if you look at the gulf a the number of platforms and pipelines in the gulf, you can see that the call is one of those places where the ability to respond is far greater than in the arctic. when you read the news reports about the number of personnel and the number of ships, the number of resources that can be brought to bear in that response, it is a far, far different scenario then in the arctic. the arctic is e of those places for when you used marine special planning and you wonder and hand the true dynamics, what we call our response is much more present in the gulf. there are very few air strips, the coast guard has very little presence in the arctic, and your ability to respond to any disaster is far different.

it is also a place that does not have those wonderful microbes that began to consume oil in the gulf. today you can go to the >> you can pull up oil that is still there 20 years some later. for the commission's kidder -- consideration , there are a few rocks with the wheels still present. the impact from that region is still being felt. the workout population is on its way to extinction. -- the orca population is on its way to extinction. this hearing is about making changes that the public demands in how we approach the oceans, for all the wives in the ocean.

we want to ensure -- all the ocean life. the right information so we can guide gas development and protect resources that are fundamental to our economy. you have a wonderful opportunity to bring the way we approach the ocean into the 21st century. thank you very much. >> thank you. this commission has used its practice of having lead questioners who are responsible for developing questions the commission feels will bring out the necessary information. for this panel the lead? for mr. west will be bill reilly. the lead questioner for mr. roberts will be chancellor

ulmer. >> thank you. this is a question for robinson west. i attempted to go deeply into your principle and to ask you to explain the degree to which you think practices conform to your ideals. i am not sure we have been enough time. we will spend some time drilling down into mms. you were present at the creation. there were proposals to remove or distinguish more completely the leasing and revenue collection functions by creating a new agency,ike the nuclear

regutory council. do you have any he is on that? >> it makes sense for the regulatory function and safety function to be kept apart. it is a different imperatives. viewof the government's the offshore program, countries such as norway and brazil -- this is a huge part of their economy. they have highly skilled experts to look at the legal issues. they have people looking at environmental issues. in brazil and norway there has been a tremendous focus on

creating local content and the industries. the severing of these functions makes a lot of sense. >> severing them with the department of interior? >> as long as they don't get lost in the bureaucracy, you could put tm in a number of places. whether they stay in the department or not is critical. there ought to be a clinical delineation. the leasing and fiscal aspect is a different world. it should be recognized as such. >> we have heard repeatedly and there is a story about the use of the terms "my clients" been

customary, which makes one wonder whether alamance would continue -- elements would contin. is that culture going to change? >> i think the whole point of the safety case is it shifts the burden and creates a challenge to the industry to demonstrate they have to think through the implications of all their actions and anticipate. the other thing they have to do is -- a vast network of companies that supports these activities. they have to be brought in as well. i think having a constructive relationship -- the relationship

did not have to be adversarial. >> with all of the complexity of technology, how can we anticipate there will be adequate trained inspectors in the federal government to oversee that? ijaz >> industry to do more than its presibed to do. >> it shifts the burden to the company is to think it through. they have to come back to the government to explain what it is. you have to recognize this is a world-class industry. this is one of the most sophiscated employers of technology on the earth.

this is a state of the art. the level of sophistication of the industry and mms was not it could be very difficult to be successful. >> you heard mr. roberts. . i would be interested to know whether you have reconsidered your own safety containment planning for the proposals you have made in alaska. and going beyond the current proposal in the arctic, you consider the technology is adequate to move forward based upon what we learned?

>> i feel it is. we have started to develop a system to complement the containment systems. the operating environment is different. i think is adequate to proceed. we were very concerned to -- after the exxon valdez. we wanted to make sure adequate skimmers were availab in the presence where there might be spills. are they present in the arctic. >> they are managed by an oil delivery manager. i understand our strate. our program would bring the

response with the program. it is a flotilla of vessels. it is remote. you cannot not respond ung these facilities. it has to be part of your initial operation. >> what do you think of marine at spatial planning? >> >> it sounds like a good idea. >> we have heard frequently one of the principles mentioned was the need to have content communication among various players. we have heard it is anything but transparent. ofin public or even to other

companies. >> it is human nature to hope for -- don't make a comment until you understand all sides of the story. when you speculate and make an opinion, it is human nature to defend it. wait until you have all the facts. >> if you had a laggard company there is not much you could do about it. >> the way we run our business, we do an assessment of our joint venture partners. how do they manage their risk? >> i see you would do that with joint venture partners, but you were shut down from a lease

applications because of something that did not concern you. had you been concerned about the practices that led to that what would you have done? >> on a personal level, we do our best to communicate. we have joint safety meetings with other operators. we realize this would impact all of us. it is hard to distinguish one operator from another. >> theseere rich presentations. we would like to ask more questions and hope you continue to cooperate. i appreciate your presentations. >> thank you for your presentations. you mentioned it research and development has not kept pace

for a clean up spills response. it is because it is not commercial. the federal government has not made that investment either. we are using a lot of the same technologies after the exxon valdez oil spill. what ideas do you have about how we can improve that aspect in terms of financial commitment for that government should make so we can keep pace? >> several of the large operators stepped up with $1 billion to create a facility that would be able to move within 24 hours and contain spills within 10,000 feet of water.

the second way is that there is a per barrel fee, and for a spill response fund, there is a possibility of adding to that feed to make sure research is properly funded, but we are dealing with a state of the art instry. we do have to have state of the art technology. >> any other panelists care to comment about cleanup and spill response capacity? >> i served on briefings with those who spoke eloquently about the degree to which you can

clean up oil. it ranges between 7%-15%. in places like the gulf where the ocean front stairway to restore itse to some degree, you are in a much better situation than the arctic where the oil does not go away. part of my responses you have different standards for different places. you don't allow oil and drilling to occur unt you address that. if you create that says a standard for production, the standardust be met. you will force the industry to come to gri with this issue.

there will be some places where you don't drill. >> when we talk about the total will, it is helpful to think about the rapes and the volumes. it will enable you t get on it with equipment that could cap it. the ability to respond with a capping measure impacts the volume as great as the rate that could come out of the well. it is the total william , -- total of volume. >> i am trying to resolve leasing with marine at spatial planning.

this sometimes covers vast areas. you actually understand life patterns or special ecologically important areas. who does it? how do you online important public interests in states like alaska or louisiana? based on what norway has done, would you comment on how you see that work? >> as for the conflict between them approaches, it is obvious which one gives you the ability to make smart choices. the big lease areas are enormous

and yet those decisions to leave were based on a decision on one sector in deede not looking at the entire ocean. al 8 gets done depends upon taking advantage of the expertise in the government. interior is entrusted for managing public areas. epa has its own expertise. the key is to find a process that takes advantage and against that approach enough independence so it is not crushed underneath the imperative of delivering oil and profits and revenue. we believe the executive order

tablishing a national ocean policy approach gives you the opening to knit together a work of those agencies. what we need is to link that to using that to guide oil and gas exploration. >> there is a role for local stakeholders to plant. >> when we sta our operations included in that is planned stoppages to allow for -- that was gained through interactions with local stakeholders. the local stakeholders have to be engaged and have an appreciation their concerns are also being addressed.

>> in terms of the leasing process, there is a consultion of process. one area was this question of state versus federal and in the gulf of mexico a lot of damage that has been done did not happen in federal waters. it happened sooner or long ago. this question of federal versus state this aerious issue, i think sometimes it is a question of this is a policy driven by the states and not coastal communities.

>> thank you very much. >> i will ask you to break your rule about speculation. would you have drilled away bp did? >> if we follow our guidelines i think the answer is no. we would have installed a stream with additional barriers. >> for mr. west, on technology, it has been described -- some made the analogy that deep water drilling his akin to the shuttle program. we can build it but cannot fix it.

if something goes wrong we don't have the technology to respond in a meaningful way in a reasonable amount of time. >> i am not a technical person. the industry believes they do have t capability to deal with this. they are putting $1 billion into it. i think they should be required to demonstrate they can move to deaths of 10,000 feet within 24 hours. the answer is yes. we have the capability to respond. we understand the risks. we have the right level of

controls in there. it all starts with the well- designed. is it robust enough so we can quickly get on its and close it in? that capability exists. >> i have some follow-up questions. i will defer to the chairmen. >> i have a question for mr. west. i am pleased to hear the industry -- how do you maintain it? how you maintain the safety case culture without going into complacency? do you have any ideas about this? >> the uk system -- they have

demonstrated anbility to keep the industry on its toes. the burden is on the industry to demonstrate they can do this. every facility has to go back every five years to demonstrate it can meet new challenges. it shifts the burden. the stakes are the amount of capital is enormous. the company's understand that. >> who determines what is the regulatory structure that determines the demonstrations are credible?

you have to have people of sufficient competence. you are dealing with some of the most sophisticated industries on earth. you have to have people of comparable quality on the other side. they have to have the tools, too. >> it all comes down to a healthy [unintelligible] at the end of the day ts process involves a tremendous forces we ask our people to operate under. when i ask them how their safety is going the one thing i don't want to hear is everything is fine. that is the first onset of complacency. we have some areas we are

looking at. the minute you think it is as good as it can be, that is when complacencies starts. some of the most riskiest operations are not the new ones. everyone is doing the best they can. disasters tend to happen during the routine. that is my biggest fear. there has to be a structure that enable still -- i like to go out there and ask people what are the barriers? operational is your hse -- operationalize your hse case. does everyone understand who is responsible?

safety case enables you to have that conversation. >> this is the challenge of constant improvement. the second thing is very important. the role of the service companies. they have to be engaged in this process. it is not just the oil companies, there is a whole team in faults. what are the critical challenges to maintaining the safety culture? do you have any comments on the hardest things to overcome in maintaining the safety culture? you said safety, york subcontractors and other companies.

>> creating a safety culture is not simple undertaking with a huge organization. had those long lists, but it has to be something constantly reinforced. this question of incentives and clarity is important. >> thank you all for appearing this morning. i have a question for mr. west. the deep water horizon spill is a major event, but the president has issued an executive order on a new ocean policy.

has the industry started addressing how bad factors into their planning moving ahead? -- how that factors in. it calls for greater balance among competing uses. how will the industry participate in balancing those uses, particularly in the arctic? are you participating in that conversation? in the gulf the industry rules what happens, but this policy calls for a different approach. >> the industry has no choice but to be engaged. they have a lot of powerful

tools that can add to this debate. something happened in this event which has engaged the body of politics. the industry has to be part of it. >> are you aware at those conversations areappening? fran raise the issue of leasing programs that go forward. is there any conversation going on about narrowing that approach or having the industry targs where there are areas of conflicting uses? >> this is not a new issue. the industry is very sensitive to that.

to what extent the industry is participating at this stage? i don't know. >> we are running to the end of our time for questioning. >> to follow up on the comments about the industry's response with the containment corp. and you said it was moving in the right direction. i have seen a presentation on this and it is very impressive with the level of financial commitment, but what assurance should be required to make sure this capacity is up to the task before trusting this in the

future >? will it be sustained and will there be constant improvement? my advice is to ask the companies. that is the challenge. >> have you been involved in these discussions? >> i have not. my role is to insure the well designs will enable full capability of that system. >> thank you very much. we appreciate a very informed that panel. thank you for your comments. it may be we will develop questions subsequent to this hearing. if those were submitted would you be willing to continue to assist us in trying to

understand this complex issue? >> certainly. >> we will take a break until 10:45 p.m. >> no more from today's hearing on the gulf of mexico oil spill. we heard from former officials at the management center. this is the management that is in charge of offshore drilling. this is an hour and 1/2.

>> this panel is concerned with meeting regulatory challenges. we have the director of global studies, thomas kitsos, randolph all luthi, and elizabeth birnbaum. we will hear from each of you sequentially and hold our comments and questions for your conclusion. we are very pleased that you are here and appreciate your coming to present to us, responding to our questions, and we begin with

tyler priest. >> i would like to thank the commissioners for inviting me to appear today. commissioners for inviting me to speak and the former mms directors. my name is tyler priest. i am a member of the scientific advisory committee. theemarks don't reflect opinions of my members on the committee. the federal program administered by the management service since 1982 has been the steward of the vital offshore oil resources and public revenue generated. it oversees 1.7 billion acres. it is the largest landlord.

the program is navigated through many controversies. regulatory lapses have deepened the impression as an agency captured by the oil industry. the concept of the agency capture does not do justice to complexities of the bureaucracy and offers little insight into managing land. during its early history of the program was a weak partner to offshore operators. the small staff issued leases

and another handful of people from the conservation division collected revenue. federal officials in the gulf it relied on industry to draft new regulations and orders. environmental safeguards were lease managementere asin 1916'0 office -- 1969.

those inspectors depended upon operators for transportation. in the late 1960's the relationship was transformed. pressures from the bureau began to see the nation was receiving fair market value and forest land management to devote more money and before release sales. those led to the rejection of bits that did that meet criteria. the even bigger change came from the santa barbara channel. the department of interior quickly issued a stringent set

of regulations enforced by an inspection program using the list of incidents of noncompliance. the organization developed its own research program and the gulf of mexico operators developed equipment needed to ensure safer operations. bring more caution to development. one official response -- offering more sales and placing emphasis on resource evaluation.

a contradiction between stronger regulation and accelerated development was built into the program. the land act amendment attempted to resolve this contradiction and a related problem exposed a problem. the benefits are distributed nationally while they cost so far concentrated locally. the 1970 amendments introduced a five-year lease schedule. at each stage of the development process and amendment created a new environmental studies program. the efforts failed to resolve the tensions between environmental assessment and

resources evaluation. resource evaluation and the service of domestic energy production is biased. if it is no secret this has permeated mms and department of interior. it stems from the professional orientation of many parts of the program. this strengthened wendy conservation offices were merged. the leasing system introduced by the secretary of interior further reinforced this by s by opening up larger areas.

the logic was to explore first in and ask questions later. there were compelling reasons to proceed this way in the gulf at the time. during the last 25 years the gulf of mexico has become one of the most dynamic oil regions in the region. it is a credit of bringing new sources and doing it safely. their success in the gulf has led to a collective attention inside and outside government. as domestic oil production declined elsewhere and other

production areas came under moratorium, politicians encouraged the development of the deep water gulf. there was not a lot of opposition to that development. it was mostly focused on the revenue reductions that came from leasing. the dramatic expansion in the gulf since the 1990's has occurred during fiscal restraint that has handicapped the mms. it went from 2000 to 1600 full- time employees. its annual budget increased to $296 million. this was a decline of 10%.

this was less than half of what was spent by the program in 1975. it is 10% in real terms of what environmental studies was. this contraction happened during a significant expansion to evaluate new areas in the analyze questions surrounding alternative energy places. during this same time 3487 production facilities were installed in the gulf. double the number installed in the previous 30 years going

back to 1953. there were hundreds of removal'' that involved oversight. add to this the increasing complexity of deep water drilling and time constraints placed on environmental assessments. the mms was underfunded. you can see why is it allowed industry to drive regulations. why its use of exclusions soared after 1997. we all share in some of the failures that cost this disaster. we have not been mindful of the costs and risks borne by that region.

we accepted the plan to explore first and ask questions later and stopped asking. many of us are hopeful this will lead us to ask the right questions. if you have questions i will attempt to respond today. >> 34 years ago an event occurred on the house floor that may not seem connected to the deep water horizon tragedy, but says a lot about the relationship between government and regulatory agency. i am pleased to be invited to testify today. i came to the conclusion after watching the thorough testimony

being presented about the process that i would not duplicate it but provide some reflections on my involvement in this process. on september 28, 1976, the select committee brought to the floor a conference report that contained a provision which set the federal government that is directed to carry out an exploratory drilling program. the prior authorization provided similar authority. most of the work done was [unintelligible] not unstructured, because the

industry did not want the department to do it. the opposition to the provision directing the possibility of an exploratory program was fraught with interesting debate on the record and on the floor of the house near the cloak rooms. it was interesting to me and it has come back to haunt me. we saw what happened with the oil spill. the opponent to this position was -- to this provision was the governor of delaware and a very articulate spokesperson. you did not want big government

to be heavily involved with the exploratory drilling. this had nothing to do with the deep water development. it had to do with the concept about separating exploration from development. how can the government offer leases for sale if they don't know how much resources may be out there. seismic testing was in its infancy. we did not know how much oil was going to be there. have the government set up some kind of program. the congressman made the case that you did not want government getting involved in the question of exploration drilling on the

ocs. they should not be overly involved. you did not want the government to be hiring people or engage in its drilling technology. toward the end of the debate he turned toward the majority side of the house and said, if he liked the way the u.s. postal service's operating you will vote for the federal oil and the gas company. the congressman hamilton moved to recommit the report back to committee and killed it because it was near the end of the session. the vote was to recommit and it

was successful. it was killed by four boats. -- by four votes. the democrats had just come off a post-watergate election. the democrats controlled the house by 291 votes-144. ocs cuts across party lines. we have seen it time and time again. as far as i know, that is the last time and the only time the direct issue of should the government be more involved in the drilling activity, was directly confronted by congress.

the decision was no. it took the election of president carter and dropping of that provision to get the report passed. the process we have under the amendment subject to the criticism -- must of is it is justified. it is time to change what we did back then. there have been 23 years before this was implemented. i think the time has come given what we found out about the oil spill. the 78 amendment served us well, but they need revisions. we have a process-rich set up in mms, but mistakes were made.

we need to professionalize our inspectors and increase the budget. obviously you have heard from many witnesses this said part of the problem with bp was we had a pretty good safety record. that tends to lead to letting decisions go that need greater scrutiny. we had issues regarding the environment. [unintelligible] was relatively near when the amendments were passed. there are provisions requiring that impact statements be done and other areas would be silent about whether it would apply. there was an internal debate about that you mentioned at,

that might mean there will be interpretation the absence means it does not apply. it is up to the federal manager to make a decision whether there is an activity that affects this environment. there was this debate in which members of congress mentioned -- other times when other advocates say don't mention it to many times because you will wipe it off the books. that is one ocs has a mixed record. i have not been and at mms since 2001. it has been nine years. i was there during the 1990's. more companies made greater

finds in deep water. that is where the resources are. we did put forward deepwater operation plans and called for prescriptive regulations to be supplemented to adopt environmental management plans. that did not make it through the process. during our time there was a deep water subcommittee added to the science committee. there was an awareness that we were moving into deeper water. perhaps we needed more scientific knowledge, but we eft and i'm not sure what happened after that. i went to the u.s. commission

on ocean policy and we took a broader look at motion issues, including a chapter on offshore energy. when i was there we spent a lot of time fighting about royalties. we got into a big fight about how to process that. and i have seen the statements made that were stimulated by omb looking for additional revenue. my sense was there was a recognition there was some gaming going on that would reduce the price of oil. it has nothing to do with the deep water horizon. it just dominates your time when

you are at the agency. congress paid a lot of attention to it, including moving toward the royalty program. you lose your attention on issues that are more important. that is part of the history of what we experienced in the 1990 costs. i will not use all my time. i yield to my colleagues. i think it is quite obvious the agency, at the federal government need to adopt better safety requirements and develop a stronger cold church. that is so difficult to do, but i believe the industry has its own responsibility for

developing a safety culture. i worry about the question of technology. what can government agencies know? it is a very difficult issue. let me note that if you do nothing else, you should make a recommendation that the 30 day requirement be changed pending legislation. that does not work. it was one of those compromises made in the amendments. i would be happy to answer any questions when the time comes. >> thank you. >> good afternoon distinguished members of the commission. thank you for the opportunity to meet with you today. i want to wish you the best in your investigation concerning this terrible accident.

none of our actions can compensate for the loss of 11 lives. we are working to identify the means of preventing this from occurring again. you had asked me to talk about my tenure. i understand you are seeking an understanding of the kinds of issues and challenges that face the director. it was my privilege to be the director of mms until mid january 2009. i am honored to share the panel with elizabeth birnbaum and thomas kitsos. we represent a wide range of experience and have served in republican and democratic administrations. our jobs were never boring and never lacked challenge.

since its inception in 1982, the dedicated employees of mms have been instrumental in developing reliability of the nation's daughter, michelle. they connected billions of dollars unfunded federal, state programs in the land and water conservation fund. under current rules of energy development provides about one- third of our nation's oil and approximately little more than 11% of our natural gas. we also made great strides in establishing the renewable energy program. following my departure, the director and rarely received and continue to make mms the leader of offshore energy production. despite our varied backgrounds and interests, i believe you'll find we have several common beliefs. one of the beliefs is that what the people of mms have done with it will continue to do under which ever name you call it, it is a vitally important to our nation because we are considered -- consumers of energy. one thing has been the vilification of the great people of mms.

i have never worked with a more dedicated sincere, ethical, and let's do the right thing group of people. it has personally pained me to see the entire agency paid to and -- painted with a broad plot -- a broad brush of blame. i would trust mms with my safety, my money, and my reputation. these are people that gave up countless must review and improve our ability to accurately determine and enforce the correct royalties. these of the people on the front lines when hurricanes three cabinet, death, and destruction. i recall that in 2008, four hurricanes across the gulf of mexico, causing a time or nearly 100% of the gas and oil production was shut-in. many offshore structures or badly damaged or destroyed, but there was no loss of life and no appreciable spill of oil or gas in the outer continental

shelf. those who oversaw those operations crofton hundreds of miles away from their families and loved ones. -- there were often hundreds of miles away from their families and loved ones. not all employees are perfect, and not all behave in the manner expected by leadership. however, let me confirm that the inspector general reports have shown inappropriate behavior at mms, while very well publicized, was in frequent and involved a minority of employees. i mention the reports today because it illustrates how the directors focus is pulled in many directions. as with all agencies, it includes hundreds of people spread over thousands of miles. directors not necessarily aware of every day to day activity. and i believe those are at the table today would agree that it is not what you know that comes up to bite you. it is what you do not know. the director provides a broad

policy guidelines with goals and outlines, and some are involved in this routine daily activity. that is left up to the professional managers of the agency. however, and i would say rightly so, the director is ultimately responsible. inspector general investigations and reports are an example of situations that require the directors time. over the years, mms has certainly had its share of those investigation reports. when those resurfaced during my tenure, we cooperated fully with the gao or inspector general. when the reports were released, and i point out that often the reports are released years after the event actually occurred, we discipline and those involved, and we implemented the recommendations and changes recommended. during my tenure, considerable attention, and consequently much of my time was devoted to that determination in collection process, but i know

that is not your focus today. the exact cause of the april 20 loss of well control and explosion has not yet been verified, but it is my hunch, and as you know from my background, not an engineer, not an expert in this area, but it is my hunch that you're going to find a series of court judgments and a series of human errors. an investigation such as the one you are doing will fill in those holes that either the regulations did not require the correct testing or the well- designed procedures were not followed, and once the picture is clear, industry and federal regulators must take corrective action if they have not already done so. we must never have a repeat of this occurrence again. this event has often been referred to as a black swan, and even that was not adequately inspected and will forever change exploration. this deadly accident also changes how we view the past.

a missed inspection, a quick approval or procedure, which in the grand scale of things may or may not be significant, but suddenly it looms large. we look differently at the past now. as you know, all offshore energy has some risks. until april 20, it appears that the safety mechanism and the safeguards in place actually worked. the hurricane season of 2008, which i mentioned, is a good example. but much of the good news about 2008 was based upon the lessons learned after hurricanes rita and katrina. for example, additional morning requirements were put in place following 2005. regulators and industry learned hard lessons from disasters and no doubt will do so now. during my tenure, many leases were sold, many wells are drilled in deeper and deeper water, and certainly at deeper and deeper depths. well it did not get the public

attention of the royalty program, safety, both in terms of the environment and human safety, was very much discussed. i think everyone involved in the leasing and save the program knew that just one accident, it just one accident, which changed everything. and how true that has ended up being. through the well, it appears the technology to explore has outpaced the technology to respond. but at the time, the track record of safety procedures, the blowout preventers seemed well within the reasonable risks parameters. however, then and now, one of the best ways to ensure cities to have the best qualified and trained personnel involved in the permitting inspection areas. while i was at mms, the oil field was absolutely booming, and we spent hours evaluating how to retain and attract quality employees.

these efforts included creating retention bonuses, recruitment techniques, imploring the office of personnel management to approve a higher salary structure. while i think we were fairly successful in that area of bonuses, in particular, there was always a challenge to our financial and technical resources, which you have heard in today's discussion. it is industry and not government that developed deep water technology and equipment. therefore, it is not only necessary, but i would say highly beneficial, to develop and maintain connections with industry in order to keep abreast and regulate the latest technology safety issues. i was never under the impression that industry was calling the shots. but certainly saw their input, which i believe is rightfully so. and as you are acutely aware, this nation is at a crossroads in its energy development. your recommendations will help

steer our energy and environment. while the deepwater horizon changes are perception, and has not change the fact that would depend upon a reliable, secure energy source that there reasonable cost. it has not changed the fact that we import approximately 60%. it has none change the forecast that was greatly increased emphasis on renewals, and fossil fuels will still likely provide three-quarters of our energy portfolio for at least the next generation. link the exploration moratoriums, the fact moratoriums, additional reviews will eventually cost jobs, will eventually cost energy reliability, and will eventually cost energy supply deficiencies. we have already read the prediction of job loss of 23,000 jobs in the current moratorium. decreased domestic production

will eventually resolve for more imports. it will eventually result in future and higher fuel costs. the challenge as i see it to you, and i wish you the best in this, is how far we move that needle in additional safety regulations and additional 66 cards in response to that. how far do we move that needle? yet, we do not go so far as to cripple our ability to produce domestic energy. i wish you well in finding that sweet spot. in closing, i reiterate to you, it was an absolute honor for me to serve this country and a privilege for me to work with the fine people at mms. the challenges were great. however, being a director of mms was one of the highlights of my career. as a government agency, i thought we were nimble, quick. we attempted to provide service, a timely service, both

in terms of energy exploration as well as safety. but it is a very, very delicate balance and continues to remain so. and i think it is good that we always have these kinds of discussions to remind us of the types of balance it takes. thank you for your attention. thank you for years that precise -- sacrifice in serving on the commission. i look forward to attending to answer your questions and further discussion. >> thank you. next. >> good afternoon. my name is liz burnbaum. i served as director of the minerals management service from july 2009 to may 2010. let me start by expressing my deep regret that the deepwater horizon accident occurred during

reported with the immediate congressional investigations and hearings. this brings me to my second recommendation. the commission should support the development of a body of regulations for oil and gas exploration and development processes. it would be quite distinct from the technical standards generally adopted by mms in the past. there are requirements for communicating internally, establishing written protocols and living by them. double and triple checking activities. and for providing incentives to internal sector reported in two i understand there is a body of literature and academic investigation in support of process 64 industrial activity. mms had only begun to address the issue when i left. when the deepwater horizon incident occurred, we were in the process of finalizing safety and environmental management systems regulations.

but staff had developed the record of accidents and regulatory violations over the last several years. staff analysis determine the subsidies systems would dress failures involving more than two-thirds of the incidents. secretary settled -- salazar's report mentioned the regulations. i would suggest that the commission considered not only insisting the regulations be finalized but also ordering a broader review process regulations for our shores or oil and gas. another area of deficiency that has become apparent is a lack of adequate oil spill response capacity. despite what was adopted in the oil pollution act of 1990, the nation's only not resolved adequate oil spill response planning and basic research and development for oil spill response technology. as the house energy investigation has shown, oil spill response plans prepared by industry, and a review of those plans by the mms, were lacking. in addition, while the u.s. coast guard is responsible for implementing the plans, the

coast guard has never acted on our offer to allow the coast guard to review the plans before they were approved. the commission wished to reconsider the terms of the executive order, implementing that act which splits the responsibilities between the two agencies. to the extent the responsibility for oil spill response is share, all responsible agencies should review industry plans and standards. the second issue in oil spill response as the development of adequate clean-up technology. it is a challenge to maintain sufficient research funding for technology to address the problem that only draws public attention once in a generation. to support all spill cleanup research and development. mms receive appropriations from the trust fund under that act to conduct research into support

oil spill response train. clearly the level of investment has been an adequate. this commission should address the issue. i would suggest the commission determined and adequate funding level and then recommend direct spending from the trust fund to support research and development under the supervision of the coast guard or successor agencies, whoever is responsible. finally, i would like to address what i consider the most difficult issue in oil and gas regulation, the inspection of offshore drilling rigs and production platforms. appreciate the careful job done by the inspector general and electrons inspectors in the last administration. inspectors who had accepted gifts from industry employees had extensive social and community connections, including family relationships, with those employees. simply put, they'll live in the same towns. this is not a point of criticism. offshore inspectors have to live

along the texas-louisiana coast in order to lie offshore on the inspections. even if the agency brought in a completely new cadre of inspectors, they would still have to live there. following the deepwater horizon incident, i heard recommendations that mms should have as had inspectors on the drilling rigs at all times. it would require the inspectors to live all -- live on the rigs along with the drilling crew. they could not fly back and forth on ships. the weather would make this impossible, even if funding allowed it. having the inspectors live on the platforms would tie them even more closely to the industry. another factor contributes to the close relationship between inspectors and industry. the training necessary to understand operations of the drilling rigs and platforms is not available in schools. it is like being in of a

mechanic. you have to spend some time under the hood. historically, people with experience working for the industry have and those with the knowledge necessary to inspect the platforms. the only way to eliminate the connection would be to provide extensive training. there would still be no silver bullet to eliminate the close connection between offshore inspectors and the employees of the industry they regulate. they will still live in the same communities. one suggestion made by the interior inspector general is a penalty to be established for industry for those who require -- to receive inappropriate gifts. requiring rotation and inspectors, putting firewalls in place, marking the rate of violations found by inspectors in district offices, importing -- imposing moratoriums.

combination of these standards combined with close oversight will be necessary to insure adequate inspections. we ask the national academy of sciences to conduct a review of the offshore safety inspections. the report is due out this fall. may provide some additional input to you on this issue. i want to thank the commission for the opportunity before these thoughts. i don't envy you the daunting mission set for you by the president. in order to provide recommendations that will ensure safety and environmental protection, the commission will need to go well beyond the technical standards to review all aspects of offshore industry practices and enforcement. i will be happy to answer any questions. >> thank you very much. y'all have introduced information here that supplements -- you all have introduced information that supplements new and detailed concerns that have been raised and we appreciate it. we will have as our lead

questioners here chairman graham and the chancellor. i will turn to chairman graham. >> dr. priest, earlier today we heard from the gentleman from shell. he was asked the question about his evaluation of the drilling that took place on the deepwater horizon. he had a number of technical comments as to how he thought it should or should not have been done. that raised in my mind the question, is there some effort to have a determination of best practice and uniform application of best practice where there is an activity that is relatively repetitive, and if not, why not? how is it that we can have one

company do something as standard as drilling, admittedly a complex activity at this depth, at such variance to what another, sister company would have done? >> i think the industry makes a good-faith effort at trying to develop and apply best practices. it does this in many different ways. primarily through the american petroleum institute recommended practice documents. operators are encouraged to follow them and contractors are encouraged to follow them. there is extensive technological information sharing in forums like the offshore technology conference and the society of petroleum engineering, so i think -- i don't think the industry as a whole is negligent

about these issues. they don't want to see blowouts. they don't want to see platforms exploding into flames. i think there is a good faith effort among the active operators to establish and follow best practices. >> so this incident of the peat assuming that the criticism we heard was a program it was an allied air, an aberration? >> you have to remember i am a historian. i look at these things in historical perspective and i hesitate to make judgments on the industry as the way it operates now, or speculate on what it should be doing. i do know there is a long history of the industry getting better and communicating with the best practices are. >> there have been a series of events in the last 10 years that

have had some effect on the context for what happened on april 20, and given the range of service of the three mms directors who are here, you covered most of these events. i would like to raise them and ask a question or two about each. your the acting director during most of the year 2001, which was the time in which the new administration had come to washington and had announced that they were going to have a new energy policy. the vice president was put in charge of developing that policy. to what extent were you, as the acting director of the mms, consulted on issues of energy

policy by the vice-president of the task force? >> i was consulted about the status of the program and what the offshore program looked like in all the different procedures. i really was not asked any questions about policy. senator graham, i was a career civil service person and i took over when the prior director left because of the change in administrations. i was subject to the new administration selecting somebody. it turns out that i left before they actually had selected somebody to go work at the ocean commission. the vice president's energy task force got started late in my time there. this was just getting off the ground. there were some early and preliminary questions about what is the program all about, and i

dealt with the staff on that. by the time i left, the task force took off and were making some policy decisions, but i was not there. >> do you know if the task force asked any of your staff or your successors question suggests, what would be the implications in terms of personnel and agency budget in order to carry out various new energy policies that the task force might be suggesting? >> no, i never received any questions about budget matters, as far as i can recall. they had the budget numbers and for a damn about what the status quo at the time was, but the direction they were headed was not shared with me. >> the next event i wanted to discuss with the establishment of the department of homeland security which resulted in a considerable amount of

reshuffling of agency responsibilities. one of the most affected agencies was the coast guard, which had been variously in the part of the treasury in the department of transportation, and i was moved to the new part of homeland security, with the priority assignment being counter-terrorism. i understand that i think this occurred between -- there was a memorandum of understanding in which some of the coast guard's previous responsibilities were transferred to mms. is that a correct statement? >> it sounds correct to me. i know it was not initiated while i was there. >> did mms get some additional resources in order to take over the responsibilities that previously had been coast guard

obligations? >> i cannot answer that. that was probably done during the 2004-2005 budget hearings. the budgets i participated in was the end of 2008, no, 2009 budget and beginning of 2010. i really have no recollection. >> in his testimony earlier, dr. priest talked about some of the declines in the budget. i believe there was a reduction in headcount from roughly 2000 to 1600, and the inflation- adjusted decline of approximately 10%. how did the agency during your tenure go about managing those reductions and resources, particularly as this was also a time of an accelerated level of activity, particularly in deep water? >> what you do is, you do your

best to do your best with less. those were times when it was very tight budget times. i mentioned to you as we try to figure out ways to try to retain quality employees, we used what sources we had available to use retention bonuses. we had discussions about how to make that money stretch out as far as we possibly could. again, my recollection may be a little fuzzy on that, just because of my timing in terms of the budget process. when you come in at the end of an administration, i don't believe by many different than anyone else. i came in knowing it was probably about an 18-month window, regardless of how the elections turned out. you are going to be probably finding another job. you look at, am i going to focus on how to make the agency work with what it has come arduous

been a lot of time trying to change it. frankly, mr. chairman, i tried to make the agency work with what tools i was given. >> what are some of the areas that you had to eliminate or reduce the previous level of intensity, such as number of inspections of well sides? >> i do not recall the necessity to reduce the number of inspections. the inspection process is very fascinating, as ui am it -- as m sure other can tell you, the weather is a major factor. i had the opportunity to meet with many of the inspectors and got an idea of what kind of job they have to do. i am very grateful for the job that they do. when you are faced with b.g.e. need to go out on a helicopter,

and you are more than 100 miles away from shore most of the time. any kind of weather event, you don't want your inspectors out there. in terms of -- i do not recall having to reduce the number of inspections. i do recall before i arrive there, there was a discussion about making sure we had helicopter so we could get them to and from the rigs, which is absolutely vital. you have to be able to get on the -- you are going to be able to inspect it effectively. >> another event that occurred that was some of the discussion with panel 2 was the discussion to open up more offshore areas for oil and gas exploration. were you consulted by the administration in terms of the policy of opening up more, and what would be the consequences of that on your agency, such as

on personnel demands? >> certainly we had extensive discussion about the fact that if we went into new areas, there would be were promised for additional internal studies. for step would be additional environmental and resource studies that would require significant investments. the decision of what goes into the five-year plan was never delegated to the mms director, but the informations the secretary of the interior relies on came largely from the mms. >> what would your level of contribution to the decision to expand the area for offshore oil and gas exploration which was announced in march 2010? >> i provided the secretary of the interior with every piece of information i could. >> in addition to providing a permission, were you also ask for your judgment and opinion? >> yes.

>> and what was your judgment and opinion? >> i cannot take the number of meetings we had in the number of conversations we had about different aspects of it. in the end, i supported the administration's decision. >> thanks to each and everyone of you for being here today and providing additional insight. i would like to address the question of reorganization from mms and other pieces of responsibility. i was very interested in prof. priest's description of the historical perspective that helps us understand how mms got to where is and why it makes some of the decisions it makes. i particularly appreciated his reference to the culture of deregulation, almost anti- regulation, which describes the american political environment

for the last 25 years. that creates an environment which is probably difficult for mms to move forward just by reorganizing. it requires some statutory changes and resources and expertise. to the extent that a reorganization might actually assist the people who are working in agency to make good decisions and to be more objective and perhaps not quite as close in relationship as you were describing, living in the same community, would you reorganize mms the way the administration has proposed, or would you make some other changes? >> i think the leasing division of mms needs to be separated from those that have the responsibility for safety and environmental regulation and enforcement. that part of the administration's proposal seems to make good sense. what i am not clear about is

whether it is being proposed that they remained different divisions within the new bureau, or whether they be separate bureaus. in any event, i think that is important separation in that you really have a professionalize asian up your inspectors in your internal people on one side and the other side, those who engage in developing the five-year leasing program. there also has to be some cross fertilization. you cannot develop a by-your program without the internal people being involved. that would require either mou with two separate bureaus. you have to have some cross fertilization. i think the separation of safety and environment on the leasing part is critical. >> i think there is a reason why internal assessment and environmental studies are in the

leasing part of the agency. just as mr. kitsos explained, they need to be involved at the early stages. internal studies does work with other sister agencies -- environmental studies works with other sister agencies. the contract with noaa and other agencies. it does happen very early, perhaps there needs to be more statutory authority related to that. i don't know, but there is reason why environmental studies and assessments are in the leasing department. >> as mr. priest said earlier, there is an inherent conflict in that it requires both promotional production and environmental review. the number of environmental laws that apply -- there is a constant tension between the

two. i agree with tom that is very important that the environmental folks be elevated and given a level of independence that they have not had in the past. whether it needs to be done in a separate agency or not, there is a lot of communication that needs to go back on the resource in burke -- evaluation. you need to develop some sort of structure that allows for continued communications on a whole variety of issues that affect the oil and gas program. >> he spoke to process say, and most very complex industrial organizations and systems have process safety. i am sure all the companies who are involved in the gulf of mexico would say that they do something along those lines, but obviously as we heard this morning, the four companies have

very different approaches to it. the question of standardization, the proposed regulations, did not been adopted. why is there so much resistance from the industry to regulations like that, that would set certain standards for safety, when they obviously have a vested interest in having a safe record? i am particularly confused in this particular industry, where you have so many different players, the operators, the drillers, the contractors, subcontractors, the owners, and each and every one of them have slightly different approaches. it raises all kinds of questions about consistency and help contractors and subcontractors can move from company a to b to c. it seems a bit confusing, almost

as though some order -- people would see the advantage of having some consistency so that people have some predictability. why so much push back? >> you make a very good point. when you have drilling contractors to work with a number of operators, the operators like bp or shell are ultimately responsible, but the drilling contractor like trans ocean works with most of them and has the largest number of drilling operations in offshore u.s. waters. you'd think they would want to have consistency among the people that work with. it is my experience that virtually any industry universally opposes regulation generally, and they are no different. there are some standards for process systems, best practices,

suggestions for the industry, but everybody likes to think they have the best idea and they don't want to be told how to do it. i think that is a more generous way of saying the industry resists regulation, partly because they think they know better. >> i can put a little bit of history on this. in july 1991, the mms published a proposal for an integrated city management program that they intended to make a mandatory on the industry. this was based on recommendations from a committee of the national research council. it came in the aftermath of 1984 and 1988. osha had done a process that diminishment recommendation and the epa had its own risk

assessment program. the industry in response to the mms proposal preferred to crawl up api recommended practice -- draw up api recommended practice. it was determined at the time that mms would not make it mandatory, but the industry would implement this voluntarily, but at mms would monitor to make sure that company for following these best practices. there was a pretty high degree of adoption in the late 1980's, but it just sort of lost momentum in the 2000's.

there was a real effort in the , and industry was serious about this, too. it was not just mms. they thought they could do it on a voluntary basis through the recommended practice documents. >> but they did not. the last question is about liability. congress is debating whether or not limits on liability should be raised. do you have an opinion he would like to share on the question of the extent to which live build settlements influence the safety culture, risk-taking, balancing risk? apparently not. >> that would appear to be a hot one. >> thank you all for being here. i wanted to tell loren to issue

of what the internal review process is. in the investment in baseline scientific data and a culture of mms, as far as doing the internal review. always interested in the comment that the investment has gone from $40 million to $10 million annually in basic clients. >> $20 million. >> but it has dropped significantly since the early days, and yet the expansion is considerable. there have been a lot of articles suggesting that within the ems culture, indeed mms culture, the scientific recommendations have not received the kind of seriousness that maybe they should. an earlier panel talked about the interagency process, consulting with other agencies in environmental review. can you just reflect on your own experience at mms and how

internal decision making is made, how you would recommend strengthening at? some have recommended there be a senior science officer at mms which would give more weight to that side of the equation, or is this something that mms should really focus much more on, the development side, and strengthen the other zero agencies? >> it seems as though we have not as robust an internal review program at mms that would appear necessary at this point in our zero zea's development program. " would be each of your recommendations on how to fix that culturally within the agency? >> i did look at this, and in fact appointed the first signs

adviser to the director. he had been executive director of the society for conservation biology. he in fact was there in order to provide support for an focus on what mms science was, what might need to do to make it more robust, and how to communicate that also. to some extent, mms does suffer from the pact eject from the fact that people don't know what the effect of mms scientists is. the suns the advisory board that mr. priest is on is actually very good collection of academics from a wide range of disciplines that are unaffected by a c s development. there is no question that there needs to be more investment. i believe that should be --

there is a huge need for more science investing at noaa and many other places in the federal government. we had a conversation about relying on outside agencies baseline science vs. the signs we developed inside the agency. mms science is focused on what we need if we are going to consider leasing in this area, what baseline studies we need. as we are moving into offshore renewable energy development, renewable energy development requires the study of a whole different set of issues that had not been considered before. migratory bird issues off shore that never had been examined, but there needs to be a strong focus on science investment at

mms. >> i have read to similar reports that there are concerns that the science is not getting the same issues as mms. we were very proud of what we thought the scientists were doing, and i agree with the former director, it does help to have the science tidy and with the exact mission you were doing -- tied in with the exact mission you are doing. we made a public relations effort to emphasize the types of science at mms is doing, particularly a whale study in the gulf of mexico that was almost unprecedented at its time. in short issue is money. >> it is important to put a little perspective on this. in 1975, there were no studies. that is one reason why the

budget is so much higher then than it is now. in some cases, in some areas, there is almost data in digestion because there have been so many studies funded. it is important to understand it from that perspective. also there are other agencies doing similar kinds of studies, and i know the studies program has to be careful not to duplicate what other people are doing. it is a quality organization and they produce very good science. they always have to balance between funding science and also gearing and tailoring it to the mission of the agency. that is a big challenge. >> 1 relationship with the diminishing science budget at mms was the fact that during the 1990's, the offshore program was

pretty limited because of congressional and presidential moratorium with roles. therefore, there was a decision made at omb when they saw the program was contracting, that the science budget could go down a little bit. not enough money was being spent in the gulf, which is where most of the leasing and production occurred. when so much is taken off the table, but it was one of the first things to go. >> as you look back at the way the program has been administered and you see the huge scale in which area wide planning takes place, the argument the scientists make is that the decisions -- first call, they are up not the appropriate specificity which they were consulted in a timely way. they are asked to comment on very large areas in the beginning, and then there are

the exclusions, categorical exclusion. you have a thing -- any changes to recommend in the way that leasing is conceived and planned and scientists are consulted? scientists outside mms, based on what i have been told, did not really think that have been adequately consulted or effectively involved in these decisions. some will say they have had insufficient resources themselves, but others will say they have not had confidence that if they had put greater efforts into these consultations, that they would have been taken seriously anyway. that was not there is true. do you have any responses to that krista mark >> -- responses to that? >> i suspect that area wide leasing is still going on. what is significant about the economics, it was not the question of whether you could do sufficient scientific analysis at that level.

mr. priest suggested that area wide leasing had actually reduced the income from leasing. there is a question as to whether if you restrict the number of parcels to make available, does the industry want to make x amount of investing so they will bid more parcels. processor i understand it is an extremely complicated economic problem. on the scientific basis, i am a little bit dismayed to hear that scientists might have suggested they didn't comment because they were afraid nobody would listen to them if they did. i am not sure if that is a question of area wide leasing. that is a question of the culture of the agency, which needs to be raised to be considered to be coequal with the leasing program, whatever

way they had been viewed as aborted and needs to be elevated. >> the program that generates largest amount of treasury revenues except for the irs. is it reasonably expected that the folks would be equivalent with respect to the science as on the leasing revenues themselves in one agency? no matter how that agency is broken up. >> i think it is possible. it is a question of the culture of -- that you inculcate within an agency. the revenue was never the guiding force for anyone involved in the offshore process. nobody ever brought that in as an issue a policy in determining how to do it or what the internal review was. >> if you take into account

civil service pay grades, hiring constraints, and challenges of rapidly developing technologies , how the level the playing field so the inspectors are a matter for the operators? can you do that? >> i think it is a really tough question. that is why i spent so much time on it in my statement. you are going to have the problem of the work they need on train you to understand how drilling rigs and platforms work. there are very specialized, and giant pieces of equipment. you still have the problem that they need to live along the coast to do it. some of the ideas i suggested, rotation, -- although the inspectors have not been the

folks who had to pay limit problems, but if you brought in engineers you'd be paying them more anyway. the big problem on pay has been in the headquarters in new orleans region. >> i would add a little bit to that, on the inspection side. the most recent ig report talked about dealing with the inspectors. frankly, i would recommend that report as well as the one did in with the rik question be mandatory reading for all federal managers as well as anyone in the industry. one of the telling things as you got down into the details was -- an e-mail or correspondence between an inspector -- let me , wrongfully so, he was inspecting a platform at the same time he was negotiating

employment. i get ashley get paid $64,000 with all those bells and whistles? that is what caught my attention. i am not sure i can say how $64,000 relates to the economy in the gulf, but that was certainly an issue for that inspector. therefore, pay is a question. >> some of you may have heard the testimony this morning about the safety culture, the safety case that characterizes the uk system. are any of you familiar with that? >> i know a little bit about the uk system. >> i would be interested if you would comment later for the record and submit your views on it. he certainly extolled as a superior system in many respects. whose idea was it to expand offshore oil and gas? he said it was one you supported.

did emerge within the mms? >> expanding offshore oil and gas production had been put on the table -- substantial expansion. >> the decision president obama made to increase the area, that was on your watch. >> the proposal was much vaster and had been presented by the last administration on the last day of the last administration. what this administration did was significantly cut back on that proposal. >> so the idea was a bush idea that president obama supported? >> president obama cut back substantially on the bush proposal. >> what about the moratorium? did that originate with mms? there have been to moratoriums on leasing deep water in the gulf. >> i was not there for the

second one. for the first one, there was extensive discussion back and forth between the white house. i don't know where it originated. >> mr. kitsos, your unique among these boats because you have been involved with congress and the authorization of language, having had a hand in writing some of the language. with the ocean commission you had to step back and look at the big picture with government. one of the things we have been pursuing in our research and questioning is this issue of how we expanded in the deep water without paying real attention to the new risks and issues associated with it. i think dr. priest actually gave us a summary of that, and you commented on it as well.

i want to ask you what was your experience in congress, you were around when the royalty relief was put in place that gave opportunity for doing deep water drilling with less payment of royalties, and then later, you mentioned in your testimony now the mms had been working on a plan and evaluation of the issues associated with deep water, and then in 2001 he said you did not know how that worked out or what happened to it. can you give us some perspective on the importance of both of those, how they influenced moving into deeper and deeper water without thinking through all of these issues? >> in 1992, the energy security act was a major law passed by congress, and during that discussion, right at the end of

the bush 41 administration, there was a big o c s title that included some revenue sharing, some moratorium, some promotion of production areas, and senator bennett johnston of louisiana came in and proposed deepwater oil rally. at that time i was working for the committee of merchant fisheries and to congressman from the resources committee were the lead conferees. they strongly oppose that, and the entire zero c.s. title dropped out of that. in 1995 i was at the interior department with that legislation was dusted off and passed. it was part of a larger alaska export restriction bill.

the act had a major impact on companies willing to make war capital investments in deep water. i always thought that probably would have done so in any event, even without the royalty relief, but we will never know. it seemed that the amount of acreage leased was large, got larger, and it was a major event. the studies are referred to earlier were just a series of different environmental assessments, one report associated with eight shelf proposal, another was a generic report. i cannot remember all the details of who did them, but within agency, we were anticipating going into deeper water and it meant something different than what we were used in shallow water. there were a number of unanswered questions and we started to raise some of those questions, but i don't know what happened.

>> dr. priest, do you have a sense of that as the historian of this? >> deepwater role to what -- -- the blogger royalty relief was something that was under discussion at the mms in the early 1990's. it did not pass until 1995. it was sort of a victim of poor timing. i believe it was not necessary when it was passed. the boom was already on in deep water. it'd probably have an effect on sun co's decision to make larger investments, but it is hard to know cause and effect. . .

it came out on a lease by lease basis. >> we were involved in this. it provided a subsidy of 10 civilians and dollars for deepwater development. it is not clear how much it amounts to. they are not paying warrantees. it is worth tens of billions of dollars. >> we do have some more

questions of we live like to pose. and think we will lead to explore with the yeaou question. thank you very much of thing with this. >> we are going to break up until 2:55.would you please sta?

i want to advise you that a false statement given to an agency of the united states is punishable by fine and/or imprisonment. knowing this, would you raise your right hand? i will be representing him this morning. >> thank you for being here. >> any board of questions? penny aplysia name -- can you please state your name? >> my last name is spelled th

ierens. >> thank you. >> what position do you currently hold? >> i currently hold the position of vice-president in drilling completions in operations based in london. \ >> common year said he had with bp? >> approximately 21. >> how long did you had your current position? >> december 2009. >> what other previous jobs it to hold within bp? >> prior to this role, i was the director for the gulf of mexico. prior to that, i held numerous jobs with the bp in various locations globally. >> when were you the well director? how long? >> 2006 through 2009. >> what is your educational

background? >> and i had in hnc engineering qualification in mechanical engineering. >> can you please briefly describe what your job responsibilities are as vice president for the operations? >> yes. i'd be poured into the technology vice-president in mbp and the principal function i have is a functional role. my principal accountabilities were actually focused on several critical produce coming up in bp.

i would take over the order greoup? >> where is that? >> out of london. >> did you put it paid in the deepwater horizon bop your pension? >> yes, i did. >> while you selected? >> i was in the united states on business the previous week. >> did you head of the

intervention aside for the bop stack operations? >> from bp's side, yes bu >> do you recall making a log book? >> yes, i do. >> is it the log book that you actually took? >> yes, this is my logbook. >> just to give me an understanding of how you are communicating with people, who were you working with within transition to address the intervention? >> several people. i do not recall all of the names.

>> i was really porting. out working principally with mr. don king. >> i was aware that transition was doing that. i did not get fully involved in the end of improper for a couple of days. >> do you know what days you action got involved? >> it think it would have been around the 23rd or 24th. i have lost track of the exact time. >> i'm going to referred to in a

teammate on april 25. -- referred to a note you made on april 25. do you have that in front of you? >> i cannot find it. >> it should be tabbed for you. right there should be the first one. >> can you repeat that number? >> april 25. it should start 1415 at the time. >> that is correct. >> can you go down where it says 1500? is that correct? above that, there is a note. >> that word is sum. can you read that to me? >> this is -- there is some

confusion about details from the control system. transition was aware a change had been made in the control system and a they are trying to establish what they have got. >> from this law, any time to

get updated drawings? >> yes. >> when was that? >> i do not recall precisely. it would have been some time after ben. i do not know who brought them. >> we are talking hours? in days? at most, i think it would have been a day. >> do you think not having these updated drawings have been fed on how the response? >> i think there is a time where transition was looking for what was referred to as places of

interest. there is a faster response to the operation a bit. >> how familiar are you familiarboip -- familiar are you if bop? >> and produce a working knowledge. i am not an expert. >> do you know if there is a time stamp on how long the cutting element shear has if it comes in contact with sand? >> i do not know. >> i am going to refer to the time on the very next page. it is 1550 . employs one hour later the -- it was one hour later. can you please read the first part of the?

>> his address 1550. it is comparable to the function prevent i asked when this change happen if transition could provide drawings of the change and is told in no. i've been contacted but people who have made the change. i was told then.

>> can you elaborate on what the function is? >> is actually saying st system. the function of the st lock is to provide a locking mechanism once the rounds of an actuated into a closed position. the crack>> i saw a drawing whih reflected in initially handwritten red felt tip pen or something like that it showed overlying original drawings where the modification had been made. >> who provided you with the drawing? >> i do not know.

i do recall seeing the drawing on the walls in the room. >> can you continue to read the last paragraph? >> my concern right now is that trans ocean may possibly make an uncontrolled change locally on the rig. it does not appear at this time that they have a control process for this change on something which is critical. >> he confirmed that you still think it is a safety critical element? >> absolutely. what did you mean by "uncontrolled change." >> it is control of work. it is with the company procedure. >> with that the bp?

>> this to be a transition procedure. it took some time to understand. it had an impact on the time we had to respond to the intervention. >> when you say "took some time" can you give me a better definition of "time?" >> it may have been 12 or 24 hours. it was a considerable amount of time trying to understand what changes were being made. >> i'm going to go through a list of some possible issues and modifications they might have become aware of. i'm going to ask you about them.

i'm glad to ask if you were aware about them. alecky determine the possible of that it would have on the intervention. where you aware there were any leaks? >> at what time? >> after the intervention commandeering parana -- after the intervention, during the intervention. >> no. >> we aware of any leaking on the pot after the incident? >> no. meanwhile prior to the incident? >> no, i wasn't. >> we talked about the leak on the bop circuit. >> i was not aware of that before the incident. >> we aware of any dead man series modifications? >> no, i was not. >> were you aware that there was

a conduit things which out with one made by atag? >> no, sir. >> were you aware that fail-safe kit were removed and replaced with an alternative arrangement? >> no. >> were you aware of the lower pipe was replaced with a tet- ram? >> i was a with a change had been made sometime in the past, yes. >> with that have an impact on the intervention? >> it would not. >> real where the lower stack panel was reconfigured? >> the prior to the intervention. >> we you aware that after? >> i was made aware of it during the intervention. >> what type of panel was it? >> i do not know the type. >> were you aware that the

middle pipe on the boers? was in these test ramp? >> the prior to the intervention. >> after? >> yes. >> with that have an impact on the intervention? >> yes. >> can you elaborate? >> in the instance where it being rov port is incorrectly corrected, when you think you are operating the metal pipe ramps, the test is designed to hold prssure from the top and not the bottom. it would have a misleading impact for us, yes. >> where you made aware of any modifications to the pods defective their ability to be retrieved without intervention? >> no, i wasn't. even not confirm they did have outdated drawings. >> we have modified drawings,

yes. besides have vp been made aware? where is bp made aware of all? >> who would be made aware? >> it did was to be made aware, it to be made aware to the well team. >> would you agree that bp cannot have control over the modification? >> i do not know. >> did you know who made the

modification? >> no, i did not. >> earlier, you name two gentlemen that you worked with the the gentleman. where there any problems that they had with modifications that delayed their response? >> i do not know what problems they had. and do not know was going through their mind. >> did you work in the same room? >> we were collected in the same room. >> did you have david conversations? >> yes. >> did they discuss any problems with you? >> i do not recall.

>> do you know that during the intervention the rov and a small leak on the injection port? >> no, i do not recall that. >> at any time, when you made aware of any type of solenoid the issues on either the pods? >> and not during the intervention, no. >> were you involved with pulling the pods? i was involved with the removal, but wanted had been retrieved, i left on a break. >> have you ever visited the deepwater horizon prior? >> yes, i have. >> some of the last time you were there? >> i cannot recall the exact date. i believe it was possibly

october or november time frame in 2009. >> this is the name of thing over the group in london. did you see anything that had any concerns? >> i did not take the audit group until the march timeframe. >> when you are on the rate, did you see anything that indicated any type of concerns? >> no. >> well you -- while you were the director, when they had bop issues reported on thed daily reports, who is responsible for making the determination that the pods or equipment was functional? >> transition would be

responsible for making sure that anything on behalf bop was functional. >> when they pulled the yellow pawed, did you read any report on that? >> no, i did not. >> do you know who did? >> no, i don't. >> did anyone tell you there was a solenoid failure on the yellow pod? >> i did hear that. i do not recall where i heard it. >> i'm going to refer you to some logs that bp provided to us. i think it is in front of a start with number hzn-mvi.

>> take your time. there is a section of the yellow solenoid failure.

>> i'm sorry. >> with all due respect, he had no firsthand knowledge of any issue with the yellow pods. i think there are witnesses who will testify who did that might be better to address this. >> in response, this information was gathered from bp team. i assume you have been working with. at one to notice the mayor of this document -- i want to see if he was familiar with the document.

>> i went several years trying to see how to do it. i want to make sure that you actually can see it. if there is difficult, i always carry a spare. >> you are referring here to the sixth of may. >> yes. >> i have not seen this document.

>> i do not. crack>> are you still got to the intervention? >> were you involved when they made the cut above the riser package? >> i watched that. quite the you recall what they saw?

they moved it out of the plume. it appeared there were two sections of pipe. >> that the summit to what you are looking at? >> had bp done any work? >> the engineering group were looking at the analysis of how that could be. and do not have any information. >> another has been a lot of discussion. mention the new responsibilities. had you ever looked at the rate audit prior? >> no.

>> were you made aware of this? >> >> i do recall seeing a note in 2009 the mentioned below. >> why you were the director, did anyone indicate to you that the staff was not in compliance with the regulations? >> i do not recall.

>> did you note any problems that might have future concerns with? do you have any faith in it? >> that is a very broad question. >> do you have any faith? you think it is a reliable source. >> yes, i do. >> how many have you been on the floor? >> i do not recall exactly. i know it is a least one prior to this. >> where was that? >> the gulf of mexico. it would have been around 2003. i cannot recall exactly. >> it was successful? >> yes, it was very successful.

>> you and i were together for 10 days. >> good morning. >> [inaudible] i ends today as he to answer as the -- i ask you to answer from the perspective of the bp and

the perspective of being with your years of experience in the oil and gas industry as a senior statement. -- statement. i'm asking for your opinion on some things. you do not have to speculate. you can make a recommendation to the best of your knowledge possible. i would appreciate it. >> have you been following the investigation pretty closely and turns a transcript? there is progress. >> i've not been following the investigation. >> i will provide you some information that have been

presented at the hearings. he had se>> if you have knowled, please, let me know. for you aware of the march 23, 2005 explosion occurred at the bp texas city refinery? >> i am aware. >> were there any lessons learned for bp after that incident? >> i believe there were lessons learned, yes. >> what were those? >> i do not recall. >> the note would bp did with those lessons learned? >> i cannot remember. >> in 1999, this involved bp.

the crew experienced in your well blowout. how far [inaudible] >> i was aware of that instant. >> what lessons learned came out? >> i did not see it. >> was there an investigation? >> i believe there was. i do not know who ran the investigation. >> you are not aware of any

lesson learned? >> i do not recall. >> so any action that bp to ooko improve the effectiveness, you are not aware of it? >> i am not aware specifically. >> you been in the industry for a long time. there is a disaster in 1998. did you did are you familiar? >> i recall that incident. >> what your member the details? >> i didn't remember anything. >> what if i tell you that there was a ghastly that cause an explosion killed 167 people?

did that refresh your mind? >> what i see as the previous casualty. the guerrillas set out in my mind a lot of things were identified i 1998

[inaudible] let me run through some of these items here. you understand what we call the safety net, and do not you? >> i have not. >> in terms of rules of a various entity. half year never heard of that? >> i do not know that phrase. >> within the safety net, there are different in ditties with different responsibilities. they have different trees bonds abilities in insuring the safety of the vessels.

>> let me go first into the response aspect. yesterday, we receive testimony from the rig manager for the deepwater horizon. later on, we received testimony from mr. john winslow.

>> he said no. i think this is an area that it to be looked at in terms of fellini to do anything to enhance it. you operate in the gulf of mexico. >> there is the characterization that mr. winslow's testimony is that he ordered the captain to do what ever it was. >> that was a long question. your recollection is undoubtedly

better than mine. we can do this on this. we will be satisfied. >> i think the captain morning to set the setting for the audience for th. the real question is a forward- looking recommendation. >> i appreciate that. i would snojust note that his aa of testimony that was identified in the area for which she was prepared is the bop intervention. i understand your question, but that is the area of his concentration. >> i understand that. he has extensive experience in the oil and gas industry. i would think that he is the senior statesman for the industry. >> i am sure you he is a

qualified person in his field. more than qualified. a senior spokesperson is a heavy burden to carry. >> theories of what i am telling you is there is some confusion that i can see here in turn and coordination. do you have any recommendations in terms of improvements for drilling for exploration? to you have any recommendations? >> it is not my field of expertise. i am not capable of forming an opinion of that. >> had ever served as in oim

aboard a vessel engaged in drilling operations? >> no, i have never done that. fif>> i will continue. in terms of search and rescue, there was an office supply vessel. were you aware of that? >> no. >> it has taken the ability of rescuing crafts. it was very critical in rescuing survivors. one of the questions i asked today about the recommendation to have a standby vessel for a motive in gauging during operation, [unintelligible] it is not a requirement right now the mr. winslow said no.

they have a lifeboat could if -- lifeboats. ben >on board the vessel, it isa three legged stool. you have the master, manager, and the well site leader. those three people are supposed to make decisions. are you aware of that arrangement? >> i am not aware of the arrangements that were in place on the horizon with regard to

this. >> i understand it is pretty much the standard on all engagements. it is not just the deepwater horizon. >> although i am the well site leader, it sounds like part of the compliment of the vessel, yes. >> it is not a bp vessel? what i'm sorry. at that you were referring to mobile drilling units. >> you are the vp for drilling and completion for bp and you do

not know the chains of command aboard a vessel in case in this activity? >> i do not know the chain of command of board precisely the vessels. >> any vessel operated by bp? >> i do not know of the tin command is a navy vessel. i believe the oim is in charge of a bp drexel -- vessel. >> what you mean by a bp vessel? >> you refer to thunder course. does the he have any vessels? >> not that i am aware of.

four vessels operating, the deep water horizon is a vessel. who should be in charge? cle>> i hate to be defending a p witness, but [inaudible] i do not think this is bible information. >> the board has some for the we have lived to each witness to see if they have any recommendations to make things safer.

it would be great if your experience have let you. we do not want to experience the benefit of your knowledge. i think the board members fill it is our duty that we have for the thing recommendations if they have any. this is not a test. he did not have to answer. if you have an opinion, we would welcome on the deepwater horizon, being oim is in charge from what we understand. for you aware? >> i am not absolutely eschesuro

is in command. >> give a cruise director in charge of entertainment for their energy entertainment. >> of expected capt. to be in charge. >> does it make sense for the deepwater horizon to have a single person in charge evelyn to in the hood is? >> i do not know. -- in charge to know who it is? >> i do not know. >> do you have an opinion? >> i do not have an opinion.

>> how much knowledge do you have in regard to international regulations governing? >> i do not have knowledge of that. who in bp at your level would have knowledge and maritime operations including international regulations that limit -- regulations? >> i do not know. >> is bp a growing company? there is very little attention paid.

>> there are stovepipes aboard in terms of the system. on the company side, you have the stovepipes with the marine system. i do not see how everything is coordinated. that is why my questions have to be received a management assistant for the is to be the framework that everything is tied into. the system identifies one person in charge that is accountable and responsible for upgrading the vessel. it seems to me that not

everything is focusing on drilling here. especially when we go into the emergency situations. it makes it difficult to do have an effective response. you say you are out there. the things you would not know anything about. it seems that and not a lot of things are very well coordinated. . .

>> i am not trying to nail down here is responsible for what. it is a conversation between you and die. i am not holding you accountable for your answer here. but that is what i am seeing. >> i would like to respond. there is a lot of data that is yet to be understood, how this whole event occurred, which has to incorporate everything that has to do with the technical side, the drilling side, for the

marine side, who does what, who responds to whom, who takes what responsibility. i think that is the time you can really understand what happened with regard to accountability. i do not have data of that nature. and i also do not have a thorough understanding of the chain of command it through the sequence of the bands. i do not have an opinion on that. >> yes, sir. i appreciate that. since you are involved in the oil industry for a long time, that is why i am asking you for your opinion. if i am asking the ceo of transocean and he is giving me the same answer you are telling me, and i am getting the same answer, that is not a good thing.

somebody has to be in charge here. somebody has to have an overall picture of what is going on, not only in the vessel, but all whole company operations in the industry. i just do not have that clear a picture in my mind of who that is right now. that is why i am trying to ask you your opinion. that is why i am trying to bring it back to the piper alpha incident, 22 years ago. it is something that people say this catastrophe happens every 20 years or something like that. history,n't learn from you repeat -- or what ever the phrase is. that is what i am seeing. a lot of what is identified 20 years ago is happening right here. i prefaced before i question to is that what i am looking at

you as a senior statesman for the industry to tell me your opinion on things we can improve and things that we can prevent something like this from happening again. this is simply a conversation between you and i. not asking you who did what -- it is not that. >> [inaudible] ased on the board's classification -- and i think he is happy to answer all questions related to that, things that were his direct involvement. unfortunately, he does not have all the facts related to it. >> yes, ma'am. i understand that. that is one item we identified.

it does not restrict the board from exploring questions. >> understood, but these arc -- some of these things i think mr. harry thierens expressed he does not know. >> i appreciate that, ma'am. >> any other board questions? >> [inaudible] -- from the mms? >> i don't recall. >> when you were the director of the wells in the gulf of mexico, did you receive engineering bulletin's from cameron? >> i don't recall. >> did you review the audits for bp? >> no. >> so the rig you were responsible for you never

reviewed any type of audits or bulletins or safety alerts from anyone? >> not that i can recall. >> any other board questions? >> mr. harry thierens, as the wells director for the gulf of mexico from 2006-2009, what were your areas of responsibility? >> i managed the engineering and operations group in the gulf of mexico, and those duties changed in that period of time. when i first came, the engineering and operations groups were dedicated to individual assets in the company.

the long-term goal was to pull those together into a centralized group, which is where we finished up. >> you had engineering and operations? >> correct. >> just to make sure i understand -- so it was part of that -- who withini tha that grp working for you reduce the operational aspects such asri rg audits, notice to lessees, bulletins, who handles that within your group? >> with regards to audits, they are managed through the wells teams, the operations teams. with regard to notice to lessees, i don't know. and with regard to industry bulletins, i am not sure who

they would be addressed to. >> have you ever seen an notice to lessee? >> i do not recall seeing one. . >> not in the three years that you worked in the gulf of mexico? >> i do not recall. >> you were the walls director and you are currently the vbp -- for operations. in those roles, how did you ensure the people answering to you are actually doing their job if you are not doing spot checks are having some type of accountability to make sure they are doing what you pay them to do. >> we would check with people what they are doing, but this would go down to the chain of command. so i would not necessarily go direct to a single person. i may go to a manager, are we on track?

are things going ok? are we managing the way things should be? >> one more question. as the wall director of the gulf of mexico, were you responsible for specific projects? >> no. >> did you normally have an a projectraction in like this one? is a typical for bp to have approval come from anadarco? >> i would not be involved in that work. >> any other board questions? >> thank you, a judge. i represent the republic of the marshall islands.

i have just a few questions for you please, sir. you testified in response to the questions from mr. matthews that as you were involved in the intervention activities you came to learn that there had been some changes made in the bop, but that it appeared to you that there had not been a management of change procedure within transocean with respect to the safety critical equipment. i understand said testimony correctly, sir? >> yes. to be precise, what i said was my concern right know is that transocean made possibly an uncontrolled change. >> i want to explore that we do a little bit.

you testified that you were working with mr. stringfellow, mr. hand, and mr. schultze from transocean. >> amongst others. >> did you discuss that issue with any of those three individuals, whether or not transocean had an mrc procedure? was that a topic of conversation with any of those three individuals? >> i do not recall exactly the conversation. i recorded what i heard from mr. hand at the time. >> did mr. hand tell you what you had recorded their? wamr. handset told m told me te s a change made a couple months ago. >> to explore with him whether or not the company had a procedure for managing that kind of change? >> no, i did not.

>> in your capacity as director for dnc ops and specifically with regard to your experience in the gulf of mexico, do you have knowledge or oversight as to the activities and procedures that are involved in the temporary abandonment of wells? >> i am not involved in the detail of that. i do understand what temporary abandonment of a well means, yes. >> do you have knowledge of what tests and activities are required before a well can

be safely, temporarily abandon it? >> no. >> i have nothing further. thank you. >> do you have any questions? >> bp? >> yes, thank you. good morning. on behalf of bp. may i procede? thank you. good morning. what is your current job title? president fore-

drilling and completions operation. >> where are you currently based? >> london. >> to you have any current responsibility for drilling and completions operations for the gulf of mexico? >> no. >> so when you were asked questions regarding your involvement in drilling incompletions operations with respect to the gulf of mexico, you have no responsibilities in the gulf of mexico currently, is that correct? >> that's correct. >> have you ever held the position of director of drilling and completions operations for the gulf of mexico? >> yes, i have. >> and when were you involved with gulf of mexico operations? >> between 2006 and 2009. >> now, with respect to your involvement in the lacanodo well, you were asked about a

rig audit. are you a marine authority? >> no, i am not. >> are you a professional manner. >> no. -- are you a professional mariner? >> no. >> are you personally involved in conducting e rithe rig auditn the deepwater horizon in september, 2009? >> no. >> who with in the gulf of mexico operations had responsibility with respect to monitoring or following the september, 2009, a rig audit. >> that is the responsibility of the team leader associated with the vessel. >> did you have any responsibility associated with monitoring that 2009 audit? >> no.

>> yesterday we heard testimony from mr cramond, who was the marine authority in 2009. did he report to you? >> he does not report to me. >> and did he report to you in connection with the 2009 rig audit? >> no. >> i want to turn to discussing your involvement with the post- incident intervention efforts. when did you first become involved with the post-incident intervention? >> i received a call or a text in the early hours of the 21st of april informing me that there was an incident on the deepwater horizon and there were not a lot

of details available. >> and where were you physically located, which country were you and, since you are normally based in london? >> i was in the united states, in houston. >> was it a mere coincidence that you were in the states when this incident took place and they were asked to become involved as a result of that? >> yes. >> could you describe for as a generally what you're involved post-incident was specific to the bop? >> yes, i can. there was a lot of confusion and a lot of activity in the first couple of days of my involvement. i stepped up to help with

putting together a resource- loaded plan that would help us move forward. so the first few days, i was not directly associated with the bop. i was associated with putting teams together with regard to relief well response, with regard to contain, etc. so i had some knowledge of what was going on during the early days, but not first hand knowledge. call then't re date, but i was then asked, ok, we need to get focused on how we respond. i was then told, your duties are to work with the team, the combined response team on the bop. that would be around the 23rd or the 24. >> when you state the combined

response team, what team that you refer to? >> the combined team are referred to is transocean who were leading the response. cameron, companies like oceaneering that could be involved with above bop response. >> the team you worked with was that -- was that a team comprised of members from different companies including cameron, transocean and others? >> yes. >> what were your duties in connection with that response team? >> transocean had an outline plan going forward, and one of the first things we had to do a combined plan for which was agreeable with us, with transocean, and unified command, and mms and coast

guard. when my first duties was to do an outline plan. i do recall discussing some of that with mr. carroll and the coast guard. and then we would put that forward for approval, as a work plan, and we would agree that that would be our work plan so that we could plan ahead to come up with the right response and the right tools. >> so what was the purpose of that team and you were working on -- to understand what had happened with the bop or to understand going for what could be done with the bop? >> the purpose of the team was to close the bop. >> in connection with the work that you did for the purpose of deciding how to close the bop, did you come to learn of various changes that had occurred to the bop?

>> yes. >> could you tell us what some of the modifications were that you learned about? >> well, early on, there was an inability to close the bop with the rov functions, and it was not fully understood what it could not occur. there was speculation it may be leaks, something else, but it was important to establish why we could not create sufficient pressure in the system. and it was during the process of looking to establish what the problem was that we discovered a leak. >> what leaks was it? >> if i recall, the leak was in

the vicinity of the blind sheer round of shuttle. it was a connection on one of the control lines. >> who was it that discovered the leak? >> deepwater hotransocean were g the work, and it wasn't until we installed a bladder on the seabed, which is a reservoir, with dye, then we could pull it slid through the control system and observed where it may be leaking -- pump it through the control system and observe word could be leaking. -- where it could be leaking. >> did transocean indicate if they were aware of that leak

prior to this incident? >> no. >> do you know whether they were aware of that week prior to this incident? >> that calls for speculation. hearsay. >> you can ask if he knows. tellf he knows, he can us. >> i can clarify. the first time i asked if transocean knew. now i want to know if he knows if transocean knew of that leak. >> i do not know. >> fair enough. >> were there any other modifications identified as a result of the work that you did post-incident? > i don't recall any further modifications to the control system during that, but it was highlighted to us near the end of the bop intervention work

that one of the rov function lines from the panel which we assumed was to the metal pipe ground was to the lower round, a test round. >> mr. harry thierens, did you take notes of your observations as you're going to use different process these? >> yes, i did. >> and did you create logs of what you were observing as you were going through these steps? >> to the best of my ability. >> let me give you a notebook. i apologize. i handed them out, but i do not think i gave one to the witness. aside.uld just steop if i can approach?

thank you. mr. theirens, i have handed you a notebook with the various logs. if you could tell us whether these are the logs you created as a result of your post- incident intervention efforts. while you are looking at them, i will identify them for the record -- they are three logs. -- 137274 through 303. 4/22. a log dated the second is a log dated 4/28.

bph znmbi 00171039 through 1063. and then there is a log dated may 1st. bphznmbi 00171007 through 038. do you have those logs? >> yes, i do. these are my logs. >> we will not go through all of them, but to be clear, for the record, are these notes you created it while you were involved in this effort? >> yes, they are. they are notes i created but in ed notes s i 8 added notaddded that were handed to me.

all the handwritten notes are mine. >> you are talking about learning about plumbing, do you recall that? >> yes. >> if you will turn to the third tab, the log dated may 1st. that is my second tab. >> sorry. the page ending 1028. >> yes, i have that. >> could you read for us what you noted in connection with the plumbing of the test ram in you r log book, beginngiing with "stat". >> "on the middle pipe rams is

beings plumbed for --" >> is 13:50 the time? >> it must have been? >> do you know that date? >> i don't recall exactly. that was the date there. maybe the 3rd? i don't know. >> sometime around may 1? >> probably. >> "that stab in on the middle pipe rounds -- and that was a statement we received from mr. ray picard who was from transocean. >> it was mr. picard who notify you that the npr was for the

test ram and not for the mp. r. >> he did not notify me personally. he was called into the room and we had open communications. was made it werehaaware that e discovered this, but he wanted confirmation. >> what does it mean to stab into npr? >> you have to realize that when things are moving dynamically, you put down a note to the best of your ability. the stab in port for the rov panel has been plumbed for the test rounds. >> so the plumbing that should have been in a metal pipe ram was in the test ram? >> yes. it says pipe rams on the rov

panel. our assumption all along was that plumbing was to the metal pipe ram. >> is the test ram a ram that is capable of activating in order to assist with a well controlled event? >> no. it does not hold pressure from below. >> so if the plumbing is to the test ram rather than the vvr, what effect does that have on the upper ability of the bop for purposes of activating and well controlled event? >> it would mean that the pipe rams could not be closed. the test ram would close in an emergency, but it would not be capable of withstanding pressure from below. >> continue reading your notes,

please. >> "met immediately with steve hand, robert white, transocean, lawrence, who i believe was transocean, and coastguard, chris martin. we also have present then -- jose and frank. jose santos had -- was there from petrobras assisting us. and frank gillander was in a similar way in giving whatever assistance chevron could. and we met immediately, because -- and i do recall it was a significant event. there's a lot of commotion in

the room at that time. we have come a long way. to find something like this was quite emotional. so we met, and i spoke frankly about the seriousness of this. and i was frankly astonished that this could happen. >> is that what you noted in your notes? spoke frankly about the seriousness -- >> yes. it says i spoke frankly about the seriousness of this issue, and quite frankly was astonished that this could have happened. i told transocean to get photographs. to get with their subsea engineers and to understand what has gone wrong. when i heard this news, i lost all faith in the bop. billy stringfellow, clearly emotional at that point, told me, this is plumbed wrong. >> and to be clear, who is mr.

stringfellow? >> mr. stringfellow was transocean's subsea superintendent who is effectively leading the operational side of the bop stack intervention. >> you have the words "-- billy stringfellow told me, "this stack is plumbed wrong." why quotes? >> this was something i heard police sbilly say. >> did the fact that the plumbing on the bore rams was mistaken, they appeared to be plumbed it to the test ram, did

that have any affect on the -- >> i would object. that is mistaken. this witness is involved in intervention, it only served a purpose of promote a closing the bop after a blowout. and what was a known, what was ordered, what bp and transocean did prior to the casualty is not within the realm of this witness's knowledge and should not be in testimony. whether he was mistaken or not it's a mischaracterization. >> two things. as we all know, what one of the attorneys says in a question for is not really evidence. however, your objection is well- taken. without necessarily its forbidding any motive for or historical knowledge -- without necessarily in attributing any motive or historical knowledge, could you get to the conditions

and the impact of the conditions, then he can answer the questions without including any speculation as to cause of it that others might dispute. >> certainly. >> thank you per >> does the fact that the mpr had been plumbed to the test ram and not to the middle pipe ram, did that have any effect on the intervention efforts? >> yes. >> what effect did it have? >> we did not agree to a program to try to close the metal pipe rams. we got to this point in the program and we found all of our efforts to do that had actually been directed to a different set of rams. >> and did mr. stringfellow said it was in his view -- this had been plumbed wrong? >> yes. >> mr. thierens, were there

other modifications you identified during the course of your intervention efforts? >> and no. >> now, you referrenced a drawing you saw for the bop, is that correct? could you repeat the question? >> you had asked for a drawing of the bop. >> that's correct. i did not receive it. it was on the wall in the room. >> were there any markings on that drawing, as best you can recall? >> yes, there were. >> can you describe what those markings work? >> not precisely, but there had been some red lines put on the

drawing which were indicating that this was a new route for pipe work. bop not an expert on th piping systems, but there were some red line drawings overlaid on the drawing. >> to you know whether those red markings were intended to denote the difference between the bop as built versus the condition were finding it in the intervention? >> as a recall, i recall seeing a as-built diagram for the bop. there were some modifications made to the drawing. lasterter, i would see another drawing which brought more

clarity to that. >> do you know what the purpose of the later drawing was? >> i don't know. it was highlighting and a more specific way the findings that transocean had. >> did you make any of those ridings or were those made by others? >> there were made by others. >> do you know who made those writings? where was it posted? >> it was posted on the wall in the operations room. >> at whose offices was this drawing was marked up? >> it was not place in an office. it was placed in a room on the third floor and the incident command center. >> fair enough. discuss modification you

identified. i think you also discussed leaks discovered during the course of this incident. were you aware of any of those prior to this incident? >> no. >> i have nothing further. thank you 3 >> thank you. >> transocean? >> thank you. good morning. i represent transocean in this litigation or before the board. >> good morning. >> as i understand, sir, your first involvement with regard to

this bop was after this casualty. >> that's correct records for purposes of the introduction? >> that is correct. >> did you review the may news records of thistenance bop? did you interview any bp witnesses about their satisfaction? and had you for any reason seen the bop prior to the casualty? if you did, you don't remember. it was incidental. >> if i had seen it, it would have banned it sometime in the past when i visited the rig. >> i take it you have no

comment regarding the fund sodalifunctionality of the bop r to the incident? >> no. >> you did not undertake to determine why if any modifications were made, the new, for what purpose, any of that? >> my job was to expedite with transocean the close of the bop. i did not have time or desire to do that. >> i understand. would you take a look at page that she directed to you in her tab two? i hope you will find it ands spare -- >> i have that. >> i'm curious. is the handwriting on this page yours? >> yes.

>> is all of it yours? parte directive - you -- the to be a it papearappears different style in handwriting. writing.is my rid sometimes i write in capitals and sometimes in free hand. >> ok. with regard to your writing at the top of the page, as i understand this is a product of the notes you made with mr. picard. do you agree? >> that's correct. it's a record of what i heard in

the transcript from our conversation. >> mr. picard wanted confirmation of this? >> he identified this as an issue, and if i recall, we asked at that time for cameron to step into the room and look at the rov pictures and confirm if that was correct. >> and the test rams to which your comment refers, i believe you testified were not used for well control. that is not the function of those rams. >> their function was for testing the bop. >> ok. at this point, you were -- your goal, the mission for which you were assigned here was to see if he could get the bop closed,

and you were trying to do that by stabbing from an rov. >> for the purpose of trying to close the piper rams, that is correct. >> the scope of your study was not to determine whether any of these pipe rams, the test rams, could still be closed from any of the bop panels on the deepwater horizon. rather, your determination was simply that you had difficulty closing them by stabbing from an rov. is that correct? >> i do not understand your question. could you repeat it, please? >> mr. picard did not comment, and your group did not study whether the test ram could be closed from any of the bop

panels on the rig in the normal course of operation? >> i do not know. >> all this simply relates to your task of the rov intervention while after the casualty? >> yes. all of my task was after the casualty, yes. >> were there other rams your team sought to close by stabbing from the rov which did not have any plumbing issues? >> no. >> make sure we are not missing a connection -- were there other rams that to not have any plumbing issues? >> if i understand your question, if there other rams that could be closed from the rov that did not have plumbing issues? my answer is no. >> do you agree with me that the

plumbing issue was only raised with regard to the test rams? >> that's correct. >> how many days did it take bp to shudder this well. >tter this well. >> we worked on it about 12 days and we did not shut the well in. >> how many days did it take to get to where we are now in the control of this well, with the subsequent modifications? 90? 100? >> i do not know exactly. you have to look back from the 21st of april. >> thank you. as i understand, the time it took for you to get modified

drawings was a day. >> approximately. i do not recall exactly. >> that is what you said under direct examination. he said with respect to getting a modified drawings, you got them in a day. >> it was about a day, yes. >> ok. and the time it took to understand what mr picard raised took, and i understood you to this indirect, was between 12 and 24 hours? >> i don't recollect that. you are referring now to the test ram? >> yes. the drawing you saw, the concern you raised. i understand it took approximately 12-24 hours per >> cannot clarify? -- can i clarify?

that was regarding the leak and the control changes associated with the st lock system. they are not associated with the plumbing for the test ram. >> i would like to focus on whatever delayed this must have resulted in, and ask you are we talking about a day and a half to two day delay? the delays the items may have caused when you testified. i may have got it wrong. i thought you said it today to get modified drawings provided to you. and 12 to 24 hours to do something else. >> maybe i can clarify. was about a day before the during arrived. i do not know exactly. this was early on. the time that transocean had taken to understand what

possible changes had been made to the control system when we were looking for the leak to somewhere between 12 and 24 hours to serve a that portion of the bop. that work is not connected to the issue here that we found later, which was the lower pipe ram. >> i may have missed characterized the work. what i am trying to get to is the delays you are talking about. 12 to 24 hours to arrive at the understanding on the other item. >> no. 24 hours was the time taken to understand the leak on the first round. >> were there a lot of people

involved in this intervention project? q>> yes. >> did bp ever commissioned a critical path analysis to determine whether this one and a half to two day delay or items caused any real delay in this project? >> i do not know. >> you have never studied that? >> i have not heard >> and you did not know if any of the other tasks undertaken by the teams would have caused delays at that time anyway? >> i did not recall. >> thank you, sir. that is all i have. >> thank you. >> next we have anadarco.

>> good morning. i represent anadarco. on our witness list, which means you, we have you identified as executive vice president of the drilling and completion operations. is that right? >> no. >> so there is no executive in front of a vice president? >> no. >> now, is there a region you are responsible for? >> no. >> let me give an example. i am just trying to understand how the bp organization is set up. we have coming to testify before us as well pat o'brien, also is a vice president of drilling and operations -- drilling and completions. what is your relationship to him? are you co-equals? >> clearly we know each other,

but pat o'brien is vice- president in this particular business unit for drilling and operations in its entirety. in the same way that we have vice-president for drilling and operations in the north sea or in gold or other countries. my role is a functional role, not a line role. so i am not accountable through the line for any operations that have taken place within bp. that is the accountability of the incumbent vice presidents for that particular area. >> right. did i hear you say you have a function that is development of best practices? >> no, i did not say that heard >> do you have that function? >> the purpose of the function in bp is to ensure that across

the business in the segment -- our particular area -- that we are managing our operations in accordance with the functional agenda. >> "with the functional agenda." what you mean? >> when you look at strategy, technology, are we doing things for the common good? do we manage people and places at the right time? can we ensure that people go prepared? >> do you, in the course of managing under the functional agenda, attempt to impose some uniformity in practice across the organization? >> bp has a set of standards for many parts of the drilling and

completions function. and the expectation is that people work to those standards globally, yeah. so we -- part of our role is to ensure that people are adequately provided with an adequate prepared for their operations. >> in the course of being adequately prepared for the operation, for instance, the drilling and temporary abandonment of the macando well, is it the best practice to ensure that the procedures are written in advance of their actual implementation? >> i do not know. >> let me give you an example. a negative test. is it a bp breasest

practice to ensure that there is a test written before the time it is to be conducted? >> i do not know. >> does bp endorse a doing a negative test on the, flig makig fly, making it up as you go along? >> objection. >> if you want to clarify again what you mean on the fly? >> do you have any knowledge of this area at all? >> no, i do not. >> you do not know about-testing procedures? >> no. >> do you know what procedures are uniform in the context of drilling and exploration well? >> only a very high level with regards to policies, etc. with regard to the design and drilling of a specific well, no. >> please give me an example.

>> bp has a policy procedure within the company, which covers a range of expectations around well designed. >> and when you say expectations of around it will design are those expectations regarding safety? >> they incorporate safety. >> today incorporate cost efficiency? -- do they incorporate cost efficiency? >> i do not recall. >> what do they incorporate? >> i do not recall the entirety of policies and procedures. >> did you have any part in developing those? >> no, i did not. >> do you know as well site leaders are giving broad discretion to participate in the development of, for instance, cementing procedures while on the rig? >> i do not know.

>> you just do not know at the level of what is conducting on the rig, you are not aware of what those procedures are? >> that is not my job. i do not know. >> no further questions. thank you. honor,uestions, your thank you. >> cameron? >> good morning. my name is david jones and i represent camera. on. you mentioned leaks observed during your intervention efforts. were those leaks you saw on couplings on hose lines? >> not all of the leaks were on hose lines.

>> where were they? >> we observed one leak on a solid hose coupling at the st locke area of the blind sheer rams. we observed another leak -- it was a plug of some sort that was attached to a surge bottle. and other leaks we found were associated with hose couplings. >> very good. the test ram, pipe ram plumbing issue. do you know how the stack was plump when it was delivered in 2001? >> no. >> when a stack was delivered in 2001, the lower pipe ram was not

-- >> i do not know how it was configured in 2001. >> you do not know if there was a change between 2001 and april, 2006? >> i heard there was a change made some time, perhaps 2004. >> do you know how those changes were made, mechanically how he would switch uplight bram inta ? >> no. >> do you know if there were any plumbing changes that were done at that time, at the conversion? >> i don't. when that occurred, in 2004, i was not involved in the gulf of mexico. >> i assume he did not know if any plumbing changes were made? >> i do not know anything about that. >> when there's a discussion about this? being plumbed wrong, i want to

be clear that you were not -- this stack being plubmembed wro, i want to be clear that you were not -- >> there is no suggestion of what the status of the stack was when it was delivered by cameron. >> that's all i had. >> it has been a couple of hours now. we appreciate your patience. we want to take about a 10 minute break. we will reconvene at >> coverage of the deep water horizon oil spill continues through friday.

you can find links to related news stories and government reports. it is all at c-span.org/oil spill. coming up next on c-span, a discussion about the role to have private sector on homeland security from the heritage foundation and then "washington journal" and then live coverage of the heritage foundation. >> we are all pawns from the chess board playing our parts in the drama that is neither fiction nor unimportant. >> i come before this body to personally express again my sincere regret about the encounter with the capitol hill police. >> i can't walk away and have you guys doing your campaign because i'm annoying. >> watch more onlined read about

them on c-span's video library. all searchable and free. it is washington, your way. >> the heritage foundation held a discussion yesterday about homeland security specifically looking at the role of the private sector. the panelists looked at what lessons can be drawn from 9/11, hurricane katrina and the recent gulf of mexico oil spill. >> talking about infrastructure and protection. now i think we're going to move to our next panel which is really going focus on what are the lessons learned on private sector engagement? 9/11 attacks, hurricane katrina and the recent oil spill have lessons we can take into the future.

>> joining the firm, mr. finch was an attorney with a washington, d.c. law firm and worked as legal counsel. he received his j.d. from the george washington school of law. second, we have brian finch, who is our hometown -- two brines today. i don't know -- brians today. i don't know how i'm going to handle it. he is from our center of legal and judicial studies. before joining heritage worked on contract with the department of homeland security working to

integrate private sector organizations and government emergency preparedness and disaster response efforts at the federal, state and local levels from 2002 to 2005. he was an associate in the washington oufs of kirkland and ellis l.l.p. and served as a law clerk for the u.s. circuit court of appeals. he really understands a loft private sector challenges. he holds a bachelors degree in physics. i'm very impressed. his degree from the university of colorado. finally we have mike pearl, the president and c.e.o. to have homeland security and defense business council. prior to joining the council in 2008, mark was the principal of i.c. solutions which we founded

in 2003. in terms of meeting public policy challenges, simultaneously serving as director of the consumer electronics resource association. before he launched this effort, pearl was a partner and led the e commerce policy practice at a global law firm. he was previously general counsel and served as vice president of government affairs at the information technology association of america, now tech america. he served as chief of staff in legislative counsel. he received his b.a. from case western reserve university and his j.d. please join me in welcoming our fellow panelists. we'll go ahead and start with brian finch. >> thanks. first of all, thanks to you to organizing this and to jessica and to the heritage foundation

for including me today. it is always a privilege and an honor to participate in one of these panels. this is a real intriguing topic for me. homeland security, particularly after 9/11, katrina and deep water and other issues. i think more than anything else, all of those events, and response, the recovery, the mitigation efforts, they serve as an important reminder in the critical role over the private sector and how important they are when it comes to homeland security. not just to tidying their own shop but supporting the government as well. we all know where that number actually is. it will be subject of another debate. everyone would agree, a significant part of the critical infrastructure is at the hand of the private sector. just as importantly, though, is a reminder that at the end of th