beautiful country like america that has freedoms and rights and everything else afforded to its citizens. i just cannot believe why the rich should not pay? they would not be rich if they were in any other country. where could they earn billions and billions of dollars and feel like they have not obligation to give back to the man and the people that afforded them the opportunity? host: thanks for the call. . it may say something revolutionary about the debate in this article. the piece this morning in the latest edition of the

"washington journal." here is the last word from dallas. caller: i want to thank c-span for being there for me. i listen to you every morning. i do not understand why you had someone on the right to represent -- to talk about the issues of shirley sherrod. wouldn't you have someone else beside him to give a more balanced view? host: we are focusing on the conference taking place, that is why we did that today. .

also tomorrow morning, a round table discussion on race relations in america. that's all tomorrow morning. and matthew lee with an assessment of hillary clinton's trip to afghanistan, also her recent trip to south korea on the situation in north korea

and wrapping up a conference taking place this weekend in vietnam. washington journal every day 7:00, 4:00 west coast. thanks for joining us on this saturday morning. enjoy the rest of your week. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

former bush mrs. secretaries gale norton and kent thorzoifplts the joint hearing examined the interior department's history of regulating offshore oil and natural gas exploration focusing most of the time on the mccon do well, the site of the deep water horsen explosion. discussing the oversight of offshore drilling under their watching. this isn't about two hours.

last week we heard encouraging news. the oil is temporarily under control. despite our relief that the flow of oil has abate, the consequences of the spill continue to mount. 11 men lost their lives on the day that deep water horizon drilling rig exploded. the four states that border the gulf of mexico have suffered terrible economic and environmental devastation. that is why we're continuing our investigation. this is the fourth hearing of the oversight investigation subcommittee has held in the eight hearing overhauled in the energy and commerce committee. our second hearing was a field hearing in new orleans where we heard from the widows of two men who died on the explosion as well as shrimpers and other

small business owners who have suffered from the environmental catastrophe that followed. our third hearing identified 5 key weld design decisions relating to casing and cementing that increased the risk of a blowout. bp made a series of poor judgments. the company took one short cut after another in order to save time and money. and when the blowout occurred bp was hor i haveically unprepared. today the subcommittee and if energy and environment subcommittee are joint holding this hearing to examine the conduct of the regulators who have overseen oil and gas development in the gulf of mexico. there has been a per vaseive failures by regulators to take action to protect the safety of the environment and individuals. as oil and gas companies new incentives to drill deeper in the gulf of mexico. the number of producing deep

water wells increased from 65 in 1985 to more than 600 in 2009. but the number of federal inspectors working for the minerals management service mms has not kept pace with the number and complexity of the wells and dinsns inspesketors must travel. mms has 65 inspectors and 58 some 20 years later. currently mms has 60 inspectors to inspect almost 4,000 fa sits. inspection has not been a priority. the dove interior also backed off when the oil and gas industry objected to proposals to strengthen government regulations. reports prepared in 2001, 2002, and 2003 recommended two blind shams and questioned the liability of their backup systems. yet, regulations finalized in 2003 did not require a second

blind sheer ram backup systems on vops or even testing of backup systems. the same rule making identified poor cementing practices as one of the main primary causes of sustained casing pressure on producing wells. but in oil and gas industry coalition opposed mandatory requirements and the department optted against any prescriptive requirements. some helpful changes were made by secretary salazar and the obama administration. the abuse program was phased out. stronger regulations were proposed. but these changes were more cosmetic than substantive. for the deep water horizon and the bp well it remained business as usual. i want to thank former secretaries for appearing today. i hope they will address what went wrong under their tenure and what less snd can be learned. and i want to thank secretary sals czar for appearing before the committee. he has proposed many significant changes to the

minerals management service now called the bureau of ocean regulation and enforcement. i would like to hear more about what he has planned and how he will ensure how these changes make a real difference. i also want to extend my appreciation to chairman markie. our subcommittees have worked clabtively throughout this investigation and i thank him and chairman waxman for their leadership in this area and with respect to the blowout prevention act that we reported out of committee last week. >> early on we had the executives from bp, transoaks and hall burton here in front of us and i was dismayed by all the finger pointing i saw. it even rose to the lavel of

the national consciouses in where jay leno referred, what a nice of disgrace all the executives pointing. president obama's had enough of it. no more finger pointing and then he went out and blamed bush. that's where we are this morning. but this hearing does come at a critical time. i am grateful we're able to refer to the oil discharging in the gulf in the past tense. we hope that stays in the past tense. we have had encouraging news that it seems under control. there are serious environmental and economic impacts to confront in the gulf. bp caused the spill. some of the damage relates directly though to the administration's decision making in the aftermath of the deep water horizon explosion. most significantly, as we convene this hearing and people continue to struggle mightly to clean up after the bp spill the department of interior has made decision upon decision in recent weeks that we are told may kill upwards of 20,000 jobs in the gulf coast energy industry. some of this new wave of

economic destruction is already occurring. this is where we're hitting people when they're down and when they need it the least. the governor of louisiana this part saturday wrote a powerful op ed in the "washington post" that i would like to submit that for the record. in this editorial the governor describes what he sees as an effort by the secretary of the interior to impose a second economic disaster on the people of louisiana. this second economic disaster is one of the most pressing issues before us but there are other questions concerning the department of interior's decision making that we must explore today and the person most able to answer these questions and provide us the necessary documents is the current secretary of the interior, ken salazar. so i appreciate very much finally having an opportunity to ask secretary sals czar about the department's role of the handling of the deep water horizon incident. >> i understand the majority wishes to use the review mirrors as is the examining

lens to talk about this zeafert. chairman markie explained so that we may understand the totality of the department cls tributeion to the deep water horizon disaster. for this reason, we will hear this morning from two former secretaries of the agency both from the bush administration and in fact we're only going to question former secretaries from the bush administration. we're not going back to question secretaries from the clinton administration. but we're grateful for the voluntary participation i might add of gale norton and dick kemp thorn. i look forward to their perspective both as secretaries and state elected officials. but i question whether now as private citizens they can really provide the committee information as full and complete as we could otherwise obtain through agency documents through the current secretary of the interior. today secretary salazar will appear on a second panel. the fact that a sitting cabinet member follows two interior

secretary past, i don't think he's here, i don't think hezz listening to any of our opening statements unless he's tuned in with rapt attention to c-span so he should be here. so mr. salazar, if you are watching on c-span please come to the committee room. we need you here. the american people need you here. the people of the gulf coast of louisiana need you here. oversight means oversight of the administration in power, not past administrations. yet, the fruits of the committee's executive branch oversight relating to deep water horizon that's been underwhelming. committee requests for documents have amounted to some 2,000 pages. a few e-mails, internal memoranda, and other information. i hope we press for more cooperation, mr. chairman. by contrast, majority with minority support has effectively and aggressively investigated the companies associated with the disaster. some 120,000 pages of documents

all in the middle of one of the largest cleanup operation. this is asymmetric oversight and prohibits the committee's ability to get the full facts and circumstances. it inhibts our ability to understand current and ongoing actions by this administration in responding to this oil spill. the majority tries to trace the deep water horizon back to the bush administration and has raised technical issues in its memo issues to apply that the problems can be traced to that administration. but the majority knows all available e evidence suggests the disaster resulted from the failure to follow existing regulations and best practices not that george bush prevented a second set of sheer arms. we heard from the two ladies who lost husband, they said we don't need more regulations but we do need someone to oversee and insist that the regulations that are already in place are in fact followed.

the fact remains, it was under secretary salazar that bp's initial explore ration plan was reviewed and approved by the minerals and management service. it was under this administration that bp's permit to drill the well was granted and all the inspections were approved leading utch to the explose. we now observe the secretary making decisions to restructure the agency in the middle of an environmental crisis. so we had a single spinal cord response, a single spinal cord sin aps when we should have cortcal. how have these actions affected the agency to respond to the crisis? do they inhibit the secretary to ensure safe well drilling operations? we also see the secretary appears to -- >> mr. burgess i'm going to ask you to finish. >> because of the time it's taken to get the secretary here mr. chairman i beg your indulgence to let me conclude. >> mr. burgess, we've got a

large group here. we're not going to let everyone go over time limits now. you're already a minute and a half over. i asked you to finish. >> the question we need to answer is what is going on at the department of interior now really based on sound agency, safety analysis based on what we know about experience. certainly we should try to gather information on past actions that contributed to the current response problems. i would like to understand whether the company, the oil companies had to rely on faulty government computer models and what the secretary plans to do about improving those models.

>> i thank you mr. chairman for your leadership and chairman waxman's leadership on this issue. i do believe that president obama is wise in the maintenance of his moratorium and altered deep waters if we are going to drill in ultra deep waters we should ensure that it is ultra safe and in the event of an accident that a response would be ultra fast. right now we are not sure that is the case. that is why the president is wise. oil is not the result of spontaneous generation. the conditions for its creation are set millions of years before. organisms die and decay. heat, pressure, and time do the rest. just as with the slow creation of fossil fuels, the conditions that created the bp disaster in the gulf were put in motion many years ago. increasing pressure from the

oil industry to relax regulations and the willingness of regulators to take the heat off companies did the rest. ten years before the bp oil spill in january of owe, a directive issued by the department of interior under the clinton administration stated that the methods used to model spills, quote, are not adequate to predict the behavior of spills in deep water. and that a new model would be required. unfortunately, this never happened. the bush administration never followed through. nine years and three months before the bp oil spill, just two weeks after taking office, president bush created the cheney energy task force. the task force met in secret largely with representatives of the oil gas and other energy industries. a little less than nine year before this spill on may 16, 2001, the cheney energy task force submitted its report.

the report asserts that explore ration and production from the outer continental shelf has an impressive environmental record. the report further states that existing laws and regulations were creating delays and uncertainty that can hinder proper energy exploration and production projects. we are warned that substantial economic risks remain to investment in deep water and that the interior department must therefore be directed to consider economic incentives for environmentally sound offshore oil and gas development. with the cheney task force report, the first condition for this disaster rewriting the offshore drilling policies to prioritize speed rather than safety was set in motion. eight years before the spill, the interior department began issuing regulations that would extend and ultimately expand the royalty-free drilling given

to oil companies for offshore oil and gas production. but financial incentives weren't enough. so the bush administration's interior department made the choice to assert that a catastrophic spill could not occur. seven years before the spill, the bush administration exempted most gulf of mexico leaseholders from having to include blowouts scenarios in their oil and gas exploration or production plans. oil companies were also no longer required to say how long it would take to drill a relief well and how a blowout could be contained by capping the well. bp therefore included no such information in its plans for the deep water horizon well. three years to the month before this smill, in april of 2007, the environmental impact statement approved by the bush administration for drilling in the gulf of mexico said that since blowouts are quote rare

events and of short duration, the potential impacts to marine water quality, quote, are 3409 not expected to be significant. the analysis concluded that the most likely size of a large oil spill would be a total of 4,600 barrels and that, quote, a subsurface blowout would have a nedgible impact on gulf of mexico fish resources or commercial fishing. a few months later, in 2007, in the bush administration's interior department, it completed another environmental review and issued, quote, a finding of no new significant impact. no further environmental review was needed according to the bush administration. on april 20, 2010, the regulatory house of cards erected over an eight-year period by the bush-cheney administration collapsed with the explosion on the bp deep

water horizon rig. today, we will hear from the nation's last three secretaries of interior who have presided over our nation's leasing of offshore oil and gas since january 2001. i welcome the secretaries and we look forward to their testimony. >> thank you mr. markie. mr. you wanten opening statement 5 minutes. >> thank you, mr. chairman. what happened on deep water horizon rig was truly a national tragedy. we all hope that the recently installed well cap will hold and not an ounce of oil will leak from that well ever again. once the happens, our shift needs to get folks back to work. citizens on the gulf don't need to be further burdened by job killing policies being pushed by the congress or administration. of course we do want answers. we want all the answer. we must work to ensure a disaster like this never happens again. since that reg exploded and

millions of gas leaked into the gulf, our posture has been weakened. a joint investigation into the causes of the blowout explosion and spill are currently being conducted by the coast guard and mms. in addition, president obama announced a presidential commission that will investigate and report. the team of engineers tapped by secretary salazar to examine what went wrong on the horizon rig recently wrote, we believe the blowout was caused by a complex and highly improbable chain of human errors coupled with several equipment failures and was preventable. the petroleum industry will learn from this. it can and will do better. we should not be satisfied until there are no deaths and no environmental impacts offshore ever. however, we must understand that as with any human ender there will always be risks. end quote. secretary salazar pointed to this team of engineers to ration lies the moratorium and

only did the engineers disagree, so did the courts. the court has overturned the salazar drilling moratorium a number of times. the gulf accounts for nearly a third of the united states oil production. knee jerk reactions and finger pointing won't make drilling any safer and certainly isn't productive for the citizens of the gulf. let us learn from this awful mistake, fix the problem, clean up the gulf, and move forward to fix our ailing economy and create private sector jobs. i yield back the balance of my time. >> thank you, mr. you wanten. mr. chairman, chairman waxman for an opening statement. >> thank you very much for holding this joint subcommittee hearing. i think it's an important hearing. during the last three months since the deep water horizon explosion and blowout this committee and its subcommittee has held seven hearings and those hearings have focused on the actions of bp and other oil and gas companies.

and we learn that bp repeatedly made dangerous choices to save time and money. transoakses plowout preventer had a dead battery a leaky high draudic system, and we learned that the entire oil industry is unprepared to deal with a significant blowout. today we're going to examine the role of the regulators. we will learn that the department of interior under both president bush and president obama made serious mistakes. the cop on the beat was off duty for nearly a decade, and this gave rise to a dangerous culture of per misiveness. secretary salazar has testified before several committees and we welcome his appearance today. what makes this hearing unique is that we'll be hearing from two of his predecessors, former secretary gale norton and former secretary dick kemp

thorn. and i welcome bods of them to our committee. this will allow us to examine our history of federal drilling regulation. in many ways this history begins with vice president chain eas secretive energy task force initiated during president bush's second week in office and for weeks it met privately with oil and gas executives and other industry officials whose identity to the administration stedfastly refused to disclose. four months later the vice president released a report describing the new energy strategy for the administration. the report directed the interior department to, quote, consider economic incentives for environmentally sound offshore oil and gas development. as recommended in the report,

president bush immediately issued an executive order to expedite projects that will increase the production of energy. secretary norton let the implementation of the bush strategy for the department of interior, promoted new incentives and royalty programs. but she failed to act on safety warnings about blowout preventers and she rejected proposals to strengthen standards for cementing wells. those decisions sent a clear message. the priority was more drilling first and safety second. secretary norton left amid the scandals involving jack abenoff to work as general counsel tor shell, a major oil company. her successor oversaw the lease sale of bp of the future mccon do well and secretary oversaw the deeply flawed assessment of

flawed impacts an assessment that did not anticipate the possibility or impacts of a catastrophic subsea blowout. as a result of these environmental assessments, bp did not have to includ an oil spill response discussion, a site specific oil response plan or a blowout scenario in its exploration plan. in many ways, congress was complicit in this oversight. the energy policy act of 2005 granted royalty relief and subsidies to the industry but did not strengthen regulatory requirements. as a democrat, i hope if obama administration would do better and in some ways there have been reforms. the scandal ridden royalty in kind program was canceled. secretary salazar instituted

new ethics programs, and in the department's budget secretary salazar requested more inspectors for offshore facilities. but there is little evidence that these reforms changed the laysa affair approach of mms in regulating the bp well. mms approved the plan and changes that we have questioned during our investigations. the april 20 blowout was a wackup call for this administration and for congress. secretary salazar's now reorganized mms, issued a po 30-day safety report, developed a plan to implement the organization and asked the department ig to examine cuppability and issue suspensions of new high-risk activity until there is evidence that blowout preventers are safe enough and the oil industry is capable to respond to another spill. these actions are long overdue but they are necessary steps in

the effort to revitalize drilling regulation, and i welcome this chance to learn more about them. chairman stupak and markie, thank you for holding the hearing. and i hope we can learn the extra part of our investigation as to what the regulators were doing during this 10-year period. >> thank you, mr. chairman. mr. barton for opening statement, please. >> i thank you both chairmens and the full committee chairman waxman, for this hearing. i welcome our two former cabinet secretaries who are both friends of mine. we appreciate you all voluntarily coming today. three months ago today, an explosion tore through the ship. it killed 11 men. it has filled great swaths of the gulf of mexico with crude oil. as the spreading spill has focused the nation's attention on what we need to do to stop it and prevent it in the future, our job here in this

committee has to conduct a bipartisan investigation to identify what went wrong and try to figure out if there's a way that we can help prevent it in the future. last thursday, the full committee put together some of the results of the fruits of our investigation to pass out the blowout prevention act of 2010. this bill passed this committee 48-0 on a bipartisan basis. it will improve safety, it will protect the environment, and yet it will allow responsible drilling to go forward in the outer continental shelf. having said that, we still have a lot of work to do. as has been pointed out right now it appears that the leak has been stopped, but we certainly haven't stopped the economic and environmental harm in the gulf of mexico. i believe that this committee's bipartisan oversight is providing the most powerful

search light for getting to the frutesdz so that we can address in the very near future what additional steps in addition to the blowout prevention act that we passed last week need to be done to prevent this tragedy from ever happening again. we have found and spotlighted a number of disturbing bp decisions in some cases nondecisions that were made or not made at critical moments that if made differently perhaps this accident may not have occurred. having said that, we need to remember that the drilling in the outer continental shelf in federal waters is a regulated federal industry. and today, finally, we're going to begin to look at the role of the regulator, in this case the department of interior. we're going to see if perhaps past decisions and current practices have led to the accident that we all wish had not occurred. wemt to understand why the

department has allowed bp to do what it did, was the department really watching what was going on at the drilling operation? keep in mind that the blowout preventer that failed on april 20 passed inspection only two weeks before. americans want to understand what the obama administration's response to the oil spill was and is both in terms of what it did not do to stop the spread of oil and what it is doing right now apparently to stop energy production. it was the obama administration not the bush administration that didn't waive the jones act so that some of our foreign friends could bring in their oil spill equipment. it was the obama plrks, not the bush administration, that wouldn't waive certain environmental impact studies so that our friends in louisiana and mississippi and alabama could put up some berms that could have prevented the oil from reaching their beaches.

it was the obama administration, not the bush administration, that made the decision not to transfer pre-positioned equipment in other parts of the country for oil spills to the gulf of mexico to help in this spill. it was secretary salazar, not secretary norton or secretary kemp thorn that either made or didn't make those decisions. what we have right now is a worst-case scenario. the folks that depend on their lielyhood for tourism on the beaches of the gulf are not having the tour yirtses come because tour yisses are afraid that the beaches might be soiled. the people that depend on their livelihood for fishing and recreation in the gulf are not allowed to fish or reck rate in the gulf. and the people who depend on their livelihoods by drilling and working on these offshore rigs and the service facilities that service them are out of

work because they're shut down. so we kind of have a lose-lose-lose situation, mr. chairman. we hope in the very near future that we can put it together in a win-win-win situation. the majority has invited former cabinet secretaries norton and kemp thorn today and we thank them for voluntarily appearing for the transparent purpose, in my opinion, to focus blame on the bush administration. but as i have pointed out, the decisions and nondecisions that are being made and have not been made are not being made by these two individuals. they're being made by secretary salazar, president obama. so i would hope that we will focus most of the attention of today's hearing on the current cabinet secretary and not the past cab cabinet secretary. i see my time's expired, mr. chairman. i will put the rest of my statement into the hearing but thank you for holding this hearing. >> that concludes the opening

statements. we have our first panel of witnesses before us. we thank them for being here. we have the honorable gale norton who was the secretary of the interior from 2001-2006. and we have the honorable dirk kemp thorn who was the secretary from 2006 to 2009. thank you for being here. we appreciate your being here and you have appeared here voluntarily, and once again we appreciate that. it is the policy of this subcommittee to take all testimony under oath. please be advised that you have the right under the rules of the house to be advised by counsel during your testimony. do either of you wish to be represented by counsel? ok both indicate no. then i'm going the ask you to please rise, raise your right hand and take the oath.

>> you are now under oath. we begin with a five minute opening statement. madam secretary, we'll begin with you. >> thank you. mr. chairman, and members of the subcommittee, i am deeply saddened and appalled by the deep water horizon disaster. it is violetly important that americans determine the causes of accident and that we take steps to ensure offshore production can continue safely. the explosion and oil spill have been a tragic disaster with unprecedented impact on the affected families, communities, and eco systems. it is disturbing to watch the damage unfold. my thoughts have been with the people of the gulf region. as i consider the deep water horizon disaster, i am constantly reminded of my earliest exposure to accident investigation. my father, who devoted his career to aviation, was occasionally involved in investigating the causes of crashes of small planes. i learned about the national

transportation safety board and its process for unraveling accident causation, then feeding that information back to manufacturers and pilots. as with the devastating aircraft crash, we need to objectively seek the truth of what happened in the gulf of mexico so we can learn lessons that may prevent future tragedies. all those affected deserve an analysis of the problems. emotional and hasty reaction should not form the basis for long-term policy whether flying airplanes or tapping offshore resources. getting the balance right requires knowledgeable professional inquiry. it has been nine years since i took the helm of the department of the interior. i am not as converse nt about offshore issues as i once was and i will only mention a few things at this point in time. the importance of domestic energy production was brought shockingly into focus by the terrorist attacks of september

11, 2001. it is risky to rely on unfriendly nations. but the attacks transformed that risk into a manner of grave national security. offshore petroleum's role as the source for roughly a third of american production gave it an important focus. without question, the most powerfulo cs experience for me was the 2005 hurricane season. over 4,000 offshore platforms were operating in the gulf of mexico when hurricanes rita and katrina pummeled the area. safety and spill prevention measures were put to a severe test. amazingly, despite two category 5 hurricanes, the amount of oil spilled from wells and platforms were small. the shutoff valves located at the sea floor operated as intended. they prevented oil from leaking into the ocean floor when the platforms were destroyed.

there was one weakness in the performance. the hurricanes dislodged 19 mobile drilling rigs from their moorings. once cut loose they driftted for miles, dragging pipelines behind them and endangeering other platforms. the amount of oil released was relatively small but a significant problem had been revealed. i brought mms and industry together to figure out a solution. after my departure from interior, mms completed this process and strengthened its mooring standards. we found out about the problem and solved it. there has been a great deal of media attention to the ethics of the minerals management service. it pains me to see the villification of mms and its employees. i want to speak in defense of the vast majority of hard-working and professional men and women in the minerals management service. as revealed by inspector general reports after i left the department, a handful of

employees blatantly violated conflict of interest requirements. their actions were wrong and unacceptable. but mms has over 1700 employees. the very few misbehaving employees have been blown out of proportion to create a public image of the mms as a merry band of rogue employees seeking favor from industry. the public servants i encountered were entirely different. i will never forget a meeting with the mms employees after hurricanes rita and cailt that na. they were in temporary he had quarters because their new orleans he had quarters was no longer available. they were crammed into a couple of rooms make shift desks and working hard to keep up with the demands that were coming through at that time. approving pipeline repairs, addressing environmental and safety issues, expediting the

requests, trying to regulate with common sense in incredibly difficult circumstances. these employees coped with submerged homes, families who were in limbo and essentially homeless. but they were working out of dedication serving the country, serving their gulf coast communities. these are the people who represent the minerals management service to me. industry and offshore energy supporters were always conscious of the political reaction and industry setbacks occasioned by the 1969 sant barbara oil spill and reinforced by the exxon valdizz. no one wanted to repeat those failures so industry had an incentive to maintain strong environmental protections. that, coupled with regulation, encouraged careful planning and adequate safety precautions. that formula worked well. three months ago and for the many years preceding the

regulatory and response structure was based on a past history of success. since 1980 the largest spill from a blowout in federal waters was only 800 barrels. all of the plans under both republican and democratic administrations were adopted against this backdrop of safety. unfortunately, now the federal must establish future policies in the aftermath of a worst case scenario beyond anything that most people contemplated. i hope congress will follow the process that has served us so well, study what caused the accident and then adopt new or additional procedures on that basis. offshore regulators need to have a good working relationship with industry to understand what they are regulating, and to avoid imposing one size fits all rules that ultimately decrease safety. for half a century, the gulf of mexico has produced a third of our nation's oil, a huge

economic benefit to america with an impressive safety record. the federal government should not throw out a system that was so successful for so long without understanding where the problems really are. thank you. >> thank you. secretary kemp thorn, opening statement, please, sir. >> mr. chairman thank you very much to all members of the committee. i have testified before congress as the united states senator, as the governor of idaho, as a cabinet member. thts my first time testifying that i've been in the elevated position as a private citizen. responsibilities as secretary ended at the department of interior 449 days ago. 90 days ago, the bp oil spill exploded into the nation's consciouses in. the accident dp's oil rig caused 11 families to bury their sons, husbands, fadsers. the accident injured 17

workers, forced fishermen and others to lose their livelihoods, engulfed the gulf of mexico with oil slicks that now car coastal beaches and marshes in the buyo. out of respect for congress and out of respect for these two committees i accepted your request to talk but about the tragic oil spill. in light of leaving interior 18 months ago and without access to interior staff or briefing documents, i prfass all of my remarks with the understandable caveat as i recall. until now, i have declined multiple media requests to comment in the belief america was best served by letting those in charge to focus on job number one of stopping the oil spill. as you can appreciate i cannot find any insight about the exploration plan and the many dimensions of the application for the permit to drill which cumnate in deep water horizon accident because these were

evalwutted and approved after i left interior. for 40 years, prior to this accident, the interior department and the industry it regulated has f had a remarkable record of success and safely developing and producing energy from oil platforms and drilling rigs. secretary norton and i took note of this remarkable safety record and so did our successor, secretary salazar. before the bp oil spill, secretary salazar on march 31, 2010, announced he had revised the 2007-2012 five-year plan, calling to develop oil and gas resources in new areas while protecting other areas. on the issue of safety, secretary salazar said, gulf of mexico oil and gas activities provide an important spur to technological innovation and industry has proven that it can conduct its activities safely. that statement, mr. chairman,

is consistent with my own impressions while serving as the secretary of the interior. by requesting me to attend, you're asking about the record the bush administration on offshore energy development. i offer these perspectives from my experience as secretary. this hearing giving me an opportunity to address an issue about the ethical culture at the minerals management service. let me address the issue of ethics head on. shortly before leaving office i was summoned to congress to testify about unethical conduct. on september 18, 2008, i unequivocally told congress that the conduct disgusted me and there would be prompt personnel action. because that action was under way, i was advised by lawyers at the department of interior that i could not discuss it in detail. now i can including the fact that we fired people. it should be part of this

record that johnny burton who had been director during secretary norton's tenure has publicly stated that she personally requested the ig to investigate. it should also be part of this hearing record that those involved were fired, retired, demoted, or disciplined to the maximum extent per misible. the facts are that all of these actions were taken before i left office. i would add a statement that secretary devainy said in testimony on september 18, 2008, and i quote. i believe that the environment of mms today is decidedly different than that described in a reports. unquote. and i agree with the ig that 99.9% of do i employees are ethical, hard working, and well intentioned. mr. chairman, members of the committee, they are part of your team. there are good people there.

i received another report critical of the mms service royalty program. again, i took action. the current administration put stock in the report reviewing mms. i would like the record to note that i personally called former senators jake garn, a republican, and senator bob kerry, a democrat, and asked them to conduct a bipartisan, independent and thorough examination of this program with no preconceived outcomes. they did with other talented experts. they issued a report that recommended 110 actions to improve the program, including, as i recall, 20 recommendations directly from the inspector general's office. we methodically implemented all the recommendations that could be done while still in office, which as i recall was about 70. mr. chairman, i would ask that the testimony of inspector general earl devainy and i gave to congress in september of 2008 be made part of the record

as well as the report. >> without objection, it will be. >> also, while i was secretary of interior not once but twice increased royalty rates that companies paid for energy produced from deep water offshore leases. in 2007 increased the royalty rate from 12.5% to 16.67%. in 2008, the royalty rate was again increased to 18.75%. this is a 50% increase in royalty rates paid by oil companies for the right to produce oil and gas from federal waters. i can report to you that these increases came as a result of a conversation i had with president bush. he believed and i agreed that a 12.5% royalty rate was too low. i would also note that not once but twice budgets that i submitted call for congress to repeal sections of the 2005 energy policy act that allowed additional cost.

as secretary i was required by the outer continental shelf lands act plan covering the years 2007 to 2012 for offshore oil and gas development. once we finished that plan it was required by law to be submitted by congress for a 60-day review. congress had the power po to reject that plan. congress did not. in fact, as i recall, i don't think any legislation was introduced calling for the plan to be rejected. the plan is here. this plan was developed after extensive consultation with members of congress, state and local officials, tribal officials, industry and environmental organizations. we received comments from more than 100,000 interested citizens, 75% of the comments received from the public supported some level of increased access to the domestic energy resources of the outer continental shelf.

my five-year plan, mr. chairman, was developed with both draft and final environmental impact statements. relevant fact is that, along with environmental assessments and oil spill response plans were based on the probability that a significant oil spill was small. the environmental impact statement used historical information and models. when the 2007-2012 five-year plan was written there had not been a major oil spill in 40 years. one very real consequence of the deep water horizon accident is that these historical assumptions will be forever changed. an additional significant development was taking steps to further the work that secretary norton set in motion to develop offshore wind, wave, and ocean current strategies.

mr. chairman, i would conclude with two thoughts. one, as you appropriately deal with this issue, and i appreciate the tone which has been set by so many of the members of this committee, that this is an opportunity to bring out issues that may be before us, to find out what work did not work and what is the path forward. but i would encourage for all officials working on this to keep in mind the great resources that you have at the states with the governors in those gulf coast states, proven leaders who are pragmatic and want to be partners. they also have solutions to this. and second, the consequence of the deep water horizon accident is that it will forever change the offshore energy industry. never again will cabinet secretary take afse and be told that more oil seeps from the sea bed than has been spilt from drilling operations. never again will decision makers nont include planning

for events that might be low probability events but which in the unlikely event they occurred would be scaltstrosk. thank you, mr. chairman. >> let me thank both secretaries for your testimony and thank you again for voluntarily appearing. caution to members. we had 34 members here and if we all take five minutes each that will take us close to the three-hour limit. so i will push members to keep your questions within that five-minute range. otherwise well have a run away committee as opposed to a run away well. let's begin with chairman waxman for questions, please. >> thank you very much, mr. chairman. i will abide by your anmonition on the time. secretaries, i have some quess about the goals of the bush administration's national energy policy. president bush and vice president cheney's task force suggested several ways to boost offshore production of oil and

gas but cheney task force recommended that the interior department offer new economic incentives to encourage industry to pursue offshore oil and gas development. these incentives included a proposal to reduce the royalties private companies have to pay the american people when they take oil and gas from public land. the task force also recommended that the interior department identify and reduce impedments to explore ration and production both onshore and offshore. secretary norton, were those components of the bush energy plan? >> to the best of my recollection, man, as to economic incentives we employed the economic incentives on royalty relief that were put in place -- >> my question is that general statement of that energy plan was to provide incentives and to reduce impedments in order

to develop more energy supplies. isn't that what the plan was all about? >> we were facing a very serious energy crisis at that point in time -- >> i'm not asking for justification. there is nothing wrong with that. >> we were looking to increase the energy production. >> immediately after the task force released its report the president issued two executive orders. this task force that the vice president cheney chaired was a subject that i know a lot about because i was trying to just find out who he met with. we never even got the lists of the scuteives from industry that he met with. i don't know what the secret was all about but we had to go to the supreme court to try to get that information. so the task force released its report. then the president issue two executive orders intended to increase energy production. one of these orders required agencies to compile for every rule making an analysis of whether the rule would adversely affect energy supply. the other order ordered

agencies to expedite and accelerate the completion of nrning related projects. secretary norton, in august of 2001, steven griles, your deputy secretary, wrote a memo to the council on environmental quality stating that the department, quote, is fully commited to splaying a role in this effort, end quote. secretary norton, during your tenure, did the department of the interior support president bush's policy of expediting drilling in the outer continental shelf? >> we took many actions looking at what could be done to make sure that the permitting in place and so forth was done in a -- >> you were trying to -- was that the policy of the administration. weren't you? >> there was really not much change as to theo cs. we looked primarily at onshore areas and the permitting process in those areas. >> ok. i have limited time but the

answer is yes, you were trying to do this within your purview. secretary kemp thorn, when you led the department isn't it true that the bush administration plan and the resulting energy policy act of 2005 specifically encouraged deep water and ultra deep water drilling in the outer continental shelf? >> i believe so. >> what concerns me is that in the task force report in the president's executive orders, i have no problems with those reports in themselves, but i don't see any conversation for the importance of improving drilling safety while we encouraged more explore ration. committee staff reviewed your testimony each of you gave to the congress when you were secretary and found no discussion of strengthning safety standards for blowout preventers, no discussion of best practices for well design, and no discussion of how we ensure that industry can respond to a large oil spill. both of your testimonies talk

about the safety record of offshore drilling but it seems one thing we learned is that deep water and ultra deep water drilling might involve different risks than shallow and it wasn't appropriate to rely on assurances based on shallow water drilling experiences. i'm not trying to lay the deep water horizon disaster at the feet of the bush administration. in fact, i look forward to hearing from secretary salazar on some of these same quess. but i'm trying to understand how we got here today and how congress and the regulators accepted the industry's promises of safety as we press full steam ahead into the deepest waters of the gulf of mexico without verifying that industry could deliver on its promises it's as if we're going to raise the speed limit to 100 without how to improve air bags. the american people deserve

answers and an energy policy that conversation the need for better safety rules as industry takes greater risk to find oil and gas. thank you, mr. chairman. >> thank you, mr. chairman. mr. barton for questions, please. >> thank you, mr. chairman. i'm going to try to hold it to the five minutes just as chairman waxman did. i might point out if we followed regular procedure and had the incumbent cabinet secretary here first where most of the questions are, we wouldn't take up as much time with two prior cabinet secretaries who have no official standing. but that's just me kind of saying we ought to use the regular order instead of this unusual order. but having said that. we're glad you two folks are here. . .

i do know that president bush waived the chose act as quickly as possible after hurricane katrina so we could bring in assistance from either countries. >> the magnitude of this catastrophe would suggest that you should be able to a re all

assets made available to you. i do not believe that is what occurred. >> we have also given authority to waive certain epa environmental review requirements in times of emergency. several governors of the gulf coast, louisiana and mississippi ask for such a waiver. it has not been implemented until you had the ironic situation with the coast guard attempting to facilitate the creation of burns to prevent non of oil from reaching the beaches. the epa was refusing to grant a waiver because of some potential impact that was undone at the time. do either of you have a comments on why the obama administration would not listen to and work with the governor's

and states on this issue? >> a drawing from the region and katrina experiences, we tried to do everything we could to move ahead as quickly as possible with common sense. i really cannot comment about the aspects of the current administration decision making. i am not there. i do not know the details. >> if i may add, i referenced in my comments that we need to utilize very talented people. when i was governor of idaho, and we had katrina and rita, there were governor's that on a moment's notice would say the need they might have, and i could implement the national guard. team in the 30's that would leave, a convoy that would go we

move faster than the federal peroxy was moving. we are still the united states of america. working together can yield great results. i urge the partnership with the those in the gulf coast region. >> there is one more question i want to ask. much to my dismay by some of the friends and the majority on the fact that we passed energy policy? and we put in a culture and deep language -- ultra deep language. they made the decision not to require a price trigger for roy royalties, but we did provide a volumetric trigger. those were put in place when oil per barrel or below $30 per barrel -- i think it was $20 per barrel.

it makes no sense not to have some sort of a price royalty trigger. it was the clinton administration that made the decision initially, not the bush administration. isn't that correct? >> yes, we found the clinton administration has omitted price thresholds from some of those that were issued. my administration would put price threshold on the new leases. there has been a lot of litigation about that. i will not -- not go through the history. >> in hindsight, we should have had a price trigger. we put them in place for future -- the clinton administration did not have it in place at the time. prices were so low that they were not honored. my time has expired. i thank my witnesses for being

here. >> thank you. you were secretary when they had the bp continental well left. is that correct? >> yes. >> and there was a lease sale 34 million. we won the championship, but one thing we were struggling with was a bad act of policy. there were will fall by deal -- willful and valuations. -- violations. could you have said, we will not let you draw in this area based on your past record? >> i do not believe that is part of the current matrix.

>> should it be? should the secretary be able to say, thank you, even though you are the highest bidder, we will not give this to you? >> many of us in our daily lives and decisions have to do due diligence to see if that should be part. >> i would also say that winning a championship, we were there in the big dolma of the new orleans saints. new orleans was trying to come back. it was in that context. >> they did when a big a championship last year. >> if i could have a quick comment. it makes sense to have that actor propositioning is participating. i think there are some problems entering into subjective aspects of the decision making as to who wins the highest bid.

having a clear high bed and awarding on that basis is something that provides a lot of manipulation. >> the law requires you if you have the high bid. and having >> let me ask you this. an explosion was caused by a series of short cuts before the explosion. there was the failure to cut the pipe, stop the blowout, and seal the well. this is the fail-safe. bp officials were shocked. i am surprised that anyone would be surprised given the situation. there was a report that there

should be in some reductions of the likelihood of a blowout. they can cut through the drill pipe and clothes and out of control well. did the department of interior require two blinder sheer ramps to do this? >> the department of interior looked at the real issue and the regulation saying that they must be capable of sharing the drill pipe. they have to be sufficient. required four types of blood preventers to be present on each of the well. >> i am talking about subsurface. they are easily accessible. a report dealing with that.

>> our regulation required that they're being a blind sheer ramp sufficient to address the situation. >> there was a backup redundancy to have a fail safe. i understand you did not require two. >> that is something that camlet doubts because regulations do not require that amount. the expert looked at that issue and determined that what is needed to be addressed was having. [unintelligible] >> they received another report saying a grim picture to cut pipes were necessary. in response, they took one minor step. they required each will

operator of -- it is unclear about this information being reviewed. they testified on this and said he was never to look for this information when reviewing the application. how did you explain his testimony. he was unaware of the requirement. >> the regulations are there. they are very clear about the need to have a blowout prevention devices that will function in a certain circumstance. they have to be maintained and checked. i cannot address several -- what happened several years after my watch. >> when you did the final

regulation, you have three reports to your agencies and you issued a final ruling in 2003. you had verification. >> if you look at the 30 day report to the president following the disaster, they looked at the studies and found that they reinforce regulation as it was written. >> i am looking at the federal register which you submitted. it was absence of of of that. >> we put in place the requirements that they had to have sufficient blood of prevention. >> with your references -- we heard references. i appreciate your bringing of

the responses in what happened in the gulf. it seems like we have heard a reference -- and i have taken three trips to the gulf. there was a much public recommendation to try to protect certain areas. we heard about the placement of some rocks. it was near some of the barrier islands. if the oil interests them getting into the sensitive area, the recovery. could be long. -- the recovery time could be long.

sooner or later, they will have to use it or send it back. it is this kind of tension between people on the ground, the environmental protection agency. you have dealt with pretty big disasters. big forest hour -- fires that went on during your tenure. do you recall this kind of tension in in the various federal agencies that are responsible for the disaster and overseeing the effect on the environment. >> it is catastrophic. in its sheer magnitude. it will be stressful for everyone involved. i like your average of all hands on deck. if you can create an atmosphere of collaboration of utilizing

resources you have, identifying what is the major hurdle we currently have a facing us? what are the assets that can be deployed. where might we have flexibility or be able to go to utilize some of practices that are based on past practices that we think would benefit? the barrier island is a project that has been reviewed for some years. in essence, we have lost them. we need the restoration of those. it is something that the government there has been fully engaged on. i think we should be moving in that direction. you can have a waivers so that you can do the pragmatic without causing long-term adverse consequences. >> this is traveling. everybody sits in the room.

someone says no, and it is the end of a discussion. i think there is one guy who is able to cut through all of that and get stuff done who has the flexibility. it is the non engagement of the white house right now that it's still frustrating. >> we had a water crisis in the part of the country. it was escalating. i was told after a cabinet meeting that i was going to the cell is not the states because the president wanted me to step in and see what we could do to resolve it. by getting all the principals in one room with the assets and the authority, you are able to make proper decisions.

>> let me ask you a question. how difficult -- you referenced that people were let go after some of the difficulties. how difficult is it to fire someone from a federal agency? >> there is due process. you have to protect the right of the employee. imagine how difficult it was for me in that hearing knowing that we were issuing letters to employees that they were going to be dismissed. they would see if they would contested. it is the law that we adhere to you. protect the rights of the individuals. >> are these covered by union contracts? >> i do not know. >> i am not aware, but i do not

know. there may be some employees, but i am not sure how they are affected. >> thanks. >> in your responses, you denied that changes in the drilling policy were undertaken as part of the efforts to implement the task force plan. in 2000 when, in reality, the department of interior, under your leadership was considering the possibility of a worst case of oil spilled when it was a guy awaiting the potential environmental impact of the gas production activities. do you agree that it was wrong for your to ignore the potential for a worst-case scenario? >> i am sorry i do not know the

document to which you are referring. i do not know exactly what it is that you are referring to. i apologize. i do not recall. >> it is true. i have the document right here in my hand. you can review it later. i will summarize it for you. you stopped considering -- jurors strategy in for a post relief compliance in deep water areas of the gulf of mexico did change the manner in which they evaluated the worst case impact. and here is what they informed about our changes in 2001. they do not include the oil spill as part of the review.

in ramallah to protections no longer have to include the worst case spill scenario. you chose to replace a real case analysis with an exercise that was not realistic. the believe at the time was that blowouts' were such a low probability event that the time and effort being spent on analyzing them or cite specific was not worth the effort. do you agree that that decision was a mistake? >> going forward, you have to deal with the aftermath. >> do you agree the decision you made was a mistake? >> you cannot stop all drilling in the future.

>> no one wants to stop all drilling in the future. did you make a mistake in 2001? >> i do not know the document you are referring to or have had the chance to look at it. he would have to have a reasonable analysis. >> was it reasonable to not to do a worse case scenario? >> it was reasonable to take into account what the history had been. >> >> very large spills. we have seen a very different change. >> and tigger leadership, they exempted most gulf of mexico and some runoff scenarios in their production plans. they were exempted from a requirement to provide information on how long it would take to drill and how long it

would take to cap a blowout. this was reiterated in 2006 and two dozen eight. bp did not include any of the blowout scenario or leave well plans. in retrospect, do you think this exemption was a good idea? >> my understanding is that under one act, there is a process of looking at things on a broad scale. >> was it a mistake in retrospect? >> it is appropriate to deal with those issues by looking at those from a big scale basis. for the individual wells and plants of exploration, we focus on those things that apply to them. >> there was a de regulatory

ticking time bomb set that has not exploded in terms of this blowouts and other devices were not properly regulated. do you believe it was a mistake? >> i have not seen anything that would indicate that there is a cause and effect relationship between the deep water horizon decisions that were made by bp and what this analysis is that you are talking about. a climate of complacency was created. >> it has now led to a catastrophe. that complacency was the duringory environment that eight year timeframe.

it dealt with all aspects of what we are dealing with is the consequence of this issue. thanks. >> your questions? >> starting with the moratorium that has been discussed a lot, all want to go back to the safety report. they have put together a commission. they did a 30 day report. they recommended some safety changes that should be made that i think reasonable recommendation afterwards the moratorium, it was alluded to that of the 30 day commission supported the moratorium. they came out the next day and made it clear that they were against it. they gave good safety reasons.

i want to ask your opinion. it has not been discussed a lot. it has a greater impact on our state long term because of the negative impact on jobs. some were trying to make the choice between jobs. the president recommended this himself. they said you would reduce safety in different areas if you have a moratorium. the most experienced would leave certain rigs and crew members -- they cannot put a pause on their life for six months and sit idle and collect unemployment. they will have to do something else to earn a living. you lose those experienced crew members. there are high risks involved with starting and stopping.

our country's dependence on oil has not decrease. is will have to come from somewhere else or imported from eastern countries, many of home do not like us. you increase the likelihood of spills. with all of that said it, i have seen a lot of discussions on the other side of that. i want to get your take on that. >> i think there is legitimate concern about losing the most sophisticated to other countries. and making sure that we are not losing all of the personnel of the most experienced to other places and lose those good jobs.

i think you raised a good point. you are right that in our past experiences, it had been tankers that were the larger source of oil from the industry overall as opposed to the platform. >> you made many good points. there is a question as to what caused this current tragedy as of 90 days ago. was it the regulation that for a number of years was on the books and we did not see this catastrophe, or was it human

decisions made in the implementation after the drilling permit was granted? i cannot comment with regard to the safety group and out a letter may have surfaced were been misrepresented. it may be something that your next guest may have to address. it was appropriate to go and look at the safety. had you found there were a number of problems, then you would have consideration of what else to do. you did not. there was only one concern that was identified. >> if you look at a lot of the rigs operating in deeper waters -- there are people out there

that follow a different set of safety standards and do not have this problem because they play by the rules. hopefully, we can get into that more later. clearly, their biggest frustration was that there's been in more time battling the federal government because you do not have that hands on deck emergency taken that we need to start now. what were federal regulators for offshore drilling that would come into the federal treasury last year? >> $23 billion. >> questions? >> i would like to begin by offering the service report for

congress. it is the minerals management service and environmental policy act dated june 1, 2010. >> we will take a look at it. >> one of the things that this report identifies is that there are four different stages of the review process that should take place on the continental shelf. the first is the development of a five-year program. then there is approval of the exploration plan and the development and production plan. would you both agree with that? >> yes. >> the statutory basis for the requirements? you have to say yes. one of the things that the court interpreting that act has

concluded is that one of the basic premises of this review process is a tiered environmental review assuming that the level of scrutiny increases as this moves toward approval of the development and production plan. would you agree with that? >> yes. >> one of the things that disturbs me about the report and the circumstances that led up to this disaster is that the requirement for a blowout scenario differ upon which part of the gulf is affected. are you both aware of that? >> yes and no. the flow of current might be different. the terrain on the shoreline might be different. in any -- many ways, the impacts are going to be the same. whether it is deep water horizon

>> i am not talking about those issues but the regulatory framework itself that requires blowout prevention scenarios to be part of this review process. can you explain to me why in the state of florida is the affected states there is a military requirement for a blog scenario. when the state of texas is the affected state, or the central gulf region, which is most devastated by this disaster, there is not a mandatory requirement for a blogged scenario under the bridgett -- regulations? >> i have not been able to determine the rationale behind that. we had to ask what the thinking was on that.

it could have been those things are handled in other documents and through other analyses. >> my review of the regulation makes it clear there are specific preferences given to individual states. can you give a legitimate reason why the residents of the central gulf would have less interest in an extensive environmental review then residents of the state of florida? >> there is an act that has significant impact on offshore development. it requires the federal government to take into account the plans of various states of sure. >> do you agree the impact in devastation is the same as where it would occur? >> it has shown to be terrific devastation here and terrific

impact. >> part of the other information included is an indication that while the regulations require disclosure of a beaumont scenario and ex will ration plans, it provided an exception on this particular lease which would have been during your tenure. the exception exempted from blog scenario requirements under certain conditions, those of the conditions i am referring to, which did not require a mandatory blowouts in the gulf. were you aware of that? >> there is a longstanding provision that allows a regional direction -- director to limit information. >> here is the problem. bp submitted information at the

earlier stages of this least indicating there was a 99% chance of a blowout over a 40 year time frame. the most likely scenario would be a hit 10,000 barrel release as far as that blowout. bp discussed a worst-case scenario was bonds in its initial exploration plan. it considered a worst-case scenario to be a blowout at the exploratory stage leading to a spill 38 57 barrels per day. even with that information, a response plan was approved for a worst-case scenario. despite the information in the leasing record, the bp receives a categorical exclusion from an environmental impact study at the later phases of this process. given what you admitted to me

earlier about the intention being about more strict scrutiny of the environmental impact toward production could be explained -- can you explain to me why that happened? >> i do not know the specific details you are citing. the categorical exclusion for those things has been part of the plant's management since the 1980's. it is the way in which those things have been handled through out the existence of the program. >> this report raises the disturbing scenario that to the approval process in the categorical exclusion and eliminating the need for an impact statement later on turned the expected level of scrutiny on its head so that instead of having a stricter scrutiny of that environmental impact at the later stages moving toward

development and production -- production, they did not require a more intense level of review. that makes no sense. >> there are details of the specific proposal that you have to look at. the concept of the outer continental shelf is that you look at those large-scale issues on a large-scale basis. >> i understand that. let me close with this. do you not agree that in light of what we know now, that policy of giving categorical exclusion, which seems to be the opposite of the restricted scrutiny as you get closer to production should be re-evaluated by mms? >> i think you need to look at these things going forward and look at your overall process. i think you need to look at how those things need to relate in the future, especially as you are talking about how something

that is very catastrophic has a small probability of having. >> this had a 99% probability of happening in a 40 year lease. >> i think it may have not been in a correct reading. >> i am reading the report, and i yield back. >> we need to look at its. >> can we go 25 more minutes? >> we are anxious for the next guest to join you. a few more questions. >> it seems like we have the energy task force in to the someone. we have a couple of executive orders, do what you can. it seems like we have developed

the technology to drill deeper and in more sensitive areas. hopefully we will do it in a sensitive manner. hong what about a clean-up? [unintelligible] in the government models, we talked about worst-case scenarios. last time it was updated was 2004. in 2005, the modeling team recommended in that it must be upgraded to deal with a water release. any reason why it was not done it? do you remember the report? >> i do not.

let me ask this. the history of no spills, you mentioned we were looked at it favorably. i am looking at a report since then dated july 24, 2001. this is out of norway. they were talking about the study of blowout preventers. what goes on. i thought it was very interesting. out of the 83 drilled in deepwater from 1,300 feet, there was a total of 83 -- 1 1/7 seen failures in 26 different rates.

that is to incidences' per well. this reports goes on in a configuration that will improve safety. what happened to this report? >> i do not recall ever seeing it. >> when you did in the 2003 rule, you did not take this into consideration, because you did not see it? >> i would imagine that someone who had the responsibility and the technical expertise to evaluate it did so. as secretary, i did not see that. >> we heard a norwegian company to do it.

gulf of mexico versus norway. we had problems with pressure and kickbacks and issues that led to the problem of the deep water horizon. i will conclude my questions right there. >> i am prepared for the secretary to come and give a second panel. are you ready to it started the second panel? >> i am ready at 2:00. >> is the secretary here? >> no. >> i am not going to wait. i am offended that we have been here all day, people have been asking questions and people have been made statements. >> the secretary has his staff here. he may be watching it. >> he is not noticing that we

are winding down. i have some questions. let us visit some of the questions that one person was asking. would you became secretary and inherited the agency in, were there specific regulations related to deep water drilling proposed by the previous administration? >> yes. an preventers nc maintain -- cementing. >> what was the result? >> they were proposed in a previous administration. they were finalized in my id fenestration. very few changes took place

between the proposed and the final. one key thing that we added in to that was a requirement that the company is a look at deepwater technology and how they were using stronger pipes and needed to have stronger things to deal with those types of pipes. be put in place in the requirement that had not been in the previous proposal that required industry to do that. we put in place several requirements over the injection of industry. >> it does not compute, does it? was it a ticking time bomb during the clinton administration?

or was it a red herring? there is no question. i have a list here. some studies were done by the research program. someone has been kind enough to provide me with 150 studies. -- 600 studies that have been done. not everyone will lead to a new regulation. it is addressing the problems that become part of the investigatory process that leads to the will making that governs the rules. it is difficult to run any industry. it becomes very difficult to run anything with having this level

of regulation. at the same time, both of you were charged with looking at these things and putting what you thought were reasonable proposed will making. >> i also said some of the industry standards adopted took into account -- those things were changed more frequently than the regulation. >> we had one hearing where there were five or six executives from the exploration companies. one of the things that really struck me during that morning was they would not have done what bp did as far as the drilling practices. from the individuals that work to their way up, a lot of the

sensitivity to the fact that you sometimes had to shut down a well. one of the executives made the comment or response to one of the democrats questions. if you go too fast, you will get someone killed. it is important to have that as part of the process. the fact that it could be done in a vacuum without taking into account that people know how to run the business is preposterous. i will yield back the balance of my time. we have others that want to feel the void. >> questions. >> you heard me question one person on the 2003 decision to

exempt the gulf of mexico from including a blowout scenario in their oil and gas exploration plan. the policy was also continued in 2006 and 2008 when decisions about bp and the well were being made. in retrospect,, should they have a plan for a blowout scenario? >> i have a great deal of faith in the professionals that deal with this into the different levels, the regional directors, except rep. based on what had been a 40 year record in retrospect, do you believe that decision was wrong?

>> based on what had been a 40 year history, i believe they took the appropriate action. >> was the advice they gave you wrong? >> they gave -- you are not willing to say the advised you got was wrong? i am asking you in retrospect, was it wrong? >> of the advice [unintelligible] as you look back, are you willing to say the advice he received was wrong?

>> i do not think we have the hindsight. >> you have the hindsight. should that decision have been made and given what you know today? >> it is something that can be evaluated. >> i think that is a completely unacceptable answer. the american people want to know the people making these decisions at the time understand that it was wrong. a blowout could occur. a spill could occur. it would be catastrophic. until you are willing to say it was a mistake, it is going to be very hard for the american people to accept that we can move forward without the likelihood that we will ever see this kind of accident again if there is a republican administration that comes back into power. >> in the atmosphere that this

committee was called, the fact that we came here voluntarily debt of this assignment of blame -- >> i am asking you if in retrospect he still believed it was the right decision or the wrong decision. i am not asking for you to say anything other than that. >> based upon a record and based upon the expertise of the professionals at the time, that is the reality. >> it would be helpful if you could say we were wrong. we made a mistake. i understand you do not want to do that. obviously, that is the case. since blowouts are rare events,

the most likely side of this bill would be 4,600 barrels total in retrospect. don't you think the analysis of the impact of the blowout was inadequate? wouldn't you agree to that conclusion, that it was wrong? >> i reference back what i said to my opening comments. when he even though we had a 40- year track record that because of the catastrophe that happened 90 days ago, it has re-evaluated everything. i will also note that in the current administration, it also uses those same assumptions. >> action 2004, your assumption

was there would only be 1,000 barrels of oil that would be spilled. it would have been at the notion and it does not include the use of the person. do you agree now to -- that such a plan was inadequate? >> that statement was based on information available at the time. we do not have the ability to go back to the people that made the recommendations. >> were the recommendations were wrong? >> i have no idea the context in which it was made. i have no idea what was the decision you are talking about. >> quarter. the time has expired.

>> i did not do this in my opening statement, but i'd like to take a brief moments. you are here today at the request of the subcommittee to discuss your time. and you are here as private citizens and you are doing it voluntarily. i appreciate that. most members of the committee feel the same way. bellevue had interesting experiences with mms. du witnessed firsthand the devastation by katrina. you saw up close and personal how mms on to what could have been an ecological disaster. in your testimony, i think he mentioned the issues that arose

with some individuals that were dismissed from their petitions due to an ethical, and. both of view had a need experience. that leads me to a question. based on the structure you had in place, please respond. has this -- had this accident occurred on your watch, would you have used that as a means for reorganizing mms? >> the new structure does not differ that much from previous ones. the revenue aspect and the regulatory aspect have always been a separate division. i do not think i would have used it as an opportunity for an

allocation for reorganization. that is within the purview of an existing secretary. >> certainly. i want to thank you for your comment. i think you raise the question of timing. in that catastrophe, when those are your human resources, we need everybody pulling together, i think he would want to have as much as an atmosphere that you will work together a cohesive play instead of having concerns about whom may be singled out next. there is a question of timing. the creation of a proper atmosphere. >> i appreciate the response.

i feel the same way. you go through all this dancing around and rearranging the deck chairs on the titanic. you come up with a new name. have you really done anything? the distraction trying to do that when the focus needs to be on the cleanup and the response. your response reinforces my suspicion in regard of that. can you please comments on the nature of how long -- how long-

term moratorium would negatively impact the economy in the gulf coast and how it would make is more dependent on foreign sources? i would love to hear a response even though it may have been answered when i was not here. >> when companies make decisions for offshore oil wells, a platform is a multi- billion dollar decision. we need to have long-term predictability in years of planning that go into that kind of thing. to have the drilling rigs the option other countries because of the moratorium will have free proportions -- repercussions far beyond it.

if there are many years of delay and the impact of moving jobs a way that is involved. >> i have practiced it by saying i felt it was an extremely appropriate state except to do a safety review. they did so. with regard to what i recall, 30 drilling rigs in the deep water. of those reviews, it was found that perhaps only one ahead in noncompliance of some element. the vast majority of all of the specifics in place -- it was good to take a look at that. we need to consider the big

picture which is the energy security of the country. i think we are too reliant on foreign sources of energy in. i also believe the devastation which has been horrible and what it has done to the environment -- a moratorium would compound the devastation by the loss of jobs. the gulf coast region needs an opportunity to recover. it does not need further devastation. >> thanks. .

without objection those will all be made part of the record. >> mr. chairman, also, i would ask that governor jindel's op ed from the "washington post" from last saturday be made part of the record. >> without objection. i think we have about three minutes left if you want to ask questions for three minutes. >> thank you, mr. chairman. i will ask both of you, did either of you issue the permit for the mccondo well, for bp to drill the well?

>> definitely not. >> no, sir. >> just saying that to point something out. there are people in this administration that want to blame people for things. there's no doubt that in the time line even submitted in the committee report it was issued on may 22 of 2009. and neither of you were there. i think would realy it's amazing to me it seems like every time there's a problem this administration wants to try to find somebody else to blame instead of rolling up their sleeves and do the job and solve the problem. we wouldn't have so many of these issues that we're dealing with, especially the issues that my local leaders are facing today. three months later. if the administration was just willing to say let's do our job, let's everybody get in a room and when there is a problem, whether sand berm which took over three weeks to issue, governor jindel put a protected ten miles of our par sh in the period of time it

took to get that issued and still this day they're waiting to get permission to protect some of these fragile eco systems where you have pell kn nests and other valuable resources. the approach should be sit in that room and nobody leaves until you figure out a way to get it done. and if this plan is not the way to do it, and there is no perfect plan, but whoever's plan is better let's do it. but your answer can't be we're denying your planned and nothing gets done and more oil gets into par shes. and that's the problem we're facing. so maybe they don't want to own up to the fact that they issued the permit and they're trying to blame ortsde people. but the bottom line is we want to get these problems solved and we want the attention of this administration doing their job under the law. the oil pollution act says it's the president's job to protect the coast. unfortunately, he's not doing that. our local leaders are trying and they're being blocked by federal government.

there's no excuse. getting back to the moratorium, while there is a moratorium that even though the federal courts have said is arbitrary and capricious and the administration doesn't have the legal authority to issue a moratorium, they're saying that there's not a shallow water moratorium but in fact there are over 40 permits pending for new drilling in shallow waters which haven't been issued so there is a defacto moratorium on shallow water drilling. can you talk about the differences between shallow and deep water drilling and the consequences of having the shallow water moratorium which is causing even more job losses that even though this administration says there is no moratorium, they're not allowing it and people are being laid off still to this day. >> there are often different drilling rigs involved in different areas. but whether the moratorium is in shallow water de facto or in deep water, if you are actually

going to have projects moving ahead, if you're actually going to have the jobs that come from those projects, you need to have prezictability. so there needs to be overall predictable focus on safety, but also a focus on solving the real problems and letting the thing thars dependable move ahead. >> mr. kemp. >> i really can't add anything to that. i appreciate that. >> i know you both touched on it a little bit but i want to get back to this concept of a six-month pause. and when secretary salazar says i just want to hold my finger on the pause button for six months and let it go and start things up again as if magically everybody sits around waiting for six months and you start it up again, we're already seeing that some of those rigs are leaving. some have already signed contracts to leave the country and take those good jobs with it and the energy producing capability with it. and many others are in

negotiations and at some point soon they're going to be signing their contracts, too. but if you waited for six motses, i do think it's disingenuous to say there's just a six-month pause and we'll start everything up again. if you want to halt drilling for a long period of time that's a policy decision and we can debate that but i don't think it's fair to insin wut that you can stop for six months and start it up magically everything will work fine. what point down the road do you severely limit the ability for an instri to come back in a short period of time and in fact maybe years? >> i know from our experience with rita and katrina that, yes, there was a lot of damage that had to be repaired. >> and i commend you on your fork in getting those issues addressed quickly. >> we just found it a whole lot longer for the industry to

recover for the energy production to recover than we would have expected. >> secretary, did you want to add something? >> very brief. businesses need to have business plans. they need to have prekictability. as long as you put this question as to whether or not and when they might be able to come back, also we need to put it into human terms. the employees that drive their lielyhood from the drill rigs, what do they do for six months during the pause? how do they derive their income for their families? >> thank you, mr. chairman. >> that concludes all time for this panel. i want to thank secretary kempthorn, secretary norton who voluntarily came here and gave up their time to help us with this problem, this disaster that our country is facing. we thank you for your insight and answer to all of our questions. with that, this hearing will be in recess until 2:05. we're going to take a ten-minute break. we're in recess.

>> we have a special web page with all our coverage about the gulf of mexico oil spill. nearly two dozen congressional hearings from here in washington to field hearings in louisiana. plus, all the briefings, speeches, and links to related web pages. we've also set up a twitter section. you'll find it all at c-span.org/oil spill. and you can see continuing coverage of the oil spill cleanup on the c-span networks.

tonight, a kentucky senate candidate forum with republican rand paul and democratic attorney general jack conaway. the candidates discuss agriculture and other issues including health care, immigration and the economy. we'll also have comments from both candidates. that's tonight at 8:00 p.m. eastern on c-span. >> this weekend, former "new york times" editor on the changing world of the newspaper industry. >> i werery about some of the standards and maintaining journalistic integrity as we move from one media world to another. >> clark hoyt, sunday night on c-span's q and a. >> on thursday, the house oversight and government reform committee looked at the reorganization of the minerals management service. the federal agency formerly

responsible for regulating offshore drilling. mms was reorganized following the deepwater horizon explosion and two different interior department reports showed misconduct within the agency. at this hearing, interior secretary ken salazar and the director of the bureau of ocean energy management testified about the ongoing reorganization as well as the moratorium on new deepwater drilling. this portion of the hearing is an hour and 55 minutes. the deepwater horizon disaster has now expezzed what ap pears to be continuing major problems

at mms. over the last decade, mms has essentially permitted the oil industry to police itself. for example, in 2000, mms issued an alert requiring oil companies to have a backup system to activate blowout preventers. one of the components that failed contributed to the deepwater horizon explosion, and exacerbated the size of the oil spill. but mms officials decided to let oil industry executives determine how theptted to comply with this requirement. in other words, bp and the other oil companies were essentially on the honor system . the deepwater horizon disaster suggested this is not an effective approach to ensuring safe offshore drilling.

reg la tory failures at mms were made worse by the rapid growth of offshore oil drilling in the gulf. over the last two decades, the number of offshore oil rigs in the gulf of mexico has expanded dramatically and extended further offshore into much deeper waters. yet, at the same time, mms remains relatively small, had trouble recruiting qualified engineers, and inspeckedors, and could not keep up. -- inspectors and could not keep up. though drilling has expanded in the gulf by tenfold, the numbers of inspectors has only grown by 13%. the results, fewer than 60 inspectors are currently responsible for conducting over 18,000 inspections annually. the agency was born with a

built-in conflict of interest. when mms was created, it was given the dueling responsibilities of promoting drilling and collecting royalty payments on this one hand, while also issuing and enforcing environmental and safety regulations on the other hand. it seems as though it was only a matter of time before these conflict and responsibilities would lead to the disaster we are seeing here today. in short, it was a tug of war between drilling and safety as the bp disaster illustrates safety found itself on the losing side of the struggle. even worse, regulatory failures have been accompanied by ethical failures. in 2008, the interior department inspector general found a culture of ethical failures within mms royalty in

kind programs. the ig's investigation revealed that over a four-year period, senior employees within mms improperly accepted gifts and engaged in sex and drug abuse with oil company employees. unfortunately, this was not an isolated incident. just last month, the ig released another report which found that inspectors improperly accepted gifts from oil companies. additionally, at least one employee simultaneously conducted inspections of an oil company's operation while negotiating employment with the very same company. in addition, in a series of reports, g.a.o. found that flaws in royalty collections have resulted in millions of dollars in lost revenue. we can and must do a better job

overseeing offshore oil and gas activity. today, we will hear directly from the secretary and mr. bedroom witch about how bramwitch about how they plan to implement the reorganization and increase oversight and accountability at mms, which we're anxious and eager to hear. before we begin, however, i want to make one final observation. while the interior department is responsible for regulating the oil industry and they have been taking a lot of heat for that, it does not change the fact that bp was responsible for the safety of its oil well and bp was responsible in terms of responding to the oil spill. and it is bp that is ultimately

responsible for the entire cleanup and the cost as well as the job losses and lost income resulting from the spill. i am commited to ensuring that the government has the authority and ability to effectively regulate the safety of offshore oil drilling. obthat note, i now yield five minutes to the ranking member of the full committee the gentleman from california congressman icea. >> thank you, mr. chairman. and thank you for holding this important hearing. five years ago, we began looking at failures in the gulf and more. in light of hurricane katrina, we knew that this was a sensitive area and one that would struggle for years to come and one that was vulnerable to failures by the federal government in just an area or two. and whether it's the levees

that failed to protect the people of new orleans or the plan approved by mineral management service that failed to even consider the possibility that oil could come ashore in a disaster of this size, we, the federal government, have failed. every day, every american here somewhere it seems that a chain is only as strong as its weakest link. there were two weak links that led to this disaster. british petroleum acting irresponsibly failing to maintain safety standards well established in the industry failing to maintain their own safety standards, and being in too big a hurry to cut corners, cut cost, ultimately leading to the loss of life and the loss of billions of dollars to the american people around the gulf and beyond. but there is another weak link. a well noted weak link. one that this committee has

been pursuing change for almost six years now from. mineral management service. an organization that has checks and balances that mean nothing. years ago, we discovered that when a contract was signed, person after person after person was required to initial it. they nirbled it and nothing else. they did not read it, they did not verify, they did not ask any questions. that kind of absence does not just go to the engineers that are hard to recruit, it goes to the very top of the organization and has under multiple administrations. in fact, problems in our first set of hearings go all the way back to the clinton administration. but let us make it very clear, those problems were well known during the entire bush administration. and for those eight years change did not occur. sadly, mr. secretary, during the year and a half of your administration, change did not occur. i know that it seems like a

very little bit of time but if in fact the 20 or so findings that have occurred by your own igs and g.a.o. had been put together with the work of this committee sooner and the urgency put on to it, i believe this could have been prevented. having said that, we need to look to the future. we need to look to real change in the mineral management service. i personally would not like to see it broken into three even smaller parts but rather have the real focus either as an independent agency or as one that has a level of clarity to the american people much more similar to the e.p.a. we need to have that. we need to have the american people under that the proper revenue that does not come to the american people is a factor. the proper controls and safe zpwaurds are a factor. chairman waxman, mr. cuse niche, mr. towns, and the rest of us have all seen hearings

but we haven't seen the amount of hearings that we should have had and we haven't had the followup by the previous administrations or to date by your administration. i believe that there are a number of factors that we can deal with today that have to do with the current disaster with the number of factors including a, if you will, an overstatement of available resources, an overreporting of available resources and when they were, and a number of other areas. those occurred under your watch. but ultimately this is the committee of oversight and reform. and it's those published 20 reports that we want to deal with primarily. it's the discovery of documents that would allow us to take a first-hand in the reorganization to ensure that when this is over with we can count on an agency that recruits and trains the kind of second guessers to an oil industry. i think it's important to note that there are many, many, many

rigs that have been operated safely and responsibly. it only takes one operating irresponsibly and then a lack of oversight. in fact, to my amazement, the last inspection by mineral management service of this rig before the disaster occurred, as required, with two individuals, two, being part of the inspection team. that was because there was a requirement to have two separate people independently second-guessing each other. to my amazement, of course, it was a father-son team and in fact less likely to be independent. this is one of many too cozy relationships at mms that has to change. this has to be an organization of professionals, not a family practice. the american people want us to take care of a number of items, but they want us to go further. i will note today that four other major oil companies have announced an investment in the construction of a very large

dome designed to work in the gulf certainly on our part of the gulf but perhaps in brazil and other areas if a similar event happens. this kind of proactive thinking is important and in fact, mr. secretary, to the extent that you've been involved in it either by urging or demanding, i would like to personally applaud you. i believe that when we look at the blowoff preventers next generation, something that's been needed since 2003 and we look at the recovery and response assets, not just for this event but for any event, for a major shipwreck, a hurricane that destroys a refinery or even chemical failures, we all have a responsibility to see that we go with a program much more similar to putting a man on the moon than simply business as usual in the gulf. so, mr. chairman, i look forward to an extensive hearing today. i look forward to the balance of our discovery, i look forward to working with you on trying to oversee over the next

couple of years a real birth of an organization unlike the old mms and much more like an organization that we can all be assured will keep the good actors doing what they're supposed to and the bad actors altogether out of the business. with that, yebt. i yield back the balance of my time. >> i now recognize for three minutes the gentleman, the chair of the subcommittee from ohio, congressman cuse niche. >> thank you very much, mr. chairman, for calling this hearing on offshore drilling will interiors reforms change its history of failed oversight. it's important that we do our work of oversight. but i also have to tell you that while i'm sitting here looking at the preparation for the hearing and thinging about how we're going to focus on things, for example i'm going to have some questions about

the atlantis platform, how 19 members of congress wrote to the mineral management service back in february raising questions about engineering documents, about and didn't get the answer that is we were entitled to. the breach in the catastrophe occurred with deepwater horizon but the questions that we raised with respect to the sthriss atlantis platform were relevant not only to the atlantis but other platforms in the gulf. so we're going to get into that in the q and a. but i just have to say something about this moment. there seems to be some feeling in this country that we can endlessly invade the natural world without any consequences

while the catastrophe in the gulf put a light to that. but we still believe we can do it. we're still moving forward with people talking about doing more drilling and we built our whole economy around this. and so, mr. secretary, you're being asked to defend a system which truly is basically collapsing. really. and i thank you for your service. but the fact of the matter is system itself is collapsing. we think we can keep interfering in the natural world without any consequences. we think we can postpone the development of alternative energies. we think we can keep on living the way we've been lig without any correction in the course even in the face of a tremendous catastrophe in the gulf. we're going to have to start thinking again.

i yield back the balance of my time. >> i thank the gentleman from ohio. i now recognize the gentleman from ohio congressman mica for three minutes. >> first of all, i want to thank chairman towns and mr. icea for convening this hearing. i am pleased to see the secretary here. there are some very serious questions that need to be answered about what took place and also what measures we have in place to deal with the current spills that i see from florida, around the gulf coast affecting people's livings, the moratorium. we have so many questions. but i'm pleased that you're here to hopefully shed some light on your colleagues. mr. icea stated that we knew something was rotten in the mineral management service even under the bush administration, and i will put in the record a copy of a letter that cites

three criminal investigations were launched during the bush administration on that agency, things that we knew there were problems with. i would like to know from you when you inherited that position if that was one of your focuses. there are other questions that have been raised about the development of policy with the new administration. you know, i think a lot of people voted for president obama and the other side they thought they were the protectors of the envirnement and all this and it turns out that they were asleep at the switch. what baffles me is how you could come up with proposals to -- and i want to know if you were consultted on this budget proposal in 2011 to cut the coast guard budget which is one of the first responders

whenever you have an oil incident or a disaster in this country. in addition, $2 million cut from mms, mineral management services budget for environmental reviews. it's in here. these were proposals. i don't know if you had anything to do with this, in february of this year. and then this is february, and then in march the administration develops a policy. here's' a headline from the "new york times." obama to open offshore areas to oil drilling. and it cites the gulf gulf gulf of mexico. so here we're cutting the assets and those responsible for oversight and permitting and there are questions about the rubber stamping cart blanche of the approval. this is approval signed by your

administration to drill in deep water. and then the rush to do more deep water drilling. this is the list of 33 approvals by the obama administration. there's only a total of 27 deep water operations in the gulf, half of those are exploratory, half approximately production. but you're rushed to more drilling and cutting the assets. i think, i would like to know how this policy was developed and if you had any part in it or what the thinking was. >> the gentleman's time has expired. >> i yield back the balance of my time. >> thank you very much. let me end kate that it's a long standing policy of this committee that we stand all of our witnesses in. so if you would stand and raise your right hand. >> let the record reflect that the witnesses answered in the

affirmative. we're delighted to have secretary salazar with us. he is serving as the ath secretary of the united states department of interior. prior to his confirmation secretary salazar served as a senator from the great state of colorado. before becoming senator, secretary salazar spent two terms as colorado's attorney general and served as chief legal counsel and executive director of the colorado department of natural resources in the cabinet of governor roy roamer. welcome. we are aware of your time constraints and we will respect them. no question about it. and then mr. michael bromwich was sworn in to lead the bureau of ocean energy management regulations and enforcement formerly known as mms.

on june 21, 2010, director bromwich served as inspector of justice and assistant u.s. attorney in the southern district of new york most recently, a partner at the law firm, freed and frank where he specialized in conducting internal investigations. we welcome both of you. at this time, i ask that each witness deliver their testimony within a five minutes, which will allow the committee ample time to raise questions, and also considering your time constraints, secretary. of course you know the rules. that the start out the lights on green, and then of course you know because you know all about these lights, and then all of a sudden -- that's

another issue. but all of a sudden at the end it becomes red. so mr. secretary you may begin. >> thank you very much, chairman towns and thank you congressman icea and all the members, distinguished members of the committee who are here and at the outset let me just say thank you to the committee for the work that it has done in the prior years relative to putting into the spotlight some of the necessary reform efforts that are required of the minerals management service. many of those which we have been working on since day one when i became secretary of the interior. let me at the outset just say to the members of the committee i know you are all wondering about the status of where we are with respect to the containment of the oil leak out in the gulf of mexico. since day one, and today is day plus 93, we have been working from early morning until late at night making sure that the

entire arsenal of the united states of america is focused on the problem and getting it resolved. myself and secretary chew, other members of the cab nest have been working on this from day one and today we see the light at the end of the tunnel. there is a shut-in that has occurred of the well and the monitoring that we have required of bp is showing that it is holding. but the weather patterns that we are seeing may have some interruption in terms of getting to the ultimate solution here, which is the ultimate kills that have to occur of this well. but we are seeing the light at the end of the tunnel. let me move to the subject area that i think this committee wants to explore, and that's the issue of responsibility and what is it that has happened here. let me frame it for this committee the way that i see it. this is a collective

responsibility. and i do not believe that at the end of the day that the blame game is going to help us relative to how we move forward and develop the broad energy portfolio and the comp hencive energy plan that is required of america, that we need to work together to fix the problem, make sure we learn the lessons from this incident, and that we move forward with an energy portfolio that i think at the end of the day will include oil and gas that has been the position of the president and my position as secretary of interior. in terms of the responsibility for this incident that brings us here today, certainly bp and other companies that were involved have broken the rules and have strayed from the best practices of the industry. many investigations are going on. much of that has already been reported in the press. secondly, industry has made the wrong representations of both to the congress as well as to the department of interior and

others. with resfoket drilling safety, with respect to the ability to contain blowouts, and with respect to oil spill response. the efforts announced yesterday by the four major companies and moving forward with a $1 billion effort on which i was briefed will need significant additional work before we can be satisfied with at least one of those particular prongs that i think are essential to be righted. thirdly, the congress shares a responsibility. this committee has been at the forefront at least of exposing sonl of the ethical lapses but at the end of the day the drilling that has occurred and the deep beart drilling has been something this congress has also embraced. and i was a member of the u.s. senate that passed the policy act which other members of this committee voted on essentially was part of a national framework. fourth, there is a reality that this is an issue which requires looking back not just at one

administration but it's multiple administrations. the mms was formed in 1981 sand you think about the fact that there have been republican and democratic administrations that have essentially allowed this organization to continue by secretary tall order. and it was for that reason as early as last year i proposed to the natural resources committee, congressman ray hall's committee that we move forward with organic administration because the missions of this agency are so important. so it's a shared responsibility and we need to move forward and fix the problems. i believe that we started in my tenure as secretary of interior moving forward implementing the reform agenda much of which had been uncovered by this committee. on ethics from day one we put together a strong and robust ethics program working with the findings of the inspector general and moving forward to clean up the corruption that occurred in there and other

places. people have been fired, sent over for criminal prosecution, suspend, and we have done everything we can to clean house. we eliminated the royalty in kind program which had been one of the mag nets for corruption that had been eliminated and we move forward with a comprehensive review and change with respect to the outer continental shelf plan proposed by the prior administration. and finally, we have worked very hard to stand up the renewable energy resources out in the oceans of america. with respect to what has happened since april 20 and how we move forward with that reform agenda, it's a continuing effort. we have proposed and developed a report on safety to the president of the united states, a report that laid out a number of different major prom ploout prevention to moving and encasing and the like. we have proposed in the last two years budgets efforts to

expand the number of inspectors that we have at mms, and we're moving forward with the reorganization of mms now into the bureau of ocean energy enforcement and regulation. and that is being done under the leadership of wilma lewis and michael bromwich, they bodes have great credentials and they were chosen by me to run the agency in large part because of the ethical improprites which this committee and which the inspector general had uncovered. so we have been working hard on making sure that those ethical lapses are not there. we understand there's still significant reform that we have to undertake in the days and months ahead and we will will to wased on and look forward to working with you and members of this committee to make sure that the new organization ultimately gets it right. let me finally, know some of you will have questions on the

moratorium. i will be delighted to answer those questions. finally, in terms of what i hope the legacy of this crisis is. i would hope that as we learn the lessons from this crisis that at the end of the day we'll look back and say that we have together as a nation developed safer oil and gas production in the outer continental shelf that does in fact protect the environment and protect the safety of the workers. i would hope that we can move forward as a nation and say that we have restored the gulf coast to a place in a better condition than it was before april 20, and i would hope that we are able to move forward and embrace the new energy future of the america with a much broader portfolio that includes solar, wind, geothermal and all that is part of the initiative of president obama and members of this congress. thank you, mr. chairman. >> thank you secretary for your statement. mr. bromwich. >> thank you chairman towns and members of the committee, it is a pleasure to be here and to

testify before you and to answer any questions you may have. as the chairman noted and as the secretary noted, i'm new on this job. i've been in the job exactly a month yesterday. as head of the newly renamed bureau of ocean energy management regulation and enforcement. the change of name was made by secretary salazar with a point, which was to stress and emphasize the regulation and enforcement part of the organization's mission that many people have fairly suggested have suggested has been ignored or neglected in the past. let me focus very briefly on three thing that is we've been doing since i got there. number one, on the second day after i was named director with secretary salazar's approval, we created an investigations and review unit within the organization that will have several primary functions but the principle function will be some self-policing.

it will be authorized in conjunction, cooperation, and communication with the office of inspector general to do investigations into ethical lapses, into misconduct and so forth. to my surprise, there had not been that capability within the organization previously. i believe that any healthy and robust organization should have that capability. this organization now has that. second, that unit, the investigations and review unit, will spear head a heightened enforcement program that will be focused on oil and gas companies and that will launch aggressive investigations in those cases in which there are allegation that is the rules have been violate. too often in the past i've heard and i fear enforcement has not been vigilant, it has not been aggressive. that will change. finally, as the ranking member and the chairman noted, there have been many, many reviews and investigations by various

entities, including the office of the inspector general, g.a.o., and so forth. one of the duties of this investigation will be to follow up on those reviews to see whether the remedial steps that should have been taken and where statements may have been made that those remedial steps have been taken, whether they have in fact been taken. so that will be a central mission of the investigation's review unit. the next subject i would like to touch on briefly are the new regulations that have already been implemented and will be in the future. following the deepwater horizon blowout and the 30-day safety report that the secretary mentioned, a new safety regulation was issued that is binding on the industry. that was followed by the issueance of a more environmentmently oriented regulation. these are tough new rules and regulations that govern oil and gas companies as they do work in the outer continental shelf,

and i think they are fair and appropriate new rules and regulations. there are other rule makings that are in process that are in part the product of learning that has gone on in the interior department both previously and that is going on in an accelerated way over the last two months, and we hope to be putting out those rules in the near future. again, i think we feel that those are necessary and appropriate. finally, the secretary mentioned briefly the moratorium. one of the charges he gave me in connection with the moratorium issued on july 12 was to conduct a series of public forums around the country to gather information on three central issues, drilling safety, spilling containment, and spill response. with an eye to gathering as much information from industry, from academia, from stake holders, from ngos, from environmental groups to determine whether there are ways in which the moratorium might be shortened before the

november 30 current expiration date. but generally to learn as much as we can on what additional measures need to be taken on those three dimensions to ensure that, when deep water drilling is resumed, it's done in a safe and appropriate manner. we will begin those meetings starting august 4 in new orleans. we will follow those in a series of meetings in mobile, alabama, peninsula, florida, california, mississippi, texas, and louisiana. those will be conducted between august 4 and september 15, with a goal to report back to secretary salazar with the results of those public forums no later than october 31. it's a lot of work, but it's a lot of important work and we look forward to doing it and i look forward to working but. thank you very much. >> thank you for your statement. let me begin by secretary salazar. will you commit today that the

reorganization process will be transparent and this committee will be provided with all the critical details? >> yes. we will absolutely working with the committee, with members of congress relative to legislation on the reorganization as well as the keeping you up to date on the implementation of the new organization. >> now, the reorganization, i want to know, how will the reorganization help to prevent further future disasters? >> well, first, in terms of dealing with some of the ethical lapses which i agree have been abhorrent in the past and which this committee has pointed out as well as our inspector general, department of interior, we are dividing up the agency into different units so the revenue functions of the formerly in the mms will move over into an office of natural

resources revenue. so the dollar collectors will be separated from those who are in charge of granting the leases and doing the enforcement. the rest of the agency, which director bromwich will oversee will be split into a bureau that manages the resources out in the outer continental shelf, both conventional as well as renewable, and another unit in charge of safety and enforcement. that's the essential concepts around the reorganization to ensure, first of all, that conflicts of interest are avoided in the future, the kinds that you have pointed out in your investigations. and, second of all, that there is a kind of enforcement with respect to safety and environmental requirements. >> you know, the g.a.o. and of course doi/ig, have made numerous recommendations to improve royalty collection. have you implemented any of these recommendations or up to

this point? >> mr. chairman, the answer to that is we have in major ways relative to the elimination of the royalty in kind program. we were also looking at other ways in which we can provide a more effective calculation of royalties and have been working at putting together a program so that the american taxpayer receives the return from the royalties or from oil and gas production that the american taxpayer deserves. >> let me squ you, have you looked at the turnover process in terms of people that work for mms moving on based on the fact that they're so poorly paid? >> the resolving door issue is one that has troubled us and one that we are working on. it is my personal view that if you have been an mms director that you ought not go out and

then work with the industry. but i will have michael, if i may, mr. chairman, quickly answer that question because it is something that we have been focused on. >> i think it's a serious issue and a serious problem. there have been historical problems in recruiting qualified inspectors. and many of the inspectors do come from industry and then seem to want to go back to industry. now, it is my view that we can do a couple of things about that. one is to create tighter rules to ensure that if people who are agency government inspectors do go back into the private sector, that at least they don't deal directly with the agency that they just left on any of the matters that they worked on and for some period of time, perhaps not with the agency at all. so that's one set of issues that we're in the process of addressing. i think a more fundamental issue, though, is how do you enlarge the pool of qualified inspectors? one of the things that i've

begun conversations about is talking to some of the schools of engineering around the country to see if we can develop recruiting programs so that this becomes a desireable public service career path. let's recruit the best and the brightest out of some of the petroleum engineering schools around the country, people who have no prior ties with industry, and let's make it a sustainable career path so that they're not tempted by more dollars in the private sector but they can make a decent living serving as a qualified inspector. so i would a conversation yesterday with the dean of the school of engineering at uc berkeley. he said there are a number of school of engineering deans around the country who are interested on working with us on precisely this point. so we're at the beginning stages, but i'm hopeful that we will have some robust alternatives to the back and

forth revolving door system that has existed up to now. >> i now yield five minutes to the ranking member congressman icea. >> thank you, mr. chairman. first a little technical housework. mr. secretary, your staff up until last night told us that there was a policy which they would not provide in writing that you only deliver document requests to the majority, and then the majority has been kindly making copies and giving them to us. however, under ranking member waxman and the bush administration, we never saw such a policy and we were not able to get it in writing. would you pledge that both the rest of the discovery would be coming which you already said before the committee hearing started, but also that the discovery would be transparent to both sides, that the chairman may have requests that are slightly different than we have, but what we request would be granted to both sides at the same time rather than relying on somebody to go through and try to make an effective copy rather than your knowing that

you delivered both sides the same information. >> congressman, we delivered thousands of pages of documents both to the chairman as well as to you, and we're working with you to try to get all the additional documents. >> and i appreciate your participation and your promising that. it was actually more technical than that. until last night, any documents we got, we got because they were delivered to the majority and not to the minority. and the majority then made copies. and that's not a normal practice from government. each of us has independent requests and usually they're shared by delivering them either to the person who requested them if only one requested. but in most cases, the administration delivers to both sides so that both sides know exactly what's being delivered. this was troubling in particularly when last night your folks suddenly changed and probably because you were going to be here and gave us both copies. we would like to know that that would continue, that each of us would get information

independently but copied to the other. >> congressman icea, let me say that we will follow the process that the department of justice and others have required of the executive branch of government. my view is that transparency is important. we have provided tremendous documents to this committee and will continue to work but to provide you the information that you need so that you have absalute information relative to what it is you are seeking. >> i will trust that if you gave it to us directly last night you will probably continue giving it to us directly and not the way your staff decided to do it prior to that time. the questions i have are a number and i will try to be brief. the culture at mms we can talk about changing. i'm looking forward to your helping change that. but in our earlier

investigations one of the things we discovered was not only was this organization cozy, it was inept. we had testimony and evidence that your now what you own or maybe what you own, mr. secretary, the portion that was collecting the money completely relied on the energy companies to deliver how much was owed from where, that there was no independent accounting and that no dautted ever basically found a different number. meaning, if ker r maggie said we got x amount out, they just took the money and recorded it that they had no independent ability to know whether that was the right number or not. do you, one or both of you, have plans to implement a system that you can independently discover how much money oil or natural gas or other resources are being taken out and verify them, not just take the word of the good players and the bad players alike? >> the answer to that,

congressman, is yes. and we have already done it indeed with bp. we just sent them a notice for some i think $5 million with respect to royalty underpayments in an onshore activity. and secondly, with respect to the office of natural resource re new which we have created, there will be the auditing function soss that we can do that independent verification. and perhaps you may want to comment on that as well. >> i agree that is an inappropriate and unacceptable system. the secretary has just said that's been changed and that's the right way to do it. you cannot rely on the regulated entity without checking that and coming up with an independent assessment. >> i appreciate that. and very quickly, i might suggest that every year the army corps of engineers have huge amounts of engineers retire that would still like to work for government. i hope you look at both ends of

the spectrum, those lookic at universities but perhaps senior engineers who have fife, 10, 15 more good years to give that also are not tainted by an ambition to work for seven figures for an oil company. >> i think that's a great idea. last week i found out there may be a pool of people in the coast guard who similarly have useful experience that we can coundf count on. so i think there are actually pockets of experienced personnel all over government that people just haven't thought of tapping into in the past but we are going to now. >> thank you. >> i now yield to the gentleman from ohio, congressman cuse niche. >> thank you very much, mr. chairman. i indicated in my opening remarks that i had some questions about the way that the minerals management service handled the british petroleum's atlantis platform issues in the gulf of mexico.

i was one of 19 members of congress who signed a letter to the mineral management service back in february, 2010. this was about mr. bromwich, two months before the deepwater horizon incident. ms. birnbom, the former brector, received a letter about bp atlantis' platform. we requested an investigation to verify a whibble claim that 90% of the final construction plans for the platform, almost 7,000 plans, were never approved. so if there's an accident in that rig, there would be no plans for response teams to use to try to deal with it. though i am happy to see that an investigation is now under

way, i am concerned that it is not expected to conclude until september. it is important to keep in mind that this platform is in waters deeper than the deepwater horizon platform, and bp's own worst case scenario for a catastrophe with atlantis would put over 20200,000 barrels of oil per day -- 20,000 into the gulf which is about four to ten times as deep water horizon catastrophe. my first question. is whether bp would be found in violation of the law if it does not maintain certified as built drawings on file. >> i don't know the answer to that. let me get back to you. >> i'm disappointed you don't

have the answer. i'll give you the answer. the answer would be yes. now, i'm told it should not take that long to view the plans. that raises a question that the plans might not even exist. i'm concerned that atlantis is the rule and not the exception. given what we know about the horizon accident and how bp atlantis does not have engineer certified documents for its subsea components as required by law, wouldn't it make sense for the bureau, for ocean energy management regulation and enforcement to close the atlantis project as well as any deep water drilling production operations in the gulf that lack final plans until an independent third party has proven that they're operating with complete sets of engineer approved drawings for their above and below sea components. mr. bedroom -- braup witch. >> you are correct that there

is an investigation going, that it will be complete by the end of september. i am advised that there is a letter on its way to me that will update you and other interested members of the committee with what i anticipate will be preliminary results of that investigation. the trudes is i've spent the bulk of the month since i came on board dealing with various offshoots of the deepwater horizon matter. and so i'm not fully aware of the atlantis matter as you would like me to be. but i will make it my business to become more knowledgeable about it and happy to talk to you further about it in the near future. >> i appreciate that response. but i think it would be useful for you to review the letter that was sent back in february, february 20, 2010, signed by 19 members of congress including myself which provides a very powerful warning about the consequences of not having an appropriate inspection of the

issue relating to engineering plans that bp atlantis platform. >> i will review that. >> you are dealing with a casscattass if i from the lack of appropriate oversight at deepwater horizon. what i'm maintaining to you and what other members of congress, we have all joined together in asserting is that lack of appropriate oversight also exists with respect to a bp atlantis platform which could have even more catastrophic implications than the deepwater horizon disaster. i thank the gentleman. i yield back. >> if i may, mr. chairman, congressman cuse niche, i would just want to supplement what the director said by saying, one, the investigation is under way and hell keep you posted as to the results of the investigation. number two, we have sent inspectors out into the gulf to look at the drilling as well as

the production platforms. and so there's an ongoing inspection effort under way. and number three, one of the thing that is should come out of the lessons learned here is that you cannot have 60 inspectors essentially having the responsibility of conducting the massive job that has been assigned to these inspectors. and that is why there is a budget amendment in front of this congress to try to beef up the level of inspection and investigation capability within the agency. . . >> mr. chairman, i just want this committee to be on notice that we've got to find out whether bp has certified as-built drawings on file. this is a serious matter especially in light of deepwater horizon. thank you. >> gentleman's time has expired. i yield five minutes to the gentleman from florida, congressman mica. >> we appreciate you being here, mr. secretary. i raise some questions in my

couple of minutes of the opening statement. i think everyone has to be baffled by the administration's development of policy. you were one of the first people nominated, i think back by the president. people were pleased. we had someone from the congress and your experience from the position. so you came in in 2009. you had an opportunity to develop budget and policy, i would imagine, and i was kind of shocked again when the staff gave me the budget and it showed cuts like $2 million in the mineral management environmental permit activity that was proposed by your agency. did you participate in making decisions on that or again, the primary agency for response in these kinds of disasters would be the coast guard. the administration proposed 1100 positions cut -- cutting assets, ships, planes, helicopters, all of the things that you would use

in a response. were you part of the decision to make those cuts either in your agency? maybe not coast guard? >> congressman mica, with respect to the budget that has been submitted to mms. if you look at the ten-year history of the budget. there had been erosion within the department of interior mms as well as with all -- >> with -- >> let me just finish, with respect to the other agencies in the interior including mms, a very significant erosion after we came onboard. you will note that the inspectors that are set forth in the budget for mms are a significant increase from what had been there in the past. the question that was appropriate for this committee and for the congress is that number sufficient and in our view it is not. we have to have additional capacity. all i can go by the budget asked is is if you were there when the decision was made to cut the environmental review activities which also reviewed permits and

then the next thing is this is february, it came out. in march did you participate in the decision to expand drilling in the gulf and other areas? >> the -- >> were you consulted? is there any documentation? >> not that i was consulted. it was my decision, and it was my plan and it's a plan that i am very -- that is a very well-thought-out plan relative to moving forward in a thoughtful way that changes the direction that we were going on in the oc is that does different things with respect to what was being planned on the atlantic and the -- and the different things that was being planned in alaska and brings in the kind of environmental reviews that are necessary. >> again, let's go to that. you were there when they issued this one-page permit and this is the permit to drill for bp, one-page. this is backed up by a 500-page

cleanup spill plan. i'm sure you didn't review this, but you told me that people who are responsible in all were fired and people changed. have we got that organization chart? the guy that was responsible for signing this. we've got two people here and tolbert signed it for saucier. he's still there. he's got that circle there, that yellow thing. so he wasn't fired. he gave carte blanche. this is the approval for bp to drill and the conditions by which they drill and it referred to a 500-page document. that 500-page document i've -- my staff tells me it has bill provisions for seals and walruses and polar bears. none of which i have in the

gulf. it looks like this is all sort of carte blanche approval. is that what it appears to be? and is this guy going to get fired or anyone -- and this guy is still making the decisions. this is saucier and here making the decision on implementing the moratorium. >> congressman mica, let me respond with two points. first, while it is true that people committed both criminal and ethical conduct that is -- wrong -- >> and he is responsible -- >> let me finish, congressman mica. the reality of it is that there are very -- there are many good people within the agency. there are some bad people and those are being dealt with. with respect to the document that you're referring to and with respect to people that were involved concerning the approvals of the ma conneda wells, i have asked the

inspector general to take a look at that and they have taken our own independent review which we'll be happy to share with members of this committee. >> i appreciate a list and the status of those held responsible. thank you. maybe we can submit that to the committee. >> without objection. >> now i yield five minutes to the gentle lady from california, miss beard. >> thank you, mr. chairman. thank you to the secretary and mr. bromwich. a series of questions. from the outside there is an ethical crisis at mms, whether you change the name or not, there has been a history of drugs, sex, rock 'n' roll concerts and i am concerned based on the post article today that says there is a much higher degree of revolving door that exists in the oil industry than anywhere else in that three out of every four lobbyists had some

relationship to the government. we know there are 12 former employees of mm is that are now lobbying for the oil industry. mr. bromwich and secretary, i would like to know what you're going to do now to freeze out those 12 former employees from interacting with mms? >> well, we will certainly make sure that they observe the current ethical rules that exist, that restrict their contracts to some extent, but one of the things i have to do is to gather information from people who have the information, if they happen to be former employees of the agency. i'm not going to exclude them for that reason, but i'm certainly not going to give their information any more weight than anyone else's. i agree. i read the same article you did and i'm troubled by it. i think what i can tell you and tell the committee is that you'll never see me in that position.

i'll say right now that i'll self-impose a lifetime ban on contacts with the agency, and i hope that sets an example for other people in the agency and other people throughout government. i agree it is unseemly. >> i guess from our perspective, can you take action independent of congress passing a bill to restrict former employees from having access to the agency? >> well, let me give you an example. i've actually met with two of the former directors who are now part of trade associations within the last couple of weeks. >> that was at your request. >> no. it was at their request, but i am in the business right now of trying to gather information from a variety of sources, including from trade associations because they have relevant information to provide bearing on some of the issues that the secretary and i are working on. i'm going to give them a hearing, but i'm also going to give all other groups including environmental groups, including -- >> i understand that. i have a limited amount of time.

>> okay. >> my question was can you act independent of congress in creating some restrictions around access to the agency after employees have left? >> yes, we can, but we need to do it in a thoughtful way. >> so you report back once you decided what you will do with the committee? >> sure. >> the gao report to this commit i indicated that the revenue share the government collects for oil and gas produced in the gulf ranks 93rd out of 104 revenue collection regimes around the world. i think most of us find that stunning and shocking. what are you going to do to change that so that the royalties being received from the gulf are reflective of the world as a whole. at least the international average of royalties received around the world?

>> congresswoman spear, let me just say that the royalty issue in getting a fair return to the american taxpayer is foremost in our minds. we have been working on it it. we have been working on it and we have ways to change how to make the american tax payer is getting a fair return on royalties, not only on the offshore, but also on the offshore when you have a circumstance that is worse when you have the same royalty rate that existed since the 1920 mineral leasing act at 12.5%. so we are making the kinds of changes that will bring in the right level of royalties and at the same time make sure that there is accountability with respect to the auditing functions relating to that. >> and when will those be put into place and do you need congressional action to do that in. >> we are working on it. we are moving forward with it. it is being put into place as we speak. the royalty was part of that

effort. >> that's good news to hear. one last question. my understanding along with congressman mica's reference is that this particular 600-page document was reviewed by two people for a total of ten hours. so by anyone's measurement it was inadequate. i don't care if you're a speed reader, there is is no way that in ten hours you can give the kind of attention to that document. what are you doing moving forward to make sure the employees doing that kind of review are both qualified and have adequate amount of time to do the review? >> with the reorganization that we have put on the table and the resources that we have asked from congress to be able to do the right kind of work in ensuring safety and ensuring environmental protection should address those issues. >> the gentle lady's time is expired. i yield to the gentleman turner.

>> thank you. mr. secretary, i have a few items on a timeline that lead up to the explosion in the oilfield and the oil leak. i would like to go over some of those items and get your responses. we focused a lot on what happened after the explosion and i would like to focus on the period leading up to it. i would like the timeline included in the record. the timeline begins with january 29, 2009, and the secretary being declared and the secretary is appointed on that date and declares himself the new sheriff in town. this is january 2009. in february 2009 in a site-specific exploration plan filed by bp, it states that it was, quote, unquote, not required to file a scenario for a potential blowout of the deepwater well. march in 2009 as we have a new sheriff in town, a whistle-blower brought forth an issue of a safety breach by bp in the gulf of mexico to the

attention of mms. quote, the whistle-blower who was hired to oversee the company's databases that house documents related to its atlantis project discovered the drilling platform had been operated without the majority of the engineer-approved documents that needed to run safely. no action was taken by the agency, but the most important thing was two months after the whistle-blower came forward in may 2009, mms fails to perform a standard monthly inspection of the deepwater horizon. what happened in the secretary's office in may 2009, our interior secretary is speaking at the wind energy conference in chicago. june 2009 mms proposes new rules to require oil and gas operators to require and implement safety and environmental systems for offshore drilling. the rule is still not finalized one month and one year later. in june of that same month these rules were provided, but not

finalized. secretary salazar hires silvia baca away from bp america to become his deputy assistant secretary of land and materials management according to this timeline. summer 2009, the mms awards transocean's u.s. gulf of mexico operation a safety award for excellence and our secretary directed mms to begin focusing on promoting wind energy. elizabeth birnbaum assumes duties as director of mms. the new york times recorded that quote nr particularly and tasked with handling the issue of the 25-mile cape wind farm off of cape cod. what happens the next month august 2009, mms fails to perform a standard monthly expansion of deepwater horizon. august of that same month, white house -- at the white house's request, secretary salazar takes a break from her wind energy efforts to begin the big effort of selling health care reform. august 2009, you traveled throughout the west to tout

obama's stimulus plan. i understand from this timeline that on the 21st of august that you were in grand canyon south rim on the highlighting 10.8 million stimulus dollars. 8/20, you were in utah. $3.6 million stimulus dollars and on the 20th you were in oregon on stimulus dollars. the very next month the national oceanic atmospheric administration sent mms a letter about the offshore drilling proposal saying mms understated environmental impacts of the new drilling proposal. september 8th of that month, salazar says during an interview at reuters says root now we are focused on health care reform. in fact, krshs reports in november 2009 that anticipating a struggle the white house deputized ken salazar and former senate majority leader tom daschle to join vice president joe biden in trying to clear the way for healthcare bills

overhaul of the next few weeks, but mms is is busy. mms has a renewable energy task force meeting in rhode island, massachusetts, and new jersey and with all of this activity happening in november, what happens in the gulf in december? december 2009, mms fails to perform the standard monthly inspection of deepwater horizon? they again failed to perform the inspection in january and then through a series of notifications that bp provides to the agency, the specifications from deepwater are continued to be adjusted. mms responding in seven minutes to one request for modification, 4.5 minutes to another after having routinely not shown up for standard inspections and in april, the deepwater horizon rig explodes and then sinks, and i believe the secretary is there by april 30th after attending on

april 27th, participating in a ceremony on wind turbines. april 28th, announcing the approval of the cape wind project and then your attending in the gulf to take a look at what has occurred. >> the gentleman's time. >> a significant amount inactivity. >> the gentleman's time has expired. i believe my staff has a copy of the timeline which i can also provide to you. >> mr. chairman respond even though the gentleman's time has expired. the fact is the united states department of the interior has a major mission to protect and preserve the natural resources of america both onshore as well as offshore as well as being the custodian of america's mission and on that mission we work on the set of issues relating to native americans and although the other assignments that we have within the department of the interior.

specifically with respect to many of the things that you cite in there, i have spent probably more time on the comprehensive energy program for the nation that the president and i have been championing than on almost any other issue, but i can tell you within the comprehensive energy plan, we are confident that we will see and fold for this nation that we will have a broad energy portfolio that will include oil and gas and at the same time include the new energy frontier of solar, wind and geothermal that we have worked on very hard. i will say this to you, mr. turner, that without equivocation, we have spent a huge amount of time with respect to all of the issues relating to mms and they have included changing the ethics culture moving forward with a new direction on the shelf from what was left over from the prior administration and moving forward to standing up, a renewable energy program.

so we work hard. we cover a lot of ground and we have a lot of ground to cover in the future. >> thank you very much, the gentleman's time has expired, and i now yield five minutes to the gentleman from california, miss chu. >> thank you, mr. chair. we know that the blowout preventers failed with bp with enormously tragic consequences. it's my understanding that an inspector does not actually have to witness in person the blowout preventer test, but can simply review paperwork from the oil company operators and they can basically take their word for it. we know that these tests can be successfully faked as illustrated by several cases. this practice is just unimaginable and cuts corners and compromises the oversight of the validity of the test. so how -- how was the reorganization of mms work to

improve these inspection practices and what specific improvements do you anticipate making to make the bop test effective and what are your thoughts about having these types of tests certified by independent third party inspectors selected by federal regulators and not the oil companies? >> congresswoman chu, it is a very good question and something which we have been working on that relates to two parts, the reforms within the ocs and the first of those is having the right standards in place and many of those standards were set forth in the 30-day report which president obama directed they deliver to him. many of those standards are being implemented with respect to the notice that director bromwich spoke about a little bit earlier and then finally with respect to the enforcement of those standards there needs to be a significantly beefed up effort with respect to the

agency's inspection capabilities because right now it is a fool's errand to think that 60 inspectors can essentially come out and inspect all of the different ocs facilities including production facilities that are out there. >> so you will be coming forthwith new regulations pertaining to this particular practice? >> yes. >> well, then it leads to another question which is about new regulations and one of the problems with the current regulatory system is that it takes a long time for any improvements and in fact, it took nine years for regulations related to pipeline safety toe work its way through the process and take effect. so how will the reorganization of mms work to resolve this issue of delayed implementation of new and necessary regulations? the reorganization itself, there will be two parts essentially

dealing with the shelf beyond the revenue site and one of them will be to provide the safety and enforcement and we will make sure that we are moving forward to address all of the issues and all of the lessons to be learned from this tragedy. >> but my question is how long will it take and what will you do to make sure that it's accelerated? >> congresswoman chu, i think some people might say that we should have waited for another six months, eight months until we found out exactly all of the results of all of the investigations. our view from day one has been that we would work on the issue as fast as we can and so the 30-day report that was delivered to the president is the report that has many rules and requirements and standards which are already being implemented and some of them notice the less sees and some of them through rule making that will be

conducted by director bromwich. >> finally, let me ask this. under the two interior department regulations, oil companies use models developed by mms to predict the oil reaching the shore following a spill. in the deepwater horizon case, these models incorrectly predicted that there was a 0% likelihood of oil reaching both shores in florida, alabama and louisiana. it suggests, of course, that these models are outdated and that the regulations relating to the oil response plans need to be revisited. so my question is does mms need to re-examine all of these oil spill response plans particularly with regard to these kinds of predictions which are clearly incorrect and way off and how will the mms reorganization help this process? >> the answer is yes on drilling safety and containment measures and oil spill responsibilities

and i would like director bromwich to comment on that as well. >> you are quite right, congresswoman, that the oil spill response plans are plainly inadequate and that is one subject on which i will be gathering information on the public forums that we will be holding over the next month and a half with an eye toward not only insisting on the short term for regulations that those oil spill response plans be substantially revised if they're going to pass muster, but also with an eye toward getting out new regulations in the future and we'll make sure that that's the standard from now on. and you're reviewing all of the plans? >> yes. >> gentlewoman's time has expired, and i yield to the gentleman from tennessee and let me also wish him happy birthday. >> well, i have the honor of sharing a birthday yesterday with the chairman and he sent me a note saying that he thinks we should make it a national holiday. >> that was a very nice note.

mr. secretary, thank you for coming here. i've sat through hearings in the transportation committee and the resources committee on the bp oil spill and in both of those hearings the witnesses have mentioned that over 40,000 wells have been drilled in the gulf since 1960 and my staff got information from your department earlier today saying since 1947 more than 50,000 wells have been drilled in the gulf of mexico and it's -- would you not agree it's an -- it's almost an astonishingly safe, clean history that we have there in the gulf? i mean, there have been almost no -- there's been anything even close to this bp spill. in fact, i'm told there are more spills out of ships than there are from these rigs.

>> congressman duncan, i agree with you. in fact, i think it was that history of safety over all of those times, 50,000 wells which essentially was the imperical foundation upon which the national framework has been built with respect to the oil and gas production in the outer continental shelf. >> i am told there are now 3600 structures in the gulf right now. governor engler wrote a column for "the washington times" a few weeks ago and says drilling moratorium is a jobs moratorium. he said the moratorium immediately shut down 33 deepwater rigs in the gulf including 22 near louisiana. this action could cost 3,000 to 6,000 louisiana jobs in the next two to three weeks and potentially 20,000 by the end of next year. for every one employee on an oil rig, there are nine employees

onshore supporting that one employee. that's -- that's my main concern because not only did i read this by governor engler, but repeatedly, i've seen on the news reports that these oil workers in the gulf area are almost in a panic situation about all of the thousands of jobs that are being destroyed and are to be destroyed. >> congressman duncan, let me just say that we, too, are concerned and we are aware of the issues of our view and my view in issuing the moratorium that it was the right way to move forward to put the pause button in place until we can answer three fundamental questions. drilling safety and blowout containment capability as well as oil spill response capability. if we were to have another one in the gulf of mexico today or next week, we could not have the oil spill response capability to

deal with those blowouts. the effort which exxon, shell and chevron and conoco phillips came up with yesterday is the beginning point of that conversation relative to how we address one of those three fundamental issues and director bromwich's set of meetings will help us answer those three fundamental questions so we can determine how to move forward with respect to the pause button in place. >> on another point, the columnist and commentator whoi think almost everybody agrees even if they don't agree with him, they think he's one of the smartest men in this city. he wrote recently, environmental chic has driven us out there. he asked why we were drilling in 5,000 feet of water in the first place. en inchmental chic has driven us out there, they have rendered the pacific and nearly all of the atlantic coast off limits to oil production and of course, in the safest of all places on land, we've had a 30-year ban in the arctic wild life refuge.

i've seen articles that say something like 83% or 84% of the continental shelf is off limits to oil production and that -- that also is a concern of mine and then finally, before my time runs out i'll say to mr. bromwich, i'm concerned we've changed the name and there seems to be a goal of emphasizing enforcement, and i'm just wondering, are we going have a gotcha-type agency now? because most of these companies, let's forget about bp. let's consider them a bad actor, but most of these companies are doing a good job and complying with all the laws. >> i agree with you. we're not going have a gotcha culture, but we're going to have clear rules and we're going to have aggressive inspections and violations of those clear rules will be dealt with severely. i think that's the right kind of

regulatory regime to have. >> if you find a violation are you going to give the company a chance to correct it or are you immediately going to come down on them and shut them down? >> that's a fact-specific determination and we'll have to take it on a case-by-case basis. >> the gentleman's time has expired. i recognize the gentleman from maryland, congressman cummings. >> thank you very much, mr. chairman. secretary salazar. one of the things that we are -- that we had with the coast guard sub commitet and transportation committee and one of the things that we were concerned about is the -- what role do you all see the coast guard playing in the future? you know, the legislation passed by the committee on transportation infrastructure will require much more significant role for the coast guard and the approval of the oil spill response plans which is crucial given that the coast guard is responsible for managing the response to the

spills. so what steps, if any, mms and the coast guard taking now to strengthen the role of the coast guard and by the way, that's been one of their complaints that they're asked to be responsible for overseeing the cleanup, but they don't have enough say in creating the plan. did you know that? they've actually testified to that. either one of you. >> congressman cummings, if i may, the role that we have seen play out with respect to the response with the deepwater horizon blowout and the bp oil spill has been one that we have been working with hand in hand with admiral allen as the national incident commander and it's been continuous. we will look back at the deepwater horizon tragedy and look at the lessons learned including the capacity that are out there with respect to the coast guard and others, but the

fact of the matter is the relationship in terms of the structure has been set up to respond to the oil spill response has worked well between interior and the coast guard and other agencies that are also involved. i've got to tell you again, we've had testimony within the last three weeks and i will get you that information where they have told us that they want -- and this is not admiral allen. they want more say in the development of the response, the emergency response plan because they just feel like, by the time, if you're going to call on them to oversee the cleanup, they should be more involved than in the beginning. i'll get that to you. you might want to take a look at that. i'm surprised you didn't know that. >> let me say this, congressman

cummings. the fact that the oil spill response issue is is one of the three most central issues that we're looking at and that issue will necessarily involve -- should involve and will involve, i will make sure it happens, a close collaboration with the coast guard because we're not going to move forward until we have an assuredness with respect to the adequacy of oil spill response plans. mr. secretary, although the deep-water horizon was registered in the republic of the marshall islands, has testified before the joint mms coast guard panel saying that the rmi as a flag state did not inspect the drilling equipment & on the deep water. he indicated that such inspection are left up to the mms and we understand that mms often relies on key tests and

that mms inspectors only review the paperwork associated with the text. how is it that adequate -- how can we make sure that we have adequate -- that is, approval of these -- of these reports? because there's a question of inspection that some of the inspections are not actually done by our people, but they're done by the marshall allen folk and people they contract so how can we guarantee that those inspections which are so important are properly done? >> let me say first there were inspecs conducted of the deepwater horizon including inspections in april and testing including of the blowout preventer that occurred in the days leading up to the explosion. secondly, we will have a significantly more robust inspection regime and it's part of what director bromwich will

be working on and he may want to comment on that. >> that's absolutely right. those are one of the things we'll be focusing on most intently. the important inspecinspections to be done by human beings and human beings with experience and demonstrated competence and an arm's length relationship at least to the entities that own the facilities. >> i see my time is up. thank you very much. >> the secretary has got leave at 12, and i'm going to try to get in as many members as we can before they have to leave before they go to vote. mr. burton, five minutes. >> you know, 50,000 wells have been drilled in the gulf without a problem, and yet the president put a moratorium on the drilling, and as a result you've had some of the rigs go to egypt, to the congo.

in canada they're talking about new wells digging up to 6,000 feet and we'll lose the wells and they'll probably not come back for a long, long time. it makes no sense to me to cut off the drilling in the gulf when you've not had any real problems except for this one catastrophe, and i just don't understand why the administration has taken this carte blanche approach. can you explain that? >> congressman burton, having been involved in this matter in response to the deepwater horizon blowout every single day since the blowout, i can tell you that there are three fundamental questions that have to be answered before we take our hand off the pause button and those are the issues of drilling safety and oil well blowout containment as well as

oil spill response capacities that's what we are working on with director bromwich as well with a whole host of other efforts. >> you've already stated that there's more of a chance from a leak of a tanker than there is from one of these rigs. it just doesn't make any sense with a 50,000 drilling of wells in the gulf and you have one spill that you will cut off everything and the rigs are already moving to brazzaville and the congo and we sent them to drill in deepwater areas. so what we're doing, in effect, is shoving oil production away from the united states and we're costing us jobs when there is really no reason for it except for this one exception and what you're talking about, in my opinion, it doesn't make a great deal of sense. i want to ask you a couple of other questions really quick. i have a video i would like to show you really quick. it's about 15 seconds long.

so can you cue up that video? >> salazar and nap alton aeapoa been on the islands three times. >> it's a photo-op? >> i don't know. >> do you have contact on the stock level? every time napolitano and salazar has come on to grand isle they go on a boat or helicopter and something like that. they've never met with local homeland security. i don't think they've met with anyone in town. she drove past me last time and i was standing at the airport waiting for you to come in and she drove right past me. >> well, this is dino bonano who is the homeland security director down there and the fire chief mark scardino. they said you've never been down to that parish and that's one of the most toxic areas that's been hit since the spill took place.

why haven't you been down there? >> congressman burton, first of all, we believe that the last count that i saw had 11 times that we had been in the gulf coast states -- >> this is one of the hardest hit. >> i have been through louisiana, alabama, mississippi, florida. i don't know the exact parish by parish, but let me just say since april 20th and even before that, i spent a lot of time on the gulf coast and i continue to spend a lot of time down there and will and will work relentlessly on this problem until we get it fixed and we charge the way forward -- >> it seems like this would have been one of the top priorities. i don't understand why you weren't there and they were complaining very vigorously that you had ignored their problems there. >> the president, the vice president and members of the cabinet have been down there countless times. my assistant secretary -- my assistant secretary for fish and wild life has taken 17 trips

down into that area to deal with these issues. >> you're the guy. you should have been there, in my opinion. the last thing i want to ask is i know the jones act was referred to. there were a number of countries that wanted to bring skimmers in as soon as this thing took place. we could have eliminated an awful lot of these ecological problems if those skimmers had been brought in. why in the world did we let the other countries bring in the skimmers as fast as possible. >> i disagree with you. the jones act has not kept a single vessel from coming into the country, number one. we have a shortage of skimming vessels has not been an issue and the jones act was want an issue. >> why weren't they allowed in. >> thad allen and the national incident commander had been in charge. >> the gentleman's time has expired. thank you, madam chair. my intent wasn't to rebut my republican colleagues in the

hearing, but given what was just said about the exception of this disaster, it's like suggesting that 9/11 was an exception to air traffic control regulations and that we shouldn't react to that. the fact is that this has been an environmental disaster and the fact that we should look at the regulation a preep atly of oil wells in the gulf and i think it's very appropriate that the administration take the steps that it has to make sure that all of the wells are safe. i further heard my republican colleaguing is that its lum tagdzs on onshore drilling and other parts of the country that is driving bp and others to go to the gulf upon i assume that they're making money in the gulf that the reason they have this in the gulf is because they have oil wells there and they're making money, is that correct? >> that's correct. the reason bp and other oil companies are, in fact, drilling is because they're making a profit in the gulf? >> that is correct.

i would like to move on and i think the issue here is one that's important and it goes back to the 2005 energy act and the issue of categorical exclusions. i am concerned, as are others with regard to the number of categorical exclusions that we have seen for wells in the gulf, and i would appreciate if you would help us better understand how categorical exclusions are determined and whether or not bp advocated exclusively for categorical exclusions for the drilling operations in the gulf. >> congressman, let me just say, first of all that just back on the moratorium, it was a prudent position that we have taken and i appreciate the support that you echo for the moratorium because of the fundamental issues that we do need to have addressed. secondly, with respect to the question on categorical exclusions, they appear at a time when after significant environmental analysis has been done because the process in developing a five-year plan, you

do an environmental impact statement before you issue and have a lease sale there's another environmental impact statement reviewed before a sale happens. the categorical exclusion in the gulf of mexico which has been granted to more than bp. those occur in large part because there is a 30-day window of approval required by statute when an exploration plan itself is filed as part of the leasing and development process. so we've asked the congress to extend that 30-day window to the 90-day window, and i hope that it is something that you enact in the oil spill legislation before you. >> when you say the 30-day window is in statute. when was that 30-day window implemented and why was it only 30 days and who advocated for the 30-day window? >> i do not have the specifics on when that requirement was put into the law, but i can get that for you.

>> do you believe -- what is your opinion as to how long it should be for the review? you said 90 days. is 90 days appropriate. 30 days i believe is too short, and i do think what we need to do especially in places like the gulf of mexico, you have tremendous environmental information and reviews that have been conducted and so we just need to make sure that the environmental reviews that are being conducted are worthwhile and that we're doing the right thing in terms of the aim of the environmental analysis which is to understand what impacts they'll be to the environment and the activity. >> do you believe there's been an overuse of categorical exclusions under the previous administrations and in the 30-day window is a primary cause of that? >> i do believe that there was an overuse of the categorical exclusions and indeed with respect to what we've done on the onshore under the bureau of land management is that we have

changed that practice and obviously, we are now conducting a comprehensive review with the council of the quality relative with the changes that will happen. >> thank you, madam chair, i yield back. >> mr. murphy? >> thank you very much, madam chair. i know we're about to go to votes and secretary salazar, you've been great to spend time with us. i appreciate your response to mr. burton's question. we could be for days on end if we would play single individuals that were upset that one particular federal official didn't visit them. i think we're very lucky to have you in this position. so many of us have been impressed by your immediate and robust response to this tragedy and mr. bromwich, you have a reputation as a no-nonsense administrator in everything you've done, and i think you're the right guy for the job. i just have a couple of quick questions. one relevance of funding source

is moving forward. the reorganization as you split into three different entities will require more people in and of itself and three directors and three officers of congressional relations and we know that we need more people to do the inspection work. as you look down the road at how you think the agency should be funded and you look at a potential diminishing reliance on royalty payments. how do you expect that moving forward the new functions of these agencies are going to be funded? >> congressman murphy, thank you for your comments. we are in the midst of working with the appropriators in developing the budget amendment to make sure that the funding is there to be able to do the job. and the funding sources themselves they'll be part of the discussion to engage with congress on. >> with respect to royalty

payments. do you have ideas as to what components will be -- continue to be funded by royalty payments or what components you no longer want to be funded with respect to those payments. that is part of the review that we currently have in the implementation programs that we are developing. and maybe i'll direct this question to mr. bromwich and i would be happy to have the secretary weigh in as well. one of the things that has been of great frustration to us is the technology that we're using right now to deal with this, bill. and the fact that we've had a fairly slow pace of innovation within the industry in developing new technologies to address spills. maybe it's moving a lot faster right now as we speak, but over a long period of time it's been relatively slow given the threat. can you talk a little bit about how you foresee either within your agency or -- or in putting pressure on the industry. how do we more quickly do we mo

oil spill disaster technology going forward? >> yes, it is a very good question. i think one of the things that this disaster has foecused people's attentions on is oil spill response technologies. it has been recognized by us and players in the industry. i think that is one of the reasons why yesterday we saw the four largest majors come forward with the outlibrarines of a pla deal with oil spill containment in the gulf of mexico. i think that this disaster has focused people's energies and it will stimulate innovation. we will be directly involved in that process. the proposal that was made yesterday is an interesting intriguing one. but we will want to review and

study it carefully. it is one that we, and you and the american public is going to need to have confidence in. >> mr. isa for five minutes. >> thank you, madam chair. just one quick question, you know mr. secretary that your decision was arbitrary. in light of what you said earlier today, would you say that resources that are freed up at the time of the kill of this well could just as easy be the end of the moratorium? as you said earlier, clearly there were resources that you didn't want to have not available as one in 50,000 wells happened a second time. but wouldn't a target of the killing of this well be just as appropriate for considering limited well-super viwell-super

back into exploration of the existing 22 rigs? >> congressman, i appreciate your observation and i appreciate the sense of urgency that you have that these issues be addressed. but there is a tremendous amount of work that will be unfolding. i will have a report back from the oversight safety board which includes great work from the in specker general and her staff that are focused in on these issues which is due on i believe on august the 15th. the academy will have a report more knme by october 31st. so, if there is a point in time between now and november 30th, where the three questions that i have already addressed are addressed to our satisfaction, we will revisit that timeline.

>> i appreciate that. i yield the balance of time to mr. fortenberry. >> thank you for joining us today. this oil spill is an environmental ca tkcatastrophe. we must work together to make thur that the leak is continuing to be stopped and that the environment is cleaned up and that we work with the resources we have to make sure that this never happens again, in that regard, your reasoning for the moratorium is that our resources are currently deployed and depleted and in case there was a second spill like this we would not have the resources to work against it. but given that there is the potential for this leak to be permanently stopped in the near term, your consideration of that factor in terms of the moratorium deadlines i think is reasonable. the second point being given

that the resources that are applied are under intense pressure to move overseas and that this would cause more imported oil to come into our waters, mortane tankers that ar more dangerous than the drilling itself. is the moratorium timeline more risky? a related point is that all drill something not the same. bp was engaged in the riskiest type of drilling. is there a krarconsideration th those may be excepted as well given that the profile is lower? >> congressman, the answer to that is yes. and that is part of what the director will be gathering information on. there may be different activities and different zones of risk that might be allowed to go forward.

we have made one of those findings with respect to the sha shallow water drilling and there may be others as we move forward. >> seg men station of risk based on the actual hhistorical past,s of risk rather than a blanket moratorium? >> there may be for example, differentiation between the expiration wells in the deep water and wells that are being drilled into already develop ed reservoirs that you know exactly what it is that you are drilling into as opposed to the exploratory type of wells. so those are the distinctions that we will be taking a look at in the months ahead. >> i think the last thing that we want to do is increase pressures for more water.

with that said, i want to point out that i visited the area recently. these people are exhausting themselves to save their way of life and the environment -- >> i think you are heard. >> your time has expired. >> i had a good video for you, but we'll have to do it at another time. >> miss maloney. >> thank you madam chair and i thank you both for your testimony the devastation of the bp oil spill has highlighted many problems in worker's safety and containment and oversight. but it has especially highlighted the missmanagement of the mms, the minerals and management service agency which if managed appropriately could bring in millions if not

billions to our treasury from oil extracted from land owns by the american people. under the current structure, the general accounting offices found that the mms should do a great deal more to improve the accuracy of the data used to collect and verify the oil royalties, and i have a bill in hr-1462, which would require the national academy of engineering to study and come forward with impro improvements and rem decisions of ways that we could more accurately collect the royalties on the production of oil. i would like mr. secretary, if you would review it and this could be helpful in defining it in a way that we could be more successful in giving the american people the taxpayers their just reward or their just tax revenues or revenues from

this oil. according to the general accounting office report, that was given to this committee, the revenue share that the government collects from oil and gas produced in the gulf ranks 93rd among the lowest of the 104 revenue collection regimes around the world. are we 93rd in collection? >> i have not -- i cannot comment on that statistic. but we have been collecting recommendations from the accounting office as well as recommendations that came forth from the kerry-garns commission that addressed many of these issues. at the end of the day, what we are looking at is to achieve the objective to make sure that we are getting a fair return back.

>> did you testify earlier that this has not been updated since the 1920s? in your statement? >> no, dinod not. that is something which we have been reviewing and do believe it should be changed. >> so that has not been updated since the 1920s. we certainly should look at that and bring it into the 21st century. also the gao reported that mms does not audit oil and gas company royalty numbers, is that correct at this point? that was the gao report. >> there are auditting functions that do occur. we do collections from companies where they have under paid and that does happen on an ongoing

basis. we are in the process of implementing numerous recommendations from gao as well as those from our inspector general. >> but is it fair to say that we could be under collecting by mill ions possibly billions in this royalty program? >> i think it is fair to say that there is under collection that is taking place and it really revolves around two key issues one is the measurements relative to the oil and gas that is being produced against which the royalties are being leveed and secondly, the royalty level itself and whether or not that is the appropriate royalty level. >> and that is what my bill would look at to look at more accurate measurements and compare with other countries. also --