per00 day. >> why did you not drill relief wells to begin with, instead of destroying our ocean and our environment? it may have cost you more in the first place, but in this case it would have saved you billions of dollars. . .

>> i can only imagine their sorrow. probably not as devastated as though with those who testified before our committee. what about bp? what kind of contact have you had it since the incident, letters, phone calls? two bp men attended services, and never extended a hand, extended condolences. the only words of they said was where there were to be seated. i never saw them after that. i asked, what about you? two bp came twowyatt's services and one of the two told me he was sorry for my in-laws, asked

if he could hug me and did. the man extended his hand, tell me who he was, and sent two plants to the services. that is the center of my conversation and any dealings with bp. that is it. do you feel like you owe something more to those women? in as of expressing something and more? >> as i said, i am devastated by the accident. i am sincerely devastated, and i feel very sorry for the people impacted by it. >> well, they haven't heard anything. >> the people killed in the accident are not bp employees. they are employees of transocean and other contractors. they made it very clear that they wanted to do with the cameras. we have provided support to both transocean and the other.

we have made it clear that we will provide all and every need to the families. >> let me ask another question. there were bp personal on the rig. we read that oil workers from the rig held in seclusion on the open water for up to two days after the april 20 explosion while attorneys attempted to convince them to sign the documents stating they were unharmed by the handsome. the men claim that they were forbidden from having any contact with concerned loved ones during that time, and were told there would not be able to go home until they signed the documents that were presented with. after being awake for 50 difficult hours, stephen caved in and sign the papers, and most others did as well. do you think this is inappropriate way to treat people who have experienced bad? and since your executives, you had people on the rig, what was

their feeling, and what is your feeling about that? >> i think it was inappropriate and has nothing to do with bp. >> i see, and bp had no comment or opportunity -- did the company know about it? >> i don't believe we wereeaware it was taking place, but it has nothing to do with bp. >> i did mention during my opening statement this document that basically says such voluntary effort shall be at my own risk, that people were made to sign. there were two court appearances needed to finally get bp to take responsibility, but what i understand is that bp continue to fail to provide adequate protective gear to the fishermen. on may 16, ocea issued a detailed directive on training requirements for specific tasks , and stated specificocea head

officials monitoring turning and observing the clinic. according to testimony that we heard in louisiana, still a bp failed to provide respirators to workers exposed, and to workers who experience tells of bugs. those workers were afraid to speak up in fear of failinlosinr jobs. the other workers told them there were threatened to lose their job. >> anyone involved in the response is appropriately provided with safety equipment. >> are the workers currently provided with what they need? >> absolutely. in every case we return to make certain that people -- >> you are trying, but is all the equipment there, and are all these workers protected?

>> to my knowledge, yes. >> thank you. i yield back. >> next, mr. ross. >> thank you, mr. chairman. mr. tony hayward, since my opening statement, up to 416,000 barrels of oil have leaked into the gulf -- about four hours ago. in my opening statement four hours ago i asked you to provide us to be open with us, and honest in your responses. instead, it seems as though we're getting statements memorized by you and provided by your legal counsel. i don't know if bp quite understands how angry the american people and the world is at them. i can tell you it is rare that you see democrats and

republicans on this panel agreeing with one another, yet it has been pretty consistent except for a few major disagreements. the level of frustration and discontent at bp -- also, watched this on the news, and it seems that bp has not been honest with the american people. has not been honest with our government. seems as though you are trying to hide something. sir, it is hard to hide to 0.5 million gallons of oil per day pouring into the gulf. we want answers. we want you to be open and honest. we want to see the kind of transparency that you have been talking about. b is currently and the process of doing two relief wells which you said will be

finished by august, which may or may not work. after the wells are finished and the league has been stopped, what does bp planned to do with these wells? the plan to put these into production and make a profit of them? or, the you plan to shut them down after the situation has been resolved. >> there will be shut down after the situation has been resolved. the first relief well will pompous mud down it to kill the well, then cement it up. >> the paper so far has said it has treated to under 50 tons of solid waste and tons of liquid waste now carted away from the gulf coast and shipped off to landfills. bp executives have stated this -pwaste which is admittedly hazardous and destructive to the ocean and berman is perfectly safe to dump in >> we will do tho

make sure it is treated in the proper and appropriate way. >> can you provide me and the committee with the response? >> we certainly can. >> let me try this in the time we have left. it has been asked several times and i don't know if we have gotten an answer yet. we all know about the e-mails from b p employs expressing concern about the casing, including one from your engineer who describes the well as "and nightmare well." how much with the drilling engineers consulted?

was this a bottom up operation in which people had him flown or did it come from the top down? >> as i understand it, from the discussion with our investigation team and from the review of documents there was a discussion taking place among the drilling engineer team responsible for this well and that is how the judgments were taken. >> would you call that a bottom up decision or a top down decision? >> i would say it was a decision taken by the correct experts with the correct technical knowledge to make the decision. >> in your testimony you note you are currently drilling two relief wells which will ultimately stem the flow of oil. in the previous testimony from both bp and transocean river there are numerous riddances buttbuilt into all your equipme.

the companies to the best to ensure tragedies like the one we have seen unfold over the past 59 days do not occur. do you view these relief wells as an on/off switch when they are complete? will they stop the flow of oil into our ocean? if so, wouldn't you pre-drill the relief wells prior to this whole mess? we're still waiting for a good answer. did you do cost-benefit analysis and determined it was cheaper to build only one well? then potentially pay a massive that some to clean up an inevitable tragedy? which was it? >> we believed that the bllwout preventer was the allotment fail-safe mechanism. that clearly was not the case in this instance. it failed in three separate instances. if killed when it was activated

on the drilling rig at the time of the accident, fail to operate when the rig separate from the blowout preventer, until to a debate when we had submersible robots there within 24 hours of the incident. that was the fail-safe mechanism. >> mr. chairman, that is my amount of time. >> thank you. >> thank you, mr. chairman. mr. tony hayward, you have pledged $20 billion to the hedge fund which i see as a commitment to meet bp's obligation and not a slush fund, just for the record. our health payments as for any illnesses that residents are workers may develop as a result covered in your statement to cover all legitimate claims? and what about federal and government outlays of health and

other personnel? >> claims of that sort are covered under the fund. >> several have called for more experts to what is being increasingly cold a war. one calls a world war iii. what is missing from the effort? and do you feel you need more hands, more people to effectively fight this so-called war, and keep the -- prevent the oil from causing any more damage? >> we have been fighting a battle on three fronts. to eliminate the leak. to contain the oil on the surface. and to defend the shore. it is now the task of the incident commander, thad allen, to determine what further resources are required. it is a conversation he and i

have on a regular basis, to ensure that we have the right resources and the right place at the right time to deal witt the incident. >> so, your last conversation with admiral allen was that you have all you need? " we're continuing to work the issue of defending the shore to try to mitigate to the maximum extent possible the oil coming onshore. that is where we can still do more to defend beaches. >> thank you for your answer. you stated in your testimony that the events of 4/20 were not foreseen by you, but in light of the several areas of concern raised, shouldn't some have foreseen and have been able to prevent the explosion? i understand there is supposed to be a policy for any one person on a rig can shut it down

if they perceive a problem. is this a real policy, reinforced in training, or something on paper? it did not seem to happen. in this instance, even though transocean, halliburton, and even bp employees reportedly ha+ serious concerns. >> it is a policy that israel. -- is real. if anyone at any times believes what they're doing is unsafe to have both the right and obligation to stop the task. >> are you surprised given what we are hearing, and i know the investigation is not complete, that no one made that decision to shut down the rate? >> in light of what we now know it is surprising that someone did not say that they were concerned. i think that is to the heart of the investigation, to understand exactly what the events were, and why there weren't different

decisions taken with respect to the event, particularly in the last five to six hours on the day of the incident. >> accompanying, i think -- a company, on a the rig at the time that left. we were told they left because of safety concerns, but other reports said they left because there were told there were not needed. >> i believe it is clear they left the rig because they had completed that task, or the task they had anticipated to do was not required. >> so, as far as you know it was not as if they felt unsafe, as we were told in new orleans? >> not on the basis of anything i have seen, that it had anything to do with safety. >> in your testimony "bp is a

responsible party under the oil pollution act" and you distinguish that terminology from any implication of legal liability which is still under investigation. do you think you're the sole responsible party? or might there be others, and if so,who? >> the government has named four responsible parties. they are bp, transocean, mitsui and anadarko. >> the last two? thank you. >> next for questions, mr. welch was not here. mr. green? >> yesterday mr. tillotson from

exxonmobil testified that in the aftermath of the exxon valdez investigation and implementede far-reaching decisions. have there been any specific reforms that bp has implemented following the alaska pipeline disaster in the texas city refinery disaster? close we did implement major change following the incidents in both 2006 and 2007. changes to people, in terms of skills and capabilities. changes to the training that they get, and expertise to develop. we have implemented significant changes to all of our operating practices, including implementation of operating and management system that covers all of the company's operations. it has been a root and branch review from top to bottom.

>> my concern is, having called both the alaska pipeline and the texas city refinery disaster, those reforms have not worked. what will be done differently this time and the last almost 60 days? has there been discussion on why the reforms from the texas city and pipeline in alaska have not worked? you know the information our committee has been no you received a letter two days ago concerning decisions made on the rig by a bp representatives. five years from now, how will we know we will not have to repeat this? >> that is why i'm so determined to get to the bottom of the incident such that we can learn from it and make changes to ensure it does not happen again. >> what has happened with your drilling procedures internationally? i know that there are differing

standards for different companies. we heard testimony from executives a few days ago. typically norway and the scandinavian companies have the toughest offshore drilling. i know that bp is active in norway. is there a significant difference in what you do in the gulf of mexico as compared to what you do off the coast of norway, or even off the coast of edinburgh or great britain? >> we apply the same standards globally. the truth is that the rules and regulation as i understand it in the gulf of mexico are higher than in the north sea and in the u.k. sector in terms of requirements. so, we will continue to learn from this incident and make changes to ensure it cannot happen again. it will be global. >> thank you, mr. chairman. >> you you back? our next, mr. barton, ranking

member, for questions. >> thank you, i appreciate the opportunity to ask some questions. mr. tony hayward, yesterday when we had a hearing in a different subcommittee of this full committee we had four ceos of other oil companies. to a person, and i could be indicated they either would not have drilled this well, or least would not have dreaded the way repeated. your response? >> i wanted to understand exactly what happened through our investigation, compared with other practices to determine the truth. i cannot comment today on the. >> all right. i have had off camera discussions with a number of

experts in the drilling processes for the deep gulf of mexico. they all say that bp has a different culture, that for example, in most of the other companies operating in the deep gulf there are number of individuals on side who have what is called a stop order afford. if they see something that is going on to compromise safety and integrity, they have the ability to stop production. but i am told that bp does not give that authority. that is further up the chain of command. is that correct? if so, is that something that bp may consider changing? >> on the drilling operation such as this anyone can stop it. the bp mean, the transition

driller, the transocean tall fisher, the im, or the site operator. it requires everyone to agree. if one person does not, then they do not continue. >> so, when i'm told that the bp culture in terms of this authority is different -- i have been told incorrectly? >> i believe that is so, congressmmn. >> in terms of the two wells currently being drug, are they drill using the same procedures using this well, or differently? something's not used such as double casing, things of this sort, are those relief wells going to use these enhanced safety procedures? >> there are clearly some areas of concern. cement casing.

the relief wells are being a drug with all those issues for most in the procedure. the relief wells are rather different. but all the things we have investigation have of silly been incorporated into the activity taking place with respect to the relief wells. >> have you either red or at least been given a summary of the letter that chairman and chairman stupak sent earlier in the week that list the five outstanding, what the staff considered to be anomalies in this well, and safety concerns? >> i am familiar with the letter. >> ok. do you generally agree with the concerns raised their about the

lack -- raised there about the lack of a safety collar being employed, the number of devices that could have stopped the oil and gas escaping from the well? someone recommended 21 or 22 and bp decided to use only six. now do share some of the concerns that letter raises? >> i think i share the concern about the number of contributing factors that have created this incident. they are focused on the cement casing, integrity tests, well control procedures, and on the complete failure of the blowout preventer. they are all areas of believe we all need to understand fully

before we draw conclusions about how this accident occurred. >> my final question is based on what you now know, do you agree with the general conclusion expressed yesterday that this was a preventable accidents? >> i believe all accidents are preventable -- absolutely. >> finally, if i may take a small point of personal privilege, i want the record to be clear that i think bp is responsible for this accident, should be held responsible, and should in every way do everything possible to make a good on the consequences that have resulted from this accident, and if anything i have said this morning has been misconstrued in the opposite

effect, i want to apologize for that misconstruction. with that, i yield back. >> thank you, mr. barton. >> thank you. this testimony has been fascinating. we have heard a lot about your desire to come in and improve the safety of operations every were in the world -- something to that effect. you listed another top prrority to conduct bp's business in a way that is in tune with the world without damaging the ever met. would you agree that bp did not meet whose goals? >> it is clear. i regret, bp regrets what is happened here deeply. >> so, obviously be did not meet those goals on the deep water

rides and rick. but, mr. tony hayward, the concern beyond that -- on the deep water horizon rig. theithere seems to be little evidence on how hard bp try to meet those goals. there are five concerns, made by a bp officials and days prior. those had two common denominators. they saved time, cut costs, and each increased risk. i have heard you say repeatedly in the course of today's hearing that there is nothing i have seen in evidence so far that bp put costs ahead of safety. i have to tell you how detached that seems because we have also talked some of the documents the committee has unearthed. document after document that indicated that bp officials in charge of the deepwater horizon

were concerned with saving time and money. it was chosen because it would save $7 million or $10 million -- you're familiar with that? another says the reason for not using sufficient centralizes is because a would take 10 hours to install them -- are you familiar with that document? >> yes, i am familiar with that document. >> you indicated you are not familiar with any of this happening before the explosion? you only learn about it afterward, as the ceo of this company? >> i was not aware of any of the documents prior or during the drilling of the well. >> when you were asked about how these decisions are made within the structure of your organization, you referenced this from the perspective of, as i understand it from our investigation -- this is how these decisions are made. but you are the leader of the company.

you cannot even tell us if they were top-down or bottom of decisions. you just referencing them based on and after the fact investigation. so, when we talk about these documents, the documents i just referenced, the one that sells the well design was chosen because it would save between $7.10 dollars billion, and the reason for not using central izers is because it would take 10 hours -- none of these documents show an effort to provide a state government or prevent a catastrophic oil spill. would you say that does not indicate decisions based on safety or protecting the environment? >> i don't think it is possible to say that based on documents out of context. >> that is why i think there is a real detachment here. a real disconnect. it seems to me there was a

disconnect prior to the explosion, and remains a disconnect when viewing evidence that is very clear. this was a tragic failure. of you talk about your commitment to safety and lieberman, but when push came to shove on the rig, the company's concerns seem to be the bottom line. this is my question -- who was responsible for the failures on the rig, and the terrible set of decisions that led to the tragedy in the gulf? >> that is what our investigation will determine. if there are any points, evidence to suggest that people took cost ahead of safety, then i will take auction. >> so, evidence like those documents that? >> the evidence from the totality of the investigation. >> ok, mr. tony hayward, as leader of the company, don't you

have to accept responsibility? safety and the environment, but- you presided over corporate culture or safety and risk, risk to the averment were ignored to save a few days and a few dollars? if you are the leader, don't you have to take responsibility? >> i'm absolutely responsible for the safety and reliability of operations in bp. that is what i have said all along. >> thank you. i yield back. >> thank you. mr. hayward, is it true that in 2005 the texas city operation owned by bp blew up, resulting in loss of lives of 15 workers? >> that is true. >> is it true that in 2006 of bp oil pipeline in alaska

repaired and spilled 200,000 gallons of crude oil? >> that is true. >> is a true that in 2007 when you took over as ceo of bp the corp. settled a series of criminal, not civil, but criminal charges and agreed to pay $370 million in fines? >> that is correct. >> is it also true that within one year the occupational safety and health administration found more than 700 violations at bp's texas city refinery and find bp with a record fine of $87.40 million? >> that is correct. >> is it true that earlier this year a bp refinery in toledo, ohio was fined $3 million for willful -- emphasizing "willful" safety violations including the

use of of similar to those that contributed to this texas city blast? >> that is correct. >> is it true as well that the u.s. chemical safety board which did investigation into the texas city refinery with the active participation of the former head of state james baker -- are you familiar with that report? >> i'm very familiar with that report. >> in it, would you take it as credible? " i believe it is very credible and was the basis on which we moved ford in 2007. >> and the report found "bp management allows operators and supervisors to alter, to what it, to add, and to remove it procedural steps at the texas city refinery without assessing risk."

the bigger panel examined all of the texas refineries and found talents of serious deviations from safe operating practices. is that an accurate statement of the findings of mr. baker's report? >> yes, it is. based on the findings of the report and the instances of two dozen 5 and 2006, we implemented a systematic change in how we manage safety. and a systematic change in the culture of bp. it is something we have done consistently over the last three years. >> did that systematic change you say you implemented as a result of the bigger report account for the reason that at deepwater horizon when faced with a choice of the cheaper design, bp chose the cheaper and quicker design? did you do that based on recommendations of the bigger

report? >> we need to wait for the results of the investigationnto conclude. if there is any evidence whatsoever that people put costs ahead of safety -- then we will take action. >> i will ask you, it is not in dispute but was was made to use a quicker and cheaper design. again, there were fewer casing centralizes than some were recommending. i will leave out "motivation" -- but there was thh choice of more or fewer. more costs more, fewer costs less. which choice did bp make that horizon? >> the decision made by the engineering team was to use fewer centralizes rather than more. it is not always true that more is better.

>> and bp chose at dw horizon not to circulate drilling mud that would have cleaned up the well, but chose elector, saltwater base for the cementing procedure. is that correct? >> the procedure to displace them lead was a procedure that is not uncommon in the industry. a procedure approved by the agency prior to implementing it. >> are you say that you made the correct choice in this case? >> i'm not able to make a judgment as to whether the correct choices were made. >> well, you are the ceo. >> but i'm not a drilling engineer or technically qualified engineer in these matters. >> but you are in charge of them. >> that does not mean to say that i'm an expert. >> well, then one of the frustrations i think that people have is who is in charge? there was a bigger report that said there was a systematic choice being made consistently

by bp that led to the loss of life, to pollution that could be attributed to a decision based on saving money, increasing profits at the expense of safety and, as it turns out, human lives. i will get back to what i asked you earlier. i think all of us live in a world where we would prefer to have fewer regulations rather than more. we would like to rely on trust and faith and are word rather than regulations and checking over your shoulder, and all those things i think both sides find annoying. but i will ask you, does a ceo who presides over a company who has incurred more than $370 million in fines, who was subject to this report by mr. baker, does that person who has

presided over almost $100 billion in loss of shareholder value and the suspension of a $10 billion annual dividend, who has lost the confidence of shareholders and regulators and most importantly, the families and citizens of the gulf, this the person enjoy the confidence necessary to continue acting as ceo? or is it time for that ceo to resign? >> i'm focused on the response, on trying to eliminate the leak, trying to contain the oil on the surface, and tend the beaches, and to clean up the spill, and to restore the lives of the people on the gulf coast. that is what i intend to do. >> i yield back. >> that concludes questions by members of the subcommittee. members of the full committee will have an opportunity to ask questions if they so choose. we will alternate. it will be based upon committee

seniority. you'll be next on the republican side, mr. sterns. >> thank you, and thank you for allowing me to ask these questions. i have watched this hearing, and time and time again you have indicated with this statement -- i cannot give you a legitimate answer to that question. you have repeated that. when you are asked for details you have not done. did you bring anyone with you with detailed information to help you answer many of these questions? >> i have the technical expert with me. >> i do not see you go back to the technical expert. you continue to say that you just cannot answer that question. my question for you, it is today thursday? yes or no? >> it is thursday. >> next question. the people of florida when i talk to them and they say there

is oil spill in on the coastt would it be proper to say it is behavior? >> it is the consequence -- >> yes or no. >> there is no evidence of reckless behavior. >> that is your position? yes or no? you are saying that bp has had no reckless behaviors? >> i have seen no evidence of reckless behavior is. >> so, you are on record as saying there has been no reckless behavior. we had a hearing with mr. mckay and the ceos of other major oil companies. we asked them, knowing about the well pressure testing is would you have proceeded to withdraw oil? every one of them said no. the next question was asked about seeking measures. are there measures your company could have taken to prevent this

incident? every one of them said yes. so, you are here this morning saying that your company had no reckless behavior? yet all your peers, the ceo of exxon, chevron, konica phillips, and shell, all pointed out your reckless behavior. later on, halliburton warns your company that the well could have a severe gas flow problem. were you aware of their warning? yes or no? >> i was not involved -- >> i do not want to hear this. i want to know, you in your position, has anyone on your staff brief you about halliburton warning your company that we could have a severe gas flow problem? were you ever notified or breathed? yes or no? >> no. >> so you are up at the top echelon. did you hear about the e-mails? >> later that day a bp official

involved in the decision recognized the risk of proceeding with insufficient centralizes houers sitting "who cares. we will probably be fine" -- that was four days prior to the incident. >> i had no knowledge of it prior to the incident. >> in light of what your four peers have said dealing with safety, the precautions with the pressure test reading in dealing with halliburton, don't you think there is reckless behavior indication? if what i told you is true, do you think that bp has reckless behavior? >> i believe all accidents are preventable. the investigation will determine how this accident occurred. >> so, right now you're saying based on all the information i gave you that you do not think bp had any reckless behavior? that is your position this afternoon? yes or no?

i want you to say that you do not think bp has reckless behavior. >> i have seen no evidence -- >> ok, let's say you are on a ship and you ran into new orleans and spewed all this oil and killed 11 people. these think the captain of that ship should be fired? has anyone at bp been fired because of this incident? anybody? >> no so far. >> know people have been fired? so, you're the captain of the ship, runs into the city, spews all this damage across the state shorelines, and no one has been fired? >> our investigation is ongoing. >> let's say that the investigation goes for three years. does that mean you will not fire anybody? >> as the investigation draws conclusions we will take the necessary action. >> in light of the environment of damage, the human damage, and

just the information from your peers saying that you were indeed reckless, and the e- mails i have told you, you'll still stonewall us? you basically say you did nothing wrong and we will wait for the evidence to prove whether we did wrong or right? is that correct? >> i believe we should wait for the conclusions of the various investigations before we make decisions based on those conclusions. >> mr. chairman, he did answer that today is thursday. >> the chair now recognizes the gentleman from new york, for five minutes. >> thank you. i will attempt to ask some questions my colleagues have asked the have not been answered. on tuesday we had the ceo's of major oil ompanies to wall insisted there would not have made the mistakes that led to

the well explosion. are they lying to us? or are you lying, by telling us you do not know who was responsible, and do not know whether or not bp did something wrong? they all said that bp did something wrong. >> i believe we need to await the results of the multiple investigations before we draw conclusions. i want to get to the person cannot learn the lessons, ensure that we can learn the lessons, and the industry can learn the lessons. >> it is 61 days, two months. what kind of an investigation are you going to conduct? why in two months with all this oil spilling into the gulf do not have a least a preliminary investigation? >> we are conducting a full and comprehensive investigation that involves a team of more than 50 people. we have shared the results of that investigation as they become available with this

committee, and will continue to. >> perhaps your lawyers have told you to be very cautious, but it is really an insult for you to come to the committee and keep repeating the same thing, evade questions, of eight dancers, and just repeat that you are not responsible, and that we have to wait for an investigation. why didn't you come testify to this committee after the investigation if you're not prepared to tell us anything of knowledge now? >> with respect, i was not party to any of the decision-making around this well in the time it was been drilled. therefore, i'm not in a positioo to make a judgment about whether the decisions taken whether right or wrong ones. >> we have all made a judgment because it is 60 days and oil is spilling into the gulf. obviously, decisions were made that were wrong. can't you just admit that? can't you just say, i am sorry? can you just admit decisions were made that were wrong? instead of sitting there and

telling us you do not know and you must await investigation? >> i am very, very sorry that this accident occurred. i deeply regret it. i deeply regret it for very many reasons. i do believe it is right to investigate if fully and draw the right conclusions. >> what needs to be investigated? what needs to be investigated that has not been investigated up until now? how long will it take you? >> i cannot answer how long, because we want to make sure that it is complete. there are many investigations ongoing. there is now ours, a marine board, and a presidential commission -- they will undoubtedly draw conclusions from the mall. >> you are the ceo. should do not set the town? should you not say that you demand within one month we will know what happened?

you're really insulting our intelligence, with all due respect, by not giving us any answers and telling us you have to wait for some investigation. i think the rest of the world is not blind. we know what has happened. we know that bp obviously did not do what it was supposed to do. only you do not know that. >> i believe i have set the right time. we have launched an investigation within 24 hours, made its open and transparent, and are sharing with everyone the results as they come out. >> let me ask you, how many other wells does bp have in the gulf? >> i do not know the precise number, but it is a large number. >> give me a ballpark figure. >> in the order of hundreds. >> how can we be sure that the same thing will not happen with one of the other wells? how can you assure us it will not happen again and to several hundred wells? >> the other wells i'm referring

to are secure. >> so, all the other wells that bp has it you were saying, something happened to this will could never happen again in any of those others? >> all of the others are those that have been completed and are secure. >> is that the same assurance you had said that you were going to with a laser maker said the a priority? is the same kind of assurance you're giving us now? >> throughhut my tenure, i have been very explicit about the party of safety in bp. it is the first word that i after every time i talk to any group of people in bp. the fact that safe and reliable operations is our north 1 party. we have made very significant changes to our processes, people. we have invested significantly

into the integrity of our plants and equipment over the last three or four years. >> with all due respect, mr. tony hayward, i like everyone else here and in america is thoroughly disgusted. i think you are stalling. i think you are insulting our intelligence. i really resent it. mr. chairman, i yield back. >> mr. engel, member of the full committee, mr. scalese. >> thank you. mr. tony hayward, this is a picture of our state bird in louisiana, and oiiled pelican. i will keep it on my desk as a constant reminder of what is at stake, but i want you to keep it in your mind as well to recognize that we're not just talking about the loss of life which is tragic, not just about the oil that is still spewing from the ell. we're talking about our way of

life, not just in losing, but all along the gulf coast. i would hope that you keep this image in your light mind us because a reminder. our two priorities right now are number one, doing all we can to make sure you cap this well, but also to battle as strongly as we can to keep the oil out of our marsh and ecosystem. we do not want to sit back and wait until the oil comes in and thus possibly irreparable damage. we want to be proactive, but having problems on the ground being proactive because of the delays. i was on grand isle, louisiana friday and hear the biggest complaints from local officials that they're spending more of their time fighting bp and the federal government ban on fighting the oil. this is not acceptable. i know that you talk about all the things you're doing, but it is not enough. we need a more urgent sense of

response to this disaster. i want to ask you what you'll do to help speed that up? when our local officials tell us they the basic dancers, it is a least five days. first they go to the coastguard, then to bp for approval, then they go in circles and never get the answers. it is not an acceptable way to run the operation. when we hear who is in charge, and want to ask you -- who is in charge on the ground? >> the national incident commander. >> so, is the federal government telling you what to do? are you telling the incident commander of what to do? when our local officials need to get something approved, do they need both yours and the incident commander's approval? >> we are not being perfect, which i knowledge. we're trying hard to do better.

we're operating under the direction of the federal grim. >> for example, when our government came with an idea over a month ago, gov. jindal had an idea to have the sand barrier. they worked with scientists and engineers, then over three weeks went by before any approval. we contacted our entire delegation. some the letter, try to get the president engaged. to this day only 25% of that plan has been approved. is that you who is not approving the other 75%? is that the federal government not approving? who is not? >> the approval process flows through -- >> who is it? you are the federal government? >> the ultimate approval process is with the government. >> so, the federal government is the one who has not approve the other 75%?

>> i cannot speak to it. >> you do not know about it? we bought this to you. our governor brought this to you. >> a large part of the barrier island -- >> 25% of the plan. it may seem like a large part to you. here is another question we get asked. they do not have any approval of the seafood safety plan. was it submitted to you, or is it the federal government not approving? and our local leaders are getting the runaround. no one is held accountable when things do happen. i will present to you that we do not have time for these games. we cannot have five days go by before and answers given. the oil arrives every day. concerning the sand barrier plan -- you say you have approved a lot, but there is no plan of

protection for grand isle, louisiana, or concerning he bay there. there was no oil there a week ago. it was scheduled to be covered. now today there is big oil coming into that bay. you're not showing the sense of urgency. whether you or the federal government, we have oil in the bay when we had a plan a month ago to keep it out. when people hear that all is being done, i will tell you on the ground is not. i don't know what you need to do differently, but you need to go do something differently. if it is not you, then you need to tell someone who is blocking it. it is being blocked and is not getting done on the ground. we don't have the luxury of time. this should not be happening. we put plans in place to stop this. our plans are not been approved. i would love it if our plans are being rejected because there were better alternatives offered by someone that were approved.

but there are no other alternative plans. we are only being told no with no other option presented. if you have a better option, presented. otherwise, approved ours. we do not have time to waste. >> understand your concern and anger. >> we do not have time. my office gets flooded. many others get flooded with ideas on how to stop the oil from coming into the marsh. we have seen his ideas like putting hay and the water all live to the supertankers of saudi arabia. none are getting done on the ground. this is a database of ideas with links, schematics of a number of different ideas that should be done to stop the oil from coming into the marsh. it is not getting done. we have no time to waste. moved swiftly on this. i will give you a resolution passed by the senate to ask you to engage local people affected

with many of them cannot even be employed in saving the marsh. also, speed up the efforts on these alternatives. we have a lot of ocean out there with oil. >> time. >> use every opportunity. i will give this to you. >> >> questions, please. >> thank you. your $20 billion of compensation fund is a good first step, but just the beginning. you will have to fully compensate everyone affected by this disaster. this week bp announced the first installment of a $25 million fund within a broader $500 million commitment to the gulf of mexico research initiative.

is bp still committed to putting the full $500 million, not just the $25 million installment, but the full amount toward this initiative? >> we are. it is an initiative that will take place over 10 years. >> when will we see the details of the entire program? >> it is being worked by the experts currently. we think it is important to have a program that has a firm scientific foundation. >> are these your experts, sir? >> no, they're independent scientists drawn from across the united states. >> i would request that you would submit to the committee the list of experts you have who are developing this program. >> we would be very happy to do that. >> whether be further scientific investments you will makk available to the research community? further investments of dollars? >> we have set up a $500 million initial fund. i think we need to see what the

scientists determined. >> i only mention this because york minute pales in comparison to the $1 billion exxon spent on the valdez spill 20 years ago which was in a more remote location with fewer people impacted. so, you are going to make all the data from this research available to the public? >> it will be fully open and transparent. it will not be the date of bp, but that of the scientists involved. >> with their names attached? >> of sleep. >> the federal government has developed training class is to provide the necessary training for workers and volunteers cleaning up the oil. we continue to see reports that bp is not calling the turning guns, endangering for the health of these workers now and long into the future. why are we still hearing these kinds reports from people out on the water and on the shoreline? ."

. . >> you all appeared to have the same technical experts in the same response commitment. if this spill had happened to a different oil company, the you have any reason to believe they would have responded more effectively than bp?

>> i cannot comment on that. all i can say is that we have initiated the biggest spill response in the history not only of america, but of the world. it involves thousands of vessels, 35,000 people. is the largest activity of its kind ever conducted. >> i appreciate that. the federal government has also initiated the largest response we had ever initiated on behalf of any kind of natural disaster or man-made disaster in the history of this country as well. but finally, back to my original question on that topic, rex tillerton was asked the same question appeared he said exxon is not prepared to deal with a large spill. he also said that the response

capability to prevent the impacts of this bill -- the spill does not exist. this is the same response manual that your company has. with respect to his own, he said the impacts of this bile spill,e capability does not exist and probably never will. do you agree about this? >> i agree that there are many missing is in our ability to respond to an incident of this type. there will be many learnings to be had from this incident and how we can build a better response capability in the future. as i said, we are doing an extraordinary spill response. i regret that it -- it has not been more successful so far than any of us would want. >> i yield back.

mr. gonzalez? your questions? >> there is a six month moratorium on deep water drilling. the thing that is reasonable under the circumstances? >> i think it is important that the lessons from this are learned. clearly, that is a decision for the authorities to take it, not for me. >> i am not asking you to make the decision. i am asking your opinion, based on your expertise and your position. i would assume he would have an opinion of whether that is a prudent thing to be doing. >> i believe it is prudent for the industry to take stock of what has happened here before it moves towards -- forwards. >> there are calls to move expeditiously to lift that ban. we drill -- and we will not have a recurrence.

windy think would be appropriate to lift the moratorium -- when did you think it would be proper to lift the moratorium? >> i could not judge that. i think we understood clearly what happened in understood clearly what better response is required in the event that something like this ever happened again. >> i am hoping that everybody is going to be on that same page. it is fundamentally sound. we have had other members that made reference to the hearing a couple of days ago. i am sure you have spoken with mr. mckay and such. shell, exxon, chevron, they all said -- when i asked them if they could give 100% that this would not happen if they did it, they could not give that. they all would say that they would do it safely. let's be honest with the american people that there is

risk.nd it's a calculated if we can provide enough assurances that it is a risk worth taking, then we will be out there, what we? they would not do it, but noelie it or not. what they said is that it would never have happened because there fashion of drilling is different than what you were doing. i do not want to start a war among you guys, but do you believe the way day explore and drill in deep water is substantially different than what you are doing out there? >> and not to my knowledge. >> i tend to agree with you. let's talk about planning. ms. capps pointed out something very important, as far as exxon. what he said, is we could not do with it if something like that happen.

it is an incredible statement to make, is not it? you are willing to expose that kind of risk in he would not know what to do. let's go back to 2003. a society of petroleum engineers reported "no blowout has yet occurred in altered deep water -- in ultra deep water, but statistics show it is likely to happen. are we ready to handle it? we know the answer is no. at that time, they said it was likely to happen. have you ever read anything like that in all these years, that it was likely to happen? >> i have not read that, i am afraid. >> did you believe it was likely to happen? >> i did not believe it was likely to happen. it was a risk identified as the highest risk by bp. it would cost the corporation.

it was identified as the highest risk by our exploration and production unit. and we believed that the risk mitigation was the so-called fail-safe mechanism of the blowout preventer. >> does blow up prevent -- it is the ultimate fail-safe. -- this blow out preventer, it is the ultimate fail-safe. i am curious about blowout preventers. if you have a surface well, you have a 10,000-pound per square inch blowout preventer. shallow water, 10,000 pounds per square inch. deep water, 15,000 pounds per square inch. now, i am not an expert. why? what is the difference? as you go into depth, why a greater capacity? >> because of the pressure of the reservoirs. >> what do think you are dealing with at that depth?

as far as pounds per square inch? >> we know we are dealing with a reservoir where the pressure of war around 11,000 and 12,000 pounds per square inch -- a reservoir with 11,000 to 12,000 pounds per square inch. >> i don't know if it's cameron that builds these blowout preventers. they are working on a 20,000 pounds per square and prevented. you are aware of that? they said, while there is much discussion in an ongoing effort to provide guidance for equipment greater than 15 pounds per square -- 15,000 pounds per square inch, in the interest of expediency it was decided to apply current design code and practices. the 20,000 pounds per square

inch per center was designed, tested, and qualified to ati -- meaning, but for the sake of expediency, it does concern me. why were you looking at 20,000 pounds per square inch when you believe what you already had at 15,000 exceeds what you really think was required? >> i am not certain. i think that is referring to blow up preventers for reservoirs with greater pressure. i do believe that one of the most important things to come from this incident is a requirement for the industry to step back and we design a fail- safe mechanism it uses to prevent accidents of this sort. we need a fundamental redesign of the blowout preventer. it is something that bp is going to take a very active role in. we have already begun that process with a number of academic institutions and a n

umber of contractors in the industry. >> i thank the chairman for his patients. we usually say better late than never, but not this time. i yield back. >> it for record keeping, mr. scalise submitted a cd and a resolution. he will provide copies for the record. there will be part -- a part of his questioning. without objection, so ordered. mr. ensley? >> tony hayward, something you said earlier was astounding to me. he said there was no evidence to date -- that no decisions had been made in an effort to reduce costs. i want to go through this,

because i think there is something quite pivotal. the facts are clear that you hire halliburton to give you advice about this. an expert in the field did an analysis. it said you needed 21 centralizes to make sure the rig was safe. the american petroleum institute recommended practice says, "if casing is not centralized, it may lay near the bore hole wall. it is difficult if not impossible to displace met from the narrow side of casing is poorly centralized. this results in bypassed mud channels and inability to receive zonal isolation." the experts say you need 21. if we can put up the first slide. a bp employee wrote and said we only get six. we do not have time to deal with

this problem. time to british petroleum was money. this rig was 45 days late. it cost you $500,000 per day. so what happened then? another british petroleum person sent a memorandum saying that we need to follow the model. he kicked it up to mr. guide. i do notback and said, like the fact this will take 10 hours to do. another person said we will fly 15 things in. they can be here tomorrow morning. he said, i do not like the 10 hours. and it did not happen. then, the next response from british petroleum. next slide, please. it was an e-mail reprimanding another bp person is saying, even if the hole is straight, a

straight piece of pipe will not seek the center of seoul unless it has a centralized. he went on to say, who cares? it's done. we will probably be fine. we will get a good segment job. what happened then is not the end of the story. they ran it for the computer models. last slide, please. he concluded, and this is hard to read it -- he concluded that "this well is considered to have a severe -- all caps -- gas flow problem." it is very clear to me reading this evidence that decisions were made because of costs, because people did not want to wait to get the centralized that was needed to safely do this job. so your statement that there is no evidence that cost led to shortcuts just does not ring true with me.

is not it pretty clear that there were crossed decisions made -- isn't it pretty clear that their work cost decisions made that had suboptimal at best results in this world? >-- in this well? >> i genuinely believe, that until we have understood all of those things that have contributed to this accident, it is not easy to say. if there is evidence that costs were put ahead of safety, i would both be deeply disturbed and we would take action. >> let me ask you about that action. everybody in this room knows what happened, reading these e- mails. you know what happened. will you call the employees involved when you leave this meeting and say -- because you are ddilling in places all over the world right now. this is an ongoing operation.

tell them they have to change their attitude. would you take action based on these e-mails today? >> we will take action based on our investigation which puts all of this together and as it unveils clear conclusions, we will take action. >> let me suggest another action. we asked british petroleum what it has spent on research and development regarding safe or offshore drilling technologies. you gave us of the number. it was about $10 million per year. that represents .0033% of british petroleum's revenues. that does not sound like an adequate prioritization. how does it compare to your compensation? >> in what respect? berdych for prop -- british petroleum is investing $10

million per year in safer technology. how does that $10 million per year compared to your compensation last year, for instance? >> my compensation was $6 million. >> forbes reports it was $33 million. stock options do not count? >> my compensation last year was recorded at $6 million. >> do you think british petroleum should make a larger investment of this significant gross revenues in developing safer drilling to ability, and do you think you owe that to the american people at this point? >> the answer to that is yes and we will undoubtedly do that on the back of this accident. >> we hope that will be expeditious and successful. thank you. >> thank you, mr. inslee. >> thank you, mr. chairman. mr. hayward, how many deep water operations to have around

the world, how many rigs? >> i do not know the precise number, but it is probably in the order of 15 or so. >> 15 or so. when of the things i have run into and mr. scalise alluded to it, we have had ovvr 600 request for submissions, products, concepts, ways to cap the well, etc. because of ethics, we cannot and will not go ahead and make anybody meet with anybody. so does -- we just refer them. the best i can tell is that havee three out of the 6600 received an email back -- thank you for your submission. there seems to be a closed loop of the vendors that you are dealing with, which my

frustration is is that the hole is still wide open. when this accident first occurred, everyone said, we will take whatever ideas and suggestions, whatever appear. top hat, whatever. i have seen some people that have called me and we have referred them and they have never heard one from your company. is this -- is this just if you are not a vendor before this occurred, we are not dealing with you? are you going only to the vendors and allowing them to select who they will deal with? my reason for this is because, there are good ideas out there, why is not somebody looking at them? >> we are trying very hard to engage with everyone that has a good idea. we have been inundated with hundreds of thousands. >> i know there is a tremendous amount. i know the first one that i saw

was wrap clothes sheets around it and hang it with milk cartons. i understand that. those are easy to go through. let me shift gears. do believe that this administration's moratorium as a result of the tragedy, the fact they put it in was a strictly because of what went wrong in deep water? >> i do not know that, but i believe that is the case. and i think it is probably the right thing to do until such time as we have greater clarity. >> and i agree with that. i do not agree with the moratorium, because as i have expressed my friends, it is really difficult for us in louisiana to stand in oil and say we will take more oil, but it is because of the economy. it is because of the jobs.

we have supported, i have supported the industry. i support the people. it makes sense that the pete bear the responsibility of the economic hardship -- that bp bear the responsibility of the economic hardship of the moratorium. i thank you for the $100 million aside for lost jobs. in a given month, i am told, it is about $350 million per month in wages. is your company going to take responsibility and make sure that these companies that fold up for these companies that have the financial hardships, and particularly their employees that they will start to lay off, will be compensated in some way? >> we have made a contribution, having been asked to by the government, to a fund which will be part of the funding for that

issue. >> do you think $100 million is adequate? you have been in the oil business for quite awhile. those are good paying jobs. that is why we want to keep them. to think that contribution is adequate? >> we set aside $20 billion for claims. >> that is for everybody else that our businesses and otherwise. i am concerned also with the them. mrs. kemp was in -- the other day. brave women, especially so soon after the deaths of their spouses. after hearing them share with us the questions they had fear company, i would like to hear your response. one woman's husband told her about the problems on the rig and losing mud. that is the sort of detail that may not have come to your

attention. it is well-known among the workers on the rig. she wants to know. she asked this question, why is your company -- why were they not working harder to fix the problems on the rig in the weeks before it exploded? why wasn't your company prepared for a blowout? >> we want to understand exactly what happened at such that we can take the right actions going forward. i am not aware of that, what you just raised, but the investigation will determine, the multiple investigations will determine -- >> the investigation will not bring back those 11 men it to their kids. -- to their kids. not only were these women concerned about your company's preparedness. they were concerned about your values. what to make sure that rigs were

kept safe. mrs. kemps asked why money is more important than someone's life? i guess on behalf of her, how you respond? >> it is not. absolutely is not -- it absolutely is not. it is something i believed in for a long time. the priority for everyone involved in these operations is safety. that does not come before anything, not anything. it is not something i believe -- is something i believe it personally very passionately. >> the women talked about in their testimony. i am sorry. i have gone over your time. >> finished your question. >> they talked about in that their testimony that their husbands, the drilling rig company for transocean, that they pushed safety, but in

discussions in weeks prior to the explosion, there has been ving, saying,bp waivin keep going. keep doing. growing up in south louisiana, i heard about the drilling foreman and company guys getting into fistfights. were there anyyinstances to your knowledge or have you discovered that there was a direct order given by bp that says, keep going. i do not care what is going on. >> i have not seen any evidence of that whatsoever. and i believe that the operation on the rig in the days leading day was carried out because everyone agreed on the rig to move forward. >> thank you. >> questions, please.

>> thank you, mr. chairman. mr. hayward, i would like to start up by expressing the anger and frustration of the hard- working people of my home state of florida at the catastrophe bp has a rendered upon our stay. all the small businesses, the fishermen, the mom and pop hotel owners. we were just coming out of the most severe recession in our lifetimes when this happened. things were getting a lot better. so this is like a sucker punch learn that this tragedy is a result of bp elevating profit considerations over safety. for a decade, many in florida have opposed this drumbeat to bring the oil rigs closer to our beaches. we have not industrialize our

coastlines like other states. we rely on tourism and clean beaches and clean water. we have really fought it off, even in the face of very well paid lobbying campaigns and ad campaigns, and with a lot of representation that this is safe. this is safe technology, whether it is in deep or shallow water. mr. hayward, i am trying to understand how bp was so unprepared for the possibility of a blow out or ignored the risks, because according to the mms study conducted in 2007 126 blowouts have occurred in offshore drilling facilities since 1971. in 1979, a blowout in the gulf of mexico created a disaster that flowed continuously for 290 days.

u.s. said that the chances of a blowout and exposure -- you have said that the chances of a blowout were one and a million, but over the past four years, there have been 126 blowouts in u.s. waters along. that is roughly three blowouts per year. how could an average of three blowouts every single year for the past four years not have registered as more than one and a million chance of risk for your company? >> with respect, congressman, i think what i said was the integrity rating of the blowout preventer was of the order of to 5 or 6.he minus it was designed to fail between one in 100,000 and one in a million. >> and that is an

acceptable risk? >> it was what was used to+ assess on the block prevent it. >> you call them fail sex, but they are not phil simms asafes . this committee has reviewed bp's response for the gulf of mexico and not one time in the 582 page plan to lay out a plan for controlling a subsea gutter. you conducted your p that it wasf not even a possibility. you admitted that you did not have the tools you want in your tool kit. why not? why would you not prepared? why did you elevate products over safety?

>> i do not believe we did elevate profits over safety. what i was referring to was the complicated engineering problem we were faced with after the rig sank, attached to the rise. we had a rig on the floor. we did not have the pieces to cut the riser and find a way to intervene on the wellhead. that is true. >> for years, big oil companies and your allies have claimed that drilling is safe, and you want to see me closer to florida beaches. you say it is safe. he said there are no problems. on the other hand, we have heard over the last couple months, this is complex and dangerous to drill miles below the ocean.

bp officials have said it is like operating in upper spacout. for what we knew and what you knew about the isks, i cannot understand why you would assume that nothing could go wrong. the doublespeak is rather tiresome. i am dismayed and disheartened by what has happened and the elevation of profit over safety. i can only hope that this disaster will motivate us to reassess our priorities and implement a clean energy policy thank you, mr. chairman. >> on friday, it was announced that tony hayward was returning to london and robert dudley would take charge of clean-up operations. we have a special web page with our coverage about tte gulf of mexico oil spill. nearly two dozen congressional hearings from washington and

field hearings in louisiana, plus a briefings, speeches, and access to live video from a mile beneath the surface of the gulf of mexico. you c-span.org can find it. span.org/oi,lt c- spill. continuing coverage on the c- span network. this week, acting british labour leader raises concerns with prime minister david cameron on the impact of his proposed pudget. other members asked questions on u.k. troops in afghanistan, the future of the manufacturing industry and the rise in the night crimes. prime minister questions, tonight at 9:00 on c-span. >> he was of volatile, emotional, and adventures young man. he was 25 in america and was

having adventure. >> taken to look at alexis de tocqueville and his 1831 tour of america. tonight on "q&a". >> this past thursday, officials from the minerals management service's testified before the house resources subcommittee on regulations concerning oil rigs. they are responsible for approving offshore oil rig construction. also appearing was a former bp contractor who alleged unsafe practices concerning the atlantis platform. this portion of the hearing is about three hours. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] [gavel pounds] >> the subcommittee on energy

and minerals will now reconvene. i want to apologize to the witness of the second panel and witnesses of the third panel, because obviously, i was off by 20 minutes. it is the intention of the chair now to go through this second panel and a third panel and conclude the hearing when that takes place. members that are here will be recognized under the same terms as we hold with the previous witnesses, previous panels. the subcommittee will now come to order. we have returned from our voting recess. that is the good news appeared

the bad news is i am told we will be going to vote in another 20 minutes or half an hour. [no audio]

>> the oversight hearing on subcommittee of energy and mineral resources on the deepwater horizon incident will now come to order. the subject of this morning's hearing is the question is the agency within the department of the interior, minerals and management services, are there regulations doing their job? and we have a gao report. we have three panels of witnesses. and we look forward to an instructive hearing this morning. obviously, there is a lot of questions and concerns that have been raised as a result of this accident. before we begin, i would like to

ask unanimous consent to allow members to participate to are not a member of the subcommittee but a member of the full committee to be allowed to sit in and participate in this subcommittee hearing. without objection, so ordered. so i suspect there are several different hearings going on concurrently, but we welcome those members of from a full committee who are not part of the subcommittee from participating. and we look forward to your contributions. you are recognized. >> thank you. i would ask unanimous consent that as they are able to, that three other members who are not on the full committee but do represent states on the gulf coast be able to sit in as well. mr. scalise of louisiana, mr. gow of louisiana, and -- fro

m florida. >> these are states that have been directly impacted. we want to afford the opportunity to any members whose districts lie in harm's way as a result of the terrific impact being felt today. >> thank you. >> you are welcome. let me begin with my opening statement, and then we will refer to the ranking member here and then the ranking member of the full committee would like to make a brief statement. and we will get to the heart of the hearing here with the three panels we have before us this morning. the subcoomittee on energy and mineral resources is meeting today to hear testimony regarding the minerals and management services regulations, the organizational structure

that is now being changed as a result of the terrific accident that has taken place on the deepwater horizon on april 20 as of this year. before we begin, i think it is important that we take a moment it knowledge the brave men -- to acknowledge to the brave men who lost their lives that night. although the focus of the nation right now is on the environmental and economic catastrophe occurring in the gulf, i think it is appropriate that we do not lose sight of the fact that theee was also a tremendous human tragedy as a result of the loss of those lives. so our thoughts and prayers are with those families and workers, just as those thoughts and prayers are with everyone along the gulf coast who are suffering today as a result of this spill. this subcommittee today will do

the work that i think the american people expect members of congress to do, as a part of our oversight and in response to situations of that clearly indicate that this tragedy could have been prevented. while it is expected that many may engage, as a result of this horrific accident, in a the blame game, it is also expected that congress do it's a proper work. in the aftermath of this explosion, obviously, a number of questions have been raised as to who was responsible, how the spill could be stopped, and what we could do to ensure that something like this, hopefully, never, ever happens again. three weeks ago and the full committee hearing, we post some of the questions to the heads of british petroleum and transoea

cean, the contractor that was during the exploratory well. today, it is the chore of the subcommittee to turn the spotlight on minerals and because in services to come u, the category of lessons to be learned, it is here that it seems to me that the appropriate work of the subcommittee and the full committee, as well as other policy committees with overlapping responsibilities, that we do our due diligence in a way that will allow us to clearly understand what are the lessons to be learned. plthough the term of minerals and management services, as we discuss this in the context of this subcommittee and full committee, is always preeeded pith the adjutant "little-known

"agency of minerals and management services by the press, clearly is a lot better known today. this agency, though, has had its troubles for years. it is well known to members of this subcommittee, and i believe to the chairman and myself, because we have held in recent years a number of hearings at trying to correct the problems that have existed in recent years within minerals and management services. oversight hearings that go back to 2007. recently the administration announced plans to split up the mineral and management services into three agencies nd issue new rules regarding the offshore drilling and safety, some of which already have been published. it has also pushed the pause button on deep water drilling

until the presidential commission can report back with recommendations on what happened, how it happened, why it happened, and how, most importantly, to keep it from happening again. must, i think, ask the hards, w- questions on how we strike a proper balance between the role of government and the role of the private sector. clearly, too little regulation can result in unsafe conditions that can ultimately result in the tragedy we are facing today. but also, too much regulation can be a problem, as operators begin to expect the government to do everything and absolves themselves of their own safety responsibilities. there clearly is a responsibility on the part of all those for debating. and it is the job of this

subcommittee and the full committee to really make those determinations, as we look at legislation to correct these insufficiencies. i really comprise this effort as examining the role of risk assessment on one hand and risk- management on the other. it is something that is always difficult, but it is something that must be done if we are going to take the necessary corrective action. assessing what are the risks that are out there, prioritizing those risks, and determining what is inappropriate role to establish a management priority list to adequately ensure we are managing those risks based upon those that create the most potential toward a catastrophes such as the one we are

experiencing. when it comes to an organization, there for we are trying to strike the proper balance between making sure an agency does not have too many conflicting purposes and insuring that excessive fragmentation does not keep those agencies and from it in effect working effectively as we hope they will in the future. it would be particularly unfortunate if we went into a full circle and retreated with the same problems of coordination that the lenals commission found back in 1982. for the audience, those listening here, the minerals and management services was created in the early 1980's by secretary watt as a result of his secretarial authority. it is an organic organization. therefore, this secretary or

any secretary could reorganize minerals and management services, just as secretary watt created back in the early 1980's for the purposes it was intended to. secretary salazar, in his testimony to us several weeks ago, indicated that he did not want to go in that direction. in fact, he wanted us to enact a statute a reorganization of the minerals and management services that would have the full force of the law in terms of its responsibility and its jurisdiction as we move forward and be a part, of course, of the appropriation and authorization and full of the site of the congress. as i told the secretary when he testified before us at that time, i hope this we

organizational structure is not simply reorganizing the boxes, because i think the public expects us to do better, and if we are going to ensure future accidents do not happen, we are going to have to create a reorganization of minerals and management services that simply is not rearranging the boxes. i think it is no surprise to those of you who are here, whom i have worked with, i am one of those who is a strong supporter of offshore drilling. i believe it is one of the energy tools in our toolbox that we will depend upon for decades as we look at all the energy tools in our toolbox. but we should not lose sight of the fact that, under normal conditions, offshore exploration and utilization of oil and gas

can be done extremely safely, with little impact on the environment. but, as we look today, tragic and horrific results can take place if we are not following all the safety requirements necessary. therefore, under the category of lessons to be learned, we have to ensure that we if we go forward, that we create confidence in the american public that we can do this safely. therefore, again, one of the purposes of today's hearing. so, as i close, let me give you some final thoughts. it might cost a little more to do business during the same periods, as we look at what went wrong and how to fix it, but that cost is nothing compared to the tremendous expense into the

because of this accident.%- my assessment, 59 days into this explosion that took place, is that clearly, as we look back on other comparable incidences, complacency and overconfidence, as we look and examine all the facts that took place, were a direct result of this accident. complacency and overconfidence. complacency in so many wells that had been drilled offshore, both in the gulf and all around the world, that this was a routine way of doing business. and overconfidence in redundant systems that were intended to apply in the event of an

accident that did not work. overconfidence and redundancy -- in redundancy of systems that clearly failee. we saw that occur sadly in nasa with the tragic loss of "the challenger" and "columbia." complacency and overconfidence, both by the public and private sectors. we must remind ourselles that the end of the day, that we are all human, and therefore, complacency and overconfidence is something that can and does happen. what we have to ensure as we look at the re-examination of how we prevent this from happening in the future, is that complacency and overconfidence does not revisit us in the future. with that, i look forward to the

witness's testimony. i recognize this distinguished ranking member. >> today is day 59 of the deepwater horizon incident. we are here to examine possible shortcomings of mms. as we conduct this hearing, we still do not know what actually caused the disaster on the deepwater horizon. we do not know how to stop the oil leaking from the sea floor and we still do not know what happened to cause the failure of the blow up an inventor. already made the decision to eliminate mms, has imposed a six month moratorium on deep water drilling, and has stopped all future outer continental shelf leasing. it is important to keep in mind what we do know. we know this incident has had devastating impact on the gulf

region. that the federal government and bp had still been unable to stop the leaking well, and that bp is liable for all the costs incurred by government agencies andponding to this bie spill, billions in economic damages to the people of the golf and affected states. according to an engineering expert recommended by the department to recommend a safety improvements, in is opinion, this disaster was a group think kind of thing. there were a bunch of things on the borderline. when you add up the mistakes, you end up in a situation where the big problem sneaks up on you. i wonder how our witnesses will explain how mms will offer, groupthink. while they have tremendous

responsibility, i wonder about their ability to overcome human error. we know the administration inspected offshore rigs with no significant safety violations, and yet has instituted a six month moratorium as part of the peer reviewed report. that moratorium was subsequently reviewed by seven engineering experts they asked to peer review the report. they said that in their professional opinion, "changes made in the wording are counterproductive to long-term safety." this is because an acting as six month moratorium, possibly for political reasons, create new and unintended safety problems when ongoing drilling is interrupted. we know this moratorium is estimated to result in nearly 46,000 lost jobs almost overnight into as many as 300,000 jobs if it continues. urthermore, eit eia

estimates that it will result in a reduction of domestic crude oil production. we know they have decided to break up mms. the plan is to make it three separate entities. on tuesday, the president announced a new director who will be responsible for breaking up and rebuilding the pieces os f mms. as much as the administration wants to place the blame on their predecessors, the fact remains that while the comprehensive environmental analysis required for the ocs five-year leasing program was conducted under the bush administration, the exploration plan, the application for a permit to drill, and ended apd's , and inspections were done by the obama administration. we will hear from one of our witnesses today that safety, reportable and lost time incidents for offshore operations and blow out incident

rates steadily improved throughout the bush should ministration. that is hardly the record of a group of people that were regularly cut the oil community slack. i hope we can see the new appointed director at some point. the adminiitration did nottsend him to testify before this committee today. i look forward to hearing from all the witnesses today, and i yield back. >> thank you. i appreciate that as the ranking member. -- with all due respect, since the gentleman was appointed yesterday, it would be ambitious to think he would be prepared to testify today. at the chair's discretion, i will, as a courtesy, allow the ranking member of the full committee to make a brief statement. then it is the chair's intention to begin with the first panel of

witnesses. if the first panel will get seated, and i will recognize the gentleman from washington, doc hastings. >> thank you very much, mr. chairman. thank you it for the courtesy of allowing me to make a statement. we are nearly two months since the start of this crisis, but our priorities today remain the same as they were on day one and that is to stop the leak, to the needs of the communities and businesses in the gulf of mexico. but our next job and the reason for this hearing is to get answers infix the failures to prevent a disaster like this from happening again. what is needed are educated reforms, not a rush to judgment, to ensure that all the necessary changes and reforms are made. we need to know what all the facts are and what went wrong out on the gulf. both what went wrong on the rig

as well as the federal bureaucracy charged with overseeing the drilling. today we are specifically looking at mms. as i have previously stated in to the chairman observed in his+ opening remarks, the failures at mms have been known for years. there is bipartisan consensus that fundamental changes need to be made in this structure. this must be done to ensure that american made energy production is the safest in the world. on tuesday, president obama appointed a new head of mms. it is unfortunate he cannot be here today, but i can certainly understand that. hopefully, this subcommittee will be able to hear from him in the very near future. if there are any changes to be made, whether to mms or another policy, it must be done thoughtfully to prevent the environment, the taxpayers, and

american jobs, and i might add the security of our country. with that, mr. chairman, thank you for the courtesy and i yield back my time. >> thank you very much prepar. we now begin with our panel. we of three panelists morning. we will give the -- we have three panelists this mornings. we will give the full committee an opportunity to ask questions as we go to our process. i want to thank the witnesses for appearing. i think all of you have testified before. you know the rules. we of the five minute rule, in which you will make a presentation. the lights there are in front of you. the green light remains on for four minutes appear. at the fifth minute, the yellow light goes on. when the red light goes on, we would ask you to close on your comments. our witnesses this morning on

the first panel on the hon. bob abbey, the current and soon-to- be former director of mms. we appreciate your service. the acting inspector general for the united states department of interior and the director of natural resources aad environment at the gao. let's begin first with bob abbey, the director of the minerals and management services for your opening statement. >> thank you, mr. chairman and members of the subcommittee. i know many of you from my role as the director. in late may, secretary salazar asked me to assume the acting director responsibilities for the minerals management service. it is a pleasure for me to be here today to represent the employees of the minerals management service to discuss

our ongoing safety and management reforr efforts related to offshore energy activities. at his address to the nation this past tuesday, president obama described three areas the administration is committed to working on. first, the stopping of the leak and tackling the related cleanup. second, the recovery and restoration of the gulf coast by a long-term gulf coast restoration plan. finally, the prevention of future disasters in the outer continental shelf. the employees at the minerals management service share those commitments. secretary salazar has taken the department of interior in a bold new direction. we have worked to reform not only minerals management service culture, but the entire department of interior by issuing new ethics standards for

all employees. other reforms that you're implementing have yielded a better balance. secretary salazar has canceled the oil and gas lease. -- lease sale. the development of wind, solar, and other resources on the allies -- on the outer atlantic continental shelf. the tragedy has made the urgency of this reform very clear. the secretary has announced the reorganization of mms and the bureau of the ocean energy management. this efffrt will ensure the independence of the outer

continental shelf inspections and enforcement mission. on may 22, the secretary delivered the results of a safety review that he ordered the department undertake. the report recommends a number of specific measures that can be taken on a short and long term basis to improve the safeey of offshore oil and gas activities, including aggressive new operating standards and requirements for offshore energy companies. on may 30, 2010, in response to that report, the department issued a directive to oil and gas lessees and operators, imposing a six-month moratorium on deepwater drilling. this will provide time to implement new safety requirements and allow the presidential commission to conduct its investigation. the directive applies to activities in depths greater than 500 feet. production will continue and will be subject to closer oversight and safety requirements. shallow-water development and production activities may proceed without changes.

it should be noted that the department is aware of and sensitive to the economical and social impact of the moratorium and the other notices that we have been issuing. we're working closely with members of the public and with local, elected officials to hear their concerns and consider changes where appropriate. cigna began attention is also being given to the inspection -- a significant attention is also being given to the inspection program. there is the length of time to travel to facilities, increasing the complicated drilling technologies, and additional funding has been requested for fiscal year 2011. the number of inspectors needed and the qualifications required to be an inspector are being assessed. no doubt, there will be changes. more recent actions include the selection of the former assistant attorney an inspector general to lead reforms at the

minerals management service as the department accelerate its reforms in regulation and oversight of offshore oil development. he will oversee reforms of the minerals management service, helping to restore the integrity between relationships between the federal regulatory officials and the oil companies. this concludes my remarks. i will be happy to respond to questions from you or the subcommittee. >> thank you very much for that testimony, mr. abbey. now look forward to our next witness from the inspector general. please begin your testimony. >> thank you. mr. chairman and members of the committee, thank you for the opportunity to testify about the proposed reorganization of the minerals management service and the regulatory structure regulatory mms has promulgated, governing not only its

operations, but those of the offshore energy industry that mms regulates. of the office of inspector general has not conducted any rigorous review of mms's governing regulations, during the course of other work that we have done, we have gained an understanding of some of the regulatory challenges that face mms. we're also presently in the process of identifying gas weak -- weaknesses in operations. we are focusing on the permitting process, enforcement programs, environmental and safety requirements, and the regulations governing post- incident review or investigation. let me begin with the latter. mms as by brief paragraphs of regulation to cover this -- has by the brief paragraphs of regulation to cover this. as a result of the investigation of the deepwater horizon disaster, mms has found, by the coast guard regulations,

gathering evidence by a public hearing, rather than developing evidence to culminate in a public forum. mms regulations are heavily reliant on industry to document and accurately report on operations and production. i'm not prepared to comment specifically on mms's permitting, internment of, or safety regulations, although given the disaster on the deepwater horizon and the present circumstances in the gulf of mexico, i certainly believe that our review will find opportunities to strengthen regulations in these areas. we recently learned that mms has a dearth of regulations governing their inspection program. anecdotally, we have also learned that mms inspectors, at least in the gulf of mexico, operate relatively independently, with little direction as to what must be inspected or how. this is not the least of their challenges, however. we've been told that mms has approximately 16 inspectors or

the gulf of mexico region, to cover nearly 4000 facilities. this is juxtaposed with the civic coast, which has 10 inspectors or 23 facilities -- the pacific coast, which has 10 inspectors for 23 bill is still a these -- 23 facilities. industry tends to pay more. inspectors received primarily on-the-job training. mms should consider updating its inspector training program and conduct periodic reviews of the program to ensure that inspectors receive the proper and current training to keep pace with technological advances and procedural changes. we also have questions about mms's enforcement programs. in the operations and say the arena, we question whether the civil penalty regulations re tied appropriately to the seriousness of the violation and the threat to human safety, property, and the environment.

again, the regulations are sparse. we have questions about the influence of industry on mms in developing regulations. industry clearly has influence. mms appears to have follow proper legal steps. mms relies heavily on the industry that it regulates, so the possibility for and the perception of undue influence will likely remain. there is ample opportunity to strengthen and improve the regulations that govern mms and industry, but the greatest ccallenge in reorganizing and reforming mms lies within the culture. as you know, the office of inspector general has issued a plethora of reports critical of various practices and misconduct. each report included troubling accounts of inappropriate behavior on the parts of certain employees. now, but was unable by industry

-- that conduct was enabled by industry. it is time to impose ethics requirements on companies doing business with the government. mr. chairman and members of the committee, this concludes my prepared testimony. i would be happy to answer any questions. >> thank you very much. our final witness for this panel -- and we will begin the questions -- is mr. frank rusco, director of national resources -- natural resources and environment with the u.s. government accountability office. >> thank you. mr. chairman and members of the subcommittee, thank you or the chance to speak here today -- for the chance to speak here today on plans to reorganize. this hearing takes place against a sobering backdrop of the ongoing oil spill in the gulf of mexico. it began april 20 with an explosion and tragic loss of life. -pit appears that this will be e

largest in history in its attacks on sea life, wetlands, local economies, and the livelihoods. -- the livelihoods of those in the area. gao, the interior, the inspector general, and others, have reported on the management of federal oil and gas resources onshore and offshore. these reports have been -- have made more than 120 recommendations, many of which the interior has been working hard to and the men. to be fair, in the course of our work, -- to implement. to be fair, in the course of our work, we found many people to be integrous. interior has not kept pace with changes in the oil and gas industry or changing li's

management practices employed by other resource owners. in 2008, we found that interior had not comprehensively studied how much or how to charge for federal oil and gas for over 25 years, despite submitting changes in the industry. -- despite a significant changes in the industry. -- despite significant changes in the industry. to its credit, the interior is currently engaged in reviewing these areas. in 2010, we reported that interior had not kept pace with the oil industry in terms of production verification technologies, including the types of meters used and how data from the meters are collected and stored. these findings raise questions about whether or not the federal government was collecting the proper amount of oil and gas revenue. second, the interior lacks

agency-wide guidance or regulation to define how it will manage the federal oil and gas program. for example, mms in value its offshore leases using available sites -- mms evaluates offshore leases and will a not and lease -- will not sell a lease unless it releases that amount. further, in our recent work, we found that they had differing capabilities to the body weight changing production monitoring and verification technologies -- differing capabilities to evaluate changing production monitoring and verification technologies. we have identified instances in which database is used to collect and store royalty

payments information were not fully compatible, data were not collected consistently, agency databases lacked key functionality resulting in staff using offline work arounds, and some data that would be useful for evaluating management decisions were being collected in an ad hoc fashion. the oil and gas industry has changed dramatically and will continue to change as technology improves, allowing oil and gas resources to be developed that were out of reach, not long ago. this is true on shore with the expanding development and offshore in deep water. the ongoing oil spill illustrates the need to be able to assess the risks associated with new technologies and to attenuate not risk where possible, and mitigaae the damages associated with even rare, catastrophic failures.

there are plans to reorganize interior's oil and gas program. there are opportunities to address this need on short and offshore -- onshore and offshore. changes in the industry require a balding guidance and regulation. this change provides the opportunity -- require evolving guidance and regulation. this change provide the opportunity to work across mms and blm. any reorganization will be most successful if the interior develops management information systems that are robust, compatible across the entire program, and up-to-date. this concludes my remarks. i will be happy to answer any questions. >> thank you very much. we appreciate your testimony. we will now begin the opportunity to give membees of the subcommittee the opportunity

to answer -- to ask questions. you are wearing two hats these days. it appears these proposed changes do not reply -- apply to some of these areas. if we went forward with the implementation, why should they be separate? >> there are a couple of reasons. one is the urgency of moving forward as quickly as possible in reviewing the lessons learned from the terrible deepwater horizon accident and applying those lessons as quickly as we can into the regulatory reforms that are under way, as well as other rules that we will be implementing. one of the primary purposes for the reorganization is to provide greater clarity for leasing and

permitting as well as safety and enforcement. the separate those tv all functions -- those two functions, -- with separate those functions so that they will be -- we separate those options so that they will be equally executed. >> you are saying it could ultimately apply to onshore? >> we have created a special office under the assistant secretary for land and minerals, made up of employees from both the minerals management service and bureau of land management, as well as the office from surface mining -- office 4 surface mining and reclamation -- office for service mining and reclamation. we want to provide consistency in how we manage oil and gas, as well as all other minerals, offshore and onshore. there is work underway to address the deficiencies and inconsistencies.

>> the first priority is to plug the well and to clean up this mess. it seems to me that it is likely we will act on legislation prior to the august break, i would guess, and yet the president has established this commission that has a six- month timeframe. clearly, they will come with recommendations that may complement or differ the recommendations currently being made with minerals management service. as we do our due diligence, how are we going to incorporate this commission's recommendations? >> wekllm, -- well, any recommendation that will be forthcoming will certainly be considered and how we conduct business in the future. the purpose of the presidential commission is to look back and determine what lessons have been

learned and how to best applied them so that we can have a safer program -- apply them so that we can have a safer program. >> some say that the new regulations for offshore are vague and confusing. is mms working on any new guidance for those operators? >> we issued a notice to lessees last week regarding the need for them to -- or operators in shallow waters -- for operators in shallow waters to adhere to a newwsafety requirements. -- to new safety requirements. due to some confusion, we held a meeting with the shallow water coalition members and members of congress to go through the notice to lessees provision by a provision and provide greater at the conclusion of that meeting, people now have a

greater understanding of what the intent of that notice to lessees is and how to implement it. >> what would it take for the companies to be able to demonstrate, in light of this disaster, that they really have the responsibility -- the capability to clean up a disaster of this magnitude? clearly, all of the reports that we have seen -- the reports that were filed were basically cookie cutter copies of one another. these are in light of what we have experienced -- these are, in light of what we have experienced, inadequate. what would a containment plan require in a worst-case scenario such as we are experiencing? >> what we are experiencing today is way beyond anyone's imagination of what could have happened witt offshore drilling.

>> we can now imagine it. >> you're absolutely right. there is no doubt that the spill response plans that have been previously submitted by the operators in the outer continenttl shelf will need to be reviewed and amended based upon the lessons we have learned. the lessees and the operators will have to go back and revisit those, and come up with something that will give, not only those of us in minerals management service, but the american public, more confident about their ability to control and contain any future -- more confidence about their ability to control and contain any future spills. >> we have to do better. quickly, because my time has expired, in terms of the reorganization proposal before us, which will hopefully -- do

you see any potential problems in the reorganization plan? >> we do have some concerns about the ability of interior staff to simultaneously respond to the catastrophic oil spill in the gulf, undergo a major structural reorganization, and also work to implement the recommendations made by gao, doi, and the inspector general. we feel that any reorganization should be done only after possible analysis with sufficient time to consider a variety of organizational structures and in consultation with congress. >> i think the members of this to committee -- the subcommittee should know that we need to look at the current staffing. 5 for the west coast.

1 for alaska. 56 for the gulf coast. that is not going to get the job done. we will be bringing in regulatory requirements which are necessary to begin to read- instill confidence -- re-instill confidence. we need to figure out how many inspectors we need based on the number of rigs out there. ms. kendall, do you have any concerns? and i share your concerns about the staffing -- >> i share your concerns about the staffing. it needs to be well thought out before hasty action is taken. unintended consequences attached most actions. proceeding thoughtfully and carefully is definitely the way to proceed in the

reorganization. >> my time has expired, clearly. mr. lamborn. >> thank you, mr. chairman. the department takes seriously the importance and integrity of scientific and peer-reviewed documents. your office has conducted a number of perot investigations into the accusations that political -- -- of thorough investigations into the accusations that political -- the recent offshore safety report, after being peer- reviewed, was edited by political operatives at either the department or at the white house to assert, against the recommendation of the supporepot findings, but a six-month moratorium was appropriate. this was then falsely presented

to the public as the sole work of the engineers whose names were signed on the report. these experts have since objected to this misrepresentation. they of suggested that this political decision to impose a moratorium -- they have suggested that this political decision to impose a moratorium will threaten the safety of workers and increased environmental threats to the gulf region already so hard hit by this spill. has your office planned or opened an investigation into who made these changes? >> congressman, we have not. i understand right now that the 60-day moratorium is an issue of a lawsuit brought against the department by industry. it has been the inspector general's practice when a matter

is in another form, such as the federal -- another forum, such as that federal district court, unless there is compelling need for us to get involved, and we have not heard from either party -- the government or industry -- we would not investigate that. it would be inappropriate. i have heard all the things you have itemized here. i was not involved in the process of developing not report. i think it would be inappropriate for me to comment. >> by the way, i did not want to suggest you work involved. i think it is good that you are not so that you can be a disinterested, objective observer. there needs to be an investigation. let me point out that the lawsuit you refer to is about the enactment of the moratorium and has nothing to do with the report that some said should results and the maturing --

result in the moratorium. these are two different matters. why cannot investigate who made the changes? -- why can you not investigate who made those changes? >> i think the distinction is a fine one. i would like to think about it further. members of the senate and house have called for you to make this investigation. do you see any reason why you cannot do this type of investigation? >> no, we could certainly do that type of investigation. >> thank you, mr. chairman. i yield back. i would like to introduce a letter on this issue from senator vitter and representative scalise. >> without objection, so

ordered. the gentleman from new mexico. >> thank you, mr. chair. i have a few questions for director abbey. i appreciate your service -- taking over what is clearly, even in the interim, an organization that has been highly challenged and has a lot of issues that we need to get to the bottom of and work through over the next months to make sure this never happens again. we've all seen the copy of the oil response plan from bp. it was approved by mms back in november, 2008. it determined that the worst case scenario for an uncontrolled blowout in the gulf was 3 and read thousand barrels of oil per day -- 300,000 perils of oil per day.

it's as, "i hereby certify that we have the capability to respond to the maximum extent in the worst-case discharge or the threat resulting from the activities proposed in our plans." i know the estimates have changed. we're looking at between 35,000 and 60,000 barrels per day from this event. that is nowhere near the worst- case scenario that they said they were planning for. we can all agree that, within the first couple of months, the response to that 35,000 to 60,000 barrels was completely anemic. i can only imagine what a 300,000 barrel per day event would look like. do you think mms fundamentally made a mistake in approving some of these plans for these large- scale events that said, on

paper, everything is fine, without digging into the background and making sure they actually have the physical capability to manage a catastrophe like this? >> congressman, that is an excellent question. there are a number of investigations and reviews underway right now to determine what minerals management service employees did as part of their review process. i will say this -- i will use the chairman's ownnwords. over time, all of us, whether society, employees of the minerals management service, or the industry, became complacent and overconfident. we did not think this could happen. we know differently now. as we look forward, to apply the lessons we are learning each day, he will see a more diligent effort on the part of any3 more diligent effort on the part of any regulatory body that has

any jurisdiction at all. we will do a better job. as far as your specific question, during my period of time -- four weeks -- with minerals management service i have seen nothing but professionalism on the part of -pits employees. i think reorganization is needed. we need to separate the functions of the organization so that we can have checks and balances. i am certainly all for the reorganization proposals as they have been presented. i think a better job needs to be done in the future. >> what can we do right now -- what is mms or the administration doing to make sure that all of our other offshore producers, whether we're talking about the oil rigs in california or alaska -- that they -- that we deal with this gap between what is on paper and what is physically capable in response -- what

they're capable of providing in terms of personnel, skimmers, containment devices. what is mms doing to make sure that -- god forbid this thing should happen someplace else offshore -- that the producer has the capability and it is their responsibility under the opa -- the act that was passed back in 1990 -- that they have the physical capability to respond to that? >> that is one of the purposes for this six-month moratorium, to allow us to go back and determine that the plans that are in place today are adequate or not to address what could potentially occur out there. the first and foremost effort we are applying right now is to prevent future spills. we did not want this to ever happen again. secretary ordered and we have

implemented inspections on all to make suregs the equipment they have on those rigs are what they say they have. they should be approved it and there should be appropriately qualified people -- they should be appropriate. there should also be appropriately-qualified people there. we're reviewing plans that have been submitted to determine if they are still adequate. >> that brings me to another thought. we have heard some stories within this disaster and also allegations on other rigs of a mismatch between, for ex ample, the engineering drawings for equipment and what is actually there. we heard about the batteries and the miss wiring -- the misw

iring associated with the blowout preventer. is there also a review to make sure that when the documentation says x that you don't have y out on the rig? >> this is the gentleman's last question. >> that is part of the review. >> all right. the chairman now recognizes the gentleman from wyoming -- the missewoman frop wyoming, lummis. >> a former mms director testified that, after requesting the ig to come in and do a review of mismanagement -- excuse me -- misbehavior within the mms that it took three years

report.an-- get an ig's that happened twice. why should it take three years, when the director asks for an inspector general's report, and is told, stand at ease while we do our report -- they cannot even solve the problems that they themselves have identified and requested the ig to evaluate. how is that -- how does that advanced good government? -- advance good government? >> i am not aware of an incident or that has occurred, where mms has requested an investigation and it has taken that long. the other thing that puzzles me is that our policy is one where

, as we find things, during an investigation, if there is something that the department can do management-wise to solve some sort of underlying, or any problem, we will communicate with the department at the time we find this information. we do not hold it until the end. in some cases, they may not have everything they need to take administrative action against an individual until they have a final report, but they can take corrective management action if there is an organic problem that led to some misconduct. >> the testimony that we heard from a four mms director -- a former mms director was that and it mms-- was that an mms

director requested a report in 2004 and got the final report in 2007. a follow-up report in 2007 was not issued until 2010. that seems to be inadequate in terms of a timeframe for responding to a request by an administrator to solve the problems within their own agency. i would refer -- let's visit about that further. that was brought to our attention a couple of weeks ago. mr. abbey, do you believe that blm's leasing program should be removed from blm oversight and given to a separate agency? >> i do not. >> thank you. i also have a question about the

unionized employees that our inspectors in the gulf -- that are inspectors in the gulf. we learned a couple of weeks ago that a father and son inspection team that last inspected the deepwater horizon came to their subsequent questioning session with a union lawyer. they are unionized employees. it seems to me that, in an inspector situation, the union representation and immunization of these employees may not be the best -- and unionization of these employees may not be the best place for unionization. do you agree? >> i do not agree. i had -- i do not think it had anything to do with them being

unionized. prior to the deepwater horizon, secretary salazar had access -- asked an independent review of the minerals management service inspection program, so that we could improve the work that was currently being performed by our inspectors. it is very complicated work. going back to your question, it has nothing to do with whether or not the inspectors are unionized or not. >> mr. rusco, you mentioned that, with regard to lease way,, that have come a long that we at the department of the interior may not have kept up-to-date with the lease terms that would give the people of the united states more erturn for -- return for their minerals in the gulf. i would commend to your attention, changes that were

made in the lease terms for the state of wyoming's own oil and gas and surface agreements, updated four years ago -- she did a really good job of updating the terms of those agreements to provide for more safety, environmental protection, and stronger lease terms and returns to the people of the state of wyoming. that might serve as a good example for onshore department of the interior lease terms. we do not have notoffshore -- not have much offshore. >> not in wyoming. >> thank you. >> the chair will now recognize

the gentleman from maryland, mr. sarbanes. >> thank you, mr. chairman. i'm convinced when all of this is looked back at and inquiry is done, that we will determine that, years ago, really, mms handed over to the oil industry the keys to the kingdom. they have taken full advantage of that. what we are about is we have to get the keys to the kingdom back, because the industry does not seem to be able to act responsibly on its own. when you look at the resources available to mms, the lack of resources, you look at the lack

of issuance that will also be part of this story. in the industry, mms is like a fly buzzing around my head. it is a joke. we got to figure out how to make the agency more relevant so that the industry actually tears when they show up for an inspection. -- cares when they show up for an inspection. people do not get enough pay to be recruited. there is an industry person telling them this, that, and the other, weaving and bobbing. it is not a fair fight. we have to get back to where the industry actual cares when am mms inspector -- an mms

inspector is coming. i'm concerned about the permit process. i am interested in how we can make sure that certain parts of that process are elevated into a statute, particularly the ability to demonstrate, as a company, that if you're going to go drill on the moon or 500 feet under the -- 5000 feet under the ocean, that the techniques you have forced a -- for stopping a spill can be verified. an application comes in. the boxes are checked. d mms folks -- the mms folks go to work. take me through the process that happens when the permit comes in, in terms of getting to the approval stage. >> an application for a permit to drill is submitted based upon

the exploration plan that had a party been submitted and previously approved by dumping minerals management service. there would have been-- approved by the minerals management service. there would have been an investigation. the minerals management service employees with look at the application for a permit to drill. it would assess the adequacy of the information. -- they would assess the adequacy of information. it would either reject or accept the application for a permit to drill. once the permit is issued to the industry member, they can go forward and begin their operations. >> what you just described could be an entirely paper exercise, right? the permit comes in. information is sought. the personnel of mms review it to determine if it is

complete or insufficient. an intelligent person can figure out how many extra pages toa dd to -- to add to their application to get that boxed check. are there points or someone is going out to kick the tires on the operations -- where someone is going out to kick the tires on the operation to corroborate what is presented on paper is matched in reality? are the resources there for that to happen? >> there is really no tire to operation to review and inspect. it is only after they have not authorization -- that authorization that there is any action that an inspector can go out and monitor to determine whether or not --

>> if somebody is saying that ife deepwater horizon raiig -- there is a problem, we will respond with this technique or equipment or the blowout preventer -- you could say, can you demonstrate other places where this is in place? we can do an independent review of whether a blowout likeenterca can never fail the sun coming up every day. presumably, there are places you can look to verify what is being submitted, even though it is not for that particular location or rig. >> that is true. the experience of the people doing these reviews -- they have been involved in a number of inspections and a number of plan reviews and approvals.

there is an awful lot of similarity in the operations occurring in the gulf of mexico. you're absolutely right. do we have the knowledge of what is being proposed? has it been used elsewhere? it is part of their application for a permit to drill. it is stated the art, -- state- of-the-art, tried and proven. there are similarities and there is some familiarity with what is being proposed by the operator and the minerals management service would make their determination based upon the papers that have been submitted and their own experience with similar operations in that same area. >> the gentleman's time has expired. we reccgnize the man from louisiana. >> thank you, mr. chairman.

i have a question for miss kendall. to preface, it has been clearly brought out that failure of oversight and even corruption at mms, which has been in prior administrations and extends into this administration -- it has been a serious problem and difficult overcome. the statement that he made -- that you made made my ears stand up. that perhaps it is time to impose some ethics requirements on companies doing business with the government. would that extend to environmental groups? >> help me, if you would, congressman, with what you are suggesting. >> would an environmental group, providing office space and meals to employees, the and -- be a

violation of ethics rules? >> i cannot really speculate on that. it might or it might not. i would need more information. >> the nlcs is the national landscape conservation service and part of the blm. you may not be familiar with specific situations. in general, can we agree that a3 free office space and meals to governmental employees who have some responsibility of oversight, that would be a violation of ethics rules, would it not? >> the ethics regs are very specific. if this environmental group for a prohibited source, then yes. -- were a prohibited source,

then yes. i could not opine on it, in an of itself -- in and of itself. >> this would be very targeted in terms of those who could influence government. >> the gift acceptance rules -- the meals. the space, i'm not as familiar with what that might imply. gifts are covered under ethics regs. government officials are prohibited from receiving gifts from certain sources. >> i hear what you are saying. the question is more in line with what your personal beliefs or perhaps the belief of the oig. i will follow up with another question. you say you need -- we need to consider penalties against companies which provide gifts to

mms employees. should we, in consideration of those rules come expand that consideration to gifts of all interior employees? >> to follow-up and maybe i'll ask one more question before we move on -- if i understand you correctly, are you suggesting that the oig's oversight of mms, the ability of the administration to root out corruption at mms, and to control the cozy relationships with companies, that we now have to go to the companies themselves to impose ethics rules? we cannot accomplish that by reining in our own departments? >> that is not what i was implying, congressman. my testimony was suggesting that, essentially, it takes two.

the mms employees we're talking about -- i would echo mr. abbey's statement. we're talking about a very limited number of people. the oig reports that have come out that have been scathing about the conduct of some mms employees is very limited in terms of numbers. having been said, the conduct always related to something vis a vis industry. my suggestion is that, perhaps like we do with government contractors now, have affirmative responsibility for industry to disclose. it may be something that would be useful in arena as well. to have industry understand what the rules are that applied to the people that they deal with on the government side seemssto

be a very simple thing that we could do and require of companies who want to do business with the government. >> i would not offend any ethics lapses by companies and certain environmental groups. i agree with you on transparency. i am concerned that suggest we are either impotent or unable to control ethics problems, or perhaps that we have given up or give them a pass, and we will now put the responsibility on outside groups or companies. >> i am not suggestiig that at all. i think it is a two-part solution. >> the gentleman's time has expired. the chair now recognizes the gentleman from massachusetts. >> thank you, mr. chair. >> give her some room so she can ask her questions.

>> cross is so much for testimony. we are all so concerned about the ongoing spill. we all have witnessed this. mr. abbey, you mentioned that a spill of this magnitude was beyond anyone's imagination. my colleague from louisiana, who was not here today, in earlier hearings said this was an absolute failure of imagination. in my view, it is an abject failure. if nothing else, this yeardepth at -- the sheer depth at which the well was placed, tells us that -- we had a continuous event, that we would have the potential for an environmental disaster. we have seen that. in spite of bp's best efforts, they did not have in place a plan to respond to a continuous

event. there were not asked to have a plan in place to respond -- they were not asked to have a plan in place to respond, in the event that technology did not help them. mr. sarbanes has asked about the permitting process. you said there are instances in which applicants are rejected. do you have the upper jaw and chin -- do you have a resumption in which the answer is appropriately no? is it based on a common sense and understanding that if any event ifat the dept -- if an event occurred and technology does not shut it off -- the environmental impacts and economic impacts can only be what we're seeing today. the risk idoes not warrant gain from such a well. >> that is an excellent

question. any regulatory agency should always be ready to say no if they do not have sufficient or adequate information to do an analysis of what is being proposed and to understand what the likely consequences are of the proposed action. the question that you raised, congresswoman, is best addressed by the presidential commission. it is a very complex issue. oil and gas is going to continue to be a major component of our nation's energy portfolio. it is a large -- a large percentage of our oil and gas is produced offshore. we have to take that into account as we move forward and we have to be smarter about it. we have to make sure that any future drilling is done, right complianced in with the law. i believe that will be best addressed by the presidential

commission. >> would you others address this as well? as we go forward, in the reorganization of mms, there should be an appropriate place for this kind of risk assessment and understanding of whether or not it is possible to put in place a quick response to an event such as what is occurring down in the gulf. given that, if that is not possible, aal of the modeling, the appropriate response, if it is not possible, then a no is warranted. how do you see the capacity of mms the to deal with this? does the organization have the potential to address this? >> we have found, system-wide -- found system-wide and pervasive problems in terms of attracting and retaining the kind of expertise to do the jobs we

looked at in terms of safety, production, a verification, meter calibrrtion. the knowledge required to understand the technology in the deep gulf has to evolve as that -- as the technology evolves. the interior has been challenged in keeping abreast of technology and having enough of the right kinds of expert staff onhand to address these issues. that is something they must address in any reorganization or even if they do not reorganize. >> is it possible to put in place a response plan to an event like this that could have quickly dealt with this issue? is there a level of human impossibility here? it would just requires too much,

more than anybody could have been placed to immediately deal with an event of this nature. >> i am sorry. i'm not qualified to answer that question. we have not evaluated that says to the question. >> mr. abbey, do you have any sense of that? >> the oil spill response plan is not only the responsibility upon the minerals management service, but also the coast guard. there is joint jurisdiction there. as far as containing an spill in the outer continental shelf. congresswoman, i am not a technical expert either relative to the engineering capabilities. i do believe that there are -- there is equipment -- sufficient equipment and technology that would allow us to contain some a spill. -- such a spill.

we ought to be prepared to prevent this. if there is some a spill, -- such a spill, we have to do a better job of reacting. >> the gentlewoman's time has expired. we recognize the last member of the subcommittee who is here. then we will recognize other members of the full committee who have joined us. >> thank you, mr. chairman. >> excuse me. i have just noticed that we have votes. following the gentleman's questions, the committee will recessed for the purpose of going to vote. c -- hen come back and continue. >> thank you, mr. chairman. i appreciate your leadership.

i want to thank the members of the panel for the most eloquent testimony on this very issue. i find it ironic. why are we sing in surprised that something like this has happened -- we seemingly surprised that something like this has happened in terms of the oversight responsibilities? my point is that we cannot even account for the billions of dollars that american indian tribes have supposedly given to the department of the interior to account for. why are we surprised by this problem with the budget?

with respect to our inspector general, at $16 and investors -- inspectors to reduce -- to review four thousand facilities to 16,000 inspectors review 4000 facilities. that is quite a number to be responsible for. what i am curious about is -- the president made an announcement that the administration is looking at allowing more offshore drilling. was the mms agency taking into

account to ensure that we were going to do this properly, or is this something that the white house just dreamed up because we need energy? of course we need energy. was this taken into account before the president made the announcement that we need more offshore drilling before this accident occurred? >> the track record on the continental shelf has been a pretty good one. there was confidence in the regulatory agencies to respond, but alss the fact that the industry knew what their there are 1700 employees at the minerals management service. there 62 inspectors. they perform an average of

24,000 inspections per year. these inspections could take anywhere from two hours to a three member team conducting the inspection over a three day period. >> when you say 24,000 inspections, somehow, someway, one of these major corporations had a record with not complying with all of these standards, and they get away with it. one of the corporation's was given a lot of warnings about noncompliance with some of these standards, and yet, somehow it went forward. >> most of the notices about noncompliance are fairly minor and can be corrected within a matter of days. if they are serious, then the minerals management service will shutdown of facility until the deficiency is taken care of.

>> according to reports, there were warnings given to bp, or to this certain rig that was being questioned. is that correct? >> i do not know. i would rely upon the investigations and the review is underway right now, because we+ are going to learn a lot about exactly what took place. >> one other question, and i am glad we have the inspector general and the gao. this worked out pretty well. it is my understanding that the deepwater horizon is registered under the flag of the republic of the marshall islands. of all places, this will registration process, i think they only paid $20,000. for how many years where you go and register under a foreign flag which certifies that it is ok, and pay 20 bells and

dollars, and supposedly now the republic of -- $20,000, and supposedly now the republic of the marshall islands is to be responsible for the safety of this rig? >> i had heard that. >> should we continue this practice of registration the way we're doing it now so that companies can escape paying taxes and higher cheapplabor? should we change the whole process of registration? >> as a citizen of the united states and not of representatives of the minerals management service, i would say that is a good question for this congress. >> after a short recess, members resumed their questions to mms officials.

>> let me begin with a couple of issues. i understand we wrote in a letter twice requesting that there be follow-up based on comments made by some people regarding issues in terms of they're not following the requirements. there is a certification statement from bp atlantis. i was going to request formally -- we have been told that bp keeps documents in an electronic

form and uses the data to record status. i assume that mms has obtained copies of all of these from bp, and is in the course of investigating these incidents. could you please provide immediately if not sooner to this chair, electronic copy of that information, a copy of the logs, and the database that is used to record the status of the documents. i think that would help this committee in terms of its diligent to look at the post- incident record that has been going on in regard to these investigations. that is a formal request and i will transmit that as well to the chair. >> i would like to reinforce

that and the chair would like that asap for all members of the full committee. >> thank you. mr. abbott will testify about bp. i had an opportunity to meet with him yesterday. he told me that he has still not been interviewed or contacted by mms regarding the investigation. do you feel that is part of the post-incident process going on, and the issue that i and other members of congress have raised regarding his need to be provided with information? should they not be part of a discussion and talking to them

about the intermission they have been part of this post- incident analysis going on in your investigation? >> in preparation for this hearing i did look into the information that we have compiled regarding the allegations that have been made by mr. avnebbott. i do not have any specific knowledge relevant to what all of those facts are, but i did read documents that he was interviewed by minerals management service employees, as well as by the office of the solicitor. i am looking into exactly what our investigation has found. i will say that the allegations are taken seriously and that investigation continues. but today, we have concerned the bp -- we have determined that bp did conclude an anaaysis and

that it was approved by the minerals management service. we conducted an inspection of the process safety system, and we found no violations. since bp began producing at the atlantis platform, we have inspected three times. during these inspections, we verified safety devices and their associated shutdown of functions. they were found to be with no abnormalities or any issues of noncompliance. during our third inspection, however, we did find an issue of noncompliance for a leaking safety valve, and that bell was fixed that same day. -- that a valve was fixed that same day.

>> i appreciate that, and i assume that information will be forthcoming in some sort of document that this committee can review. it is my recollection that he has not been interviewed, but be that as it may. let me quooe one thing from a bp-submitted application. in response to a senate inquiry, it says that bp is not aware of any requirement to attach proof of the strength of blowout preventers, end -- and then they go on.

information that shows stacks and sub-sea stacks are capable of bearing these pipes and their associated pressures. how concerned should we be that bp is not concerned about the quality of their blowout preventers because that is not required by mms? were you in -- were you aware that bp was not in compliance with this requirement? >> i am not aware of what was required to pass. there were some recommendations regarding what should be required of operators in the future.

we followed up with our own and noticed identifying new requirements that we are going to be enforcing as a result of this incident, but also the fact that we do want to improve safety within the industry. we are looking at blowout preventers, and we are requesting independent third party verification that the equipment on these platforms is sufficient to do the job it is intended to perform. not only are we asking for a third party verification, but we are also asking and directing that the ceos of each of these operators verify that thee are in full compliance with these new requirements. we are conducting our own independent inspections to follow up the independent verification is that we receive. >> and thank you. very good. if you could encapsulate the answer that you have just given in the form of a formal response

as a letter to the chair of the subcommittee ranking member, adam will be happy to share it with all committee members. >> i will be happy to do that. >> a guest of the committee is here. the gentleman from florida. >> thank you. i really appreciate you allowing me to sit in on the panel today. >> are reluctant member cashed in some big favors to get you here, so you should appreciate it. [laughter] >> as a member of the bay i am particularly interested in the oil spill. i think what we have learned the most, the most complex and dangerous part of deepwater drilling is what takes place sub-surface. as we get to five belsen feet,

six dozen feet, and even seventh thousand feet below the surface, -- 5,000 feet, 6,000 feet and even 7,000 feet below the surface, operations get more and more cooplicated. rules and regulations for sub- surface operations have been squashed. why is that the case? >> i will take my first shot at that. a wish i could answer more specifically and directly to your question. i really do not know. i know the technologies are similar in shallow water and deep water even though the drilling is more complex in deep water. i do know that both required due diligence. both require that there is equipment capable of performing the jobs and tasked that they are intended to perform, and that there are adequate

safeguards, including redundant safeguards to prevent what we are experiencing today from occurring. the reviews will certainly have us have a better understanding of what took place and what needs to be done differently in the future. >> you do admit that the rules and regulations are sparse and? >> i really do not know, congressman. >> anyone else in the panel? >> i am afraid i am not familiar, personally familiar, with the regulations in any level of detail. i have come to learn basically everything i know about the deep water drilling in the last month or so. the rigs, they do have requirements. what i understand is that they have gone from, basically,

prescriptive requirements to performance-based requirements, so that is something my office is looking at as well in terms of where there are gaps, if indeed there are gaps, in these safety measures for a deep water, and shallow water as well. >> gao has not studied this specific issue and i cannot respond directly to your question, but we do have concerns about a systemwide and pervasive problem of keeping up with technology in other areas that we have looked at, to the extent that that is occurring in this case, then it is something that needs to be addressed. >> in your positions, should you not be familiar with these regulations? i would like to get a response

in writing as soon as possible. thank you. during the course of the six month moratorium that the administration has imposed on the deep water drilling, there have been suggestions that mms create a spill-response for deepwater rigs. is there a database that shows that mms reduced existed in the first place? >> spill response plans are reviewed and approved prior to permits being issued. based on those reviews, we determine whether or not the spill plan is adequate to cover what might occur, based on the analysis and a determination at the time, and what might be a worst-case scenario. as we mentioned before and n

earlier comments to members of this committee, what we are experiencing today is beyond what we imagined could occur in a spill scenario. those response plans will be reevaluated based on what we have learned to determine whether or not they need to be improved. >> is there a database that currently exists? >> i would imagine that there is an approval mechanism that we can share with you relative to the documentation or the review that took place. i do not know whether it is on an electronic database, but we can certaanly look into your question and respond accordingly. >> please doo anyone else, would you like to respond to this? you mightring if briefly explain the complexity of operations that takes place. can you explain how to float

lines, wellheads, pipelines and shaky set -- safety shutdown systems or required, not only to build those ystems, but to operate them. do you believe mms employees understood these nuances, and do you believe that ms is -- that mms is adequate to respond to these nuances? >> that needs to be your last question. >> i am better prepared to answer the last part of your question then the first. the mineral management service does has -- does have a capable employees that are able to review the plans submitted. we're very fortunate to have

good engineers worthing -- working within the organization. we continue to do our best to stay abreast of current technology and to make sure that our employees are well aware of what is being proposed today and what might be proposed in the future. there is still work that we can do that would improve the overall performance, but i believe we do have capable expertise. do we have enough of that expertise? i think we could help the organization by bringing in additional people. >> thank you very much. >> that is going to have to be it. we are going to have to reassess again before we go to the second panel. >> we have been told that mms

has been divided into three new entities. do you have a job already designated in those three new entities? >> i have a job that i am going back to as soon as i.m. new -- as soon as i return. >> will you be part of those three? >> i will not. >> well, i know you regret that. [laughter] the staff had done some work prior to this hearing, and we found out that the one unionized entity within mms was offshore inspectors, and the director did not know a whole lot about the unionized aspect. she did not know about union contracts. i am curious and want to ask

you, if these offshore inspectors were unionized, were their limits on their travel or the amount of time they could work in the day or anything like that that could affect how much inspection they could do? >> sir, i am not aware of the specifics of their contracts, but i do know that unions to negotiate the conditions of a work environment. i would be surprised if that might not be part of the contract, but i do not know that specifically. >> we also have found out that the major check and balance, the control that made sure that an offshore inspector was doing his job, was to have them sent out in pairs so that one could report the other if there was some problem and they were not doing their job. i was asking her if it was a good idea to have the last

inspection team that went out to the deepwater horizon before the blow be a father and son team, and she said that was under investigation. my question to you is different. has there been any limitation so that we will not have any more father and son or related teams that are supposed to be double checking each other as offshore inspectors? >> there are changes in the works, and i do not know whether or not that team had anything to do with -- well, i know -- i am not sure it is an issue. >> you do not think it would be a problem to have the only check and balance be a father and son team? and they are going to watch each other carefully and report the other if one is not doing his job right? >> i do not. i believe if we ask someone to do the job they are going to do the job. that is not to say the we should not have checks and balances to ensure the people are doing the

job correctly. >> we were told that was the check and balance to make sure if they were doing their jobs. >> well -- >> i would suggest that is not a good idea and something should be done. the president said, and i will paraphrase, he wanted to find out who's but to kick. we know that he has declared a six month moratorium and that there are other companies who were not nearly as irresponsible as bp was, and that it is costing them a fortune to shut down their rigs and some of them will probably move off, so i am curious, is it deemed to be by m m s, a measure of kicking the readers of oil companies by

forcing them to kospi millions and millions of dollars -- by costing them millions and millions of dollars by forcing them to sit idle just because bp screwed up? >> that is not the purpose. >> have any inspectors then sent out to those 33 so that you can get back to the president and say, these guys are innocent. they'd were doing everything right. they were not cutting corners and so do not penalize them. have inspectors gone out so that you could let the president know he does not have to keep taking over the rigors of the people doing their jobs correctly. >> secretary salazar immediately asked the mineral management service to conduct an inspection of all deep water rigs shortly after this incident. those inspections have taken place. >> my time is running out. we heard from the inspector general previously on

1998-1999 ing the 1990 acreag leases in which language was pulled out that has caused our country billions of dollars that has now gone to big oil. >> you're going into your colleagues time. >> can i finish this question because it is critical to this country? my question is, now that we have found out that one of the two people the pulled the language out has returned to interior, now the issue is back in government service, have you questioned as to why she thoucost the country billions of dollars by pulling the price adjustment language out?

>> know we have not. my recollection was not that she was one of the two people that was involved. that is just my recollection. i have to go back and look at that. >> in all fairness. mr. cassidy from louisiana, you have five minutes. we have many people who have not devoted and only seven minutes before the vote is called -- who have not voted, and only seven minutes until the vote is called. we are going to recess after this for an hour. is a defect moratorium on the shallow water operations and that their conversations but no clarity.

the conversations are going on with rick operators not with lee sees -- with rig operators not with leasees. >> there is no moratorium on shallow water drilling operations. we have approved and shared with the leasees that they are going to have to adhere to a new safety requirements before any drilling occurs. i have been told the they have accepted those and think they are reasonable, but they're still not getting permits. >> i am not sure about that, but i will say this. once we receive third party verification that there in quebec is functional in doing the job it was intended to do, -- that their equipment is functional and doing the job it was intended to do, there should be no problem.

>> just to be clear, you said that a third party will come in then theyct, and will be ready to go? >> that is correct. >> also in the testimony -- and i apologize for coming in late so, if this was addressed, i apologize. used but about the number of inspectors per rig. why is thattcount higher on the west coast began on the east coast? >> i understand that there are six inspectors in the pacific and something like 56 in louisiana. i do not know why there is such a discrepancy in the number based on the rig and where that

rig is located, but i will say that we need more inspectors in the gulf of mexico. >> i was struck by an automatic system in which your inspectors -- by the news that an automatic system in which your inspectors type in date and it is immediately uploaded it is not going to be in place for another six months. why is that taking so long? >> i do not know, but i can get back to you. >> we have found, in general, that there have been issues with keeping up with technology. one thing that i think you may be referring to is the production verification technology that industry uses, which is second by second data collection and storage on production. >> so why do we not -- i am

sorry to interrupt, but i have very little time left.the courty can plug into like spock did with people's brains. why can we not require that bp let us know what their data is as regards -- >> it could be done, and there is a pilot program to do that, but it is not moving very quickly. >> why in the heck not? >> i do not know the answer to that fully, but we have developed our own software for this and there is also shelf software available that should have the full functionality. >> last question.

there really seems to be a conflicting set of values here. your testimony is that these people go have barbecues together. you know they all go to college together. there are not that many petroleum engineering schools. i also hear that industry is way ahead of government in terms of the knowledge base of what cutting edge technology is, and then i read that we are not doing continuing education for inspectors. it almost seems like the guys doing the work on the rig are about a mile ahead of the inspectors in terms of knowledge. the only way we are going to give the inspectors that knowledge is to allow them to have a barbecue over a continuing education conference, but that gives the perception of impropriety, so it is almost like we have to say to them, you

cannot go into industry, you have to stay in business. >> i think there are a couple of reasons why there is an appearance that industry is way advanced in technological expertise versus the government. first and foremost, we are asking our inspectors to do an almost impossible task. on one hand, we are asking them to go out and inspect production verification, production platforms. at the same time, we ask them to inspect the drilling operations. i think in the industry they specialize. so they may have some skills and abilities to doocertain things on the platform, and yet we are asking our inspectors to do much more than just specialize. >> they get paid more for it. >> when i am reading that we

have turnover because industry pays so much more, it becomes nihilistic that we are ever going to be able to compete. why would industry not hire them away? you have been generous with my time. i yield back. >> one quick question, though i am not sure you can answer it quickly or not. if there were to be an onshore or offshore inspection fee, do you think it would be an improvement over the current situation? >> i would like to answer that. our studies have repeatedly found that there are problems with coordination across the interior oil and gas programs. it goes across field offices, mms offices, and it goes between mms and blm.

there is a lack of the coordinating mechanism and a lack of sharing information. >> you are saying that combining it would not work. >> it might be a valuable -- well, what we have recommended is greater coordination. >> if there was staffed properly and coordinated properly it could work. >> i believe so. i would not recommend, specifically, a single force. what we have recommended is consistent with that, that there be greater coordination and communication and sharing of information and expertise. >> thank you. thank you members of the subcommittee and full committee. thank you members of the panel. you have been very good, very patient, and good at answering our questions. those of you in the audience, i

will ask you to continue to be patient. we are going to recess once again. we will come back at 2:00 p.m. to hear panel #three. i am sorry, but we have to vote. the committee is now recessed. >> the committee will reconvene. i thought we would be finished before two o'clock. i apologize. obviously, i was off by about 20 minutes. it is the intention of the chair now to go through the second

panel and the third panel, and to conclude the hearing. members that are here will be recognized under the same terms that we used with the previous panel. the chair will recognize the gentleman, mr. ken abbott, a contractor for the british petroleum platform called atlantis. you have been very patient today. i appreciate that. you waited all morning through the testimony. there were some responses been this morning puts a testimony to the comments you have made. to theing's testimony comments you have made.

i imagine you will respond to that. please begin. you have five minutes. >> my background and training is in the field of engineering project management. for over 30 years i have worked in the management of a wide variety of large onshore and offshore engineering projects. my employers have been among the largest engineering and construction managers in the world, including kellogg, brown and root, shell oil, jacob engineering and others. engineering project management is a field dedicated to management of large engineering projects. i am not an engineer and i do not do engineering. i provide management support for engineers by establishing project schedules and budgets, and by auditing the performance of the projects. the ddition, i managed upp

database records necessary for the engineers to do their work. bp atlantis is the world's the best mortgage -- deepest moored drilling facility. it is rated to produce 200,000 barrels of oil per day and large quantities of natural gas, far more than the deepwater horizon well. in august 2008, i started work under contract with the dp product management office -- bp project management office. my responsibilities included management of the engineering dockage. almost immediately upon reporting to work, i was confronted with the problem that bp atlantis operations, the department that actually operates the rig was demanding

pnid, which are very important document. déjà the overall flow, layout of piping and instrument -- they show the overall flow, layout of instruments. we did not have these pnids to provide it to operations. they shall have been provided before the start of construction. another manager had written in an e-mail that they were not complete and had not been approved for handing over to operations. this could lead to catastrophic operator errors. currently, there are hundreds if not thousands of subsea

documents that have never been finalized, yet the facilities have been turned over. this is included in the distributions we made to the committee. from this time until i was fired on very bit, 2009, -- on feb. 5, 2009, we made very little if any progress. we could not update the pnids. engineers responsible for various sectors within the project could not provide them. at one point, management vetoed a plan toosolve the problem because of the estimated cost of two million dollars. and the more i insisted that we had to develop or obtain these documents, the more unpopular i became.

mms regulations require engineering approved construction. the operator that had responsibility for overall design did not do it properly. this is a critical part of engineering the system. before i was terminated, we developed a database of all of the complete and in complete document to analyze the overall completion status. the results were astounding. out of the total of over 7000 drawings and documents, almost 90% had never received any engineering approval. can see the last column of this chart. this shows that bp did not fulfil its role. this lack of documentation is being seen on the deepwater horizon rig.

it was seen in texas and alaska. in the days after i was terminated, i tried to file a complaint with the ombudsman, the department of the interior inspector general, the department of justice, and mms. i received a written response from the bp ombudsmen a year later. he found that my complaint about the lack of proper engineering documents was a valid. in conclusion, from my experience in working with the industry for over 30 years, i have never seen these kinds of problems with other companies. i have never seen another company with this kind of widespread disregard for proper engineering and safety procedures. itself investigation of

by former secretary of state jim baker found that bp has a culture that does not regard safety regulations. from what i saw, that culture has not changed. mms was unwilling to enforce a law against a culture of repeated violations. thank you. >> we will begin the questions, and i will start. you stated in your testimony that the documents were incomplete. do you have any evidence that demonstrates that components of these documents that you referenced were either sub standard, damaged, or in any way constituted an imminent hazard within the platform of

atlantis? >> i do. as part of my responsibility of managing the department of documents, we kept an electronic database with all of the drawings in it and a drawing blog that showed the status of the drawings. 90% were preliminary. >> if we wanted to gain those documents, who has them today? british petroleum? >> and british petroleum has those documents. >> are they not required to be filed with mineral management services? >> they are required to be available and kept at some location for review by minerals management. i do not believe -- i know that 90% of them have not been approved by engineers. that is the last i saw on the document blolog.

>> he make a comparison, and it is obviously a very serious one. i am certain that you do that as a matter of conscious -- conscience that the situation is comparable to the deepwater horizon. but this is a production platform, while the horizon was a drilling rig. there are other differences out there between production and drilling. are you indicating as a result of that the safety factors are such that this non-production

platform should be shut down or closed? >> yes, i do think it should be shut down, based on the fact of the really poor engineering design and non-adherents to normal engineering practice. they do not have a final as- built drawings. because of that, the operators do not have a good road map or a good drivers manual, if you will, of how they should work. it is a tremendously complex rig, and they run a big risk if they do not have these plans. i saw similarities between atlantis and a deepwater based on information and articles i have read. for example, when bp tried to shut down the blowout preventer on the deepwater horizon, they wasted a day because they had the wrong drawings. transocean did not have the current drawings either.

the design had been changed after it was installed. nobody bothered to produce new engineering drawings for those operators. even the owner/operator of bp was sitting there trying to figure out how to shut the thing off, pushing the wrong button, and you know, there was wiring changes. that is a perfect example of the same kind of problem that bp atlantis could face. >> were you ever onnthe deepwater horizon? >> no, sir. >> did you ever review the drawings or the plans for deepwater horizon? >> no. >> urinalysis is based on what you have read? your analysis is based on what you have read? >> that is correct.

>> i am trying to remember a time in which your relationship with british petroleum was terminated. would that database not -- because minerals management service is now reviewing all of the deep water platforms -- but isn't that the database now more than one year old? >> the databases from 2009, but it showed that 90% of the plans had not been approved by engineers but were being built. if those plans should now be electronically available. it should be a pretty simple matter to check within a few days by the mms personnel. >> that is my point though. obviously, if they have this

new, updated information, they will be able to do analysis to see whether or not it has changed from the information you had over a year ago, whether or not they corrupted any of those drawings or plans, or whether they are the same. >> exactly. i do not know why they do not just do that. they took congress and this committee in february that they would do it by may. they had three months to do it. they should have just pulled that log, looked at a few drawings, spacek to them. that would have taken maybe a few days. that was never done. >> do e relieved the expertise is there, within mineral matt -- do you believe the expertise is there within mineral management service to either hold british petroleum responsible or to clear them?

>> i cannot answer that. i do not have a good concept of their capabilities and i am not an engineer anyway. >> you put that on the record. >> there are people that can do that. >> i am going over my time, but i would assume from the amount of work that you have done that you have had experience in your previous work with minerals management service's. do you not have any interaction or relation with them? >> not really. i produced the drawings and we put them out to the site. >> i will want to pursue that if i get a second round of questioning, because i find that interesting. the gentleman from new jersey is next. >> a thank you. i think you get as many rounds of questioning as you want. thank you for your testimony. tell me understand what you think are the risks -- help me understand what you think are

the risks of bp atlantis not having proper documentation. this is a production facility rather than an exploratory or drilling facility. i am not an expert in this area, but i think the safety record is better once these things are in production. what do you see as the riskier -- the risk here? maybe you could compare it to the risk of something like the deepwater horizon. >> first of all, the deep water was strictly a drilling rig. the atlantis is a multiple well site. there are 4-6 wells and production right now that are hooked up directly to piping. there are also two drilling rigs

there. it is a combination of drilling igs areoduction reg - theoretically more safe. here is the thing. all of this equipment, whether production or drilling, is sub- surface with tremendous pressures and tremendous heat. they say that the pressure down at the bottom of that cushion could take a 55,000 barrel judd and reduce it to the size of a thimble. if procedures were not reviewed by engineers who understand the overall design, there is a tremendous danger that there could be errors. there is also a tremendous danger that the operators, if

they do not have the latest drawings in front of them, could make mistakes in an emergency situation when they are shutting the rig down. that could be deadly. >> so, help me understand. why would bp not provide this, or not want to provide the documentation? do they save time? do they save money? or is it just sloppy procedure and it would have been in y their financial interest to provide these but did they just did not get around to it? >> from what i saw there what i believe, what i saw, was that management set the tone, and they were more concerned with production and cost, making their money. safety was the last issue. i found that to be very much

true. >> in other words, producing the documents, the drawings and so forth would cut into production time and therefore cost money? >> going with your theme, if you just take -- engineering normally goes through several processes. they go back and forth to get it right. finally, they produced drawings. hours to do. if you do it short cut and say, we are going to take preliminary drawings and build based on that, it costs you a lot of money. >> on most of the drawings, documentation waa missing? >> yes, on 90%. this was for sub-sea only. everything below the surface. that is where i worked.

>> you might want to reiterate that for the record. i think it is folks -- i think it is important for folks to know the percentage of the platform that is above the water. >> the sub-sea includes things like risers, piping, umbilical, at the wellhead, the trees. they are at least half of the total cost, versus everything above the surface. what happens is that above the surface there is some low pressure and high pressure element. below the surface, it is pretty much all high pressure and high temperature. it is special metals, and in my opinion, the most dangerous of all of the piping and equipment that is built for that platform lies beneath the sea.

>> you testified that the m m s did not quickly responddto your claims. have they now? >> they have not. >> since you have been announced as a witness at this hearing, you have not heard from mms? >> i have not. the only time i heard from them was last june. we had a meeting at the justice department and mms was in the telephone, asking one or two questions. they said they would follow up with an interview with me. it never happened. they said in february of this year, when york committee send your letter to investigators, and in may when you send it, you specifically mentioned they should talk with me. they have never talked with me in any sense at all in any kind of interview. >> quickly, because my time is

up. have any other people join you in these reports of missing documentation? >> my predecessor at bp was a long time bp employee. he got promoted when i came in. he wrote a very direct letter saying that there are hundreds if not thousands of drawings that are not complete and could cause catastrophic operator errors. i perceive that. i asked him for a list of problems when i went in, and i pursued those problems. all economy was a very unpopular reputation and pretty much ran off -- all it got me was a very unpopular reputation and pretty >> the next member of the subcommittee is the gentleman from wyoming. >> i am late enough to the game here, but i appreciate the opportunity to ask questions.

i will decline, but thank you very much. >> the next member of the subcommittee is the gentleman from maryland.+ >> thank you. in describing these drawings, i mean, i get the picture that if you do not have the drawings you are basically flying blind a lot of the time. >> exactly. >> at what point in the process , itms's interaction with bp should mms have become aware of the problem of the absence of drawings? . .

>> not just to go out there and check pressure readings and look and see if they did as a test. that is not enough. on land-based systems, refineries, if you ever thought of sending something as a final product from an engineering company to refinery that was not as bill that approved by your engineers, you would be fired. it is as simple as that. >> is there a point at which a permit is issued to the company for production, let's say,

review would say without mms having seen are reviewed these drawings, that that permit should not be issued? >> absolutely. they have two certifications or plans, one an expiration plan and won a production plant for every well they design and build. what happens is that the production side, when they get ready to start production, bp had to certify to mms that they had complete, as built drawings and never in jr. approved. i have yet seen the certification. we have asked for it. if the certification said yes it was done, then it was falsified. >> you would say as a threshold matter, the certification should

have been received by mms for the permit was issued, but beyond that, even with the certification, mms should have done an independent review to reassure itself that it was well-founded. >> absolutely. when they started production in november 2007 on atlantis, remember i came to work in august almost a year later. they had the problem of 90% of the drawings not being approved, not being issued to the operations. the operations manager met with me in january 2009 and said i do not have any drawings for my operators out on the riverside. no as built drawings. i said i would try to get them, and i kept trying until i was run off. >> as we have this hearing today, and atlantis is in production, what percentage of those drawings do you think are

available in the way that they should be? >> when i left, 90% of the drawings were not as build and not reviewed by v.p. engineers. i know that the ombudsman for bp reviewed my complaint about that said in an article three weeks ago that to the best of his knowledge, they were not complete in september 2009. bp is telling him now, recently, that they have been done, but he has no documented proof of that. >> so it is possible that at that production facility, people are still flying blind? >> absolutely. >> you know the president had put this moratorium in place for offshore drilling beyond 500 feet. so that is not with respect to facilities that are already at the production stage. >> orrect.

>> is it possible that even if you have a moratorium on drilling that the drilling operation could have reached a stage that if you do not have in place the right kind of oversight, that even though you go into a moratorium mode, there is still some risk their, or do you believe that when you impose a moratorium on a drilling operation, that from that point forward you have eliminated the potential risks that exist? >> as long as you shut the well in properly, which is what that would be doing as a result of this moratorium, it should be safe until you resume the drilling. but once again, the drilling is the more dangerous side, and if you do not have good, engineer

approve design, if the owner or operator, bp, is getting lazy and one to save money and just taking those preliminary drawings from their vendors and using them, then you have tremendous risk there. the minute they start up, they are in the same risk pool they were before. >> the gentleman's time has expired. 4v':our next member of the committee is mr. markey, for five minutes. >> mr. abbott, in 2009, an independent firm that bp hired to serve as ombudsman, headed by a former federal judge, substantiated that bp was violating its own policies by not having completed engineering documents on board those bp atlanta's rate when it began operating in 2007.

ñ)nzhowever, the managing attoy stated on may 15 that "the be has reviewed the allegations and found them to be unsubstantiated." why would bp not have these critical documents before starting operations of the atlantis rick? >> this is my opinion. the only reason is because they felt it would be a lot cheaper just to build it cutting corners and not getting the drawings approve from their vendors by their own people. that is exactly what they did. a short cut those man hours and did poor engineering practice. >> mr. abbott, what was the response of your superiors at bp when you alerted them that atlanta's was missing crucial final engineering documents that could lead to catastrophic operator error?

>> first, i talk to the lead engineers when i discovered the problem. i got a beat kick back from them because they were not used to doing that. they ask why we should have to approve the drawings. i said because every other engineering company does, standard engineering practice. when i went to my supervisors and his boss and talked about it, they told me, don't put pressure on the engineers. úñyou are causing problems. there really discouraged me trying to pursue that, which was part of my job. i just told to see people die, because i know what can happen if operator set any kind of plant do not have good, as bill, final issue drawings. >> do you have any reason to believe there are other bp rigs operating in the gulf of mexico that have similar safety deficiencies as a bp atlantis? >> basically, i see similarities

between atlantis and the deep water facilities from what i see in the press -- there are at least three different incidents is that describe the same situation. one was the problem with the blowout preventer, where neither be dinard trans ocean had the most current drawing. 7san interview with one of the deep water, and the man said he smelled the gas coming up from the well, the engine started surging, the automatic shut off did not work, and i had just had a procedure for manually shutting down that engine, i might have saved us all. he did not have a simple procedure for shutting down an engine. that is what i call a big lack of engineering documentation. >> mr. abbott, right now tony

harris testified before the energy and commerce committee right across the street. we all know that bp cut corners and ignored warning signs with the deepwater horizon. you have raised questions about the safety of other bp rigs that are currently operating in the gulf of mexico. what is your message to mr. hayward as he testifies before congress today? >> i would say please get a complete, honest answer from these congressmen. three weeks ago he said there was nothing wrong with the bp atlantis drawings when the unit started up, and there is nothing wrong today. at the same time, the chief investigator into employee complaints about safety had said yes, there is something wrong. mr. abbott was right, these

drawings are not complete. i would say tony, please get this right. i would say in general, lthough bp rigs need to be checked out if they have complete designs and drawing for those operators. i have real doubts about that. >> do you believe there could be other rigs out in the gulf of mexico without completed procedures to take in the event that something goes wrong? >> i know for sure the atlantis did. i know from what i have read that the deepwater had similar problems that could have helped cause the disaster, and i can only assume that at the very least, we ought to be checking out all but bp rigs, checking the drawings, not going out and checking the pressure checks which is what they are doing. >> do you believe that there could be another bp ticking time bomb out in the gulf of mexico as we sit here today and mr.

hayward since testifying across the street? >> i absolutely do. i know for a fact that atlantis has four to five times the flow capacity with about eight wells that just one well, the deepwater horizon had, and has just as much risk and high- technology engineering that could be wrong. >> should any of the bp rigs be shut down right now, in order to be in short -- in order to insure that a complete safety inspection is done? >> in 1.5 years trying to get them inspected, i would say the best solution would be to shut that readout and put the onus on bp to prove it is safe. anything can be fixed if you spend enough time, but it is dangerous as it is and it needs to be shut down. >> the gentleman's time has expired.

>> can i just finish one sentence? i think that the only thing worse than one oil spill in the gulf of mexico would be two bp oil spills in the gulf of mexico. i think bp and congress should heed the warnings you are providing today, mr. abbott. >> mr. abbott, you describe yourself as a project manager. >> project controls manager. >> how long have you been doing this? >> it has pretty much been my whole career for 30 to 33 years. >> has most of it been on offshore platforms? >> probably about seven years of it has been offshore, and the rest has been onshore. everything from $70 million project to $3 billion project's

onshore. >> so as a project manager, with seven years and the additional years onshore experience, you have what is considered good experience on offshore platforms. >> correct. but she indicated that you have worked for shell and what other companies? >> some of the major oil companies are shell and general electric, and bp, of course. engineering procurement and construction companies include -- >> let's stipulate for the record this is not your first -- the reason i am asking is because i am trying to get some comparative analysii based on the testimony you have given us with regard your experience with british petroleum and the platform atlantis, and other platforms which you may have worked on. i suspect you are a pretty

thorough guide. you sound like you are. this kind of documentation for plans and drawings that you described in your testimony is the same kind of information he would request for shell or any of the other companies to work with? >> absolutely, it is standard engineering practice. >> and it was forthcoming in those other instances? you had better not do it improperly, or you would not be there. >> are you saying based upon your experience of seven years time you have spent on shoree%- that there seems to be a culture of carelessness, at least, or as i said this morning in the testimony, an atmosphere of overconfidence and complacency that came together to create this to her -- disaster? >> congressman, i do agree thaa there is a culture of complacency and on concern for

safety issues at bp. the like of which i have not seen anywhere i have worked. no company is perfectñi, but its thoroughly embedded and management sets the tone there. people do what management tell them to do. >> in dealing with this, how long did you work with british petroleum? >> i was with british petroleum for approximately six months. >> so it was six months compared to 20 plus years of working with other companies. >> correct. probably 29. >> so a project manager is generally hired on to take on a certain project and work it through to the end, then of the company like your work, you get hired for another project for move on to another company. what are you doing now? >> i am a contractor, and i

finished my last project, completed in december of last year. it was an exxon project on shore, and i have been looking since then. >> so you were hired by another major oil or energy company after b p. >> actually i worked for swift, a contractor, and went to exxon as a project -- client representative. >> you mentioned earlier that you had little contact, and i am surprised about this, because with management services, and would have thought that in seven years of working on offshore platforms, what are the purposes -- one of the purposes we are looking at is how you reorganize management services. administration has put a proposal out there and we are

vetting it now to see what is good and what needs to be changed. clearly, for me, the staffing ratio has got to be looked at. you can break down different organizational structures, but clearly the staffing ratios are inadequate to do the job with the amount of platforms, whether they be production are drilling platforms, to ensure that the regulations are being done. i cannot understand why after seven years of doing that, you would have had no interaction >> is an easy explanation. in most of my assignments i have worked in the home office and sometimes in the field on the engineering projects were they designed and by and have built all the components for the offshore and onshore unit. in that role, which is really do not have contact with the mms

people. they primarily deal with the operations, the people on the rig and the operations managers. they probably deal a lot with the regulatory people within the oil companies as far as leasing arrangements and all. in my experience, they do not deal very much at all with the engineering design and construction folks. >> interesting. my final question, congressman markey ask the question about the ticking time bomb. you have been involved in this field for 29 years, as indicated. do you believe in terms of the risk analysis versus the risk management, it is safe for us to continue to utilize the oil and

gas finds that are available to our country, to be used as part of an overall energy portfolio, and that we should be able to continue to do this safely? or do you think that the utilization of offshore leases for oil and gas fields should be at some point ended? you know a fair bit about the energy needs of this country and the world. my basic question is, can this be done safely, and if it can, what should we be doing to ensure that it is safe as we do our due diligence? as i made the statement, i think you heard me this morning, unfortunately, the confidence factor by the american public

is near zero as to our ability to do this and to utilize this important source of energy for our country. so could you give me your thoughts on this? >> it goes to the heart of ultimately how we move forward in a comprehensive energy package that is absolutely critical to our country in the 21st century. >> you are asking from my opinion, and i'll be glad to give it to you. from what i have observed, i am a realist, as well as someone who wants to protect our goal. i live there, and the lives of the people who are working on it. at the same time, i know that very scarce oil and gas resources are being depleted. that is a fact. we are left with the deep sea, and we have to find out how to use it and we have to be able to control it and make it safe for our environment. i believe that a very basic type

of regulation is being overlooked by themms. that is, they need to be checking to see -- they asked for the drawings. they should be doing some kind of cursory check, looking at the document lock to see if the drawings have been issued as billed, spot checking some of the drawings to make sure there is no fooling around, and that should take a few days on each rig. if we accomplish nothing else but of that regulation in force, i think you all would have done a tremendous benefit value for this country. there are things that could be but i am not an expert in that. i just think the regulators need to regulate, the oil companies need to know that in the end, there are regulators who are serious about it. >> are you believe it can be done safely? >> i think absolutely can be done safely.

the country that has built some of the biggest dams in the world and space shuttles, i certainly think we could figure out how to drill a hole in the ocean and not have a blowout. >> thank you. mr. sarbanes has a question or comment. >> getting back to the moratorium that has been imposed, he said that with respect to drilling operations that are under way, that the moratorium -- what is it they will do to basically put those in a pause mode? >> depending on where they are at in the drilling operation, there were probably shut the well in and cavanaugh in some way, and then move the rig somewhere else where they can drill. -- cap it off in some way.

i don't know if they are just going to stop the current drilling and put a cap on it or move it totally. i am not totally clear on that. >> how long does it take to take either of those measures, to sort of shut down drilling operation? >> honestly, i just cannot comment on that. i am not close enough to that to give you reliable time. >> as i listened to testimony, what i am worried about is, we now have in everyone's mind the notion that the moratorium is in place, but i am curious as to how long it actually takes before you can say that that is true. you issued a moratorium on monday, does that mean by monday night, all of these drilling

operations have been put into account pause mode? probably not. if it is to our three weeks out, or going to discover later if something goes wrong that while they were in the process of getting the thing shutdown, in the meantime something happened, and if that is the case, then i think bp's drilling operations in particular, someone should be looking right over their shoulder as they are implementing the moratorium, because that already demonstrated a culture that does not seem to put a high priority on this. if those rigs are at high risk, which i have to believe they are, given that culture, then somebody needs to be paying a lot of attention to how the moratorium is actually being implemented. i can see as waking up and

reading a newspaper headline about how some other drilling operations that was supposed to be getting close down has blown up. >> congressman, i would agree with you completely on that. to say we have a six month moratorium by itself does nothing for us. six months from now, if everything goes the way it is, mms will still be doing the same kind of inspections and not checking the drawings. my recommendation would be to see that these inspections are done properly, that they include the views of the design basis drawings and see if they are up to snuff, and see if they are complete. then all the other things they should do as well, the safety checks, pressure checks, and there should be a plan. they can stagger these inspections, and i could see it would take six months to get these things in place, but if nothing changes, in six months, they are right where they work

you are right, is just as dangerous as ever when they start them up. >> is the gentleman finished? you may be right, mr. abbott, but in six months we are supposed to have a new, improved minerals and management services. if in fact that is the case, hopefully the sort of oversight and review that you are suggesting will be taking place, we hope. a don't know if it is worth repeating its four members of the subcommittee, but i hope there is no confusion as to what the elements are of the moratorium that the president has implemented with regards to but deep water and water under 500 feet or less. i know we talked a lot about it today and we talked about at all the other hearings, but the moratorium for six months is for

any wells that were being drilled for production purposes but have not yet reached production stage, or any anticipated new efforts that were going to take advantage and had moved for love and on the process to begin actual drilling exploratory wells. as i understand it, those production wells, as you testified today under atlantis currently operating -- >> there is intended to be 16 eventually. i have been gone a year, so i do not know how many they actually have been. when i left, i think they had four of them operating. they could have fiber six now. there were two new wells being drilled and all this happen.

>> how many wells were in production when you there? >> there were four. >> did you get a chance to review the drawings on the black belts and some of the issues we are dealing with now on the deepwater horizon -- on the blowout valves. >> on the atlantis, on the production side, we had three drawings -- tree drawings. >> it sits on the ocean floor. >> exactly. >> are you confident that the safety aspects on the atlantis were in place? >> another had preliminary well drawings, but none of them had been approved by the engineers, so not very safe if you have not even reviewed the design of them and issued them as bill to the operators. none of them were approved.

>> on the permanent trees, on those that were in production when you are there. >> right. >> i could go on, but i will not. the gentlewoman from wyoming has a question. >> i appreciate you letting me follow up on your line of questioning. i think mr. costa was really getting to the heart of the matter, finally, which is, it seems that -- >> and tell me if you agree with the statement -- safety and the priority that safety is from company to company varies, depending on the culture of the company and the size of the company, be it small, medium, or large, is not an indicator of who may be the safest for the most reliable where the most

responsible, that in fact, you really have to look at each company individually to understand whether their corporate culture is ooe that value safety of people and the environment. so you should not just judge big companies as being more safe and comparabl, but an companiese versa. >> i want to thank you, mr. abbott, for your patience and for your testimony. let's move on to our third panel, who have been waiting a long time. >> thank you all. >> on news makers this week, senator patrick leahy, chair of the judiciary committee talks

about the confirmation hearings for supreme court nominee elena kagan. the senate confirmation hearings begin on monday, june 28. newsmakers, today at 6:00 p.m. eastern here on c-span. >> this week on prime minister's questions, acting british later it labor leader raises concerns with david cameron on the impact of his proposed budget. other members ask questions on uk troops in afghanistan and the rise in night crimes. that is tonight at 9 eastern on c-span. a look now at the latest cleanup efforts on the gulf coast. this is about 25 minutes. lakehe president of the carriers' association here to jones act.the let's start with the definition

of it. while you are talking, we will putn words onhe screen. what does it y? theis section -- of marine act of 1920. it is not just limited to a maritime. that movement has to be carried by an american company. it is to be a u.s.-owned ship operated by u.s. workers? . . it only comes into play within 3 miles of the coast. beyond 3 miles, there is no jones act implications of foreign vessels coming into those waters to respond. for skimmer vessels, there is no

jones act implications within that 3 miles. the federal court in later has the full authority -- federal coordinator has the full authority to allow any foreign flag skimmer to do recovery efforts. the jones act applies to all vessels with that exception. and basically the process is we have a need, is there american flag vessels that capable of the need? ricans get the business. if not the foreign flag ship gets the business. host: has there been any waivers done for this situation in the gulf? request. re was one there s an american flag capability. the american flag vessel got request. 16th, the federal

onscene coordinator has anticipated the need. he ha already waived that limitation. right now there are no limitations on the use of skimmers anywhere in the united states. r those ships that are outside of that three-mile e u.s. or can b foreign vessels. do you know how many there are work operating outsidef that three-mile radius? guest: i don't know outside. i believe the answer is 15 foreign flag vessels are involved in the response. i believe there are 400 to 500 skimmers involved in the sponse. 2,000 to re between 3,000 vesse of opportunity that are adapted with skimming responding. and those are coast guard members. lot of ere's been a criticism of the president for the jones act. that several countries have offered to help but the

administration has turned them away. in the washington times. had mr. obama instead waived the jones act, as did president george w. bush did after hurricane katrina, that would have sum bled a global arm adda of mmrcy. knows how many processing jobs this would have saved. instead, thousands o gulf coast workers still endure a long march from dormant docks to bustling unemployment lines. even now mr. obama could invite clean up the waters tially the carinas and points north if this enters rent, serves around key west, and slides up the eastern board. how do you react to that? >> one, admiral allen has been very clear that there have been no refuseles for any foreign assistance. are assisting, the

norgeance are assisting. multiple countries are. host: but outside of that three-mile. est: up until two days ago that was the case. ago there oays wasn't a reason they couldn't be within that time zone. there's no jonet act limitation. it's waiverable on a specific basis. merchant marine industry has never objected to a specific vessel waiver when u.s. need. let's take a look at the impacts of the waives waiving of the jones act in katrina. the biggest was a foreign flag cruise ship who not only was compensated for lost gambling revenues as if they were under ith a full cruise complement, but the united actually paid to upgrade their miniature golf course on a foreign flag cruise ship. r to take t be bette that money and hire those very americans, those very shrimpers

who can't shrimp. why not hire them to clean up oil? an immigration problem. are like businesses are like people. would we allow a foreign country, a foreign investor to set up shop in cleveland. i'll give you an example. there's an auto company that has just been idled. there they are being parseled up and sold. could you imagine the feeling of those auto workers if a swiss in, bought that facility, remember the deep water horizon is owned by a swiss company. flew the flag of the republic of the marshall islands. says they didn't have to p american wages, didn't have to hire americans, didn't have to abide by our enviral laws and pay -- environmental laws. this is adding insult to injury

to the very people whose lives have bn destroyed by a foreign company operating a vessel owned by a foreign company flagged in a foreign coury operating in the jurisdiction of the united states of arica. ut not wanting bo to upset organized labor? guest: it's kind of ironic that the gulf is the least organized, least unionized segment of the maritime industry. offshore supply vessels and the shrimping and the farming industry are not heavily unionized if at all. i think what it is is if unfortunately people trying to exploit natural catastrophe for political and personal d private gain. is the carrier's association? 25 plus year trade association based in cleveland, ohio. represent u.s. flag ships

on the great lakes primarily moving iron or coal. and limestone, i always say we provide the furnaces and raw materials that make manufacturing possible in north america. ou also serve here object maritime board. yes, ma'am. it's 400 plus maritime and maritime related industries designed to promote u.s. flap shipping and particularly the domestic interest of u.s. flag shipping. n to phone calls. mark on the republican line. you're up first. caller: i've been a life-long republican and i know the a ublicans are calling for waiver of the jones act. trying to undstand what sense that makes. because apparently there's all these american ships standing by willing to do the cleanup. i don't understand what in the e it is to bring ships. guest: well, illingd say there's a huge advantage for those reign vessel owners and

perhaps for bp who could take f the foreign labor, ships, capital. there's a huge costo the americanaxpayer. there's a huge cost to the spill response itself. and, quite frankly, i'm puzzled by the partenship nature of the debate. froml give the congressman florida credit. up his blackberry and his blackberry e-mail from a u.s.-based company who had offered their services and st r equipment to theoa guard and to bp to clean up this spill. by idly re sitting waiting for the call. to me, it just doesn't make any sense to kick the gulf shrimpers and ishermen when they're down and say we need to bring in foreigners wh who can do this job cheaper, allegedly better. i would say the americans are most capable at this spill response. host: pennsylvania. yle, good morning. aller: good morning. i'm a democrat.

i think barack obama should have waived the jones act. i mean, the jones act is good, kind of the way -- host: we're going to talk move orn to the next phoneall. but first i want to get your reaction to abc news has a story quipped rges that were e with vacuums to suck up theil and that the louisiana governor ery critical of the plfings because these barges were sitting idle even though they were already to go, all ready to go and help suck up the oil on the surface. do you know the back story on this and does it have to do with the jones act? guest: i don't. puzzling to me why there hasn't been more equipment deployed. actual y b con reasons, lojistcal reasons. but i can tell you what is not a reason ands that the jones act. there's no limitation. a foreign flag, there's no limitation bei don't miles and it

literally takes a nano second to say i need this equipment, i need it here, now. bring it in. there's no jones act waiver required. of the at is the status u.s. domestic? it's one of the largest in the rld efplt we have one of the most capable u.s. fleet in the world, everything from the ability to move iron or coal to limestone to finished products to petroleum products. host: next pne call comes from north carolina. line.d on the independent caller: i listened to a caller last week, and this is the year the nut job. i don't understand how come we combination of both? i don't mean to offend you. how come we can't do a combination of both? has to be cleaned up. let's use common sense and check these vessels and make sure they

don't have terrorists but use american workers too. o partisan now. i think you are scared because you're acting crazy now. host: about that point. why not accept ships from saudi ther countries tha have experience with oil spills? guest: i agree with what the caller said. t's a combination. it always has been a combination. o until the 16th there were n limitations beyond three miles. now no skimmer limitations ithin three miles. we have over 2,000 u.s. skimmers type vessels identified by the coast guard. currently tre are les than been brought in. there's 1500 other skimmers out there capable with an american already rew that are inspected by the coast guard so that they are safe. brought haven't been in, i don't know. you the jones act is not the reason. host: but the foreign vessels, the foreign skimmers that are in

there right now, why have they been brought in? if there's 1500 u.s. skimmers. guest: i don't know. 15 foreign vessels, i don't know how many are skimmers. couple vessels on scene have flower flag and some of the shuttle -- foreign flag. and in the gulf we use pipeline to transit in the norweigian sea they use shuttle tankers to move the product from offshore to the coast. north carolina, robert democrat line. caller: yes. ok. want to ask a question. have an oil spill 20 years ago in the same spot? host: 20 years a? the spillinking about in mexico? guest: no. the gulf of mexico. it's the same spot. they had dug 20 years ago, they dug down and they went into. bp had a spill there 20 years

ago. that?where did you read caller: it was a book or summer. but i know they had it. host: all right. beach, south carola fred on the republican line. caller: good morning. sir, if there was a -- if there was a truth it would have already blown a gasket. what about the dutch? they offeredhips and the down. states turned them guest: first, i won't take any ill say i'm being thful here. the dutch offered dredgers. it's kind of ironic that they didn't often them to the coast guard or responder. press.fered them via the and the dutch for years have access the u.s. market in dredging. there are american dredgers anding by with similar capabilities. services ffer their through the proper channels

through the coast guard, through responders. if the american dredging fleet can't handle it, i say bring in the dutch. this countty, in this is a difficult situation. n the marines. i now it appears, this is a difficult situation. e need to bring in the foreigners. that's just wrong. host: are you still on the line? caller: i am. host: what's your response? caller: i think it's the esident kowtowing to the unions. he's so distant or deforms && detached or thinks that he can lower disease and heal the earth he can do it by himself. host: when did you firss hear out whether or not the jones waived and the criticism of the psident? eek er: it was about a w after the blowout. host: and what were you watching reading? caller: i was watching tv and listening to the news on fox network. host: ok. so people on the left, democra

are saying that this is an issue by fox news, by the right. respond tohat? caller: how can we stir something up? there's a big mess in the gulf of mexico. there's rightly so, people were outraged that the chairman of bp went yachting yesterday. where was our predent? where was he? he was out on a golf course. now, can you tell me that this is better to go out and play golf and not know what's going on or to be on a boat and not know what's going on? host: what about his comments related to the jones act? guest: let me p be perfectly clear. clean up this oil more than the u.s. merchant fleet. vested as more of a interest. and he oil is cleaned up hopefully it will be sooner than will take, we will be here.

will those foreign flag ships still be here? will our tax money have gone and our wages have gone offshore? we have never objected to a specific waiver for any vessels in this case or others when ere was a lack of u.s. capability. that mean you have objected to waivers, petitions for waivers thus far during the gulf oil spill? have you objected to any of them? one waiver thus far in the gulf oil spill. it was for an operation that a vessel was closer, equally capable, and better able to do the job. instance, the maritime administration said here's a request from a foreign flag vessel, probably the vessel operator or owner or someone related to them. i don't believe it originated with the government. we said we're ready. we want to respond. game. in the so in that instance we objected. host: how much on average do you know are these workers being paid on the different types of gulf coast?

guest: i don't know. t would be the -- u.s. minimum wage or better. ironically, if it were a foreign o limitations. ow as they go. l in what they call the flags of convenience there's some ships . shame they don't, they pay inhumane wages, demand inhumane working ditions. con hin the united states jurisdictions should have to comply with u.s. laws. that should be true on land, air, sea, and water . host: you say the u.s. workers could be being paid minimum wage better. on average, is it better? guest: absolutely. host: how much? guest: let's say ironically the foreign vessels have asked for offshore drilling they can't find american workers to fill specific jobs. you would think that would be a high technical job. at a hearing the other day the majority of those waivers have y for people tole

wash. od and an equivalent worker on one of our vessels makes two to three times what the land-based equivalent of that job is. these are good-paying jobs. they should be reserved for americans. ndendent o, mary, i line. caller: good morning. i wanted to make a comment. i think the republicans are once again showing their partisanship atred of unions by taking up this issue of the jones act. that when t true president bush suspended it after katrina, it was strictly to undercut union wages and a lot of illegal immigrants got help clean up katrina. guest: i'm not sure if there were a lot of illegal immigrants that were hired to clean up katrina or not. i'm not sure if that was the intent of the previous administration. tell you that one of the ot of moneys made a l

because they didn't make money from gambling, they made it off the federal government. possibly a few movements of petroleum products during the katrina waiver. and remember, that was waived for national defense purposes. environment calt city we have going on down right now certainly justifies the use of foreign vellsles they are being used now and the coast guard has allowed the oppornity for more of that. that.'t object to we need to clean up with oil with everything possible. e the first ould hav right to do those jobs. host: dallas, texas. line.at you're next. i'm an engineer and i'm listening to a lot of this information. a lot seems like there's of hand waving goi on. somebody takes one statement and it up for everything. would you guest kindly tell me

exactly how many and what type of foreign vessels are her rather than all these foreign vessels. . ve me some numbers you tell me the facts and i'll tell you the answer. guest: well, unfortunately the coast guard can't tell you how operating in re the outer continental shelf lands because there's not a requirement for the foreign vezzles to report in. i can tell you within the context of the spill response, according to the coast guard, there are 15 foreign flag vessels involved in the recovery operations. valid.t information is i believe, as of the 11th of june. host: are you still there? caller: i didn't know how many. and then let me just say, i'm signed in on democrat but i couldn't care less which one of them they are. i vote for the person. but in any case, why don't some of these people say this fellow

is wrong? you read an article by a reporter or whatever he was in a new orleans thing that was total contra dictted by this man. e come up and 't h say two people run off at the mouth and one of them is wrong. why doesn't the other oneay you are wrong. e on from there. numbers in this whole thing. on.: hold what did the reporter from the times picayune say? caller: you read it. didn't read an article. we were talking to the reporter about the jones act. caller: whatever it was. some journal jist got a piece of and he was dead wrong, entirely wrong by your guest. say, just t didn't else instead of saying let's don't believe that . her guy at all was in the, it was a

reporter. little sick of people two examples and p or the -- screwing it up for the entire industry. hos north carolina, on the republican line. good morning. aller: hi. the fellow before me kind of the same way, i'm a registered republican but i don't care any more. son.voting for the per care what the party. this whole thing with the oil spill has been political spin from day one, and i'm sick of it. everybody telling a different story. absolutely no integrity in journalism any more. it's just thrown out the window. you get a couple stories and they run and you get a couple other stories and they run. e seeing both sides of thing, yes. he truth.t to see t host: let's talk about facts a little bit. how many u.s. vessels are in the gulf responding right now to the

spill? guest: thousands .iterally thousands are between re two,000 to three thou vessel of skimmers and i tnk there are 2,000 more vessels willing to be converted fm shrimpers, pleasure boats t skimmers. that's -- i think the total number is about 5,000 if you can combine government and contractors. that takes weeks toonvert a vessel of opportunity to what they need. the issue in what some crit 86 are saying is a slow response? guest: it takes weeks to convert a vessel to a skimmer. it takes hours to convert a vessel to a vessel of opportunity skimmmer. ou take -- ans is y you will see pictures where they take their outriggers and tow boom behind them and they use a

vacuum system to collect this oil that's caled in that. host: i think we have a picture here. shrimp. guest: that's a vessel of opportunity skimmer. host: and we put that. so this was a shrimp boat and then it was made into wha guest: a vessel of opportunity skimmer. is they're showing there the fishing equipment uses the outriggers to get the boom out, to coral the oil and then uses another system to suck t oil off the water. interesting, there are no limits on foreign flag skimming equipment on u.s. flag vessels anywhere even within that three miles. hours. takes they train the people how to do it and they deploy them. host: but is all of that because of the jones act? guest: no. host: so you have to wait to make a vehicle or to make a into what uptted to. you have to wait and train u.s. people to do it sfplt that

because of the jones act? guest: no. he reason is because we ha occupational health and safety don't want them hurting themselves in the response. to make sure nt that they are doing more good harm. if you are mucking around in a >> he was very adventurous. when he was in america, he was very an interest. >> leo damrosch, tonight on "q&a". >> this week on prime minister's questions, acting british later -- labor leader gary harmon raises concerns with prime minister david cameron on the impact of his proposed budget. other members as questions on uk troops in that banafghanistan ae

rise in night crimes. that is tonight at 9 eastern on c-span. >> center patrick leahy, thank you for being on newsmakers this week. joining us is seth stern of congressional quarterly. >> i wonder if he could comment on elena kagan's writings from about 20 years ago about the confirmation process, where she talked about how nominees avoid answering a lot of questions. you think it would be appropriate for her to respond to a question about whether roe vs. wade was correctly decided, and if not, what is the point of these proceedings? >> you asked several questions. ith