before we begin again with mr. hayward, let me just again mention those viewers in our audience, emotion run high on this issue. but we have a hearing to conduct here. we're going to conduct our hearing. it's going to be done with proper decorum. mr. hayward, when you're ready we're growing to start the clock over, you may begin. >> chairman waxman, chairman stupak, ranking member burgess,

members of the committee. i'm tony haywd, chief executive of bp. the explosion and fire aboard the deep water horizon and the resulting oil spill in the gulf of mexico -- >> excuse me, mr. hayward, i'm going to ask you to pull that up, some of the members are having trouble hearing it's probably over the clicking of the cameras, but we're vag trouble hearing you. if you could just pull it closer. >> the explosion and fire aboard the deep water horizon and the resulting oil spill in the gulf of mexico. never should have happen and oar and i'm deeply sorry that it did. when i lernt that 11 men had lost their lives, i was personally devastated. three week $ago, i attended a memorial service for those men and it was a shattering moment. i want to offer my sincere condolence to their friends and families. i can only begin to imagine their sorrow. i understand how serious this situation is. it is a tragedy. i want to speak directly to the

spem who live and work in the gulf region. i know this incident has had a profound impact on your lives caused great turmoil and i deeply regret that i also deeply regret the impact the spill has had on the environment, the wildline of scrimmawild life and the ecosystem of the gulf. i want to acknowledge the questions that you and public are rightly asking. how could this happen? how damaging is the spill to the environment? why is it taking so long to stop the flow of o and gas into the% gulf? we don't yet have all the answers to these important questions, but i hear and understand the concerns, frustrations and anger being voiced across the country. and i know that these sentiments will continue until the leak is stop and until w prove through

our actions that we are doing the right thing. yesterday, we met with the president of the united states and his senior advisers. we discussed how bp could be more constructive in the government's desire to bring more comfort and assurance to the people of the gulf coast beyond the activity we've already done. we agreed in that meeting to create a $20 billion claims fund to compensate the affected party and pay for the cleanup and environmental mitigation said all along we would pay these comforts and now the american people can be confident that our word is good. i've been to the gulf coast. i've met with fiermen. business owners and families. i understand what they're going through and i promised them as

i'm promising you that we will make this right. after yesterday's announcement, i hope that they feel we're on the right track. i'm here today because i have a responsibility to the american people to do my best to explain what bmplt p has done is doing and will do in the future to respd to this terrible accident. first, we're doing everything we can to secure the well and in the meantime contain the flow of oil. we're currently drilling two relief wells, we believe they represent the ultimate solution. we expect this to be complete in august. simultaneously, we've been working on parallel strategies to minimize or stop the flow of oil. while not all have been met with success, it appears that oor latest containment effort is now containing about 20,000 barrels a day. by the end of june,e expect to

have equipment in place to handle between 40,000 and 50,000 barrels a day. second, i've been clear that we will pay all necessary cleanup comforts. we've mounte what the coast guard has recognized as the largest spill response in history. we've been working hard on the leadership under unified command to stop the oil from coming ashore. whilst we're grateful these efforts are reducing the impacts of the spil any oil on the shor is deeply distressing. we will be vigilant in our cleanup. thi,d as i have made clear from the beginning, we will pay all legitimate claims for losses and damps caused by the spill. those are not just words. we've already paid out more than $95 million and we've announced an independent claims facility headed by ken feinberg to ense the process is as fair,

transparent and rapid as possible. fourth, we need to know what went wrong. so that we as a company and we as an industry can do better. that is why less than 24 hours after the accident i commissioned a nonprimpd investigation. die it because i want to know what happened and i wt to share the results. right now, it's simply too early to say what caused the incident. there is still extensive work to do. a full answer must await the outcome of multiple investigations including the marine board. to sum up, i understand the seriousness of the situation and the concerns, frustrations and fears that have been a will continue to be voiced. i know that only actions and results, not mere words, ultimately can give you the confidence you seek.

i give my pledge as the leader of bp that we will not rest until we make this right. we're a strong company and no resources will be spared. we and the entire industry will learn from this terrible event and emerge stronger, smarter and safer. thank you. >> thank you, mr. hayward. one of the bad parts of conducting a hearing we get interrupted now and then by votes. we have three votes pending right now. there's i think about ten minutes remaining on this vote. i would suggest instead of trying to get in the questions, we take a break right now, let's stand in recess for 30 minute, we'll come back at noon and continue this hearing. well start with questions all the members. okay? this committee will be in recess until 12 noon.

committee will come back to order. when we left off, mr. hayward had finished his opening statement. we'll begin with questions. i'll begin. mr. hayward, when i heard about the explosion in the gulf, the immediate company that popped in my brain was bp. and that's because last number of years from texas city where people have died and 170 people were injured, the north slope, the problems we had there, in bp's own 2007 report on the management, accountability project in which it stated there

was a culture that evolved over the years that seemed to ignore risk, tolerate noncompliance and accepted incompetence. i wasn't surprised when we heard about the explosion in the gulf and bp was part it. since then this committee, the oversight investigations committee of the energy and commerce committee we methodically looked at this issue and i know you have and your company has also. on may 12th we had a hearing which we looked at a number of things that went wrong. on may 25th, our committee, chairman waxman and myself put out a memo and based on bp's preliminary report and i'm sure you're familiar with that report. are your not, sir? >> i am. >> on june 14th, chairman waxman and i sent you a letter where we talked about the crazy and women nightmare well. quite frankly bp blew it pup cut corners to save mean time.

and as the chief executive officer of bp, as i stated in my opening, you called for a leader decision making process u-called for fewer people in the decision making process, you stated individuals need to be accountability for risk and to manage risk. therefore, bp's leadership managed their risk in this well? did you manage the risk properly? >> since i've between ceo of this company, i have focused on safe reliable operations. the i've set the tone from the top by making it very clear to everyone in bp that safe, reliable operations are our number one priority. of course it's much more than about words. safety is about three things. it's about plans, it's about people and it's about process. in the last three years we've invested more than $14 billion in plant integrity. . what happened here? the june 14th letter we put out the other day, we went through five major areas.

the head of the ceos of the oil companies that were before this committee on tuesday all said you did it wrong. they never would have done a well this way. you made decisions whether to a casing or the tie back, which everyone said the tie back would have been safer. the lock down sleeve. centralizers instead of doing 21 as recommended you only do six. that defies this safety emphasis, does it not? >> we've launched an investigation, which which have shared with yourself, mr. chairman and all of your members, which is identified seven areas. it's identified areas around cement, casing, integrity pressure measurement, well controlled procedures, and three areas around the blow-out preventer which failed to operate. this investigation is ongoing it's not complete. >> you're the ceo of this company. you said you were here to answer questions of the american

people. you were an exploration manager with bp. you were the director of bp's exploration. you were vice president of bp's exploration and production. you hold a ph.d. from the university of edinboro. based on the may 12th hearing and may 25th memo, our june 14th letter to you, based on all those facts are your trying to tell me you have not reached a conclusion that bp really cut corners here? >> i think it's too ear try to reach conclusions, with respect, mr. chairman. the investigations are ongoing. they've of identified seven key areas, and when they are complete -- >> every one of those seven key areas, sir, dealt with saving time and saving money and accepting the risk. so if we use your own words f-you're going to hold bp accountable, then we have to manage the risk. should leadership at bp be held

accountable here? >> there is no doubt that i've focused on safe reliable operations. we've made major changes in everything we do over the last three years. we changed people. >> what changes how far made since april 20th when the bp deep water horizon exploded. what changes were made then? >> based on what we know so far, we have made changes with respect to the testing and valuation of blow-out preventers. we made changes with respect to ensuring that people who are likely to be dealing with well control are up to date and fully validated for well control procedures. and as we learn more about what happened here we'll continue to make changes. >> look my time is just about up. let me ask you this. last five years, your safety

record, 26 people dead, more than 170 injured, you that have largest spill ever in alaska, largest environmental disaster to hit the united states with no end in sight with this disaster. do you believe the u.s. government should don't allow companies that have poor safety records, poor environmental records to explore minerals or oil exploration in our country? should thereabout a ban on companies that have miserable safety of and environmental records? >> in the three years that i've been ceo i focused on safety and environmental performance. the price of this accident, that is, indeed the case and that is why, amongst all the other reasons i'm so devastated by this accident. >> i agree. under your tenure you said you had the 2007 report that was talking about bp's culture, still have problems with alaska, you said you will hold people accountable. who will we hold accountable

here? >> we've engaged in a systematic change at bp. we've begun to change the culture. i'm not denying there's more to do. but we've made dramatic changes in the people we have in our organization, the skills and capabilities they have, we've invested heavily into that. we've changed significantly the processes that we use to manage our operations and most importantly, perhaps, we've made safe reliable operations the core of the company. it is the thing that i talk about every time i talk internally and every time i talk externally about bp. >> not to play games, in your opening statement you said as long as you were ceo of bp these things would occur. do you expect to be ceo of bp much longer? >> at the moment i'm focused on the response. i think everyone here believes that the highest priority is to

stop the leak, contain oil on the surface and clean it up. and that is what my to discuss. >> mr. burgess for questions? >> thank you, mr. chairman. highest priority stopping the leak. let me ask is your presence here today in any way interfering with that number one task of stopping the leak? >> it is not. >> thank you. leapt me ask you or just make a statement for clarification. i am not going to apologize to you. it was, after all, bp executives who were on that rig. bp executives who ultimately could have made the call to stop operations when things became unsafe and youly you are the person at the top and you are responsible. we lost 11 men on that rig, transocean and other companies lost 11 men on that rig. i don't feel apologies are in order. i have serious questions about this fund we heard about yesterday. i hope this committee will stay engaged in the oversight of that activity as well. it's still a disturbing to me that we've not had anyone from

the federal regulatory side. we brought a ton of other people in here to question them. we need mr. salazar. we need the minerals and management people here who approved that exploration plan that bp submitted that was woefully inadequate. now i've got some questions i do need to ask. bp, unfortunately, is not the first time you've been in front of our committee and in 2006, although you were not ceo in september of that year, i pulled the transcript last night and looked through it again. big oil spill in alaska had to do with not proper maintenance on the pipelines. and when you came in you said you were going to focus like a laser beam on safety. and certainly that had to be welcomed news after texas city -- after the north slope accident. so what safety of briefings do you get as your office of chief executive officer and who provides them to you?

>> the basis of our management of safety performance is through something that we call our group operating risk committee. ate committee i set up, i chair. it involves the heads of all of the business streams. and we meet on a bimonthly basis to review the safety performance across the company. that process is mirrored down through the company. >> and what type of safety directives then or what type of directives do you issue in terms of safety as a result of those meetings and perhaps would you be willing to share some of that information with the committee as we go forward >> we can share that information. they range in changes to procedure to requirements to have people many where there are issues with safety to come and froent us. >> but somebody records minutes in those meetings and your directives that come as a consequence of those briefings

are written down and delivered to the appropriate managers? >> there are minutes of those meetings. >> let me ask you this. mr. stupak already alluded to the fact should we allow someone who perhaps is not following the best practices to don't drill. is there any other well, to your knowledge, in the gulf of mexico that is, has been done in the same manner as this well that was being drilled under the deep water horizon? >> there are many wells in the gulf of mexico. >> are there any other wells where you haven't put the proper number of centralizers. there are many wells in the gulf of mexico with the satisfactioning designs. there are many wells drilled with the same cement procedures. >> have the mms people been there and looked over it with a fine tooth comb the >> we are -- >> are you changing your

procedures as a result of things you have jointered. . i'm sorry. as we learn from our investigation, we will make appropriate changes. as i've already indicated. >> are there any of those changes that are wrong going right now? >> the ones i've talked about are ongoing. >> let me ask enthusiast. the question came up about centralizers and someone said that they would rather push some more, squeeze more cement than get something stuck. i'm not technically savvy enough to know about that. but if that's the statement and you'll push cement and deal with a fewer number of centralizers to hold this thing steady in the center of the column, is there any way to find out if in fact where that cement went where you intended to and that rod didn't get off to one side or the other? >> wasn't part of the decision making process on this well. . i've looked at the material -- >> that's not the question i asked. was there a procedure dhoot have been followed that would have

given that information? >> can't answer that question. i'm not a cement engineer, i'm afraid. >> there is. those people were available and for whatever reason they decided not to do that. would that have made a difference >> i'm not prepared to speculate on what may or may not make a difference until such time as multiple investigations that are ongoing are concluded. >> prior to april 20th when the well blew up were you briefed on the progress of the drilling of the well? >> the only knowledge that i had of the well occurred in april when it was evident to the team drilling it that we made a discovery and they notified myself that we made a discovery. that was my only prior involvement in the well. >> who briefed you. >> the person who would have briefed me would have been the chief executive of expiration of production. >> and were you privy ethipoian

any other information, difficulties they had, the multiple gas kicks, losing tools over the hole, the decisions to move quickly because we spent too much time over this well? >> notice prior information. >> who would have had that information? >> certainly the drilling team in the gulf of mexico. >> but you're the ceo of the company. do you have any sort of technical expert who helps you with these things who might have been there? >> with respect, sir, we drill hundreds of wells all around the world. >> i know that's what's scaring me right now. did you have a technical expert that was advise us there on this well. we heard from other people it was a bad well, dangerous well, gas kicks and the mud was not degassified. did you have a technical expert advise ug snipe had no knowledge of the drilling of this well. >> who was. if you're the ceo of this company, if i'm a shareholder of

bp which i'm not but if i am how can i then have comfort that the ceo knows what's going on as far as safety on the rigs? or is it true that it's just all about profit? >> there was a drilling team providing oversight of this well. >> there was a drilling team. >> i have to go to mr. waxman. mr. waxman for questions please. >> thank you very much. mr. hayward when you became ceo three years ago you said safety of was going your top priority. you would focus on it like a laser. your website said safe and reliable operation are integral to bp's success. i want to ask you whether you think bp has met that commitment that you made when you became ceo? >> since i became ceo we have made a lot of progress. we have made it very clear to everyone in the company that -- >> have you met that commitment that you made? >> and, we've made major changes.

we made major changes. >> we now see this disaster in the gulf. does that indicate that you didn't keep that kmipt? >> one of the reasons that i am so distraught -- >> can you answer yes or no? >> is that -- >> don't know whether you're distraught. i want to know whether you think you've kept your commitment >> we focused like a laser on safe and reliable operations. that's a fact. every day. >> let me follow up on that. we had an hearing earlier this week with ceos from other oil companies. they were unanimous in their view that you made risky decisions that their companies would not have made. and in particular they criticize your decision to install a long single string of casing from the top of the well to the bottom on april 19th, the day before the blow-out. they said this well design choice provide an unrestricted pathway for gas to travel up the well in the space that

surrounded the casing and of course it blew out the -- it blew out the seal. how do you respond to their criticism? did bp make a fundamental misjudgment in selecting the single string of casing? >> i wasn't involved in any of that decision make. >> i want to know your view about it. now that you know what your company did pursuant to your laser request that they be atuned to safety, do you think that was a mistake >> the original well design was to run a long string. it was approved by the mms. there was discussion. in the course of the drill of the well whether a long string or a seven inch line would be most appropriate. that is what i understand based on having looked at the documents and listened to our investigation team. the decision to run a long string, at least in part was to deal with the long term integrity of the well. >> let me be fair to you. because i'm asking you to look

with hindsight as to what happened and the decision that was made. but, your own engineers warned in advance that this was a risky approach and i would like to put on the screen what's called a plan review that your engineers prepared in mid-april warning against the long string of casing as you can see. your engineers said if you use a long string of case, quote, it is unlikely to be a successful cement job. you would be unable to fulfill mms regulations and there would be an open annulus to the well head. those are serious risks, a failed cement job, violation of mms safety regulations and open pathway for gas to travel to the top of the well. the same document says that if you use the liner and tie back approach which is what exxonmobil and other companies said you should have used you

would have avoid or lessened these risks and here's what the plan review said. if you used the liner there would be less issue with landing it shallow. it would be a second barrier to gas in the annulus and higher chance for a successful cement job. now you said bp was supposed to be focused like a laser on safety yet bp overruled the warning of its own engineers and chose the more dangerous option. how can you explain that decision by bp? where were the safety recommendations of your own engineers ignored? >> i wasn't involved in any of the decision making. it's clear there was some discussion amongst the engineering team and an engineering judgment was taken. it's clear to me that you don't want to answer our questions. because isn't it true that you've served your life in bp? you've only recently become the ceo. haven't you been in this

business most of your professional life? >> i've been in this business 28 years. 28 years. you should have some knowledge about these issues. and, i sent you a letter in advance asking you, said you'll be asked these questions and be prepared to answer it. how can you explain this decision when you ignore people that work for you that should have known that your directive to be laser on safety, how could they have ignored these warnings from people right within your company? >> there was clearly a discussion between the engineering team as to what was the most appropriate course of action to take. and an engineering judgment was taken that involved long term integrity. more than an engineering judgment because on april 15th, there's a document, which is five days before the blow-out that said using the safer liner will add an additional seven to ten million dollars to the

completion cost. same document calls it the single string of casing the best economic case for bp, and the conclusion i draw these documents is bp use ad more dangerous well design to save $7 million. what do you think about that? what's your response? >> i believe that document also highlights that the -- >> what? >> i believe that document also highlights that the long term integrity of the well will be best served bay long string. the long string is not an unusual well design in the gulf of mexico. as i under it -- >> say that again. >> the long string is not an unusual design in the gulf of mexico, as i under it. hadllibu they wouldn't proceed this way. others said they wouldn't

proceed this way. bp knowingly risked well failure to save a few million dollars, and drilling 18,000 feet below the sea. if you made the mistakes the consequences of those would be catastrophic and in fact turned out to be catastrophic. don't you feel any sense of responsibility for this decision? >> i feel a great sense of responsibility for the accident. >> how about for the decisions that made the accident nor likely? >> we need to determine what were the critical decisions, and -- >> did you get my letter detain review. >> it's >> i've read your letter, chairman. >> we asked you to be prepared to discuss these issue? >> as i said, i've seen the documents following your letter. and i can't past judgment on those decisions. >> even though you've worked 28 years in the oil industry,

you're the ceo and said like a laser you're going to -- safety is the biggest issue and you have people under you making these kinds of decisions and now you're reviewing them. do you disagree with the conclusion that this was riskier, to use this particular well lining? i'm not prepared to draw conclusions about this accident until such time as the investigation is concluded. >> this is an investigation. that's what this committee is doing is investigating. your failing to cooperate with other investigators as well because they will have a hard time reaching conclusion if you stonewall them. >> i'm not stonewalling. i wasn't involve in the decision making process. i looked at the documents. until the investigation is complete both yours and

others -- >> somebody's els conclusion, what is your conclusion? >> i haven't drawn a clourngs mr. chairman. >> i see. my time has expired. i'm just amazed that this testimony, mr. hayward. you're not taking responsibility. you're kicking the can down the road and acting as if you had nothing to do with this company or the decision.. i find that irresponsible. >> along those lines do you disagree with the conclusions of chairman waxman's june 14th letter the one we sent you. do you disagree with those five conclusion, five areas we hit? do you disagree with it? >> they are areas for concern. >> what? >> they are legitimate areas for concerns. >> we reached legitimate conclusions that people could then base the decision, yet cut corners to save money and we had this accident, correct >> doesn't appear you're very