unwilling to understand the and they will still be in the office host: thanks for joining us. :

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> this week on "newsmakers," our topic is the future of offshore drilling. and the man in charge of regulating that industry. thank you for being with us. >> my pleasure.

>> two reporters here to help us with questioning this morning. kneela with the times and the houston chronical. >> you took office after the deepwater horizon disaster. it's been more than six months and a lot of people are still wondering what exactly happened in the hours and weeks leading up to the explosion in april. a key piece of evidence tht ongoing investigations into what happened. the blowout preventer that was from the well site is now sitting in a nasa facility in louisiana where it awaits a battery of tests. but there's been some disagreement between the joint investigation that your agency and the coast guard are leading, and the chemical safety board over access. what does that dispute do to the time line and the chances that we'll get answers about the bop and about the well soon?

and what are you doing about it? >> well, i'm hoping it doesn't affect the time lines. i hope you know we did face some delays that put us a bit behind schedules. and some of those delays required us to request an extension of the time when our final report was going to be issued. it was scheduled for the end of january. because of the delays and the testing we had to ask for an extension until the latter part of march. i am hoping that the requests by the csb that we are trying to deal with responsively will not lengthen the time line. as you may know, they are making a bit of a fuss about it and threatened to go to court about it, and we're actually discussing issues with them this afternoon and hope to be able to resolve it. it's unfortunately, i find some of the things they've done both aggressive and somewhat puzzling since they

acknowledged whether they have any jurisdiction to conduct such an investigation. it's taken a lot of cooperation and coordination, discussions, to get to where we are right now with the bop testing. and so the csb's request, which we've been trying to accommodate recently, have been a disturbance and distraction over the last week or so. i'm hopeful we can resolve it quickly, but it would be very unfortunate if this caused an additional delay. >> viewers who are watching are wondering bop, the blowout preventer, those are words that the american people have heard. if there is a delay and no resolution, what does it mean to the american people who are watching that are waiting to find out what exactly happened? >> it means that the most extensive and comprehensive investigation of what happened would cause the deepwater horizon to have the explosions and to sink. that the final answers will not be known as early as they might

otherwise be. i never heard of the bop until a few months ago. i think that's true for many of us, and i've now falling into the bad habit of using abbreviations for the larger words. bop is the blowout preventers. the prevention board has tasks for various kinds of investigations, it is far from clear as to whether they have a strong claim to make to do an investigation here. in fact, they acknowledged in correspondance with the department a number of months ago that they weren't sure that they had jurisdiction to do this investigation. so that's one of the reasons that i find it surprising and somewhat disappointing that they're being so aggressive about pushing their positions and risking the delay in the completion of the most comprehensive investigation that we have going right now. >> well, we also know that this week there's been an election that's going to bring about a vastly changed congress come

january. i wanted to ask you about some legislation that's pending to regulate offshore oil drilling and also to give you the added resource that is you need to hire more inspectors and tighten up regulation on offshore drilling. if that legislation does not pass, what does that mean for your agency? what does that mean for oversight? >> it's too early to say, obviously. but it would mean if legislation doesn't pass, that we will lack the, what they call the organic statutory foundation for the functions that we carry out. right now, our agency is supported as a legal matter only by secretaryal order rather than statute. and that's a place where we don't want to be. but, more importantly, i think that's the sort of arcane legal issue. what's important to us is that we have the resources that we need to carry out our mission

and to do our job. i think what everyone has agreed on in the wake of deepwater horizon and the reviews of our agency that have been ongoing is that our agency has never had the adequate resources to do its job. s there agreement among pro-drilling and anti-drilling forces, there is an agreement between democrats and republicans. and the president's budget for 2011, as you probably know, contained a request for $100 million depirble for us in order to build up the number of inspectors that we have, to build up the number of engineers that we have, and to add various other kinds of both equipment and man power to do all the important tasks that we have. i am very hopeful that even with what's happened in the election this past week and even with the emphasis on deficit reduction and budget cutting that that kind of consensus on the need for us to have additional resources will survive and we will continue to have that pushed through the

congress. because the fact is that even for those people who are pro-industry and pro-drilling, what i've heard in the past is they want us to have the resources in part so we can process their permits in an expeditious way. if we don't have the resources to be able to do that, then people who want us to be granting permits are going to be disappointed as well as lots of other people being disappointed. so it's a lose-lose if we don't get the resources. >> it's a very small number. it's fewer than a half dozen. i believe it's four or five deep water-related application that is have been filed. now, all of the applications have to comply with the new requirements that have been

established over the last couple of months, and that will be a consuming process than in the past. we know there's a lot of interest in getting these permit applications processed but we obviously have a job to do in making sure that these new applications comply with the new rules and regulations. so we are going to process them as expeditiously as we can, but we need to make sure they are comply nt. >> what is it in the new regulations that you have that, as you said, makes the process more time consuming either the people reviewing the permits or the work that the oil companies have to do to prepare the permits? >> the oil and gas companies do have to do additional works and i met with one of the major companies yesterday and i asked the question, is this causing you to do additional work and how long does it take you? and they confirmed that it is additional work. and even though they saw the foreshadowing of these new

rules back in may recommending the enhanced safety and reforms in the area of compliance, that even though they've been doing some of the work since then, they are still not completely done. so there is a significant amount of additional work that the companies must do. i think they're very much expediting that process and doing that work. but there are also additional steps that twofe take. we have to ensure that certifications that are now required to provide are in good order. we have to confirm and review their cementing and casing proposals that we didn't previously require of companies and therefore we didn't have to review ourselves. now, we're doing the best that we possibly can with the resources that we have in connection with processing shallow water drilling applications. we actually bulked up the resources that we were devoting to reviewing and processing those applications. we transferred some man power from some of our smaller

regions in alaska and the pacific, but, more importantly, we transferred internally within our gulf of mexico region approximately 20 additional people. so that we now have a more robust staff of people who are reviewing permit applications than we ever had before, but still there's a lot of work to be done. it's hard to predict how long the process is going to take. >> regarding those shallow water permits, it seemed like in early october there was a flurry of approvals, the number got to about 12 or 13 new wells approved by mid october but stayed fairly flat. as of friday there were i believe 20 applications that had been kicked back or were no longer pending. what is the holdup? is there some change since the interim safety rules came out that is causing some of these delays? >> i don't think so. i think it's mort that, as you say, a number of these applications are being kicked back because they didn't contain all the information

that's required. so there's actually a very small number of applications that are truly pending. i think the number is three or four. so if we get an incomplete application, we don't have any choice but to kick them back to the companies. so the only applications that are currently on our plate, as i say, are three or four, which is not a large number. now, what i was told several days ago by our staff in the gulf is that they thought that it would not be long before for at least a small number of additional applications would be refiled, information would be complete, and we'd be able to proceed to prompt review and approval of those permits. but it's a back and forth process. obviously, information is missing we can't say we'll approve it. so we have to send it back to get information information. so it's the back and forth that's taking time. >> one of the things we're hearing people were discussing delays in the shallow water permits even before the

moratorium was lifted was the holdup seemed to be around the worst case scenarios they had to plan for that really there's a greater demand for precision and perhaps better planning on the worst-case skenyareyo. is that where some of the holdup? >> yes and just to be clear worst-case scenario looks at what happens. how many hundreds or thousands of hundreds of thousands of barrels of oil may be spilled in the case of a so-called worst-case discharge. and this was a relatively concept that had been in our processes before, but because of deepwater horizon we sharpnd it and imposed additional requirements on the companies. and the truth is that i think there was some legitimate confusion on the part of the companies in terms of what we

wanted and because we were applying worst-case discharge in a slightly different way. there were some lack of certainty even among our own people. so we solved that in a responsible way. we had a series of discussions with shallow water drillers and tried to clarify what we meant and what we were looking for. we did that both through a soaries of -- series of telephonic discussions, a series of in-person meetings and a series of frequently asked questions that we put out to try to clarify some of the uncertainty and amgutes that existed in the requirements that had been published. so i think we made a lot of progress. we've learned a lot and the companies have learned a lot, and the companies have a much better idea of what we're looking for and what will pass muster. and i think we're all hopeful that they do understand it, that the applications that we're going to be getting from this point forward in fact contain all the right numbers and analysis and we'll be able to move swiftly to review them

and approve those that are qualified. >> the worst-case discharge requirement was one of the requirements in the notices to lessees, by which you did some emergency rule-making. >> right. >> there's obviously been some push back from industry. and as you know, a federal judge in louisiana essentially kicked back one of those notices to lessees saying it should have been proceeded by a public comment period and public notice. what does that do to your ability as director of the bureau to impose new regulations very quickly without having to go through the lenttedy process? and what are your options? are your hands tide? >> the truth is it does create complications. it was one decision by one judge, it's based on one ntl, and the impact of that decision in fact is not correct because we have moved forward and incorporated most of the requirements that were in that

n.t.l. and that's notice to lessees into our final rule. so we haven't lost very much of anything in that process. but the larger concern is that we have a limited number of tools in our tool bovepl. a limited number of things that we can do to enhance safety and to make sure that offshore drilling exploration, production, takes place in a safe and environmentally responsible way. to go through an entire formal rule-making process can make many, many months if not years, and given that we're operating in a very dynamic environment as regulators, we're going to be lirning new things about what caused deepwater horizon and want to be able to act on those in a responsible way, the way the public expects us to act. it's unfortunate that there is now something of a cloud over the ways in which we can use one of the tools in our toolbox. now, we're going to move

forward, we're going to obviously be careful about the way we use notice to lessees, but we're not in the face of one adverse court decision going to stop using them because we need to. we can't afford, frankly, to go through the entire notice of rule making process for every little change, tweak, or enhancement of safety regulations. >> so if you're at home listening to this conversation, you might be thinking, could it happen again? given what you just talked about, shallow water permits and this understanding that industry has had to come to, that you've had to come to at your agency, what's the percentage that the bp oil spill could happen again? >> i can't put a percentage on it. but i think what we've all learned is that the percentage is not zero. and i think for 40 years, the last significant spill that we had in this country was 1969 in santa barbara and i think that because there had not been any events of that kind since then,

people grew overly confident, regulators and companies grew complacent, and they didn't admit to themselves or to each other that it could happen. that now has utterly changed. we know that it can happen, it has happened, with devastate combg pact to human life, and potentially to the environment. and so that's what drives us to look to ways in which we can think of a common sense, nonstifling way raise the bar in terms of the standards that are imposed on the industry so that we can drive down the risk drive it down to the pointed where we can feel comfortable proceed in a relatively risk-free way. and i emphasize relatively. >> is it the nature of what you're doing that it's always going to be 50/50? that there's a 50% chance that this could happen? >> i don't think -- keep in mind, my understandling, there

have been over 4,000 holes dug in the gulf just in deep water. ok? there was one blowout. now, those are not 50/50 odds. those are low odds. but what i think people did not recognize is that even though it might only happen once, it could have enormous consequences. and that's why we are all legitimately concerned about driving down the risk that it can happen again. is it possible it can happen again? absolutely. when you have unknown reservoirs, you have exploratory drilling, you have advanced technologies, and more than anything else you have human beings involved, there is a chance that something could go bad. now, i think what we'll learn and i think we're already learning to some extent is that what happened with deepwater horizon was unfortunately a perfect storm of both mechanical and human error. so the risk of that perfect

storm happening again is not great but it exists. and so we need to do everything we possibly can to diminish the chances that it will happen again. >> go back to our reporters. >> just a followup on that. there's a lot of criticism after the deepwater horizon both in the media and now the commission's investigations about the way various government agencies responded to the crisis. criticisms about relying too much on bp, criticisms about not really knowing who is in chargics about mfings being with held and so on. and giving all that, and you are not the only entity responsible for spill response, what -- how would things be different if there were a spill? how would the response on the government side look compared to what happened? >> i think a lot was learned during the response. a fairly complex but well functioning, coordinating

mechanism was set up that involved the department of interior, involved coast guard, involved bp, the company that was most importantly involved. so, by all accounts, things were not coherent and not terribly well organized on day one. but that changed, and that changed fairly dramatically as time went on so you had all entities functioning together, working together, and mutting their minds in and their muscles together to develop a coordinated effort. i think that one of the things we need to be very mindful of is trying to capture that learning and make sure that both the mistakes that were made and the good things that were done are memorialized and preserved so that if, god forbid, we had another spill tomorrow, we could reassemble this coordinating mechanism and move forward. we're in a different position today than we were in the sense

that industry and the government were unprepared for a deep water blowout. they didn't have containment equipment, they didn't have the resource, they didn't have the know how, they didn't have the technical knowledge. that technical knowledge now exists to very significant degree. both in the private sector, not just in bp but in other companies as well, but it also exists in the government. and the equipment deficit is being addressed through, among other things, an agreement among the agencies to put together a very ambitious corporation to develop subsea equipment that would be capable of being applied to another deep water spill. so we are in a different place than we were before. we do have the mechanisms that exist that didn't exist before. my greater concern is not that it's, god forbid, something happen in a month when those mechanisms and the know how are still more or less in one place, but how we keep those

ready to go if it were to happen a year from now or three years from now and five years from now. i think that's always the challenge. i think you're ready immediately after a crisis to respond to another similar crisis. what i worry about is the muscles aren't toned up any more to do that kind of response and so five years down the road you're not in as good a place as you would be now. >> or there's a crisis you haven't thought of. >> correct. >> there was the private sector prepared for a spill in alaska and there continues to be now great interest in drilling in the arctic ocean. and i wanted to i guess -- i wanted to find out what is going on on the side of government to make sure that the drilling is safe in the arctic? because of how complicated

we've seen -- how complicated it is to clean up after a spill there. i guess the valdez was so much further south and this is where there's going to be a lot of sice and there seems to be concerns amongst environmental groups and indiginous groups, and i ask that in the vain that you don't prepare yet, the thing that imagination hasn't reached yet. so what can one do with the arctic? and what are the challenges that are present there? and are you confident that the oil companies can meet them? >> those are very real concerns. there are difference set of issues in the arctic than there are in the gulf. and i spent a lot of time meeting with representatives of native groups, representatives of environmental organizations who have expressed those concerns to us. we've also met with the oil companies that want to operate

there and have made major efforts to show that they're doing everything possible to make drilling as safe and environmentally responsible as possible. the main concern that we have, and alluded to this in your question, is how do you deal with a potential in the arctic, because it is so different. when i held the series of publums all over the country to gather information rell vent to whether secretary salssar was going to lift the moratoriumium, i held one in alaska and the question was oil spill response and it focused on what are the special challenges that exist when you have far less infrastructure than you do in the gulf, when you don't have the kind of coast guard presence in the arctic as you do in the gulf, when you have the enormous challenges posed by broken ice and total ice. so even though it's not deep water, and so -- and the

geeology is different and the nature of the drilling would be different, the fundamental questions that we are still grappling with is have we been given adequate answers on spill response? and if not, what additional steps need to be taken in order to satisfy ourselves that drilling in the arctic can take place within a tolerable risk. and so we're still wrestling with those questions right now, but we haven't made decisions. >> given that uncertainty about the arctic, what is your expectation that we could see some exploratory wells drilled? shell's been planning to drill for a couple years now. do you plan to see something? >> we're going to make decision that is will bear on that and know in the future. so i don't have an announcement to make today, but we know we need to resolve this issue because nobody likes

uncertainty. and so we need to provide an answer so people understand which direction we're going to be perptted to go. we understand that and will try to make decisions in a timely manner. >> i wanted to ask you about staffing up for throughout the system and i wanted to find out what's happening with your efforts to increase staff, especially in the gulf. noy that you went down to do a recruitment tour and i was wondering how that went and whether people, whether you can get people into the public sector these days. >> it was actually successful and i'm thinking of changing jobs to become a fulltime recruiter. we went to five engineering schools last week, and in response to my appearance there, we got we will in excess of -- well in excess of 100

applications for both engineering positions and inspector positions. we had a job announcement more generally that was open for only two weeks and we have in excess of 400 applications for a total of 30 inspector positions, 30 petroleum positions and between 15 and 20 summer internship positions. so to say that the response has exceeded our expectations would be a vast understatement. so i was incredibly encouraged by the reaction at those in. >> thank you for being on "newsmakers." >> thank you. i appreciate it. >> "newsmakers" is back with our reporters. and let me begin with your impressions of what you heard. what stands out to you from the director's comments? >> i was interested to hear him

acknowledge that there is some concern about the bureau about their ability to do emergency rule-making, to impose new requirements on the oil industry and the drilling industry that they feel they need to move ahead with after the deepwater horizon disaster. but may not be able to do so in as quick a fashion. the director said he's not going to be stopped by this legal ruling in the federal district court in louisiana, and he will still pursue some emergency rules. but the reality is that if they're forced to go through a more lengthy process for imposing some of these well, specifically the communities that are close to these drilling operations like the louisiana coastline? and what does m